Document:

Exhibit 10.45

                          REGISTRATION RIGHTS AGREEMENT

        REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"),  dated as of ________,
2001, by and between  TSET,  INC. a Nevada  corporation,  (the  "COMPANY"),  and
FUSION CAPITAL FUND II, LLC (together with it permitted  assigns,  the "BUYER").
Capitalized  terms used herein and not otherwise  defined  herein shall have the
respective  meanings  set forth in the Common  Stock  Purchase  Agreement by and
between the parties  hereto  dated as of June 19,  2001 (as  amended,  restated,
supplemented or otherwise modified from time to time, the "PURCHASE AGREEMENT").

                                    WHEREAS:

        A.     The  Company  has  agreed,  upon the  terms  and  subject  to the
conditions  of the Purchase  Agreement,  to issue to the Buyer up to Ten Million
Dollars  ($10,000,000) of the Company's common stock, par value $0.001 per share
(the "COMMON STOCK") (the "PURCHASE Shares"); and

        B.     In connection with the Purchase Agreement, the Company has issued
to the Buyer 640,000 shares of its Common Stock (the "Commitment Shares"); and

        C.     To induce the Buyer to enter  into the  Purchase  Agreement,  the
Company has agreed to provide certain  registration  rights under the Securities
Act of 1933,  as  amended,  and the rules  and  regulations  thereunder,  or any
similar successor statute  (collectively,  the "1933 ACT"), and applicable state
securities laws.

        NOW,  THEREFORE,  in  consideration  of  the  premises  and  the  mutual
covenants  contained  herein  and other  good and  valuable  consideration,  the
receipt and  sufficiency of which are hereby  acknowledged,  the Company and the
Buyer hereby agree as follows:

        1.     DEFINITIONS.
               -----------

               As used in this  Agreement,  the  following  terms shall have the
following meanings:

               a.   "INVESTOR"  means the  Buyer,  any  transferee  or  assignee
thereof to whom a Buyer  assigns its rights under this  Agreement and who agrees
to become bound by the provisions of this Agreement in accordance with Section 9
and any transferee or assignee  thereof to whom a transferee or assignee assigns
its rights under this Agreement and who agrees to become bound by the provisions
of this Agreement in accordance with Section 9.

               b.   "PERSON"   means  any   person  or  entity   including   any
corporation,  a limited liability  company,  an association,  a partnership,  an
organization, a business, an individual, a governmental or political subdivision
thereof or a governmental agency.

               c.   "REGISTER,"  "REGISTERED,"  and  "REGISTRATION"  refer  to a
registration   effected  by  preparing  and  filing  one  or  more  registration
statements of the Company in  compliance  with the 1933 Act and pursuant to Rule
415 under the 1933 Act or any successor rule  providing for offering  securities
on a  continuous  basis  ("RULE  415"),  and  the  declaration  or  ordering  of
effectiveness of such registration  statement(s) by the United States Securities
and Exchange Commission (the "SEC").

<PAGE>

               d.   "REGISTRABLE SECURITIES" means (1) the Purchase Shares which
have been, or which may from time to time be, issued or issuable upon  purchases
of the  Available  Amount under the Purchase  Agreement  (without  regard to any
limitation or restriction on purchases), and (2) the Commitment Shares issued to
the  Investor at or prior to the  Commencement  and any shares of capital  stock
issued or issuable with respect to the Purchase Shares, the Commitment Shares or
the  Purchase  Agreement  as a  result  of  any  stock  split,  stock  dividend,
recapitalization,  exchange or similar event or otherwise, without regard to any
limitation on purchases under the Purchase Agreement.

               e.   "REGISTRATION STATEMENT" means the registration statement of
the Company which the Company has agreed to file pursuant to Section 4(a) of the
Purchase Agreement with respect to the sale of the Registrable Securities.

        2.     REGISTRATION.
               ------------

               a.   MANDATORY  REGISTRATION.  The Company shall use best efforts
to keep the Registration  Statement  effective  pursuant to Rule 415 promulgated
under the 1933 Act and available for sales of all of the Registrable  Securities
at all times until the earlier of (i) the date as of which the Investor may sell
all of the Registrable  Securities without  restriction  pursuant to Rule 144(k)
promulgated under the 1933 Act (or successor  thereto) or (ii) the date on which
(A) the Investor shall have sold all the Registrable Securities and no Available
Amount remains under the Purchase  Agreement (the  "REGISTRATION  PERIOD").  The
Registration  Statement  (including any  amendments or  supplements  thereto and
prospectuses  contained  therein)  shall not contain any untrue  statement  of a
material fact or omit to state a material fact required to be stated therein, or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading.

               b.   RULE 424  PROSPECTUS.  The  Company  shall,  as  required by
applicable securities regulations, from time to time file with the SEC, pursuant
to Rule 424  promulgated  under  the 1933 Act,  the  prospectus  and  prospectus
supplements,  if any,  to be used in  connection  with sales of the  Registrable
Securities under the Registration Statement.  The Investor and its counsel shall
have a reasonable  opportunity to review and comment upon such prospectus  prior
to its filing with the SEC. The Investor shall use its  reasonable  best efforts
to comment  upon such  prospectus  within one (1)  Trading Day from the date the
Investor receives the final version of such prospectus.

               c.   SUFFICIENT  NUMBER  OF SHARES  REGISTERED.  In the event the
number of shares available under the  Registration  Statement is insufficient to
cover  all  of  the  Registrable   Securities,   the  Company  shall  amend  the
Registration Statement or file a new registration statement (a "NEW REGISTRATION
STATEMENT"),  so as to  cover  all of  such  Registrable  Securities  as soon as
practicable,  but in any event not later  than ten (10)  Trading  Days after the
necessity  therefor arises.  The Company shall use it best efforts to cause such
amendment  and/or New  Registration  Statement  to become  effective  as soon as
practicable  following  the filing  thereof.  The Investor and its counsel shall
have a  reasonable  opportunity  to review and comment  upon any such  amendment
and/or New Registration Statement prior to its filing with the SEC. The Investor
shall use its reasonable best efforts to comment upon any such amendment  and/or
New  Registration  Statement  within  two (2)  Trading  Days  from  the date the
Investor   receives  the  final  version  of  any  such  amendment   and/or  New
Registration Statement.

                                       -2-
<PAGE>

        3.     RELATED OBLIGATIONS.
               -------------------

        With respect to the Registration  Statement and whenever any Registrable
Securities  are to be  registered  pursuant  to Section 2  including  on any New
Registration  Statement,  the Company shall use its  reasonable  best efforts to
effect the  registration  of the  Registrable  Securities in accordance with the
intended method of disposition thereof and, pursuant thereto,  the Company shall
have the following obligations:

               a.   The  Company  shall  prepare  and  file  with  the SEC  such
amendments  (including   post-effective   amendments)  and  supplements  to  any
registration   statement  and  the  prospectus  used  in  connection  with  such
registration  statement,  which  prospectus is to be filed  pursuant to Rule 424
promulgated  under the 1933 Act, as may be  necessary  to keep the  Registration
Statement or any New  Registration  Statement  effective at all times during the
Registration Period, and, during such period,  comply with the provisions of the
1933 Act with respect to the  disposition of all  Registrable  Securities of the
Company covered by the Registration  Statement or any New Registration Statement
until such time as all of such  Registrable  Securities shall have been disposed
of in  accordance  with the  intended  methods of  disposition  by the seller or
sellers thereof as set forth in such registration statement.

               b.   The Company  shall permit the Investor to review and comment
upon  the  Registration  Statement  or any New  Registration  Statement  and all
amendments and supplements  thereto at least two (2) Trading Days prior to their
filing  with the SEC,  and not file  any  document  in a form to which  Investor
reasonably  objects.  The  Investor  shall use its  reasonable  best  efforts to
comment upon the Registration  Statement or any New  Registration  Statement and
any amendments or supplements  thereto within two (2) Trading Days from the date
the Investor  receives the final version  thereof.  The Company shall furnish to
the Investor, without charge any correspondence from the SEC or the staff of the
SEC to the Company or its representatives relating to the Registration Statement
or any New Registration Statement.

               c.   The Company  shall  furnish to the  Investor,  (i)  promptly
after the same is  prepared  and filed  with the SEC,  at least one copy of such
registration  statement  and  any  amendment(s)  thereto,   including  financial
statements and schedules,  all documents  incorporated  therein by reference and
all exhibits,  (ii) upon the  effectiveness of any registration  statement,  ten
(10) copies of the prospectus  included in such  registration  statement and all
amendments  and  supplements  thereto  (or such  other  number  of copies as the
Investor  may  reasonably  request)  and (iii) such other  documents,  including
copies of any  preliminary or final  prospectus,  as the Investor may reasonably
request  from  time  to time in  order  to  facilitate  the  disposition  of the
Registrable Securities owned by the Investor.

               d.   The  Company  shall  use  reasonable  best  efforts  to  (i)
register  and  qualify  the  Registrable  Securities  covered by a  registration
statement under such other  securities or "blue sky" laws of such  jurisdictions
in the United States as the Investor reasonably requests,  (ii) prepare and file
in those jurisdictions,  such amendments (including  post-effective  amendments)
and supplements to such  registrations and qualifications as may be necessary to
maintain the effectiveness  thereof during the Registration  Period,  (iii) take
such other  actions as may be  necessary  to  maintain  such  registrations  and
qualifications in effect at all times during the Registration  Period,  and (iv)
take all  other  actions  reasonably  necessary  or  advisable  to  qualify  the
Registrable Securities for sale in such jurisdictions;  provided,  however, that
the  Company  shall not be required in  connection  therewith  or as a condition
thereto to (x)  qualify to do business  in any  jurisdiction  where it would not
otherwise be required to qualify but for this Section 3(d),  (y) subject  itself
to general taxation in any such  jurisdiction,  or (z) file a general consent to
service of process in any such  jurisdiction.  The Company shall promptly notify
the Investor who holds  Registrable  Securities of the receipt by the Company of

                                      -3-

<PAGE>

any  notification  with  respect  to  the  suspension  of  the  registration  or
qualification of any of the Registrable Securities for sale under the securities
or "blue sky" laws of any  jurisdiction  in the United  States or its receipt of
actual  notice of the  initiation  or  threatening  of any  proceeding  for such
purpose.

                e.  As  promptly as  practicable  after  becoming  aware of such
event or facts,  the  Company  shall  notify  the  Investor  in  writing  of the
happening  of any  event or  existence  of such  facts as a result  of which the
prospectus included in any registration  statement,  as then in effect, includes
an  untrue  statement  of a  material  fact or omits to  state a  material  fact
required to be stated  therein or necessary to make the statements  therein,  in
light of the  circumstances  under  which they were made,  not  misleading,  and
promptly  prepare a supplement  or amendment to such  registration  statement to
correct such untrue  statement or omission,  and deliver ten (10) copies of such
supplement  or  amendment to the Investor (or such other number of copies as the
Investor may  reasonably  request).  The Company shall also promptly  notify the
Investor  in writing  (i) when a  prospectus  or any  prospectus  supplement  or
post-effective  amendment has been filed,  and when a registration  statement or
any  post-effective   amendment  has  become  effective  (notification  of  such
effectiveness shall be delivered to the Investor by facsimile on the same day of
such  effectiveness  and by overnight mail),  (ii) of any request by the SEC for
amendments or supplements to any registration statement or related prospectus or
related information,  and (iii) of the Company's reasonable determination that a
post-effective amendment to a registration statement would be appropriate.

               f.   The Company shall use its reasonable best efforts to prevent
the  issuance  of any stop order or other  suspension  of  effectiveness  of any
registration   statement,   or  the  suspension  of  the  qualification  of  any
Registrable  Securities  for sale in any  jurisdiction  and, if such an order or
suspension  is issued,  to obtain the  withdrawal of such order or suspension at
the earliest  possible moment and to notify the Investor of the issuance of such
order  and the  resolution  thereof  or its  receipt  of  actual  notice  of the
initiation or threat of any proceeding for such purpose.

               g.   The Company shall (i) cause all the  Registrable  Securities
to be listed on each securities  exchange or trading system on which  securities
of the same class or series  issued by the Company are then  listed,  if any, if
the listing of such Registrable  Securities is then permitted under the rules of
such exchange,  or (ii) secure  designation and quotation of all the Registrable
Securities on the Principal Market.  The Company shall pay all fees and expenses
in connection with satisfying its obligation under this Section.

               h.   The Company shall  cooperate with the Investor to facilitate
the timely preparation and delivery of certificates (not bearing any restrictive
legend)  representing  the Registrable  Securities to be offered pursuant to any
registration  statement and enable such certificates to be in such denominations
or amounts as the Investor may  reasonably  request and registered in such names
as the Investor may request.

               i.   The Company shall at all times provide a transfer  agent and
registrar with respect to its Common Stock.

               j.   If reasonably  requested by the Investor,  the Company shall
(i)  immediately  incorporate  in  a  prospectus  supplement  or  post-effective
amendment such  information as the Investor  believes should be included therein
relating to the sale and  distribution  of  Registrable  Securities,  including,
without  limitation,  information  with  respect  to the  number of  Registrable
Securities  being sold,  the  purchase  price being paid  therefor and any other
terms of the  offering of the  Registrable  Securities;  (ii) make all  required
filings of such  prospectus  supplement or  post-effective  amendment as soon as

                                      -4-

<PAGE>

notified of the matters to be  incorporated  in such  prospectus  supplement  or
post-effective  amendment;  and  (iii)  supplement  or  make  amendments  to any
registration statement.

               k.   The Company shall use its  reasonable  best efforts to cause
the  Registrable   Securities  covered  by  any  registration  statement  to  be
registered with or approved by such other  governmental  agencies or authorities
as  may  be  necessary  to  consummate  the  disposition  of  such   Registrable
Securities.

               l.   Within one (1) Trading Day after any registration  statement
which includes the Registrable  Securities is ordered  effective by the SEC, the
Company shall deliver, and shall cause legal counsel for the Company to deliver,
to the  transfer  agent  for such  Registrable  Securities  (with  copies to the
Investor)  confirmation  that  such  registration  statement  has been  declared
effective by the SEC in the form attached hereto as EXHIBIT A.

               m.   The  Company  shall  take  all  other   reasonable   actions
reasonably  requested by the Investor to expedite and facilitate  disposition by
the Investor of Registrable Securities pursuant to any registration statement.

        4.     OBLIGATIONS OF THE INVESTOR.
               ---------------------------

               a.   The  Company  shall  notify the  Investor  in writing of the
information the Company reasonably requires from the Investor in connection with
any registration statement hereunder.  The Investor shall furnish to the Company
such information regarding itself, the Registrable Securities held by it and the
intended method of disposition of the Registrable Securities held by it as shall
be reasonably required to effect the registration of such Registrable Securities
and shall execute such  documents in connection  with such  registration  as the
Company may reasonably request.

               b.   The  Investor  agrees  to  cooperate  with  the  Company  as
reasonably  requested  by the Company in  connection  with the  preparation  and
filing of any registration statement hereunder.

               c.   The Investor  agrees  that,  upon receipt of any notice from
the  Company of the  happening  of any event or  existence  of facts of the kind
described  in Section  3(f) or the first  sentence of 3(e),  the  Investor  will
immediately  discontinue  disposition of Registrable  Securities pursuant to any
registration   statement(s)  covering  such  Registrable  Securities  until  the
Investor's  receipt of the  copies of the  supplemented  or  amended  prospectus
contemplated  by Section  3(f) or the first  sentence  of 3(e).  Notwithstanding
anything to the contrary, the Company shall cause its transfer agent to promptly
deliver shares of Common Stock without any restrictive legend in accordance with
the terms of the Purchase  Agreement in connection  with any sale of Registrable
Securities  with  respect to which an Investor  has entered  into a contract for
sale  prior to the  Investor's  receipt  of a notice  from  the  Company  of the
happening  of any  event of the kind  described  in  Section  3(f) or the  first
sentence of 3(e) and for which the Investor has not yet settled.

        5.     EXPENSES OF REGISTRATION.
               ------------------------

               All   reasonable   expenses,   other  than  sales  or   brokerage
commissions  and  legal  fees and  disbursements  of  counsel  to the  Investor,
incurred in connection with registrations, filings or qualifications pursuant to
Sections 2 and 3, including,  without limitation, all registration,  listing and
qualifications fees, printers and accounting fees, and fees and disbursements of
counsel for the Company, shall be paid by the Company.

                                      -5-
<PAGE>

        6.     INDEMNIFICATION
               ---------------

               a.   To the fullest  extent  permitted by law, the Company shall,
and hereby does, indemnify,  hold harmless and defend the Investor, each Person,
if any,  who controls  the  Investor,  the  members,  the  directors,  officers,
partners, employees, agents, representatives of the Investor and each Person, if
any,  who  controls  the  Investor  within  the  meaning  of the 1933 Act or the
Securities  Exchange  Act of  1934,  as  amended  (the  "1934  ACT")  (each,  an
"INDEMNIFIED  PERSON"),  against  any  losses,  claims,  damages,   liabilities,
judgments,  fines,  penalties,  charges, costs, attorneys' fees, amounts paid in
settlement or expenses, joint or several,  (collectively,  "CLAIMS") incurred in
investigating,   preparing  or  defending  any  action,  claim,  suit,  inquiry,
proceeding,  investigation  or appeal taken from the  foregoing by or before any
court or governmental,  administrative or other regulatory  agency,  body or the
SEC,  whether pending or threatened,  whether or not an indemnified  party is or
may be a party thereto ("INDEMNIFIED  DAMAGES"), to which any of them may become
subject insofar as such Claims (or actions or proceedings,  whether commenced or
threatened,  in respect  thereof) arise out of or are based upon: (i) any untrue
statement or alleged  untrue  statement of a material  fact in the  Registration
Statement,  any  New  Registration  Statement  or any  post-effective  amendment
thereto  or in any  filing  made in  connection  with the  qualification  of the
offering  under the securities or other "blue sky" laws of any  jurisdiction  in
which Registrable Securities are offered ("BLUE SKY FILING"), or the omission or
alleged  omission  to state a material  fact  required  to be stated  therein or
necessary  to make the  statements  therein  not  misleading,  (ii)  any  untrue
statement  or alleged  untrue  statement  of a material  fact  contained  in any
preliminary  prospectus if used prior to the effective date of such registration
statement, or contained in the final prospectus (as amended or supplemented,  if
the Company files any amendment  thereof or supplement  thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary to
make the statements made therein,  in light of the circumstances under which the
statements  therein were made,  not  misleading,  (iii) any violation or alleged
violation  by the  Company  of the  1933  Act,  the 1934  Act,  any  other  law,
including,  without  limitation,  any  state  securities  law,  or any  rule  or
regulation  thereunder  relating  to  the  offer  or  sale  of  the  Registrable
Securities  pursuant  to the  Registration  Statement  or any  New  Registration
Statement or (iv) any material  violation of this  Agreement (the matters in the
foregoing  clauses (i)  through  (iv) being,  collectively,  "VIOLATIONS").  The
Company shall, subject to Section 6(d) reimburse each Indemnified Person for any
legal fees or other  expenses  reasonably  incurred by them in  connection  with
investigating  or  defending  any such  Claim.  Notwithstanding  anything to the
contrary  contained  herein,  the  indemnification  agreement  contained in this
Section 6(a):  (i) shall not apply to a Claim by an  Indemnified  Person arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with information  furnished in writing to the Company by such Indemnified Person
expressly  for  use in  connection  with  the  preparation  of the  Registration
Statement,  any New  Registration  Statement  or any such  amendment  thereof or
supplement  thereto, if such prospectus was timely made available by the Company
pursuant to Section 3(c) or Section 3(e);  (ii) with respect to any  preliminary
prospectus,  shall not inure to the benefit of any Indemnified  Person from whom
the person  asserting a Claim  purchased  the  Registrable  Securities  that are
offered for sale by the preliminary  prospectus (or to the benefit of any person
controlling  such person) if the untrue  statement or omission of material  fact
contained in the preliminary prospectus was corrected in the prospectus, as then
amended or  supplemented,  if such  prospectus  was timely made available by the
Company pursuant to Section 3(c) or Section 3(e), and the Indemnified Person was
promptly advised in writing not to use the incorrect prospectus prior to the use
giving rise to a violation and such  Indemnified  Person,  notwithstanding  such
advice,  used it; (iii) shall not be available to the extent such Claim is based
on a  failure  of the  Investor  to  deliver  or to  cause to be  delivered  the
prospectus  made  available by the Company,  if such  prospectus was timely made
available  by the Company  pursuant to Section  3(c) or Section  3(e);  and (iv)
shall not apply to amounts paid in settlement of any Claim if such settlement is
effected  without the prior written consent of the Company,  which consent shall
not be unreasonably withheld. Such indemnity shall remain in full force and

                                      -6-
<PAGE>

effect regardless of any  investigation  made by or on behalf of the Indemnified
Person and shall  survive the  transfer  of the  Registrable  Securities  by the
Investor pursuant to Section 9.

               b.   In  connection  with the  Registration  Statement or any New
Registration  Statement,  the Investor shall, and hereby does,  indemnify,  hold
harmless  and defend,  to the same extent and in the same manner as is set forth
in Section 6(a), the Company,  each of its  directors,  each of its officers who
signs the Registration Statement or any New Registration Statement, each Person,
if any, who controls the Company  within the meaning of the 1933 Act or the 1934
Act  (collectively  and together with an  Indemnified  Person,  an  "INDEMNIFIED
Party"),  against  any  Claim or  Indemnified  Damages  to which any of them may
become subject,  under the 1933 Act, the 1934 Act or otherwise,  insofar as such
Claim or Indemnified  Damages arise out of or are based upon any  Violation,  in
each case to the extent,  and only to the extent,  that such Violation occurs in
reliance  upon and in  conformity  with  written  information  furnished  to the
Company by the Investor  expressly for use in connection with such  registration
statement;  and,  subject to Section 6(d), the Investor will reimburse any legal
or other expenses  reasonably  incurred by them in connection with investigating
or defending any such Claim;  provided,  however,  that the indemnity  agreement
contained in this Section 6(b) and the  agreement  with respect to  contribution
contained  in Section 7 shall not apply to  amounts  paid in  settlement  of any
Claim if such  settlement is effected  without the prior written  consent of the
Investor, which consent shall not be unreasonably withheld;  provided,  further,
however, that the Investor shall be liable under this Section 6(b) for only that
amount of a Claim or Indemnified  Damages as does not exceed the net proceeds to
the Investor as a result of the sale of Registrable  Securities pursuant to such
registration  statement.  Such  indemnity  shall remain in full force and effect
regardless of any  investigation  made by or on behalf of such Indemnified Party
and shall  survive the transfer of the  Registrable  Securities  by the Investor
pursuant to Section 9.

               c.   Promptly   after  receipt  by  an   Indemnified   Person  or
Indemnified  Party  under this  Section 6 of notice of the  commencement  of any
action or proceeding (including any governmental action or proceeding) involving
a Claim,  such  Indemnified  Person or  Indemnified  Party shall,  if a Claim in
respect thereof is to be made against any indemnifying  party under this Section
6,  deliver  to the  indemnifying  party a written  notice  of the  commencement
thereof, and the indemnifying party shall have the right to participate in, and,
to the  extent  the  indemnifying  party so  desires,  jointly  with  any  other
indemnifying party similarly  noticed,  to assume control of the defense thereof
with counsel mutually satisfactory to the indemnifying party and the Indemnified
Person or the Indemnified Party, as the case may be; provided,  however, that an
Indemnified  Person or Indemnified  Party shall have the right to retain its own
counsel with the fees and expenses to be paid by the indemnifying  party, if, in
the  reasonable  opinion of counsel  retained  by the  indemnifying  party,  the
representation  by such counsel of the Indemnified  Person or Indemnified  Party
and the  indemnifying  party would be  inappropriate  due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other party  represented  by such counsel in such  proceeding.  The  Indemnified
Party or Indemnified Person shall cooperate fully with the indemnifying party in
connection  with any  negotiation  or defense of any such action or claim by the
indemnifying  party and shall furnish to the indemnifying  party all information
reasonably  available  to the  Indemnified  Party or  Indemnified  Person  which
relates  to such  action  or  claim.  The  indemnifying  party  shall  keep  the
Indemnified  Party or  Indemnified  Person fully apprised at all times as to the
status of the defense or any settlement  negotiations  with respect thereto.  No
indemnifying  party shall be liable for any  settlement of any action,  claim or
proceeding  effected without its written consent,  provided,  however,  that the
indemnifying  party shall not  unreasonably  withhold,  delay or  condition  its
consent.  No  indemnifying  party shall,  without the consent of the Indemnified
Party or Indemnified Person,  consent to entry of any judgment or enter into any
settlement or other compromise  which does not include as an unconditional  term
thereof the giving by the  claimant or plaintiff  to such  Indemnified  Party or

                                      -7-
<PAGE>

Indemnified  Person of a release from all  liability in respect to such claim or
litigation.   Following   indemnification   as  provided  for   hereunder,   the
indemnifying party shall be subrogated to all rights of the Indemnified Party or
Indemnified  Person with  respect to all third  parties,  firms or  corporations
relating to the matter for which  indemnification  has been made. The failure to
deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified  Person or Indemnified  Party under this Section 6,
except to the extent that the indemnifying party is prejudiced in its ability to
defend such action.

               d.   The indemnification required by this Section 6 shall be made
by  periodic   payments  of  the  amount   thereof  during  the  course  of  the
investigation or defense,  as and when bills are received or Indemnified Damages
are incurred.

               e.   The  indemnity  agreements  contained  herein  shall  be  in
addition to (i) any cause of action or similar right of the Indemnified Party or
Indemnified  Person  against  the  indemnifying  party or  others,  and (ii) any
liabilities the indemnifying party may be subject to pursuant to the law.

        7.     CONTRIBUTION.
               ------------

               To the extent any  indemnification  by an  indemnifying  party is
prohibited or limited by law, the indemnifying  party agrees to make the maximum
contribution  with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that:
(i) no seller of Registrable  Securities guilty of fraudulent  misrepresentation
(within  the  meaning of Section  11(f) of the 1933 Act)  shall be  entitled  to
contribution  from any seller of  Registrable  Securities  who was not guilty of
fraudulent misrepresentation; and (ii) contribution by any seller of Registrable
Securities shall be limited in amount to the net amount of proceeds  received by
such seller from the sale of such Registrable Securities.

        8.     REPORTS AND DISCLOSURE UNDER THE SECURITIES ACTS.
               ------------------------------------------------

               With a view to making  available  to the Investor the benefits of
Rule 144 promulgated  under the 1933 Act or any other similar rule or regulation
of the SEC that may at any time  permit  the  Investor  to sell the  Registrable
Securities to the public without  registration  ("RULE 144"), the Company agrees
to:

               a.   make and keep public information  available,  as those terms
are understood and defined in Rule 144;

               b.   file with the SEC in a timely  manner all  reports and other
documents required of the Company under the 1933 Act and the 1934 Act so long as
the Company remains subject to such  requirements and the filing of such reports
and other documents is required for the applicable provisions of Rule 144; and

               c.   furnish  to  the  Investor  so  long  as the  Investor  owns
Registrable  Securities,  promptly upon request,  (i) a written statement by the
Company that it has complied with the reporting and or disclosure  provisions of
Rule 144, the 1933 Act and the 1934 Act,  (ii) a copy of the most recent  annual
or quarterly report of the Company and such other reports and documents so filed
by the Company,  and (iii) such other information as may be reasonably requested
to permit the  Investor  to sell such  securities  pursuant  to Rule 144 without
registration.

                                      -8-
<PAGE>

        9.     ASSIGNMENT OF REGISTRATION RIGHTS.
               ---------------------------------

               The  Company  shall not assign  this  Agreement  or any rights or
obligations  hereunder  without  the  prior  written  consent  of the  Investor,
including  by merger or  consolidation.  The  Investor may not assign its rights
under this Agreement  without the written consent of the Company,  other than to
an  affiliate  of the  Investor  controlled  by  Steven  G.  Martin or Joshua B.
Scheinfeld.

        10.    AMENDMENT OF REGISTRATION RIGHTS.
               --------------------------------

               Provisions of this  Agreement  may be amended and the  observance
thereof may be waived (either  generally or in a particular  instance and either
retroactively  or  prospectively),  only with the written consent of the Company
and the Investor.

        11.    MISCELLANEOUS.
               -------------

               a.   A Person is deemed to be a holder of Registrable  Securities
whenever  such  Person  owns or is  deemed  to own of  record  such  Registrable
Securities.  If  the  Company  receives  conflicting  instructions,  notices  or
elections  from  two or  more  Persons  with  respect  to the  same  Registrable
Securities,  the  Company  shall act upon the basis of  instructions,  notice or
election received from the registered owner of such Registrable Securities.

               b.   Any  notices,  consents,  waivers  or  other  communications
required or permitted to be given under the terms of this  Agreement  must be in
writing  and will be deemed  to have  been  delivered:  (i) upon  receipt,  when
delivered  personally;  (ii)  upon  receipt,  when sent by  facsimile  (provided
confirmation of transmission  is  mechanically or  electronically  generated and
kept on file by the sending  party);  or (iii) one (1) Trading Day after deposit
with a nationally  recognized  overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile  numbers
for such communications shall be:

        If to the Company:
               TSET, Inc.
               333 South State Street, PMB 111
               Lake Oswego, Oregon 97034
               Telephone:    503-293-1270
               Facsimile:    503-293-7233
               Attention:    _______________

        With a copy to:
               Kirkpatrick & Lockhart LLP
               201 South Biscayne Boulevard, Suite 2000
               Miami, FL 33131
               Telephone:    305-539-3300
               Facsimile:    305-358-7095
               Attention:     Clayton E. Parker, Esq.

                                      -9-
<PAGE>

        If to the Investor:
               Fusion Capital Fund II, LLC
               222 Merchandise Mart Plaza, Suite 9-112
               Chicago, IL 60654
               Telephone:    312-644-6644
               Facsimile:    312-644-6244
               Attention:    Steven G.  Martin

or at such other address and/or facsimile number and/or to the attention of such
other person as the  recipient  party has  specified by written  notice given to
each other  party  three (3)  Trading  Days prior to the  effectiveness  of such
change.  Written  confirmation  of receipt  (A) given by the  recipient  of such
notice,   consent,   waiver  or  other   communication,   (B)   mechanically  or
electronically  generated by the sender's facsimile machine containing the time,
date,  recipient  facsimile  number  and an  image  of the  first  page  of such
transmission  or (C)  provided by a  nationally  recognized  overnight  delivery
service, shall be rebuttable evidence of personal service,  receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

               c.   Failure of any party to exercise  any right or remedy  under
this  Agreement or otherwise,  or delay by a party in  exercising  such right or
remedy, shall not operate as a waiver thereof.

               d.   Except for the  corporate  laws of the State of Nevada which
shall govern all issues  concerning  the relative  rights of the Company and its
stockholders,  all questions concerning the construction,  validity, enforcement
and  interpretation  of this Agreement shall be governed by the internal laws of
the State of Illinois, without giving effect to any choice of law or conflict of
law  provision  or  rule  (whether  of  the  State  of  Illinois  or  any  other
jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of Illinois.  Each party hereby irrevocably  submits to the
exclusive  jurisdiction  of the state and  federal  courts  sitting  the City of
Chicago, for the adjudication of any dispute hereunder or in connection herewith
or with any  transaction  contemplated  hereby or discussed  herein,  and hereby
irrevocably  waives, and agrees not to assert in any suit, action or proceeding,
any claim  that it is not  personally  subject to the  jurisdiction  of any such
court, that such suit, action or proceeding is brought in an inconvenient  forum
or that the venue of such suit,  action or  proceeding  is improper.  Each party
hereby  irrevocably  waives personal  service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof to
such party at the address for such notices to it under this Agreement and agrees
that such service shall  constitute  good and sufficient  service of process and
notice thereof. Nothing contained herein shall be deemed to limit in any way any
right to serve process in any manner  permitted by law. If any provision of this
Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity
or  unenforceability  shall not affect the  validity  or  enforceability  of the
remainder  of  this   Agreement  in  that   jurisdiction   or  the  validity  or
enforceability  of any  provision of this  Agreement in any other  jurisdiction.
EACH PARTY HEREBY  IRREVOCABLY  WAIVES ANY RIGHT IT MAY HAVE,  AND AGREES NOT TO
REQUEST,  A JURY  TRIAL FOR THE  ADJUDICATION  OF ANY  DISPUTE  HEREUNDER  OR IN
CONNECTION  HEREWITH  OR  ARISING  OUT OF  THIS  AGREEMENT  OR  ANY  TRANSACTION
CONTEMPLATED HEREBY.

               e.   This Agreement,  and the Purchase  Agreement  constitute the
entire  agreement  among the parties  hereto with respect to the subject  matter
hereof  and  thereof.  There  are  no  restrictions,   promises,  warranties  or
undertakings, other than those set forth or referred to herein and therein. This
Agreement  and  the  Purchase  Agreement  supersede  all  prior  agreements  and
understandings  among the  parties  hereto with  respect to the  subject  matter
hereof and thereof.

                                      -10-
<PAGE>

               f.   Subject to the  requirements  of  Section 9, this  Agreement
shall inure to the benefit of and be binding upon the permitted  successors  and
assigns of each of the parties hereto.

               g.   The  headings  in  this  Agreement  are for  convenience  of
reference only and shall not limit or otherwise affect the meaning hereof.

               h.   This  Agreement  may be executed in identical  counterparts,
each of which shall be deemed an original but all of which shall  constitute one
and the same  agreement.  This  Agreement,  once  executed  by a  party,  may be
delivered to the other party hereto by facsimile  transmission of a copy of this
Agreement bearing the signature of the party so delivering this Agreement.

               i.   Each  party  shall do and  perform,  or cause to be done and
performed,  all such further acts and things,  and shall execute and deliver all
such other  agreements,  certificates,  instruments and documents,  as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

               j.   The language used in this Agreement will be deemed to be the
language  chosen by the parties to express  their mutual  intent and no rules of
strict construction will be applied against any party.

               k.   This  Agreement  is intended  for the benefit of the parties
hereto and their respective permitted successors and assigns, and is not for the
benefit of, nor may any provision hereof be enforced by, any other Person.

                                   * * * * * *

                                      -11-
<PAGE>

        IN WITNESS  WHEREOF,  the parties have caused this  Registration  Rights
Agreement to be duly executed as of day and year first above written.

                                  THE COMPANY:
                                  ------------

                                  TSET, INC.

                                  By:
                                     -----------------------
                                  Name:
                                  Title:

                                  BUYER:
                                  ------

                                  FUSION CAPITAL FUND II, LLC
                                  BY: FUSION CAPITAL PARTNERS, LLC
                                  BY: SGM HOLDINGS CORP.

                                  By:
                                     -----------------------
                                  Name: Steven G. Martin
                                  Title: PresidentExhibit 10.46

                    MUTUAL RELEASE AND SETTLEMENT AGREEMENT

           THIS MUTUAL RELEASE AND SETTLEMENT AGREEMENT is entered into
    effective as of July 7, 2001, by and among TSET, Inc., a Nevada
    corporation ("TSET"), Foster & Price Ltd., a corporation organized and
    existing under the laws of the Isle of Man ("FPL"), and Alex D. Saenz,
    an individual residing in the State of California ("Saenz").   TSET.
    FPL, and Saenz  are collectively referred to herein as "the Parties."

           WHEREAS, TSET and FPL entered into that certain Term Sheet, dated as
    of May 28, 1999 (the "Term Sheet");

           WHEREAS, a dispute has arisen among the Parties involving, among
    other things, certain terms and conditions set forth in the Term Sheet; and

           WHEREAS, the Parties  intend, individually and collectively,
    that this Agreement memorialize the terms and conditions upon which
    they shall release and settle any and all claims, counterclaims,
    cross-claims, and causes of action between or among them that have
    been, could have been, or could be asserted against each other
    (hereinafter collectively referred to as "claims") including, without
    limitation, any and all claims arising out of the Term Sheet and
    relating to that certain lawsuit filed by TSET in Clackamas County,
    Oregon, captioned TSET, Inc. v. Foster & Price Ltd., civil case no.
    CCV-0001304 (the "Lawsuit");

           NOW, THEREFORE, for and in consideration of the mutual covenants and
    promises set forth herein and for other good and valuable consideration, the
    delivery, receipt, and sufficiency of which is hereby acknowledged, the
    Parties agree as follows:

           1.     MUTUAL RELEASE AND SETTLEMENT.
                  ------------------------------

                  (a)     FPL and Saenz individually, collectively,
                          mutually, fully, completely, comprehensively, and
                          forever relinquish, waive, and release TSET  and
                          all parents, subsidiaries,  affiliated
                          corporations,  directors, officers, employees,
                          shareholders, representatives, attorneys,
                          insurers, agents, accountants, successors, and
                          assigns, individually, jointly, and collectively
                          ("the Released Parties"), from and against any
                          and all claims whatsoever, now existing or
                          hereafter arising, including, without limitation,
                          any and all claims related to the Term Sheet
                          and/or the Lawsuit, known or unknown, now
                          existing or hereafter arising,  based upon
                          intentional or unintentional conduct, acts of
                          omission or commission, statutory provisions or
                          common law, or otherwise.

                  (b)     TSET fully, completely, comprehensively, and
                          forever relinquishes, waives, and releases FPL
                          and Saenz  and all parents, subsidiaries,
                          affiliated corporations,  directors, officers,
<PAGE>

                          employees, shareholders, representatives,
                          attorneys, insurers, agents, accountants,
                          successors, and assigns, individually, jointly,
                          and collectively ("the Released Parties"), from
                          and against any and all claims whatsoever, now
                          existing or hereafter arising, including, without
                          limitation, any and all claims related to the
                          Term Sheet and/or the Lawsuit, known or unknown,
                          now existing or hereafter arising,  based upon
                          intentional or unintentional conduct, acts of
                          omission or commission, statutory provisions or
                          common law, or otherwise.

                  (c)     TSET agrees to dismiss with prejudice and without
                          costs to any party the claims asserted by it in
                          the Lawsuit, and FPL and Saenz agree to dismiss
                          with prejudice and without costs to any party the
                          claims asserted by FPL and Saenz in the Lawsuit,
                          and the Parties  mutually agree not to directly
                          or indirectly prosecute or hereafter maintain or
                          institute, or cause to be prosecuted, maintained,
                          or instituted against each other, any action at
                          law, suit, or proceeding in equity, or
                          administrative proceeding, for any claim,
                          counterclaim, or cross-claim released pursuant to
                          this Agreement, or otherwise.  Notwithstanding
                          the foregoing, nothing in this Section 1 shall
                          prevent any Party from bringing a legal or
                          equitable action seeking to enforce the terms
                          hereof.  The execution and delivery of this
                          Agreement by the Parties shall effect and
                          constitute a comprehensive, complete, and final
                          waiver, relinquishment and release of the
                          Released Parties from and against any and all
                          claims of the Parties against each other (and in
                          any combination of Parties with respect thereto)
                          relating to any aspect of any obligation under
                          the Term Sheet.  Except as otherwise provided
                          herein, upon execution and delivery of this
                          Agreement, the Parties shall have no further,
                          continuing, or additional performance obligations
                          of any nature whatsoever under the Term Sheet to
                          each other or any other person.

           2.     RELEASE AND SETTLEMENT CONSIDERATION.
                  -------------------------------------

           In consideration of the release, settlement, and covenants set forth
    herein, the Parties agree as follows:

                  (a)     Within 10 business days after receipt of a copy
                          of this Agreement showing execution by a duly
                          authorized representative of FPL and by Saenz,
                          TSET shall authorize the issuance to FPL of
                          375,000 restricted shares of TSET's common stock,
                          par value $0.001 per share (the "TSET Shares"),
                          to a mutually agreeable third party escrow agent
                          (the "Escrow Agent"), to be held as set forth
                          herein for the benefit of FPL and Saenz.  TSET
                          shall instruct its Transfer Agent to prepare and
                          deliver to the Escrow Agent certificates
<PAGE>

                          representing the TSET Shares as soon as
                          practicable thereafter.   The TSET Shares shall
                          bear the customary legend restricting
                          transferability, to be affixed by the Transfer
                          Agent.

                  (b)     FPL and Saenz acknowledge that TSET intends in
                          good faith to file a registration statement on
                          Form S-1 (the "Registration Statement") with the
                          Securities and Exchange Commission (the "SEC"),
                          such filing being anticipated to occur within the
                          30-business day period next following the date
                          hereof, and intends to include the TSET Shares in
                          the Registration Statement.  FPL and Saenz
                          acknowledge and agree that declaring the
                          effectiveness of the Registration Statement is
                          within the sole discretion of the SEC, that there
                          can be no assurance that the SEC will declare
                          effective the Registration Statement, and that
                          the number of TSET Shares that may be registered
                          pursuant to the Registration Statement may be
                          less than the total number of TSET Shares
                          mentioned in Subsection (a) above.  TSET agrees
                          that it shall use its best efforts to obtain
                          registration of the TSET Shares.   TSET's
                          inability to obtain registration for all or any
                          of the TSET Shares mentioned in Subsection (a)
                          shall not constitute a breach of this Agreement
                          or give rise to any claim of liability of TSET in
                          favor of FPL or Saenz or any other person.  Upon
                          the declaration of effectiveness of the
                          Registration Statement by the SEC, the Escrow
                          Agent shall deliver the TSET Shares to the
                          Transfer Agent to enable removal of any
                          restrictive legends thereon.

                  (c)     Notwithstanding any registration of the TSET
                          Shares pursuant to Subsection (b) above, FPL and
                          Saenz each agree that they shall not,
                          individually or collectively, sell, assign,
                          transfer, pledge, encumber, or convey (in any
                          case,  "transfer") a total of more than 5,000
                          TSET Shares on any trading day, and agree that in
                          no case shall they transfer a  total of more than
                          12,500 TSET Shares during any 5 consecutive
                          trading days or more than a total of 50,000 TSET
                          Shares during any 30 day period.  The Parties
                          agree that the first permitted transfer of any
                          TSET Shares shall not occur before the lapse of
                          30 days following receipt by the Escrow Agent of
                          the stock certificates mentioned in the last
                          sentence of Subsection (a) above.  The Parties
                          further agree that the Escrow Agent shall be
                          instructed that it can release a maximum of
                          50,000 TSET Shares for transfer by FPL and Saenz
                          in any given 30 day period.  Furthermore, the
                          Escrow Agent shall notify TSET of the date and
                          quantity of any such releases. The provisions of
                          this Subsection (c), including the limitation on
                          transfer of shares during any given trading
                          period described in this Subsection (c), shall
                          continue in full force and effect until all TSET
                          Shares received by FPL and Saenz pursuant to this
                          Agreement have been transferred.

<PAGE>

                  (d)     In addition to ensuring compliance with the
                          provisions of Subsection (c) above, FPL and Saenz
                          shall each be responsible for ensuring that any
                          transfer of the TSET Shares by them is effected
                          in compliance with all applicable federal and
                          state securities laws.  FPL and Saenz shall be
                          each responsible for the declaration and payment
                          of any and all taxes applicable to receipt of the
                          TSET Shares pursuant to this Agreement and any
                          transfer thereof.  TSET shall bear no
                          responsibility for FPL's and Saenz' compliance
                          with law or payment of any tax liabilities.

           3.     ALLOCATION OF TSET SHARES.
                  --------------------------

           TSET's sole responsibility with respect to the TSET Shares shall be
    the delivery of the TSET Shares to the Escrow Agent. FPL and Saenz agree
    that any allocation of ownership of the TSET Shares between them shall be
    their sole responsibility, and that neither FPL nor Saenz will require TSET
    or its representatives to intervene in or become a witness or a stakeholder
    in connection with any dispute with respect to questions of such allocation.
    Accordingly, unless otherwise instructed in a writing signed by both FPL and
    Saenz, as to the number of shares to be allocated to FPL and to Saenz,
    respectively, certificates representing the TSET Shares shall be prepared in
    the name and for the benefit of FPL and its attorney, Gregg A. Johnson. The
    indemnification provisions of Section 4 hereof shall apply with respect to
    any dispute between FPL and Saenz regarding the allocation of the TSET
    Shares.

           4.     INDEMNIFICATION OF TSET.
                  ------------------------

           FPL and Saenz, jointly and severally (in either case, the
    "Indemnifying Parties"), shall indemnify, protect, defend, and hold harmless
    TSET and its directors, officers, shareholders, employees, agents,
    attorneys, accountants, representatives, successors, and assigns
    (hereinafter collectively referred to as the "Indemnified Parties") from and
    against any and all known or unknown now existing or hereafter arising
    actions, causes of action, suits, claims, losses, costs, penalties, fees,
    liabilities, damages, and expenses, irrespective of whether the Indemnified
    Party is a party to the action for which indemnification is sought
    hereunder, and including reasonable attorneys' fees and disbursements
    (collectively, the "Indemnified Liabilities"), incurred or suffered by the
    Indemnified Parties or any of them relating to or arising from the Term
    Sheet, the Lawsuit and the allegations contained or that could have been
    contained therein, and/or the relationship among the Parties to this
    Agreement. To the extent the foregoing indemnification may be unenforceable
    for any reason, the Indemnifying Parties shall make the maximum contribution
    to the satisfaction of the Indemnified Liabilities which is permissible
    under applicable law. The Indemnifying Parties acknowledge and agree that
    the Indemnified Liabilities shall include, without limitation, any legal or
    equitable claims threatened or instituted by any person not a party to this
    Agreement relating directly or indirectly to the Term Sheet, the Lawsuit, or
    any combination thereof.

<PAGE>

           5.     SECTION 1542 WAIVER.
                  --------------------

           The Parties, whether or not residents of the State of California,
    each expressly waives and relinquishes, to the fullest extent permitted by
    law, the provisions, rights, and benefits of Section 1542 of the California
    Civil Code (and all other similar statutes of any state or territory), which
    provides:

           A general release does not extend to claims which the creditor does
    not know or suspect to exist in his favor at the time of executing the
    release, which if known by him must have materially affected his settlement
    with the debtor.

           Each of the Parties may hereafter discover facts in addition to or
    different from those which he or it now knows or believes to be true, but
    each Party hereby waives any and all provisions, rights and benefits
    conferred by any law of any state or territory of the United States, or
    principle of common law that is similar, comparable or equivalent to Section
    1542 of the California Civil Code. Except as otherwise provided herein, the
    Parties and each of them fully, finally, and forever settle and release any
    and all claims, known or unknown, suspected or unsuspected, contingent or
    noncontingent, whether or not concealed or hidden, that now exist or
    heretofore have existed upon any theory of law or equity now existing or
    coming into existence in the future, including, but not limited to, conduct
    that is negligent, intentional, with or without malice, or a breach of any
    duty, law or rule, without regard to the subsequent discovery or existence
    of such different or additional facts.

           6.     NO ADMISSION OF LIABILITY.
                  --------------------------

           This Agreement is being entered into solely for the purpose of
    releasing, settling, and compromising the claims and the Lawsuit described
    herein and is not intended to be, and shall not be construed as
    constituting, any admission of any liability by any of the Parties. In
    addition, without limiting the foregoing, TSET denies any contractual
    relationship or other liability to Saenz.

           7.     CONFIDENTIALITY OF SETTLEMENT.
                  ------------------------------

           FPL and Saenz agree that they will keep each of the terms of this
    Agreement confidential, and that such confidentiality is a material term of
    this Agreement. Except as required by law or court order, neither FPL nor
    Saenz shall directly or indirectly make, publish, or cause to be made or
    published any statement to any third party regarding the subject matter of
    this Agreement. Such obligation of confidentiality shall not in any way be
    diminished by, and shall continue in full force and effect regardless of,
    any obligation of TSET, as a publicly-held company, to make disclosures with
    respect thereto in fulfillment of the reporting requirements to which TSET
    is subject under applicable federal and state securities laws. If inquiries
    are made of FPL or Saenz by any third party regarding the transactions set
    forth herein, FPL and Saenz shall state only that the dispute between the
    Parties has been amicably resolved on mutually agreeable terms.

<PAGE>

           8.     REPRESENTATIONS AND WARRANTIES.
                  -------------------------------

           FPL and Saenz each represent and warrant to TSET that to the best of
    their knowledge, no other person or entity has any interest in, right to, or
    claim with respect to this Agreement, including the TSET Shares.

           9.     LEGAL FEES.
                  -----------

           Each Party shall bear and be responsible for the payment of its own
    respective legal fees, costs, and disbursements, including those incurred in
    connection with this Agreement. Notwithstanding the foregoing, the parties
    agree that, in any action for breach of this Settlement Agreement, or
    enforcement of this Settlement Agreement, the prevailing party shall be
    entitled to its reasonable attorney fees incurred in connection with such
    action.

           10.    REPRESENTATION AND WARRANTY AS TO AUTHORITY, EXECUTION,
                  --------------------------------------------------------
                  DELIVERY, AND PERFORMANCE.
                  --------------------------

           The Parties represent and warrant to each other that (a) each has the
    requisite power and authority to enter into and perform its obligations
    under this Agreement, (b) the execution and delivery of this Agreement and
    the consummation by each of them of the transactions contemplated herein
    have been duly authorized by the appropriate managing authority of TSET and
    FPL, and no further consent or authorization is required, (c) this Agreement
    constitutes and upon its execution shall constitute the valid and binding
    obligations of the Parties enforceable against each of them in accordance
    with the terms hereof, except as such enforceability may be limited by
    general principles of equity or applicable bankruptcy, insolvency,
    reorganization, moratorium, liquidation or similar laws relating to, or
    affecting generally, the enforcement of creditors' rights and remedies, and
    (d) the person executing and delivering this Agreement on behalf of TSET and
    FPL has been lawfully and fully authorized to do so.

           11.    COUNTERPARTS.
                  -------------

           This Agreement may be executed in two or more identical counterparts,
    all of which shall be considered one and the same agreement and shall become
    effective when counterparts have been signed by each Party and delivered to
    the other Party; provided that a facsimile signature shall be considered due
    execution and shall be binding upon the signatory thereto with the same
    force and effect as if the signature were an original, not a facsimile
    signature.

           12.    HEADINGS.
                  ---------

           The headings of this Agreement are for convenience of reference and
    shall not form part of, or affect the interpretation of, this Agreement.

<PAGE>

           13.    SEVERABILITY.
                  -------------

           If any provision of this Agreement shall be invalid or unenforceable
    in any jurisdiction, such invalidity or unenforceability shall not affect
    the validity or enforceability of the remainder of this Agreement in that
    jurisdiction or the validity or enforceability of any provision of this
    Agreement in any other jurisdiction.

           14.    INTEGRATION; AMENDMENT.
                  -----------------------

           This Agreement supersedes all other prior oral or written agreements
    between the Parties with respect to the subject matter hereof, and contains
    the entire understanding of the Parties with respect to the matters covered
    herein and, except as specifically set forth herein or therein, none of the
    Parties hereto makes any representation, warranty, covenant or undertaking
    with respect to such matters. No provision of this Agreement may be amended
    other than by an instrument in writing signed by all of the Parties hereto,
    stating that such instrument is intended to amend the provisions hereof, and
    no provision hereof may be waived other than by an instrument in writing
    signed by the Party against whom enforcement is sought. The term "Agreement"
    and all reference thereto, as used herein, shall mean this Agreement as
    originally executed or, if later amended or supplemented, then as so amended
    or supplemented.

<PAGE>

           15.    MISCELLANEOUS.
                  --------------

           This Agreement shall be binding upon and inure to the benefit of the
    Parties and their respective heirs, successors, and assigns. Neither FPL nor
    Saenz shall assign this Agreement or any rights, duties, or obligations
    hereunder, including by merger or consolidation, without TSET's prior
    written consent. This Agreement is intended for the benefit of the Parties
    and the Released Parties, and is not for the benefit of, nor may any
    provision hereof be enforced by, any other person. The language used in this
    Agreement shall be deemed to be the language chosen by the Parties to
    express their mutual intent, and no rules of strict construction will be
    applied against any Party.

           16.    GOVERNING LAW.
                  --------------

           This Agreement shall be governed by and construed in accordance with
    the laws of the State of Oregon, exclusive of its conflicts of laws
    principles.

           17.    REPRESENTATION BY COUNSEL.
                  --------------------------

           Each of the Parties hereto represents that it has had the full
    opportunity to consult with counsel with respect to the significance of this
    Agreement, and that each fully understands this Agreement and the terms
    hereof.

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

    TSET, Inc.

    By:  /s/ Jeffrey D. Wilson
       -------------------------------
         Jeffrey D. Wilson
        Chairman and Chief Executive Officer

    FOSTER & PRICE LTD.

    By:  /s/ Samir Mahallawy
       -------------------------------
         Samir Mahallawy
         Title: President
         as authorized signatory

     /s/ Alex D. Saenz
    ----------------------------------
    Alex D. Saenz

<PAGE>

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