Exhibit 10.1
 
 SETTLEMENT AGREEMENT AND GENERAL RELEASE
 
This Settlement Agreement and General Release (the “Agreement”) is made and
entered into as of September 21, 2007, by and between Fluid Media Networks,
Inc., a Nevada corporation (the “Company”), and David J. Williams
(“Williams”).  The Company and Williams are hereinafter collectively referred to
as the “Parties.”
 
RECITALS
 
WHEREAS, Williams is a party to that certain Employment Agreement dated February
21, 2006, by and between Williams and the Company, as extended (collectively,
the “Employment Agreement”);
 
WHEREAS, Williams resigned from his position as the Chief Financial Officer,
effective September 5, 2007;
 
WHEREAS, the Company and Williams wish to fully settle and discharge all claims
and damages, whether known or unknown, and whether anticipated or unanticipated,
which are or may be the subject of any lawsuit or any other claim which has
arisen or which may arise between the Parties upon the terms and conditions set
forth herein.
 
NOW THEREFORE, in consideration of the foregoing recitals and for good and
valuable mutual consideration, the receipt of which is hereby acknowledged, the
Parties, intending to be legally bound, do hereby agree to the following terms
and conditions:
 
AGREEMENT

 
1.           Settlement Consideration.  As satisfaction and performance in full
of all obligations due and payable to Williams by the Company and each and every
subsidiary, parent or other affiliate thereof (including without limitation all
salary, bonus payments, accrued vacation and business expense reimbursement due
to Williams under any and all agreements between Williams and the Company), and
subject to the compliance by Williams of the provisions of Sections 1 and 6
hereof, the Company shall pay to Williams the aggregate amount of Sixty Four
Thousand Eight Hundred Dollars ($64,800.00) (which amount shall be subject to
withholding by the Company).  The settlement consideration herein described
shall be paid upon the execution by the Parties of this Agreement and the
receipt by the Company of a letter of resignation from Williams in form and
substance reasonably satisfactory to the Company.  Notwithstanding the
termination of the Employment Agreement or the release hereinafter described in
Section 3 hereof, Williams shall remain subject to all the terms and provisions
of the Employment Agreement, which by their express terms, purport to survive
the termination of such agreement, including without limitation, that section of
the Employment Agreement entitled “Certain Acts”  and the terms of that certain
Proprietary Information and Inventions Agreement, dated as of February 21, 2007
(collectively, the “Surviving Obligations”), and the release set forth in
Section 3 hereof shall not operate to release any matter arising from or related
to any of the Surviving Obligations.   Each Party shall be entitled to all such
additional remedies to which is may be entitled at law or in equity in the event
of a breach of any of the Surviving Obligations by the other.
 

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2.           Releases.
 
(a)           The Company and Williams, on behalf of itself or himself and each
of its or his representatives, agents, affiliates, successors, predecessors,
attorneys, heirs, executors, administrators, agents and assigns, and each and
all of them, fully release and forever discharge each other, each of its former
and current principals, officers, members, managers, directors, shareholders,
employees, representatives, agents, parents, subsidiaries, affiliates,
successors, predecessors, attorneys, heirs, executors, administrators, agents
and assigns, and each and all of them, as applicable, of and from any and all
claims, debts, rights, liabilities, damages, costs, expenses, attorneys' fees,
causes of action, lawsuits, loss of use and loss of services of every kind,
nature, or description, whether known or unknown, suspected or unsuspected,
which previously existed, now exist, or may exist hereafter, accruing, occurring
or arising from or in any way related to the Employment Agreement, Williams’
employment or engagement in any manner by the Company, the terms and conditions
of the Employment Agreement or other such employment or engagement, the
termination of the Employment Agreement or Williams’ separation from said
employment or engagement whether based on tort, contract, statute, insurance
policy, or other theory of recovery, and whether for compensatory or punitive
damages, including attorneys’ fees and costs, as well as statutory sanctions,
which the Parties ever had against each other or now have against each other
including, but not limited to, defamation, intentional infliction of emotional
distress, negligent hiring or supervision, conversion, interference with
contract, impairment of economic opportunity, breach of promise, conspiracy,
fiduciary breach, declaratory relief, prohibited transactions, fraud,
misrepresentation, and retaliation, wrongful or constructive discharge, or
arising under any federal, state or local employee benefit, wage payment, labor
relations, equal employment, civil, human or employee rights, whistleblower or
fair employment practices law, statute or regulation and/or discrimination on
the basis of sex, disability or perceived disability (including the Americans
With Disabilities Act of 1990), record or history of disability, race, color,
religion, national origin (including Title VII of the Civil Rights Act of 1964,
as amended), ancestry, age (including the Age Discrimination in Employment Act
of 1967 (29 U.S.C. § 621, et seq.), and the Older Workers Benefit Protection
Act), creed, handicap, citizenship, ethnic characteristics, sexual orientation,
genetic predisposition or carrier status, gender or marital status, veteran
status, the Sarbanes-Oxley Act, the Employee Retirement Income Security Act, the
California Fair Employment and Housing Act and any other federal, state or local
laws or to claims for attorneys’ fees, expenses or costs with respect to any of
the above.  Williams acknowledges that he did not suffer any workers’
compensation injury while employed with Company, and agrees not to bring or
pursue any further claim or claims for Workers’ Compensation arising from his
employment with Company.  Williams hereby agrees to waive any right to recover
money damages or other relief personal to Williams in any charge, complaint or
lawsuit filed by Williams or by anyone else on Williams’ behalf.  All of the
foregoing released matters are hereinafter collectively referred to as the
“Released Matters.”
 
(b)           The releases set forth above are not intended to, and shall not,
extend to or otherwise release or discharge any rights, privileges, benefits,
duties, or obligations of any of the Parties by reason of, or otherwise arising
under, (i) this Agreement, (ii) the Surviving Obligations, (iii) Williams vested
stock options, (iv) Williams’ right to seek indemnification from the Company
pursuant to any existing indemnification agreement with the Company, or (v) with
regard to any director and officer insurance policy covering Williams.
 
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(c)           The Parties, and each of them, acknowledge that they may hereafter
discover facts different from, or in addition to, those which they now believe
to be true with respect to any and all of the Released Matters, including
without limitation, unknown or unanticipated claims which, if known or
anticipated, on the date of execution of this Agreement, might have materially
affected such Party's decision to execute this Agreement.  Each of the Parties
acknowledges and agrees that by reason of the mutual general release set forth
above, they are assuming the risk of such unknown claims and agree that this
Agreement shall apply thereto.  Nevertheless, the Parties hereto, and each of
them, hereby agree that each of the releases set forth above shall be and remain
effective in all respects, notwithstanding the discovery of such different or
additional facts.
 
3.           Civil Code Section 1542.  The Parties represent that they are not
aware of any disputes or causes of action they have other than the disputes and
causes of action that are released by this Agreement.  The Parties expressly
agree and understand that this Agreement is a full and final release of all
claims of every nature and kind, known or unknown, suspected or unsuspected,
past, present, or future, of all Released Matters, and execution of this
Agreement by the Parties operates as a complete bar and defense against any and
all claims that may be made by the Parties with regard to the Released Matters,
and that, should any proceeding be instituted with respect to matters released
herein, this Agreement shall be deemed in full and complete accord, satisfaction
and settlement of any such released matter and sufficient basis for its
dismissal.  The Parties have read and fully understand the statutory language of
section 1542 of the California Civil Code and on that basis expressly and
specifically waive all rights under said statute or any analogous state law or
federal law or regulation.  Section 1542 of the California Civil Code reads as
follows:

 
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

           The Parties expressly waive any rights they may have under it, as
well as under any other statute or common law principles of similar
effect.  Each Party represents further that as of the date of execution of this
Agreement, he or it has not brought any claims of the type released against any
of the released parties set forth above.

 
4.           Confidentiality of Settlement.  Williams agrees to maintain in
confidence the existence of this Agreement, the contents and terms of this
Agreement, and the consideration for this Agreement (hereinafter collectively
referred to as “Settlement Information”).  Williams agrees to take every
reasonable precaution to prevent disclosure of any Settlement Information to
third parties, and agrees that he will not make statements or otherwise permit
or cause any publicity, directly or indirectly, concerning any Settlement
Information to be released.  Williams agrees and acknowledges that the Company
will be required to publicly announce Williams’ separation from the Company.
 
 
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5.           Confidential Information.  Williams acknowledges and agrees that in
the course of his employment or engagement with the Company, he has had access
to and/or made use of certain confidential information relating to the business
activities of the Company.  Such confidential information includes, but is not
limited to, technical information (including, but not limited to processes,
know-how, methods, proprietary testing data, plans, specifications, formulas,
inventions, electronics, computer programs, computer codes, research and
development projects, and machines); business strategies; financial data and
results; pricing data; the contents of current or future client accounts and
client preferences; key persons to contact with regard to client accounts and
client needs; market surveys and research data; and contractual agreements
between the Company and clients and other persons or entities, compilations of
information and records that are owned or validly possessed by the Company or
are used in the operation of the Company’s business and other information that
is kept confidential by the Company.  Williams agrees that he will not disclose
any such confidential information, directly or indirectly, or use any of it in
any way whatsoever.  Williams further represents and agrees that all files,
computer programs, records, documents, lists, specifications, and similar items
relating to the business activities of the Company, including any and all copies
and summaries, whether prepared by Williams or otherwise coming into Williams’
possession, custody or control, are property of the Company and have been or
will be returned immediately by him to the Company and that he will not remove
from the premises of the Company any such property or information or any other
property, information, electronic or other otherwise, of the Company.  Williams
hereby represents and warrants that he has returned all Company property in his
possession and or under his control and that the Company shall not be obligated
to pay the settlement consideration due under Section 1 hereof until the return
of all such property.
 
6.           Warranty Of Non-Assignment.  Each of the Parties hereby warrants,
represents and agrees that he, she or it is the sole and lawful owner of all
right, title and interest in and to all of the respective Released Matters which
are referred to in the mutual general release set forth above and that he, she
or it has not heretofore voluntarily, by operation of law or otherwise, assigned
or transferred or purported to assign or transfer to any person whomsoever any
such Released Matters, or any part or portion thereof.  Each of the Parties
agrees to indemnify and hold each of the other Parties harmless from any claim,
demand, damage, liability, action or cause of action based on or connected with
or arising in any manner out of any such assignment or transfer.
 
7.           No Admission of Liability.  It is specifically understood and
agreed that this Agreement constitutes a complete compromise and settlement of
disputed claims, and that neither the execution of this Agreement nor the
payment of any monies hereunder is to be deemed an admission of liability by the
Parties or any of them.  Each Party acknowledges that this Agreement is not, and
cannot be construed as, any admission of fault by the other Parties.
 
8.           Equitable Remedies.  Williams hereby acknowledge that the
provisions of Section 6 hereof are reasonable and necessary to protect the
legitimate interests of the Company and that any violation of such provisions
would result in irreparable injury to the Company.  In the event of a violation
of the provisions of Section 6 hereof, Williams agrees that the Company shall,
in addition to all other remedies available to it, be entitled to equitable
relief by way of injunction and any other legal or equitable remedies.
 
9.           Representations and Warranties.  The Company, on the one hand, and
Williams, on the other hand, jointly and severally, expressly represents and
warrants to the other that:
 
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(a)           he or it has the power, capacity and authority to execute, deliver
and perform this Agreement and to consummate the transactions contemplated
hereby and on behalf of all whom might claim through him or it to bind them to
the terms and conditions of this Agreement;
 
(b)           the execution and delivery by he or it of this Agreement, and the
performance by he or it of his or its obligations hereunder, have been duly and
validly authorized by all action on his or its part;
 
(c)           this Agreement has been duly and validly executed and delivered by
his or it and constitutes his or its legal, valid and binding agreement,
enforceable in accordance with its terms, except as such enforceability may be
limited by bankruptcy, moratorium, insolvency, reorganization, fraudulent
conveyance or other laws affecting the enforcement of creditors’ rights
generally or by general equitable principles, including without limitation,
those limiting the availability of specific performance, injunctive relief and
other equitable remedies and those providing for equitable defenses;
 
(d)           he or it is not entering into this Agreement in reliance upon any
express or implied representation, agreement, or understanding of any kind by
the other, or any person representing (or purporting to represent) each other,
or any other person, except as expressly stated in this Agreement and the other
Parties shall not directly or indirectly be liable or responsible for the truth,
accuracy, or enforcement of any representations, agreements, or understandings
which may now or hereafter exist between any of the Parties and any other
Non-Party person and/or entity; and
 
(e)           he or it has signed the Agreement voluntarily, without any duress
or undue influence on the part, or on behalf, of any Party.
 
10.           Miscellaneous Provisions
 
(a)           Future Suits.  If any Party hereafter commences any action or
proceeding against the other based upon any of the claims released by this
Agreement, the provisions of this Agreement shall be deemed breached and such
non-breaching Party shall be entitled to recover attorneys' fees and other costs
of suit sustained by him, her or it in defending such action or proceeding and
shall be indemnified by the other for such fees and costs.  This Agreement may
be pleaded by such non-breaching Party as a defense, counterclaim or cross-claim
in any such action or proceeding.
 
(b)           No Disparagement.  Each of the Parties agrees that he or it shall
not knowingly and intentionally make disparaging and damaging comments about the
other, including his or its officers, directors, employees, investors,
shareholders, administrators, affiliates, divisions, subsidiaries and
predecessor and successor corporations, as applicable.
 
(c)           Survival.  All representations, warranties and covenants of the
Parties shall survive the execution of this Agreement.
 
(d)           No Waiver.  This Agreement (including all exhibits thereto) may
not be changed, waived, discharged, or terminated orally or in writing, except
by a writing signed by the Parties and the observance of any such term may be
waived (either generally or in a particular instance either retroactively or
prospectively) by a writing signed by the Parties against whom such waiver is to
be asserted.
 
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(e)           No Precedential Value.  The settlement reflected in this Agreement
shall be without precedential value.  It shall not be used as evidence, or in
any other manner, in any court or other dispute resolution proceeding, to
create, prove, or interpret the obligations of the Parties to each other or to
any other person or entity.
 
(f)           Further Assurances.  Each of the Parties hereto agrees that he or
it will, from time to time after the date of this Agreement, execute and deliver
such other certificates, documents and instruments and take such other action as
may be reasonably requested by the other Parties to carry out the actions and
transactions contemplated by this Agreement.
 
(g)           Entire Agreement.  This Agreement constitutes the entire
agreement by and among the Parties, and any prior or contemporaneous agreements,
understandings, promises, representations, warranties and covenants, whether
written or oral, or whether expressed, implied or apparent are hereby deemed
merged into and made a part of this Agreement.  The terms of this Agreement are
contractual and not merely a recital.
 
(h)           Successors and Assigns.  This Agreement shall bind, and inure to
the benefit of, the respective directors, officers, shareholders, employees,
agents, partners, representatives, attorneys, parent and affiliated
corporations, subsidiaries, divisions, insurers and reinsurers, joint venturers,
predecessors, successors, beneficiaries, grantees, vendees, transferees,
assigns, heirs, executors, administrators, trustees, and estates of each of the
Parties, as applicable.
 
(i)           Expenses; Taxes.  Each Party shall bear his or its own costs and
expenses relating to the transactions contemplated in this Agreement including,
without limitation, costs and expenses of his, her or its respective
counsel.  Williams agrees that any tax that may be payable on the consideration
received by Williams pursuant to this Agreement is the sole responsibility of
Williams.  Williams agrees to indemnify, defend, and hold Company harmless from
and against any liability or claim for any tax or other governmental
contribution or any penalty or interest thereon that may be incurred or demanded
as a result of the receipt of the consideration provided for in this Agreement.
 
(j)           Counterparts.  This Agreement may be executed in any number of
counterparts by the Parties hereto, each of which shall constitute an original
but all together shall constitute but one and the same instrument.  Confirmation
of execution by telecopy or telefax of a facsimile signature page shall be
binding upon that Party so confirming.
 
(k)           No Other Contracts.  There are no other contracts, instruments,
documents, agreements, understandings, facts, or rights of any person which
could alter the literal meaning or effect of this Agreement.
 
(l)           No Other Conditions.  There are no conditions precedent or
subsequent to the obligations of or release or waivers by the Parties, except as
expressly stated in this Agreement.
 
(m)           Governing Law.  This Agreement shall be construed in accordance
with the laws of the State of California without regard to conflict of laws
principles.  If any action is filed to enforce or interpret any of the terms or
provisions of this Agreement or any of the other documents executed in
connection with this Agreement, or otherwise, the Parties agree that the
appropriate venue shall be a state or federal court of competent jurisdiction
located in Los Angeles County, State of California.
 
(n)           Construction.  This Agreement has been negotiated at arm’s length
and between and among persons or entities sophisticated and knowledgeable in the
matters dealt with in this Agreement.  In addition, this Agreement was drafted
by experienced and knowledgeable legal counsel for each of the Parties.  The
provisions of this Agreement shall be interpreted in a reasonable manner to
effect the purposes of the Parties and this Agreement.  
 
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(o)           Notices.  All notices, demands, consents, approvals, requests and
other communications required or permitted hereby shall be in writing and shall
be deemed to have been duly and sufficiently given only if (a) personally
delivered with proof of delivery thereof (any notice or communication so
delivered being deemed to have been received at the time so delivered), or (b)
sent by Federal Express (or other similar overnight courier) (any notice or
communication so delivered being deemed to have been received only when
delivered), (c) sent by telecopier or facsimile (any notice or communication so
delivered being deemed to have been received if a copy is also delivered by one
of the other means of delivery and shall be deemed to have been received (i) on
the business day so sent, if so sent prior to 4:00 p.m. (based upon the
recipient's time) of the business day so sent, and (ii) on the business day
following the day so sent, if so sent on a non-business day or on or after 4:00
p.m. (based upon the recipient's time) of the business day so sent (unless
actually received by the addressee on the day so sent)), or (d) sent by United
States registered or certified mail, postage prepaid, at a post office regularly
maintained by the United States Postal Service (any notice or communication so
sent being deemed to have been received only when delivered), in any such case
addressed to the respective Parties as follows:
 
If to Williams:
David Williams
2114 Roxanne Ave
Long Beach, CA  90815
Facsimile:  ________________
 
with copy to:
Thomas M. Ffrench, Partner
Horizon Law Group, LLP
1920 Main Street Suite 210
Irvine, CA  92614
Facsimile:  949-261-2515
   
If to the Company:
Fluid Media Networks, Inc.
5813-A Uplander Way
Culver City, California
Attention:  Justin F. Beckett
Facsimile: (310) 665-0735
 
With copy to (which copy shall not constitute notice):
Nixon Peabody, LLP
Gas Company Tower
555 West Fifth Street, 46th Floor
Los Angeles, California 90013
Attn:  Jenny C. C. Chen-Drake
Fax:  (213) 629-6001

 
or to such other address or party as the other Parties may have furnished to the
other in writing in accordance herewith, except that notices of change of
address or addresses shall only be effective upon receipt.
 
(p)           Revocation.  Williams acknowledges that he has twenty-one (21)
days within which to consider this Agreement.  If Williams signs this Agreement
prior to the expiration of the 21-day period, Williams acknowledges and agrees
that he had adequate time and opportunity to fully consider this Agreement and
to knowingly waive the full 21-day period.  Williams understands that he may
revoke this Agreement upon written notice to the Company within seven (7) days
after execution of it by sending a written revocation of his intent to revoke
via U.S. mail, or hand delivery within seven (7) days of execution of this
Agreement.
 
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(q)           Voluntary Execution of Agreement.  This Agreement is executed
voluntarily and without any duress or undue influence on the part or behalf of
the Parties hereto, with the full intent of releasing all of the Released
Matters.  Each of the Parties acknowledge for itself that: (a)  it has read this
Agreement; (b)  it has been represented in the preparation, negotiation, and
execution of this Agreement by legal counsel of its own choice or that it has
voluntarily declined to seek such counsel; (c)  it understands the terms and
consequences of this Agreement and of the release it contains; and (d)  it is
fully aware of the legal and binding effect of this Agreement.
 

[Signature Page Follows]
 
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IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective
dates set forth below.

 
FLUID MEDIA NETWORKS, INC.
   
Date: September 21, 2007
By: /s/ Justin F. Beckett
 
Justin F. Beckett
 
President and CEO
         
DAVID J. WILLIAMS, an individual
   
Date: September 21, 2007
By: /s/ David J. Williams
   

 
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