Marketing, Distribution and Transportation Logistics Service Agreement with
      DTE Coal Services, Inc. dated June 6, 2006


    Exhibit
      10.79

     

    MARKETING,
      DISTRIBUTION AND TRANSPORTATION

     

    LOGISTICS
      SERVICES AGREEMENT

     

    By
      and Between

     

    KFx,
      Inc.

     

    And

     

    DTE
      Coal Services, Inc.

     

    Dated
      as of

     

    June
      6, 2006

     

    


     

    


     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    THIS
      MARKETING, DISTRIBUTION AND TRANSPORTATION LOGISTICS SERVICES AGREEMENT
(the
      “Agreement”) is entered into and made as of June 6, 2006 (the “Effective Date”),
      by and between KFx
      Inc.,
      a Delaware corporation (“KFx”), and DTE
      Coal Services, Inc.,
      a Michigan corporation (“DTECS”). KFx and DTECS are also referred to herein
      individually as a “Party” and collectively as the “Parties”.

     

    RECITALS

     

    A. KFx
      produces a beneficiated coal product known as K-FuelTM and wishes to engage DTECS
      to provide marketing, transportation, logistical and other services related
      thereto.

     

    B. DTECS
      desires to provide such marketing, distribution and transportation, logistical,
      and other services to KFx pursuant to the terms of this Agreement.

     

    AGREEMENT

     

    NOW
      THEREFORE, for and in consideration of the premises, the mutual covenants and
      promises set forth herein, and for other good and valuable consideration, the
      receipt and sufficiency of which are acknowledged by the Parties, and in
      reliance upon the recitals, representations, warranties, covenants, terms and
      conditions set forth herein, the Parties, intending to be legally bound, agree
      as follows:

     

    ARTICLE
      1 - DEFINITIONS
      OF TERMS

     

    1.1   Definitions.
      As used in this Agreement, the following terms shall have the respective
      meanings set forth below.

     

    “Affiliate”
      shall mean:

     

    
      	 	
              (i)

            	
              any
                other Person directly or indirectly owning, controlling or holding
                with
                power to vote 50% or more of the outstanding voting securities of
                the
                specified Person;

            


    

     

    
      	 	
              (ii)

            	
              any
                other Person 50% or more of whose outstanding voting securities are
                directly or indirectly owned, controlled or held with power to vote
                by the
                specified Person;

            


    

     

    
      	 	
              (iii)

            	
              any
                other Person directly or indirectly controlling, controlled by or
                under
                common control with the specified Person;
                or

            


    

     

    
      	 	
              (iv)

            	
              any
                officer, director, partner or member of the specified Person or of
                any
                other Person described in clause (iii)
                above.

            


    

     

    “Agreement”
      shall mean this Agreement, including all Schedules attached hereto, as it may
      be
      amended, modified or restated from time to time.

     

    “Applicable
      Laws”
      shall mean all laws, rules, regulations, ordinances, judgments, decrees,
      injunctions, writs, orders or interpretations of any court, arbitrator or
      governmental agency or authority or of any federal, state, county, municipal,
      regional, local or other Governmental Authority having jurisdiction over the
      matter in question including, without limitation, those laws, rules,
      regulations, orders or interpretations relating to the protection of human
      health, safety and the environment.

     


    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    “Base
      Price”
      shall initially be set at thirty three dollars ($33.00) per ton which the
      Parties intend to represent the lowest price at which KFx would sell K-FuelTM in
      the open market as of the date of this Agreement and such price may be annually
      renegotiated upward or downward to be effective as of the start of a Contract
      Year based on, inter alia, market conditions and prices of competing fuels.
      It
      is the further intention of the Parties that any adjustments to the “Base Price”
shall approximate the market price for K-FuelTM at the time of the annual
      adjustment. Failure of the Parties to agree upon a Base Price for any Contract
      Year shall be subject to arbitration pursuant to Section 10.2.

     

    “Business
      Day”
      shall mean a day commercial banks in Detroit, Michigan are open for business;
      and a Business Day shall begin at 8:00 a.m. and end at 5:00 p.m. prevailing
      Eastern Time.

     

    “Claims”
      shall mean all claims or actions, threatened or filed and whether groundless,
      false or fraudulent, that directly or indirectly relate to the subject matter
      of
      an indemnity, and the resulting losses, damages, expenses, fees of attorneys,
      experts and consultants, and court costs, whether incurred by settlement or
      otherwise, and whether such claims or actions are threatened or filed prior
      to
      or after the termination of this Agreement.

     

    “Contract
      Year”
      shall mean January 1 through December 31 of each year during the Term of this
      Agreement; except contract Year 2006 shall begin on June 6, 2006.

     

    “DTECS”
      shall have the meaning assigned in the introductory paragraph, and its
      successors and permitted assigns.

     

    “DTECS
      Confidential Information”
      shall have the meaning assigned in Section 17.1(b). 

     

    “DTECS
      Events of Default”
      shall have the meaning assigned in Section 8.2. 

     

    “DTECS
      Indemnitees”
      shall have the meaning assigned in Section 8.3(b).

     

    “Default
      Rate”
      shall mean 15% per annum.

     

    “Dollars”
      and “$”
      shall mean lawful money of the United States of America. 

     

    “Effective
      Date”
      shall have the meaning assigned in the introductory paragraph. 

     

    “Expiration
      Date”
      shall have the meaning assigned to it in Section 2.1.

     

    “Fee”
      shall have the meaning assigned to it in Section 5.1.

     

    “Fee
      Ton”
      as used in Section 5.1 shall mean each Ton of K-FuelTM produced at any K-FuelTM
Facility, but excluding K-FuelTM Direct Tons (as defined hereinbelow) that in any
      month, is marketed by KFx or its Marketing Representatives, DTECS or the K-FuelTM
Facility owner, or (ii) sold by the K-FuelTM facility owner; and such tons are
      transported pursuant to any transportation contract arranged by, or in railcars
      leased by or from, DTECS in fulfillment of its obligations
      hereunder.

     

    “Force
      Majeure”
      shall have the meaning assigned in Section 6.1.

     


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    


    “Governmental
      Authority”
      shall mean any nation or government, any state or other political subdivision
      thereof, and any entity exercising executive, legislative, judicial, regulatory
      or administrative functions of or pertaining to government.

     

    “Incentive
      Fee”
      shall have the meaning assigned to it in Section 5.2. 

     

    “Indemnified
      Party”
      shall have the meaning assigned in Section 8.3(c). 

     

    “Indemnitor”
      shall have the meaning assigned in Section 8.3(c). 

     

    “Intellectual
      Property”
      shall have the meaning assigned in Section 7.1(g). 

     

    “Invoice”
      shall have the meaning assigned in Section 5.1.

     

    “K-FuelTM
      Direct Tons”
      shall mean K-FuelTM manufactured on a customer's site for the exclusive use of
      such customer using feedstock which is transported to the customer's site
      without the use of DTECS' transportation services provided under this
      Agreement.

     

    “K-FuelTM”
      shall mean K-FuelTM beneficiated coal product processed by temperature and
      pressure by KFx or one of KFx's Affiliates.

     

    “KFx”
      shall have the meaning assigned in the introductory paragraph, and its
      successors and permitted assigns.

     

    “KFx
      Confidential Information”
      shall have the meaning assigned in Section 17.1(a). 

     

    “KFx
      Events of Default”
      shall have the meaning assigned in Section 8.1.

     

    “KFx
      Facility No.1”
      shall mean the first K-FuelTM production facility at the Fort Union Mine near
      Gillette, Wyoming, which is designed to produce approximately 750,000 Tons
      of
      K-FuelTM per year.

     

    “KFx
      Indemnitees”
      shall have the meaning assigned in Section 8.3(a).

     

    “KFx
      Marketing Representatives”
      mean those Persons designated by KFx who shall assist and participate in the
      overall marketing efforts of K-FuelTM pursuant to this Agreement. The KFx
      Marketing Representatives shall not be considered employees of DTECS for any
      purposes whatsoever.

     

    “Month”
      shall mean a period of time beginning at midnight (12:00 a.m.) prevailing
      Eastern Time on the first (1st)
      day of any calendar month and ending at 11:59 p.m. prevailing Eastern Time
      on
      the last day of such calendar month.

     

    “Party”
      and “Parties”
      shall have the respective meanings assigned in the introductory
      paragraph.

     

    “Person”
      shall mean any individual, a partnership, a corporation, a limited liability
      company, a trust, an unincorporated organization, any other type of legal entity
      or a government or any department or agency thereof.

     


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    


    “Services”
      shall mean the provision of marketing, distribution, logistical, transportation
      and other services by performed by DTECS and the KFx Marketing Representatives
      pursuant to this Agreement.

     

    “Specifications”
      shall have the meaning assigned in Section 4.1.

     

    “Tax
      Credits”
      shall have the meaning assigned in Section 3.7.

     

    “Term”
      shall have the meaning assigned in Section 2.1.

     

    “Ton”
      shall mean a short ton of two thousand (2,000) pounds (avoirdupois).


     

    ARTICLE
      2 - TERM

     

    2.1   Term.
      The term of this Agreement (“Term”) shall commence on the Effective Date, and
      unless extended in accordance with Section 2.2 or terminated pursuant to Section
      2.3 or 2.4, shall terminate on December 31, 2010 (the “Expiration Date”) unless
      otherwise earlier terminated as provided elsewhere herein.

     

    2.2   Term
      Extension.
      The Term of this Agreement may be extended beyond the Expiration Date by mutual
      agreement of the Parties. Failure of the Parties to agree is not subject to
      arbitration as set forth in Article 10.2.

     

    2.3   Termination
      by KFx.
      KFx may terminate this Agreement at any time upon sixty (60) days written notice
      if DTECS has failed to obtain rail transportation services for the shipment
      of
      K-FuelTM including commercially reasonable rates for such transportation
      services. Notwithstanding the foregoing, during Contract Year 2006 the Parties
      recognize that it may not be possible to obtain commercially reasonable rates,
      railcars and a suitable transportation agreement because of the uncertainties
      concerning the volume of K-FuelTM to be produced, the locations of customers and
      the availability of railroad capacity and cars. Accordingly, if DTECS' efforts
      to obtain same do not result in suitable transportation arrangements in Contract
      Year 2006, such failure may not be the basis of termination hereunder during
      such Contract Year. The Parties further agree and acknowledge that “commercially
      reasonable rates” may not be the lowest rates available but rates that
      reasonably allow K-FuelTM to be competitively delivered to the desired markets.
      Factors which may affect the rail rates which can be obtained for the shipment
      of K-FuelTM include but are not limited to the then current market for such rail
      rates and transportation services the volumes of K-FuelTM to be shipped, location
      of potential customers and K-FuelTM production facilities and the train loading
      capacity and conditions at such facilities. Notwithstanding any other provision
      of this Agreement to the contrary, the termination of this Agreement by KFx
      is
      the sole and exclusive remedy for DTECS failure to obtain transportation
      services as provided in this Agreement.

     

    2.4   Termination
      by DTECS.
      DTECS may terminate this Agreement upon sixty (60) days written notice to KFx
      in
      the event KFx fails to produce, or be capable of producing upon reasonable
      notice, marketable quantities of K-FuelTM including but not limited to, the
      failure to produce the volume of K-FuelTM to fully load unit trains in any
      Contract Year after Contract Year 2006; fails to reach sustained reliable
      production of K-FuelTM; or fails to cooperate with DTECS in the overall
      marketing, distribution, transportation, and logistical services efforts
      relating to the sale of K-FuelTM under this Agreement. Quantities of K-FuelTM that
      might otherwise be considered not to be “marketable quantities” for purposes of
      this Section 2.4 that are sold as test burns shall not be a basis for
      termination under this Section 2.4.

     

    2.5   Obligations
      Not Affected.
      The termination of this Agreement pursuant to this Article shall not in any
      way
      affect the obligations of either KFx or DTECS with respect to contractual
      agreements

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    entered
      into by KFx or DTECS with other Persons prior to the date of termination,
      including but not limited to customers and end users, rail and other carriers
      and rail car lessors or sublessors; and DTECS shall be entitled to a Fee (as
      hereinafter defined) due on contracts and commitments to Persons that continue
      in effect beyond the termination or Expiration Date of this
      Agreement.

     

    2.6   No
      Liability.
      If a Party terminates pursuant to Section 2.3 or 2.4, as the case may be,
      neither Party shall have any further obligations under this Agreement, except
      as
      provided in Section 2.5. Notwithstanding the foregoing, this Section 2.6 shall
      not be construed so as to relieve either Party from any liability for any breach
      or default of their duties under this Agreement.

     

    ARTICLE
      3 - SERVICES
      BY DTECS

     

    3.1   Joint
      Marketing Efforts.
      Within fifteen (15) days after the Effective Date, the Parties shall meet to
      commence development of a marketing plan for K-FuelTM. DTECS and KFx Marketing
      Representatives shall review current marketing conditions, KFx long and short
      term sales strategies and identify customers. Such plan shall also set forth
      the
      specific services to be performed by DTECS and the KFx Marketing Representatives
      in order to avoid duplication of efforts and to maximize the Parties' resources.
      The Parties may perform the marketing services singly or jointly, but at all
      times coordinating their efforts to achieve the marketing objectives agreed
      to
      by the Parties. All costs associated with the efforts of the KFx Marketing
      Representatives shall be born by KFx.

     

    3.2   Market
      Studies and Services.
      DTECS agrees to use commercially reasonable efforts to market on behalf of
      KFx
      the K-FuelTM production, in amounts consistent with the marketing plan, which
      meets the Specifications and at a price determined as set forth in this
      Agreement. Within thirty (30) days following the Effective Date, DTECS shall
      provide KFx with a market study of potential utility markets for K-FuelTM. Sixty
      (60) days after the delivery of the utility study, DTECS shall deliver to KFx
      a
      study of industrial coal markets for K-FuelTM.

     

    3.3   Contracts
      and Commitments.
      The Parties shall discuss the terms and conditions, including price, of any
      potential sale of K-FuelTM to any Person prior to entering into any binding
      commitments. Notwithstanding any other provision of this Agreement to the
      contrary, KFx shall have the right to approve or reject any contract for the
      sale of K-FuelTM. In the event DTECS or KFx marketing efforts result in a
      potential sale of K-FuelTM to a customer, the Parties shall review such offer(s)
      and discuss the terms and conditions of such offer(s), including the price
      per
      ton, volumes and the cost and conditions of transportation. The final decision
      to enter into binding contracts for the transportation of the K-FuelTM shall be
      by mutual agreement.

     

    3.4   Product
      Volume Commitments.
      DTECS and KFx will agree to specific maximum product volumes, delivery
      schedules, timing and other material terms and conditions that are normal and
      standard considerations in sales contracts prior to DTECS consummating any
      proposed transaction for the sale of K-FuelTM on behalf of KFx. Once KFx consents
      to such sale on its behalf, DTECS shall have the right to enter into any such
      transactions on behalf of KFx. KFx shall abide by and fully perform all of
      the
      terms and conditions of any contracts or commitments presented by DTECS to
      KFx
      for execution or executed by DTECS on behalf of KFx.

     

    3.5   Rail
      Transportation.
      DTECS represents that it has the requisite personnel, skills and expertise
      in
      the negotiation of rail transportation contracts, including rates, and in
      railroad and other transportation logistics. DTECS shall use good faith and
      commercially reasonable efforts to obtain rail transportation services to
      support the volume commitments resulting from the marketing efforts of the
      Parties. KFx acknowledges that the current contract rates DTECS has in place
      with various rail carriers may not be used for the transportation of K-FuelTM
sold under this Agreement. DTECS, if so requested by KFx, shall

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    use
      commercially reasonable and good faith efforts to obtain rail cars and sets
      for
      the transportation of K-FuelTM sold under this Agreement on a cost pass through
      basis, provided however, DTECS does not warrant or guaranty that such rail
      transportation services, rail cars or car sets can be obtained at any particular
      cost, or any cost, for transporting K-FuelTM.

     

    3.6   DTECS
      Not a Party.
      Unless expressly agreed to by DTECS and KFx in writing, DTECS shall not be
      or
      deemed to be a party to any of the contracts and other binding commitments
      for
      the sale of K-FuelTM made pursuant this Agreement. Accordingly, DTECS shall have
      no liability with respect to the performance, or lack thereof under any such
      contract or commitment entered into pursuant to this Agreement.

     

    3.7     
      Section
      45 Tax Credits.
      If at any time during the term of this Agreement the production and/or sale
      of
      K-FuelTM becomes eligible for certain tax credits under Section 45 of the United
      States Tax Code (the “Tax Credits”) the Parties shall determine an appropriate
      means to insure eligibility (if possible) for such credits, as well as to
      maximize the application of such credits to production and sales of K-FuelTM
under this Agreement. KFx agrees that, in those instances, where (i) it sells
      K-FuelTM, at a price below the market price for K-FuelTM at the time of the
      proposed sale; (ii) DTECS would otherwise be entitled to a Fee (as defined
      in
      Section 5.1); and (iii) the reason KFx proposes to sell such K-FuelTM below
      market is that KFx expects Tax Credits to make up the difference, the Fee
      calculated in accordance with Section 5.1(b) shall be based upon the market
      price and not the sale price. If the Parties fail to agree as provided above,
      either Party may demand arbitration pursuant to Section 10.2. DTECS shall fully
      cooperate with KFx with respect to obtaining Tax Credits for the transactions
      contemplated herein. Further, DTECS shall not intentionally market or transport
      the K-FuelTM in such a manner so as to jeopardize KFx's ability to obtain Tax
      Credits, provided KFx fully informs DTECS as to the requirements of obtaining
      Tax Credits as well as actions that may jeopardize the application of Tax
      Credits. The Parties also agree that DTECS shall have no claim to, or interest
      in any Tax Credits obtained by KFx.

     

    ARTICLE
      4 - K-FUELTM
      SPECIFICATIONS

     

    4.1   Specifications.
      KFx shall cause all K-FuelTM to be marketed pursuant to this Agreement to comply
      with the specifications set forth on the attached Schedule 4.1.

     

    4.2   Sampling
      and Analysis.
      KFx shall cause K-FuelTM to be periodically sampled and analyzed at its own cost
      and shall promptly provide DTECS with copies of such analysis for use in its
      marketing and transportation efforts.

     

    ARTICLE
      5 - FEES,
      BILLING AND PAYMENT

     

    5.1   Fees
      for DTECS Services.
      KFx shall pay DTECS a fee (“Fee”) for each Fee Ton of K-FuelTM which shall be the
      greater of:

     

    
      	(a)  	
              $20,000
                per Month plus $2.00 per Ton for each Fee Ton of K-FuelTM sold during each
                month; or

            


    

     

    
      	(b)  	
              $1.00
                per Ton for each Fee Ton of K-FuelTM sold during each month plus the
                Incentive Fee.

            


    

     

    5.2   Incentive
      Fee.
      As used in Section 5.1, the Incentive Fee shall be the amounts determined
      pursuant to Schedule 5.2, attached hereto and incorporated herein by reference.
      All prices shall be FOB rail car at KFx's production facility net of DTECS's
      Fees.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    5.3   Tons
      Included.
      The Fee shall be due and payable to DTECS on all Fee Tons of K-FuelTM whether
      such tons are sold through the individual or joint efforts of DTECS, KFx or
      the
      KFx Marketing Representatives but shall exclude K-FuelTM Direct
      Tons.

     

    5.4   Invoices;
      Payments.
      On or before the 15th day following the end of each Month during the Term,
      DTECS
      shall invoice KFx for all Fees payable for the preceding Month (each an
“Invoice”). The Invoice shall contain the information set forth in Section 5.4
      and be provided in accordance with the notice provisions of Article 10. In
      the
      event of a dispute regarding any amounts shown on any Invoice that the Parties
      have been unable to resolve by the date payment is due, KFx shall pay all
      undisputed amounts when due. Assuming that DTECS has timely delivered an Invoice
      and such related information to KFx, the payment by KFx of all undisputed
      amounts reflected in such Invoice shall be made on or before the 25th day of
      the
      Month following the most current Month to which such Invoice relates and shall
      be accompanied by a statement setting forth in reasonable detail all amounts
      disputed by KFx, the reason for the dispute, and a request for any additional
      documentation believed to be necessary to support the disputed amounts or to
      resolve the dispute. Payment shall be made to DTECS, by wire, pursuant to the
      wire instructions in Schedule 5.4, attached hereto and incorporated herein
      by
      reference.

     

    5.5   Invoices;
      Contents.
      Each Invoice required by this Article 5 shall include, without limitation:
      

     

    5.5.1  
      The aggregate Fees owed to DTECS for the applicable Month;

     

    5.5.2  
      Any interest at the Default Rate on any late payments, together with a statement
      showing the net amount payable from the prior Invoice, the amount and date
      of
      any payments received, any amounts outstanding from prior Invoices, and any
      amounts in dispute;

     

    5.5.3  
      Any other payments, charges, or amounts claimed by DTECS under any other
      provision of this Agreement; and

     

    5.5.4  
      The net amount payable by KFx.

     

    5.6   Interest
      on Late Payments.
      In the event either Party shall not make any payment when due under the
      provisions of this Agreement, except for those payments which are disputed
      in
      good faith and unless the payment is made within a grace period of two (2)
      days
      after the due date, the Party not making the payment when due shall pay interest
      to the other Party on all such late amounts from the date originally due until
      paid at the Default Rate.

     

    ARTICLE
      6 - FORCE
      MAJEURE

     

    6.1   Force
      Majeure.
      The term “Force Majeure” as used herein shall be events beyond the reasonable
      control and without the fault or negligence of the Party claiming a Force
      Majeure event and which by the exercise of due diligence of such Party claiming
      the Force Majeure event such Party is unable to overcome and shall include,
      but
      is not limited to, strikes, lockouts, labor disturbances, acts of the public
      enemy, wars, blockades, insurrections, riots, acts of God, epidemics,
      landslides, lightning, earthquakes, fires, violent storms, floods, washouts,
      environmental catastrophes, civil disturbances, explosions, acts or failures
      to
      act on the part of any governmental entity, failure of utility services,
      sabotage, failure or inability to obtain transportation or any other similar
      causes which are not reasonably within the control, and without the fault or
      negligence, of the Party claiming the same. Financial inability shall not be
      considered an event of Force Majeure for purposes of this
      Agreement.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    6.2   Procedure.
      If either Party is unable, wholly or in part, by reason of a Force Majeure
      to
      carry out its obligations hereunder, other than obligations to make payments
      of
      amounts due hereunder, then on such Party's giving prompt notice of full
      particulars of such Force Majeure situation in writing to the other Party,
      the
      obligations of the Party giving such notice, so far as they are affected by
      such
      Force Majeure, shall be suspended during the Force Majeure period. Such cause
      shall be remedied with due diligence and all reasonable dispatch.

     

    6.3   Mitigation.
      The Parties shall use commercially reasonable efforts to mitigate any adverse
      effects of a Force Majeure situation. However, the exercise of due diligence
      shall not require the settlement of labor disputes against the better judgment
      of the Party having the dispute.

     

    6.4   No
      Change in Obligations.
      In no event shall this Article 6 be construed to relieve either Party of any
      obligation hereunder solely because of increased costs or other adverse economic
      consequences that may be incurred through the performance of such obligation
      of
      the Parties hereto.

     

    ARTICLE
      7 - REPRESENTATIONS
      AND WARRANTIES; COVENANTS AND AGREEMENTS

     

    7.1   Representations
      and Warranties of KFx.
      KFx hereby represents, warrants and covenants to DTECS as follows:

     

    (a)  
      KFx is a business corporation duly organized and existing and in good standing
      under the laws of the State of Delaware and is qualified to do business in
      all
      jurisdictions where such qualification is necessary to perform all of its
      obligations under this Agreement.

     

    (b)  
      KFx possesses all requisite corporate power and authority to enter into and
      perform this Agreement and to carry out the transactions contemplated
      herein.

     

    (c)  
      KFx's execution, delivery, and performance of this Agreement have been duly
      authorized, and this Agreement has been duly executed and delivered and
      constitutes KFx's legal, valid, and binding obligation, enforceable against
      KFx
      in accordance with its terms, except as may be limited by bankruptcy, insolvency
      and other legal and equitable principles pertaining to creditor's
      rights.

     

    (d)  
      No suit, action or arbitration, or legal, administrative or other proceeding
      is
      pending or, to KFx's knowledge, threatened against KFx that would affect the
      validity or enforceability of this Agreement or the ability of KFx to fulfill
      its obligations and commitments hereunder.

     

    (e)  
      No consents or approvals are required in connection with the execution, delivery
      and performance by KFx of this Agreement.

     

    (f)  
      The execution, delivery and performance by KFx of this Agreement will not (i)
      violate any law, rule or regulation applicable to KFx, (ii) result in any breach
      of, or constitute any default under, any contractual obligation of KFx, or
      (iii)
      result in, or require, the creation or imposition of any lien or other
      encumbrance on any of the properties or revenues of DTECS.

     

    (g)  
      KFx represents and warrants to DTECS that a) KFx has all necessary and required
      United States and foreign patents, licenses, rights and other intellectual
      property (“Intellectual Property”) to produce, market, sell and advertise
      K-FuelTM; b)

     

    
      
        
        

      

      
        8

        
          

        

      

      KFx
        production, sale, marketing and advertising of K-FuelTM does not infringe or
        otherwise impair any Intellectual Property of any Person; and c) KFx has
        not
        received any notice of any infringement or misappropriation of any Person's
        Intellectual Property.

    

     

    7.2   Covenants
      and Agreements of KFx.
      KFx hereby covenants to DTECS as follows:

     

    KFx
      shall not take any action or cause any other Person to take any action not
      authorized or permitted by this Agreement that shall materially interfere or
      materially adversely affect DTECS's ability to comply with the terms and
      conditions of this Agreement.

     

    7.3   Representations
      and Warranties of DTECS.
      DTECS hereby represents and warrants to KFx as follows:

     

    (a)  
      DTECS is a corporation duly organized and existing and in good standing under
      the laws of the State of Michigan and is qualified to do business in all
      jurisdictions where such qualification is necessary to perform all of its
      obligations under this Agreement.

     

    (b)  
      DTECS possesses all requisite power and authority to enter into and perform
      this
      Agreement and to carry out the transactions contemplated herein.

     

    (c)  
      DTECS' execution, delivery, and performance of this Agreement have been duly
      authorized, and this Agreement has been duly executed and delivered and
      constitutes DTECS' legal, valid, and binding obligation, enforceable against
      DTECS in accordance with its terms, except as may be limited by bankruptcy,
      insolvency and other legal and equitable principles pertaining to creditors'
      rights.

     

    (d)  
      No suit, action or arbitration, or legal, administrative or other proceeding
      is
      pending or, to DTECS's knowledge, threatened against DTECS that would affect
      the
      validity or enforceability of this Agreement or the ability of DTECS to fulfill
      its obligations and commitments hereunder.

     

    (e)  
      No consents or approvals are required in connection with the execution, delivery
      and performance by DTECS of this Agreement.

     

    (f)  
      The execution, delivery and performance by DTECS of this Agreement will not
      (i)
      violate any law, rule or regulation applicable to DTECS, (ii) result in any
      breach of, or constitute any default under, any contractual obligation of DTECS,
      or (iii) result in, or require, the creation or imposition of any lien or other
      encumbrance on any of the properties or revenues of KFx.

     

    7.4   Covenants
      and Agreements of DTECS.
      DTECS hereby covenants to KFx as follows:

     

    DTECS
      shall not take any action or cause any other Person to take any action not
      authorized or permitted by this Agreement that shall materially interfere or
      materially adversely affect KFx's ability to comply with the terms and
      conditions of this Agreement.

     

    ARTICLE
      8 - DEFAULT;
      REMEDIES

     

    8.1   Default
      by KFx.
      In the event of the occurrence of any of the following acts or events (“KFx
      Events of Default”):

     

    (a)  
      KFx fails to pay any sum due and owing by it hereunder;

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    (b)  
      KFx breaches any material representations, warranties, covenants or agreements
      contained in this Agreement in any material respect;

     

    (c)  
      KFx shall commence a voluntary case or other proceeding seeking liquidation,
      reorganization or other relief with respect to itself or its debts under any
      bankruptcy, insolvency or other similar law now or hereafter in effect or
      seeking the appointment of a trustee, receiver, liquidator, custodian or other
      similar official of it or any substantial part of its property, or shall consent
      to any such relief or to the appointment of or taking possession by any such
      official in any involuntary case or other proceeding commenced against it,
      or
      shall make a general assignment for the benefit of creditors, or shall fail
      generally to pay its debts as they become due, or shall take any action to
      authorize any of the foregoing; or

     

    (d)  
      An involuntary case or other proceeding shall be commenced against KFx seeking
      liquidation, reorganization or other relief with respect to it or its debts
      under any bankruptcy, insolvency or other similar law now or hereafter in effect
      or seeking the appointment of a trustee, receiver, liquidator, custodian or
      other similar official of it or any substantial part of its property, and such
      involuntary case or other proceeding shall remain undismissed and unstayed
      for a
      period of sixty (60) consecutive days; or an order for relief shall be entered
      against KFx under the federal bankruptcy laws as now or hereafter in
      effect;

     

    then,
      (i) upon the occurrence of any KFx Event of Default under this Section 8.1(a)
      and the continuation of such KFx Event of Default for more than three (3)
      Business Days after receipt by KFx of written notice thereof from DTECS', (ii)
      upon the occurrence of any KFx Event of Default under Section 8.1(b), 8.1(c)
      or
      8.1(d) and the continuation of such KFx Event of Default for more than twenty
      (20) days after receipt by KFx of written notice thereof from DTECS, provided,
      if such KFx Event of Default cannot be reasonably cured within such twenty
      (20)
      day period, such longer period of time which is reasonable under the
      circumstances (not to exceed a total of sixty (60) days so long as cure is
      initiated within such twenty (20) day period and is diligently and continuously
      prosecuted to completion thereafter), then DTECS may terminate this Agreement
      at
      any time thereafter during the continuation of such KFx Event of Default by
      written notice to KFx.

     

    8.2   Default
      by DTECS.
      In the event of the occurrence of any of the following acts or events (“DTECS
      Events of Default”):

     

    (a)  
      DTECS fail to pay any sum due and owing by it hereunder;

     

    (b)  
      DTECS breaches any material representations, warranties, covenants or agreements
      contained in this Agreement in any material respect;

     

    (c)  
      DTECS shall commence a voluntary case or other proceeding seeking liquidation,
      reorganization or other relief with respect to itself or its debts under any
      bankruptcy, insolvency or other similar law now or hereafter in effect or
      seeking the appointment of a trustee, receiver, liquidator, custodian or other
      similar official of it or any substantial part of its property, or shall consent
      to any such relief or to the appointment of or taking possession by any such
      official in an involuntary case or other proceeding commenced against it, or
      shall make a general assignment for the benefit of creditors, or shall fail
      generally to pay its

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    debts
      as they become due, or shall take any action to authorize any of the foregoing;
      or

     

    (d)  
      An involuntary case or other proceeding shall be commenced against DTECS seeking
      liquidation, reorganization or other relief with respect to it or its debts
      under any bankruptcy, insolvency or other similar law now or hereafter in effect
      or seeking the appointment of a trustee, receiver, liquidator, custodian or
      other similar official of it or any substantial part of its property, and such
      involuntary case or other proceeding shall remain undismissed and unstayed
      for a
      period of sixty (60) consecutive days; or an order for relief shall be entered
      against DTECS under the federal bankruptcy laws as now or hereafter in
      effect;

     

    then,
      (i) upon the occurrence of any DTECS Event of Default under Section 8.2(a)
      and
      the continuation of such DTECS Event of Default for more than three (3) Business
      Days after receipt by DTECS of written notice thereof from KFx; (ii) upon the
      occurrence of any DTECS Event of Default under Section 8.2(b), 8.2(c), or 8.2(d)
      and the continuation of such DTECS Event of Default for more than twenty (20)
      days after receipt by DTECS of written notice thereof from KFx, if such DTECS
      Event of Default cannot be reasonably cured within such twenty (20) day period,
      such longer period of time which is reasonable under the circumstances (not
      to
      exceed a total of sixty (60) days so long as cure is initiated within such
      twenty (20) day period and is diligently and continuously prosecuted to
      completion thereafter), KFx may terminate this Agreement at any time thereafter
      during the continuation of such DTECS Event of Default by written notice to
      DTECS.

     

    8.3   Indemnities.

     

    (a)   DTECS
      Indemnity.
      DTECS shall indemnify, defend and hold harmless KFx and its partners, joint
      venturers, officers, agents, employees, successors and assigns (collectively,
      the “KFx Indemnitees”) from and against any and all suits, actions, legal or
      administrative proceedings, claims, demands, penalties, losses, liabilities,
      costs and expenses (including attorneys' fees, court costs and all costs or
      expenses related of any nature whatsoever arising out of or resulting from
      any
      misrepresentation, breach of warranty, or nonfulfillment of any covenant or
      agreement on the part of DTECS under this Agreement. Notwithstanding the
      foregoing, DTECS's liability to the KFx Indemnitees pursuant to this Section
      8.3(a) shall be net of any insurance proceeds actually received by the KFx
      Indemnitees or any of their respective affiliates from any third Person with
      respect to or on account of the damage or injury which is the subject of the
      indemnification claim. KFx agrees that it shall (and it shall cause each of
      the
      other KFx Indemnitees to) (i) use commercially reasonable efforts to pursue
      the
      collection of all insurance proceeds to which any of the KFx Indemnitees are
      entitled with respect to or on account of any such damage or injury, (ii) notify
      DTECS of all potential claims against any Person for any such insurance
      proceeds, and (iii) keep the DTECS fully informed of the efforts of the KFx
      Indemnitees in pursuing collection of such insurance proceeds.

     

    (b)   KFx
      Indemnity.
      KFx shall indemnify, defend and hold harmless DTECS and its directors, officers,
      agents, employees, successors and permitted assigns (collectively, the “DTECS
      Indemnitees “) from and against any and all suits, actions, legal or
      administrative proceedings, claims, demands, penalties, losses, liabilities,
      cost, and expenses (including attorneys' fees, court costs and all costs or
      expenses related to environmental clean-up, containment, remediation or removal
      of hazardous waste or pollution to property of DTECS or other Persons) of any
      nature whatsoever arising out of

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    or
      resulting from any misrepresentation (including but not limited to any breach
      of
      a warranty or representation with respect to Intellectual Property), breach
      of
      warranty or nonfulfillment of any covenant or agreement on the part of KFx
      under
      this Agreement. Notwithstanding the foregoing, KFx's liability to the DTECS
      Indemnitees pursuant to this Section 8.3(b) shall be net of any insurance
      proceeds actually received by the DTECS Indemnitees or any of their respective
      affiliates from any third Person with respect to or on account of the damage
      or
      injury which is the subject of the indemnification claim. DTECS agrees that
      it
      shall (and it shall cause each of the other DTECS Indemnitees to) (i) use
      commercially reasonable efforts to pursue the collection of all insurance
      proceeds to which any of the DTECS Indemnitees are entitled with respect to
      or
      on account of any such damage or injury, (ii) notify KFx of all potential claims
      against any other Person for any such insurance proceeds, and (iii) keep the
      KFx
      fully informed of the efforts of the DTECS Indemnitees in pursuing collection
      of
      such insurance proceeds.

     

    (c)   Claims.
      If a claim by a Person is made against one of the KFx Indemnitees or one of
      the
      DTECS Indemnitees (an “Indemnified Party”), and if such Party intends to seek
      indemnity with respect thereto under this Article 8, such Indemnified Party
      shall promptly notify DTECS or KFx, as the case may be (the “Indemnitor”), of
      such claims. The Indemnitor shall have thirty (30) days after receipt of such
      notice to undertake, conduct and control, through counsel of its own choosing
      and at its own expense, the settlement or defense thereof, and the Indemnified
      Party shall cooperate with it in connection therewith; provided that the
      Indemnitor shall permit the Indemnified Party to participate in such settlement
      or defense through counsel chosen by such Indemnified Party, however, the fees
      and expenses of such counsel shall be borne by such Indemnified Party. So long
      as the Indemnitor, at Indemnitor's cost and expense, (1) has undertaken the
      defense of, and assumed full indemnification responsibility with respect to,
      such claim, (2) is reasonably contesting such claim in good faith, by
      appropriate proceedings, and (3) has taken such action (including the posting
      of
      a bond, deposit or other security) as may be necessary to prevent any action
      to
      foreclose a lien against or attachment of the property of the Indemnified Party
      for payment of such claim, the Indemnified Party shall not pay or settle any
      such claim. Notwithstanding compliance by the Indemnitor with the preceding
      sentence, the Indemnified Party shall have the right to pay or settle any such
      claim, provided that in such event it shall waive any right to indemnity
      therefor by the Indemnitor for such claim. If, within thirty (30) days after
      the
      receipt of the Indemnified Party's notice of a claim of indemnity hereunder,
      the
      Indemnitor does not notify the Indemnified Party that it elects, at Indemnitor's
      cost and expense, to undertake the defense thereof and assume full
      responsibility for all liabilities with respect thereto imposed on it by this
      Article 8, or gives such notice and thereafter fails to contest such claim
      in
      good faith or to prevent action to foreclose a lien against or attachment of
      the
      Indemnified Party's property as contemplated above, the Indemnified Party shall
      have the right to contest, settle or compromise the claim but shall not thereby
      waive any right to indemnity therefor pursuant to this Agreement.

     

    (d)   Limitation.
      NOTWITHSTANDING ANYTHING CONTAINED TO THE CONTRARY IN ANY OTHER PROVISION OF
      THIS AGREEMENT, KFX AND DTECS AGREE THAT THE RECOVERY BY EITHER PARTY OF ANY
      DAMAGES SUFFERED OR INCURRED BY IT AS A RESULT OF ANY BREACH BY THE OTHER PARTY
      OF ANY OF ITS REPRESENTATIONS, WARRANTIES, COVENANTS OR AGREEMENTS UNDER THIS
      AGREEMENT SHALL BE LIMITED TO THE ACTUAL DAMAGES SUFFERED OR INCURRED BY THE
      NON-BREACHING PARTY AS A RESULT OF THE BREACH BY THE 

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    BREACHING
      PARTY OF ITS REPRESENTATIONS, WARRANTIES, COVENANTS OR AGREEMENTS HEREUNDER
      AND
      IN NO EVENT SHALL THE BREACHING PARTY BE LIABLE TO THE NON-BREACHING PARTY
      FOR
      ANY INDIRECT, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES SUFFERED OR INCURRED
      BY THE NON-BREACHING PARTY AS A RESULT OF THE BREACH BY THE BREACHING PARTY
      OF
      ANY OF ITS REPRESENTATIONS, WARRANTIES, COVENANTS OR AGREEMENTS HEREUNDER.
      WITHOUT IN ANYWAY LIMITING THE FOREGOING, DTECS SHALL NOT BE LIABLE TO KFX
      OR
      ANY OTHER PERSON WITH RESPECT TO THE LOSS OF, OR INABILITY TO OBTAIN ANY TAX
      CREDITS, WHETHER UNDER SECTION 45, OR OTHERWISE. THIS PROVISION SHALL SURVIVE
      THE TERMINATION OR EXPIRATION OF THIS AGREEMENT.

     

    (e)   Duty
      to Mitigate.
      Each Party agrees that it has a duty to mitigate damages and covenants that
      it
      will use commercially reasonable efforts to minimize any damages it may suffer
      or incur as a result of the breach by the other Party of any of its
      representations, warranties, covenants or agreements under this
      Agreement.

     

    ARTICLE
      9 - NOTICES

     

    Every
      notice, approval, request, demand, statement or bill required or permitted
      to be
      given under this Agreement shall be in writing and shall be deemed sufficiently
      given when deposited in the mail, registered or certified, postage prepaid,
      and
      addressed to the Party to whom given as follows:

     

    If
      to DTECS:

     

    DTE
      Coal Services, Inc.

    Suite
      201, 425 South Main Street

    Ann
      Arbor, MI 48104

    Attn:
      President

     

    If
      to KFx:

     

    KFx
      Inc.

    55
      Madison Street, Suite 500

    Denver,
      CO 80206

    Attn:
      President

     

    or
      to such other address as such Parties shall from time to time designate by
      notice in writing. Written notice given by any other method shall be deemed
      effective when actually received by the Party.

     

    ARTICLE
      10 - GOVERNING
      LAW AND DISPUTE RESOLUTION

     

    10.1   Governing
      Law.
      This Agreement shall be governed by and construed in accordance with the laws
      of
      the State of Colorado without giving effect to the conflict of laws principles
      thereof.

     

    10.2   Dispute;
      Arbitration.
      If the Parties (i) fail to agree upon a Base Price for a Contract Year; or
      (ii)
      fail to agree as provided in Section 3.7 with respect to the impact of Tax
      Credits on the price of K-FuelTM and such dispute cannot be resolved by means of
      good faith negotiation the dispute shall be resolved by arbitration pursuant
      to
      the Commercial Arbitration Rules of the American Arbitration Association
      (“AAA Rules”) but not under the administration of the American Arbitration
      Association;

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     provided,
      however, in the event the arbitrator or arbitration panel cannot obtain
      jurisdiction over a Person deemed by the arbitrator or arbitration panel to
      be
      an “indispensable party” within the meaning of Rule 19 of the Federal Rules of
      Civil Procedure, any Party to this Agreement prejudiced thereby may avoid the
      effect of this Section 9.1 and have resort to any State or Federal court having
      jurisdiction of the controversy or claim, by giving written notice to the other
      Party thereto. Unless the Parties agree otherwise, there will be three competent
      and disinterested arbitrators, one selected by each Party within thirty (30)
      days after one Party requests resolution by arbitration and the third selected
      by the other two within sixty (60) days after first two arbitrators are
      selected. The arbitration hearings will take place in Chicago, Illinois. If
      either Party fails to select its arbitrator or the Parties' arbitrators are
      unable to agree on the selection of the third arbitrator within the above time
      limits, the open arbitrator positions will be filled in accordance with the
      AAA
      Rules. In addition to the AAA Rules, the Federal Rules of Evidence shall apply
      to the conduct of the arbitration proceedings, and the Federal Rules of Civil
      Procedure shall apply to the conduct of any discovery in connection therewith.
      The decision and award of the arbitrator will be binding on the Parties.
      Judgment on the award may be entered in any court having jurisdiction and shall
      be enforceable in any court of competent jurisdiction. To the extent a dispute
      between the Parties is not specifically arbitrable pursuant to Section 10.2,
      the
      Parties may resolve such dispute in any court of competent jurisdiction WHEREIN
      THE PARTIES SPECIFICALLY AND IRREVOCABLY WAIVE ANY RIGHT TO TRIAL BY JURY THAT
      THEY MAY HAVE.

     

    ARTICLE
      11 - ENTIRE
      AGREEMENT

     

    This
      Agreement constitutes the entire agreement between the Parties relating to
      the
      subject matter hereof and supersedes and replaces all prior and contemporaneous
      agreements and understandings not incorporated herein by reference thereto,
      whether written or oral and sets forth all the representations, covenants,
      agreements and warranties upon which the Parties rely in entering into this
      Agreement.

     

    ARTICLE
      12 - ASSIGNMENT
      AND BINDING EFFECT

     

    This
      Agreement shall be binding upon, and shall inure to the benefit of, KFx and
      its
      successors and assigns. Either Party shall have the right, without the prior
      written consent of the other Party, to assign this Agreement to an Affiliate
      which, as a result of a corporate reorganization or restructuring, performs
      substantially the same function as DTECS performs hereunder. Other than with
      respect to assignments to Affiliates as set forth in the immediately preceding
      sentence, no Party shall have the right to assign this Agreement without the
      written consent of the other Party which shall not unreasonable withheld,
      delayed or conditioned. This Agreement shall be binding upon, and shall inure
      to
      the benefit of, DTECS and its successors and assigns.

     

    ARTICLE
      13 - NO
      PARTNERSHIP, THIRD PARTY BENEFICIARY

     

    Nothing
      contained in this Agreement shall be construed or constitute any Party as the
      employee, agent, partner, joint venturer or contractor of any other Party.
      This
      Agreement is made and entered into for the sole protection and legal benefit
      of
      the Parties, and their successors and permitted assigns, and, except for the
      DTECS Indemnitees and the KFx Indemnitees, no other Person shall be a direct
      or
      indirect legal beneficiary of, or have any direct or indirect cause of action
      or
      claim in connection with, this Agreement.

     

    ARTICLE
      14 - SURVIVAL

     

    All
      indemnities shall survive the termination of this Agreement. All rights and
      obligations provided in this Agreement shall remain in effect for the purpose
      of
      complying herewith. To the extent that any payments made by a Party hereunder
      are subsequently invalidated, declared to be fraudulent or 

     


    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    preferential,
      set aside or required to be repaid to a trustee, debtor in possession, receiver
      or other Person under any bankruptcy law, common law or equitable cause, then
      to
      such extent, such Party shall remain liable for such amounts as if such payment
      or proceeds had not been received.

     

    ARTICLE
      15 - SEVERABILITY

     

    Every
      provision of this Agreement is intended to be severable such that if any term
      or
      provision hereof is illegal or invalid for any reason, such provision shall
      be
      severed from this Agreement and shall not affect the validity of the remainder
      of this Agreement.

     

    ARTICLE
      16 - CAPTIONS;
      SCHEDULES

     

    The
      captions contained in this Agreement are for convenience and reference only
      and
      in no way define, describe, extend or limit the scope or intent of this
      Agreement or the intent of any provision contained herein. Any and all Schedules
      referred to in this Agreement are, by such reference, incorporated
      herein.

     

    ARTICLE
      17 - CONFIDENTIALITY
      

     

    17.1   Confidential
      Information.

     

    (a)  
      DTECS agrees to keep confidential and not to disclose to any Person the terms
      of
      this Agreement or any written or other information concerning or relating to
      this Agreement (collectively, “KFx Confidential Information”); provided,
      however, that any information which is in the public domain other than through
      the actions of DTECS in violation of this Agreement shall not be considered
      KFx
      Confidential Information. Notwithstanding the foregoing, DTECS shall be entitled
      to disclose KFx Confidential Information:

     

    (i)  To
      its directors, officers, employees, Subcontract Operator, agents or professional
      advisors to the extent necessary for the performance of its obligations under
      this Agreement, provided that it first obtains from any such Person to whom
      the
      disclosure is to be made an agreement of confidentiality with respect to the
      KFx
      Confidential Information in question substantially on the terms of this Section
      17.1(a); provided, however, in the case of employees, DTECS need not obtain
      a
      confidentiality agreement from such employees, but shall make such employees
      aware of, and require that such employees comply with, the confidentiality
      obligations contained herein;

     

    (ii)  When
      required to do so by Applicable Law or Governmental Authority, provided that
      DTECS shall immediately inform KFx of the demand for the disclosure of such
      KFx
      Confidential Information so that KFx can seek a protective order or other
      equitable relief to prevent or limit disclosure of such KFx Confidential
      Information or ensure confidential treatment thereof; and

     

    (iii)  To
      any Person with the prior written consent of KFx.

     

    (b)  
      KFx agrees to keep confidential and not to disclose to any Person the terms
      of
      this Agreement or any written or other information concerning or relating to
      this Agreement (collectively, “DTECS Confidential Information”); provided,
      however, that any information which is in the public domain other than through
      the actions of KFx in violation of this Agreement shall not be considered DTECS
      Confidential Information. 

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    Notwithstanding
      the foregoing, KFx shall be entitled to disclose DTECS Confidential
      Information:

     

    (i)  To
      its partners, directors, officers, employees, agents or professional advisors
      or
      to other Persons in connection with any potential sale or financing involving
      KFx or the Facility, provided that it first obtains from any such Person to
      whom
      the disclosure is to be made an agreement of confidentiality with respect to
      the
      DTECS Confidential Information in question substantially on the terms of this
      Section
      17.1(b);
      provided, however, in the case of partners, directors, officers, employees,
      agents or professional advisors, KFx need not obtain a confidentiality agreement
      from such Persons, but shall make such Persons aware of, and require that such
      Persons comply with, the confidentiality obligations contained
      herein;

     

    (ii)  When
      required to do so by Applicable Law or Governmental Authority, provided that
      KFx
      shall immediately inform DTECS of the demand for the disclosure of such DTECS
      Confidential Information so that DTECS can seek a protective order or other
      equitable relief to prevent or limit disclosure of such DTECS Confidential
      Information or ensure confidential treatment thereof; and

     

    (iii)  To
      any Person with the prior written consent of DTECS.

     

    17.2   Return
      of Confidential Information.
      Upon the termination of this Agreement, DTECS shall return to KFx the KFx
      Confidential Information (including all copies within its possession or
      control).

     

    17.3   Continuation
      of Confidentiality Obligations.
      The obligations under this Article 17 shall survive the termination of this
      Agreement.

     

    17.4   Ownership
      of Confidential Information.
      All KFx Confidential Information shall be the property of KFx. All DTECS
      Confidential Information shall be the property of DTECS.

     

    ARTICLE
      18 - COUNTERPARTS

     

    This
      Agreement may be executed in multiple counterparts, each of which shall be
      deemed an original for all purposes, but all of which shall constitute one
      and
      the same instrument.

     

    ARTICLE
      19 - MISCELLANEOUS

     

    19.1   Amendments.
      No amendment or modification hereof shall be valid or binding upon the Parties
      unless evidenced in writing and signed by a duly authorized representative
      of
      KFx and DTECS.

     

    19.2   Waiver.
      No failure by either Party to insist upon the strict performance of any term,
      covenant, condition or agreement of this Agreement, or to exercise any right
      or
      remedy upon breach of any provision, and no acceptance of payment or performance
      during the continuation of any such breach, shall constitute a waiver of any
      term, covenant or condition herein or a waiver of any subsequent breach or
      default in the performance of any term, covenant, condition or agreement
      herein.

     

    THE
      REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK.

     

    


     


    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF,
      KFx and DTECS have entered into this Agreement as of the Effective
      Date.

     

                            
      DTE COAL SERVICES, INC.

    


                            
      By:   /s/ MATTHEW PAUL

                                       
      Matthew
      Paul

     

                            
      Title: Chief Operating Officer

    


    


    


    


    


                            
      KFx Inc.

    


                            
      By:    /s/ MARK S. SEXTON

                                         
      Mark S. Sexton


     

                            
      Title: Chief Executive Officer


     

    


    17