SETTLEMENT AGREEMENT AND MUTUAL RELEASE

         This  Settlement  Agreement and Mutual  Release (this  "Agreement")  is
entered  into this 14th day of January  2004,  by and between  Reality  Wireless
Networks, Inc., a Nevada corporation ("RWNT"), and Bob Madia ("Madia").
RWNT and Madia shall be referred to collectively herein as the "Parties."

                                   WITNESSETH:

         WHEREAS, Madia invested a total of $10,000 with RWNT (the "Investment")
and was to receive stock in RWNT in exchange for the Investment (the "Investment
Stock").

         WHEREAS,  RWNT and Madia  desire to  amicably  settle,  compromise  and
resolve any and all controversies and claims between  themselves with respect to
the  Investment  and the  Investment  Stock to avoid the burden  and  expense of
arbitration and/or litigation.

         WHEREAS,  in connection  with the resolution of such matters,  RWNT and
Madia shall provide each other with a full release and  settlement in accordance
with the terms hereinafter set forth.

         NOW, THEREFORE, it is the desire of the Parties to state in writing the
details of their  agreements.  For money paid and  received  and other  valuable
consideration between the Parties, it is mutually agreed as follows:

         1.  Settlement  of Claims  against and Release of RWNT. In exchange for
RWNT' issuing to Madia  1,020,000  shares of common stock of RWNT (the "Stock"),
which  Stock  shall be  issued  after  receipt  by RWNT of this  fully  executed
Agreement,  Madia, on behalf of himself, his employees,  affiliates and assigns,
hereby  fully,  forever,  irrevocably  and  unconditionally  settles,  releases,
remises and discharges RWNT and each of its former, current and future officers,
directors, stockholders,  attorneys, agents, spouses, administrators,  employees
and all persons acting by, through,  under, or in concert with them from any and
all claims,  charges,  complaints,  demands,  actions,  causes of action, suits,
rights, debts, sums of money, costs, accounts, reckonings, covenants, contracts,
agreements,  promises,  doings,  omissions,  damages,  executions,  obligations,
liabilities,  and expenses (including  attorneys' fees and costs), of every kind
and  nature,  known or unknown,  which  Madia ever had or now has against  RWNT,
including,  but not limited to, all claims arising out of the Investment and the
Investment Stock, all common law claims  including,  but not limited to, actions
in tort, defamation,  breach of contract, and any claims under federal, state or
local statutes or ordinances not expressly referred to above.

         2.  Settlement of Claims against and Release of Madia.  In exchange for
Madia's settlement of any and all claims against RWNT and release of RWNT, RWNT,
on behalf of itself, its officers, directors, employees, affiliates and assigns,
hereby  fully,  forever,  irrevocably  and  unconditionally  settles,  releases,
remises  and  discharges  Madia from any and all  claims,  charges,  complaints,
demands,  actions, causes of action, suits, rights, debts, sums of money, costs,
accounts,  reckonings,   covenants,  contracts,  agreements,  promises,  doings,
omissions,   damages,   executions,   obligations,   liabilities,  and  expenses



<PAGE>


(including  attorneys'  fees and  costs),  of every  kind and  nature,  known or
unknown, which RWNT ever had or now has against Madia including, but not limited
to, all claims  arising out of the  Investment  and the  Investment  Stock,  all
common law claims  including,  but not limited to, actions in tort,  defamation,
breach of contract  and any claims  under  federal,  state or local  statutes or
ordinances not expressly referred to above.

         3. Representations and Warranties of the Parties.

                3.1 Authority.  Each of the Parties has full power and authority
to enter  into this  Agreement.  All  action on the part of each of the  Parties
necessary for the authorization,  execution and delivery of this Agreement,  the
performance of all obligations of each of the Parties  hereunder has been taken,
and each of the Parties has all requisite power and authority to enter into this
Agreement.

                3.2  Consents and  Approvals;  No Conflict.  The  execution  and
delivery of this Agreement by each of the Parties does not, and the  performance
of this  Agreement  by the  Parties  will not,  require any  consent,  approval,
authorization  or other  action  by,  or filing  with or  notification  to,  any
governmental or regulatory authority. The execution, delivery and performance of
this  Agreement by the Parties does not (i) conflict with or violate the charter
or by-laws,  partnership or other governing  documents of any of the Parties, or
(ii) conflict with or violate any law, rule, regulation,  order, writ, judgment,
injunction,  decree,  determination,  contract or award applicable to any of the
Parties.

                3.3 Effectiveness of Representations and Warranties. Each ______
of ______ the ______ Parties'  representations and warranties  contained in this
Agreement are true and correct.

         4. Investment.

                4.1 Knowledge of Investment  and its Risks.  Madia has knowledge
and  experience  in  financial  and  business  matters  so as to be  capable  of
evaluating  the  merits  and risks of Madia's  investment  in the  Stock.  Madia
understands  that an  investment  in RWNT  represents  a high degree of risk and
there  is no  assurance  that  the  business  or  operations  of  RWNT  will  be
successful.  Madia has considered carefully the risks attendant to an investment
in RWNT and that,  as a  consequence  of such risks,  Madia  could lose  Madia's
entire investment in RWNT.

                4.2 Investment Intent. Madia hereby represents and warrants that
(i) it is acquiring the Stock for investment  for its own account,  and not as a
nominee or agent and not with a view to the resale or distribution of all or any
part of the Stock, and Madia has no present  intention of selling,  granting any
participation  in or otherwise  distributing any of the Stock within the meaning
of the Securities Act of 1933, as amended (the "Securities  Act") and (ii) Madia
does not have any contracts, understandings, agreements or arrangements with any
person and/or entity to sell,  transfer or grant  participations  to such person
and/or entity, with respect to any of the Stock.

                4.3 Accredited  Investor.  Madia is an "Accredited  Investor" as
that  term  is  defined  by Rule  501 of  Regulation  D  promulgated  under  the
Securities Act.


<PAGE>

                4.4 Disclosure.  Madia has reviewed information provided by RWNT
in connection  with the decision to acquire the Stock.  RWNT has provided  Madia
with all the  information  that  Madia  has  requested  in  connection  with the
decision  to acquire  the Stock.  Madia  further  represents  that he has had an
opportunity  to ask  questions  and  receive  answers  from RWNT  regarding  the
business,  properties,  prospects  and  financial  condition  of RWNT.  All such
questions have been answered to the full satisfaction of Madia.

                4.5  Restrictions.  Madia  understands  that  it must  bear  the
economic risk of his  investment in RWNT and the Stock for an indefinite  period
of time. Madia further understands that (i) neither the offering nor the sale of
the Stock has been registered  under the Securities Act or any applicable  State
securities  laws  ("State  Acts")  or  securities   laws  of  other   applicable
jurisdictions in reliance upon exemptions from the registration  requirements of
such laws, (ii) the Stock must be held by Madia indefinitely  unless the sale or
transfer  thereof is  subsequently  registered  under the Securities Act and any
applicable  State Acts, or an exemption from such  registration  requirements is
available,  (iii) except as  otherwise  provided in Section 4.7 and that certain
Registration  Rights  Agreement  attached  hereto as Exhibit C, RWNT is under no
obligation to register any of the Stock on Madia's  behalf or to assist Madia in
complying with any exemption from registration, and (iv) RWNT will rely upon the
representations  and  warranties  made by  Madia in this  Agreement  in order to
establish such exemptions from the  registration  requirements of the Securities
Act  and any  applicable  State  Acts or  securities  laws of  other  applicable
jurisdictions.

                4.6  Transfer  Restrictions.  Madia will not transfer any of the
Stock unless such transfer is exempt from registration  under the Securities Act
and such State Acts and securities laws of other applicable jurisdictions,  and,
if requested by RWNT, Madia has furnished an opinion of counsel  satisfactory to
RWNT that such transfer is so exempt.  Madia understands and agrees that (i) the
certificates  evidencing the Stock will bear appropriate legends indicating such
transfer  restrictions placed upon the Stock, (ii) RWNT shall have no obligation
to  honor  transfers  of  any  of  the  Stock  in  violation  of  such  transfer
restrictions, and (iii) RWNT shall be entitled to instruct any transfer agent or
agents for the securities of RWNT to refuse to honor such transfers.

                4.7. Piggy Back  Registration  of the Stock. If RWNT proposes to
register any of its securities  under the Securities Act (other than pursuant to
a Form S-4, Form S-8 or any other  successor form of limited  purpose),  it will
give written  notice by  registered  mail at least thirty (30) days prior to the
filing of each such  registration  statement to Madia of its intention to do so.
If Madia  notifies  RWNT within  twenty (20)  business days after receipt of any
such  notice  of its  desire  to  include  any of the  Stock  in  such  proposed
registration statement, RWNT shall afford Madia the opportunity to have any such
amount of the Stock  registered  under such  registration  statement,  provided,
however,  that if the  managing  underwriter  advises  RWNT in writing  that the
inclusion of any such amount of the Stock Madia has proposed be included in such
registration  statement  would  interfere with the  successful  marketing of the
securities proposed to be registered by RWNT, then the securities to be included
in such registration statement shall be included in the following order:

                   (a) first,  the  securities  proposed  to be included in such
registration  by RWNT or, if such  registration  is for  securities of specified
security holders of RWNT, by such holders;


<PAGE>

                   (b) second,  the Stock held by Madia requested to be included
in such registration; and

                   (c) third,  all other holders of common stock  entitled to be
included in such registration  statement (pro rata among the holders  requesting
such  registration  based upon the number of shares of common stock requested by
each such holder to be registered).

                   4.7.1.  Notwithstanding  the  provisions of this Section 4.7,
RWNT shall have the right at any time after it shall have given  written  notice
pursuant to this  Section  4.7  (irrespective  of whether a written  request for
inclusion  of any amount of the Stock shall have been made) to elect not to file
any such  proposed  registration  statement  or to  withdraw  the same after the
filing but prior to the effective date thereof.

                   4.7.2.  In addition,  RWNT shall  furnish  without  charge to
Madia,   promptly   after  filing  thereof  with  the  Securities  and  Exchange
Commission,  at least one (1) copy of the  registration  statement  described in
Section 4.7, and each  amendment  thereto or each amendment or supplement to the
prospectus included therein,  including all financial  statements and schedules,
documents incorporated by reference therein and if Madia so requests in writing,
all exhibits thereto.

                   4.7.3. Registration of the Stock pursuant to the registration
statement  described  in this  Section 4.7 shall be governed by this Section 4.7
and that certain Registration Rights Agreement attached hereto as Exhibit C.

                   4.7.4. RWNT shall use its best efforts to file a registration
statement within six (6) months from the date of this Agreement.

         5. Miscellaneous Provisions.

                5.1  This  Agreement  constitutes  the  complete  and  exclusive
agreement of the Parties.

                5.2 The Parties  understand  that this  Agreement  constitutes a
compromise  and  settlement of disputed  claims.  No action taken by the Parties
hereto,  or any of them,  either previously or in connection with this Agreement
shall be deemed to be (a) an  admission  of the truth or  falsity  of any claims
heretofore  made or (b) an  acknowledgement  or admission by either party of any
fault or liability whatsoever to the other Party or to any third party.

                5.3 Each of the Parties declares and represents that no promise,
inducement or agreement which is not specifically provided in this Agreement has
been  made by any Party to this  Agreement;  that this  Agreement  contains  the
entire agreement among the Parties;  and that the terms of this Agreement cannot
be modified except in writing signed by all Parties hereto.

                5.4 Each of the  Parties  agrees not to  disclose  to or discuss
with any person,  except as where such  disclosure may be required by law, court
order,  government  agency  request or subpoena,  or in connection  with a legal
proceeding,  the substance of this  Agreement or matters  relating to any act or
omission of any Party in connection with any other Party.


<PAGE>


                5.5 This Agreement  shall be construed,  interpreted and applied
in accordance  with the  substantive  laws of the State of  Washington,  without
reference to its choice of law rules.

                5.6 Any dispute between the Parties pertaining to this Agreement
shall  be  resolved  through  binding  arbitration  conducted  by  the  American
Arbitration Association. The Parties agree that any arbitration proceeding shall
be conducted in Seattle,  Washington,  and consent to exclusive jurisdiction and
venue there. The award of the arbitrator(s) shall be final and binding,  and the
Parties waive any right to appeal the arbitral award, to the extent that a right
to appeal may be lawfully waived.  Each Party retains the right to seek judicial
assistance  (a) to compel  arbitration,  (b) to  obtain  injunctive  relief  and
interim  measures  of  protection  pending  arbitration,  and (c) to enforce any
decision of the arbitrator(s), including but not limited to the final award.

                5.7 No Party may assign any of its rights  under this  Agreement
without the prior consent of the other Parties,  which shall not be unreasonably
withheld.  Subject to the preceding sentence,  this Agreement shall apply to, be
binding in all respects  upon,  and inure to the benefit of the  successors  and
permitted  assigns of the  Parties.  Nothing  expressed  or  referred to in this
Agreement  shall be  construed to give any person other than the Parties to this
Agreement any legal or equitable right,  remedy,  or claim under or with respect
to this Agreement or any provision of this Agreement.  This Agreement and all of
its  provisions  and  conditions  are for the sole and exclusive  benefit of the
Parties to this Agreement and their successors and assigns.

                5.8 All notices,  demands and communications  hereunder shall be
in writing and  personally  delivered or sent by first class mail,  certified or
registered,  postage prepaid, return receipt requested, addressed to the parties
at the  addresses  below set forth,  or at such other address as any Party shall
have  furnished  to the other party in writing,  or shall be given by  telegram,
telex, facsimile  transmission,  overnight courier or hand delivery, in any case
to be effective  when received,  provided that actual  receipt shall  constitute
notice regardless of method of delivery.

                  If to RWNT:          Reality Wireless Networks, Inc.
                                       120 W. Campbell Ave., Suite E
                                       Campbell, California 95008

                  With a copy to:      David M. Otto
                                       The Otto Law Group, PLLC
                                       900 Fourth Ave., Suite 3140
                                       Seattle, WA 98164

                  If to Madia:         ________________________

                                       ________________________

                                       ________________________



<PAGE>


                5.9  If  any  term  or  provision  of  this   Agreement  or  any
application  thereof shall be invalid or  unenforceable,  such term or provision
shall be deemed to be severed and the remainder of this  Agreement and any other
application  of such term or  provision  shall not be  affected  or  invalidated
thereby.

                5.10 This  Agreement  may be executed by facsimile and in one or
more counterparts, all of which taken together shall constitute one and the same
instrument.

                            [signature page follows]



<PAGE>


         IN WITNESS WHEREOF,  the Parties have executed this Agreement as of the
date first above written.


                                      REALITY WIRELESS NETWORKS, INC.




                                      By:  ________________________________
                                           Name:  Victor Romero
                                           Title:  President







                                       By:  ________________________________
                                            Name:  Bob Madia