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 Ron Straight  ("Straight").
RWNT and Straight shall be referred to collectively herein as the "Parties."

                                   WITNESSETH:

         WHEREAS,   Straight   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 Straight 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
Straight  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  Straight  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,  Straight,  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 Straight 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 Straight.  In exchange
for  Straight'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  Straight  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


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(including  attorneys'  fees and  costs),  of every  kind and  nature,  known or
unknown,  which RWNT ever had or now has  against  Straight  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.  Straight has knowledge
and  experience  in  financial  and  business  matters  so as to be  capable  of
evaluating the merits and risks of Straight's  investment in the Stock. Straight
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.  Straight  has  considered  carefully  the  risks  attendant  to  an
investment in RWNT and that, as a consequence of such risks, Straight could lose
Straight's entire investment in RWNT.

            4.2 Investment Intent.  Straight 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 Straight 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)  Straight  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.  Straight is an  "Accredited  Investor" as
that  term  is  defined  by Rule  501 of  Regulation  D  promulgated  under  the
Securities Act.


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            4.4 Disclosure.  Straight has reviewed  information provided by RWNT
in connection with the decision to acquire the Stock. RWNT has provided Straight
with all the  information  that Straight has  requested in  connection  with the
decision to acquire the Stock.  Straight  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 Straight.

            4.5  Restrictions.  Straight  understands  that  it  must  bear  the
economic risk of his  investment in RWNT and the Stock for an indefinite  period
of time. Straight 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 Straight  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  Straight's  behalf  or to assist
Straight in complying with any exemption from  registration,  and (iv) RWNT will
rely upon the  representations and warranties made by Straight 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.  Straight  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, Straight has furnished an opinion of counsel  satisfactory
to RWNT that such transfer is so exempt.  Straight  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 Straight of its  intention to do
so. If Straight  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 Straight 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  Straight 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;



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            (b) second,  the Stock held by Straight  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 Straight,
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 Straight 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.


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            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 Straight:         ________________________

                                          ________________________

                                          ________________________



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            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]


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         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:  Ron Straight