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                                                                    EXHIBIT 4.32

                         REGISTRATION RIGHTS AGREEMENT

     This Registration Rights Agreement (this "Agreement") is made and entered
into as of November 29, 2001 by and between KFx Inc., a Delaware corporation
(the "Company"), and U.S. Global, LLC ("Holder") to provide Holder with certain
registration rights relative to 181,553 shares of Common Stock of KFx Inc. that
Holder has the right to purchase pursuant to a warrant provided by the Company
to the Holder dated the date hereof (the "Warrant").

     NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth, the parties hereto agree as follows:

                                   ARTICLE I

                              REGISTRATION RIGHTS

     Section 1.01. Definitions. For purposes of this Agreement:

          (a) Common Shares.  The term "Common Shares" means shares of Common
     Stock, $.001 par value, of the Company.

          (b) Holder.  The term "Holder" means any person owning of record
     Registrable Securities that have not been sold to the public or sold
     pursuant to Rule 144 promulgated under the Securities Act, or any assignee
     of record of such Registrable Securities to whom rights under this
     Agreement have been duly assigned in accordance with this Agreement and the
     Warrant.

          (c) Registrable Securities or Registrable Shares.  The terms
     "Registrable Securities" or "Registrable Shares" means (i) all Common
     Shares of the Company that may hereafter be acquired by Holder pursuant to
     the exercise of the Warrant or any warrant that is issued by the Company to
     Holder as a replacement for all or any portion of the Warrant, (ii) all
     Common Shares of the Company that may hereafter be acquired by Holder
     pursuant to the Stock Purchase Agreement dated the date hereof to which the
     Company and Holder are parties, and (iii) any Common Shares of the Company
     issued as (or issuable upon the conversion or exercise of any warrant,
     right or other security which is issued as) a dividend or other
     distribution with respect to, or in exchange for or in replacement of, all
     such Common Shares described in clauses (i) and (ii) of this subsection
     (c); excluding in all cases, however, any Registrable Securities sold by a
          ---------
     person in a transaction in which rights under this Article I are not
     assigned in accordance with this Agreement or any Registrable Securities
     sold to the public or sold pursuant to Rule 144 promulgated under the
     Securities Act.

          (d) Registration.  The terms "register," "registration" and
     "registered" mean a registration effected by preparing and filing a
     registration statement in compliance with the Securities Act and the
     declaration or ordering of effectiveness of such registration statement.

                                       1
<PAGE>

          (e) Registration Expenses.  The term "Registration Expenses" means all
     expenses incurred by the Company in complying with Section 1.02 hereof,
     including, without limitation, all registration and filing fees, listing
     fees, printing expenses, fees and disbursements of counsel for the Company,
     blue sky fees and expenses, the expense of any special audits incident to
     or required by any such registration (but excluding the compensation of
     regular employees of the Company which shall be paid in any event by the
     Company) and the expenses of underwriters customarily paid by similarly
     situated companies in connection with underwritten offerings of equity
     securities to the public (including any qualified independent underwriter
     required in connection with such underwritten offering), excluding any such
     fees based on the proceeds of sales of Registrable Securities by selling
     Holders.

          (f) Registration Statement.  The term "Registration Statement" means
     any registration statement under the Securities Act for purposes of
     effecting a public offering of securities of the Company.

          (g) SEC.  The term "SEC" means the U.S. Securities and Exchange
     Commission.

          (h) Securities Act.  The term "Securities Act" means the Securities
     Act of 1933, as amended from time to time.

     Section 1.02.  Piggyback Registrations.

          (a) Right to Piggyback. The Company shall notify all Holders in
     writing at least thirty (30) days prior to filing any Registration
     Statement (including, but not limited to, Registration Statements relating
     to secondary offerings of securities of the Company, but excluding
                                                              ---------
     Registration Statements relating to any employee benefit plan or a
     corporate reorganization) and will afford each such Holder an opportunity
     to include in such Registration Statement all or any part of the
     Registrable Securities then held by such Holder.  Each Holder desiring to
     include in any such Registration Statement all or any part of the
     Registrable Securities held by such Holder shall, within twenty (20) days
     after receipt of the above-described notice from the Company, so notify the
     Company in writing, and in such notice shall inform the Company of the
     number of Registrable Securities such Holder wishes to include in such
     Registration Statement.  The Company thereupon will use its best efforts as
     a part of its filing of such Registration Statement to effect the
     registration under the Securities Act of all Registrable Securities which
     the Company has been so requested to register by the Holder, to the extent
     required to permit the disposition of the Registrable Securities so to be
     registered.  If a Holder decides not to include all of its Registrable
     Securities in any Registration Statement thereafter filed by the Company,
     such Holder shall nevertheless continue to have the right to include any
     Registrable Securities in any subsequent Registration Statement or
     Registration Statements as may be filed by the Company with respect to
     offerings of its securities, all upon the terms and conditions set forth
     herein.

          (b) Underwriting.  If a Registration Statement under which the Company
     gives notice under this Section 1.02 is for an underwritten offering, then
     the Company

                                       2
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     shall so advise the Holders. In such event, the right of any such Holder's
     Registrable Securities to be included in a registration pursuant to this
     Section 1.02 shall be conditioned upon such Holder's participation in such
     underwriting and the inclusion of such Holder's Registrable Securities in
     the underwriting to the extent provided herein. All Holders proposing to
     distribute their Registrable Securities through such underwriting shall
     enter into an underwriting agreement in customary form with the managing
     underwriter or underwriter(s) selected for such underwriting.
     Notwithstanding any other provision of this Agreement, if the managing
     underwriter(s) determine(s) in good faith that marketing factors require a
     limitation of the number of shares to be underwritten, then the managing
     underwriter(s) may exclude shares (including Registrable Securities) from
     the registration and the underwriting, and the number of shares that may be
     included in the registration and the underwriting shall be allocated,
     first, to the Company, and second, the maximum number of Registration
     -----                      ------
     Securities requested to be included therein by the Holders and the maximum
     number of any other securities of the same class as the Registrable
     Securities ("Other Securities") requested to be included therein by other
     shareholders of the Company having registration rights ("Other Holders"),
     pro rata among the respective Holders and Other Holders on the basis of the
     number of Registrable Securities and Other Securities requested to be
     included in such registration by each such Holder and Other Holder. If any
     Holder disapproves of the terms of any such underwriting, such Holder may
     elect to withdraw all or any part of such Holder's Registrable Securities
     therefrom by written notice to the Company and the underwriter, delivered
     at any time prior to the effective date of the Registration Statement. Any
     Registrable Securities excluded or withdrawn from such underwriting shall
     be excluded and withdrawn from the registration. For any Holder that is a
     partnership or corporation, the partners, retired partners and shareholders
     of such Holder, or the estates and family members of any such partners and
     retired partners and any trusts for the benefit of any of the foregoing
     persons shall be deemed to be a single "Holder," and any pro rata reduction
     with respect to such "Holder" shall be based upon the aggregate amount of
     shares carrying registration rights owned by all entities and individuals
     included in such "Holder," as defined in this sentence.

          (c) Expenses.  All Registration Expenses incurred in connection with a
     registration pursuant to this Section 1.02 shall be borne by the Company,
     except that notwithstanding anything to the contrary herein, if a Holder
     withdraws all or any part of such Holder's Registrable Securities from an
     underwriting at any time less than ten (10) business days prior to the
     effective date of the Registration Statement, such Holder shall pay its pro
     rata share (based on the number of Registrable Securities included in the
     Registration Statement on behalf of such Holder, or if no Registration
     Statement had been filed as of the date of such withdrawal, the number of
     Registrable Securities such Holder requested to be included in the
     Registration Statement) of all Registration Expenses, excluding all
     discounts, commissions or other amounts payable to underwriters or brokers
     in connection with the offering.  Each Holder participating in a
     registration pursuant to this Section 1.02 shall bear such Holder's
     proportionate share (based on the total number of shares sold in such
     registration) of all discounts, commissions or other amounts payable to
     underwriters or brokers in connection with such offering.

                                       3
<PAGE>

     Section 1.03 Obligations of the Company. Whenever required to effect the
registration of any Registrable Securities under this Agreement, the Company
shall:

          (a) Prepare and file with the SEC a Registration Statement with
     respect to such Registrable Securities and use reasonable, diligent efforts
     to cause such Registration Statement to become effective.

          (b) Prepare and file with the SEC such amendments and supplements to
     such Registration Statement and the prospectus used in connection with such
     Registration Statement as may be necessary to comply with the provisions of
     the Securities Act with respect to the disposition of all securities
     covered by such Registration Statement.

          (c) Furnish to the Holders such number of copies of a prospectus,
     including a preliminary prospectus, in conformity with the requirements of
     the Securities Act and such other documents as they may reasonably request
     in order to facilitate the disposition of the Registrable Securities owned
     by them that are included in such registration.

          (d) Use reasonable, diligent efforts to register and qualify the
     securities covered by such Registration Statement under such other
     securities or blue sky laws of such jurisdictions as shall be reasonably
     requested by the Holders, provided that the Company shall not be required
     solely as a result of such Registration or as a condition thereto to
     qualify to do business or to file a general consent to service of process
     in any such jurisdictions.

          (e) In the event of any underwritten public offering, enter into and
     perform its obligations under an underwriting agreement, in usual and
     customary form, with the managing underwriter(s) of such offering.

          (f) Notify each Holder of Registrable Securities covered by such
     Registration Statement at any time when a prospectus relating thereto is
     required to be delivered under the Securities Act of the happening of any
     event as a result of which the prospectus included in such 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 not misleading in the light of the
     circumstances then existing, and at the request of each Holder promptly
     prepare and furnish to such Holder a reasonable number of copies of a
     supplement to or amendment of such prospectus as may be necessary so that,
     as thereafter delivered to the purchasers of such Registrable Securities,
     such prospectus shall not include an 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 not misleading in the light of the
     circumstances then existing.

          (g) Use its best efforts to list such Registrable Securities on each
     securities exchange on which any equity security of the Company is then
     listed.

                                       4
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     Section 1.04  Obligations of the Holders.

          (a) It shall be a condition precedent to the obligations of the
     Company to take any action pursuant to Section 1.02 that the selling
     Holders furnish to the Company such information regarding themselves, the
     Registrable Securities held by them, and the intended method of disposition
     of such securities as is required to timely effect the registration of
     their Registrable Securities.

          (b) Each Holder delivering a written request to participate in an
     underwritten registered offering in accordance with Section 1.02 shall, if
     requested by the Company, as soon as practicable after such delivery,
     execute and deliver to the Company a custody agreement and power of
     attorney in customary form satisfactory to the Company and any managing
     underwriter with respect to the Registrable Securities identified for sale
     by such Holder (a "Custody Agreement" and "Power of Attorney,"
     respectively).  Each Custody Agreement and Power of Attorney shall provide,
     among other things, that such Holder will deliver to and deposit in custody
     with the custodian named therein (which shall be designated by the Company)
     a certificate or certificates representing such Registrable Securities
     (duly endorsed in blank by the registered owner or owners thereof or
     accompanied by duly executed stock powers in blank) and irrevocably appoint
     such custodian and attorney-in-fact with full power and authority to act
     under the Custody Agreement and Power of Attorney, respectively, on the
     Holder's behalf with respect to matters specified therein, including the
     execution and delivery of an underwriting agreement.

          (c) Each Holder that has Registrable Securities included in any
     Registration Statement shall not (until further notice from the Company)
     effect sales thereof after receipt of notice from the Company to suspend
     sales to permit the Company to correct or update any Registration
     Statement, including any prospectus.

     Section 1.05. Delay of Registration. No Holder shall have any right to
obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Article I.

     Section 1.06 Indemnification. In the event any Registrable Securities are
included in a Registration Statement pursuant to Section 1.02:

          (a) By the Company.  To the extent permitted by law, the Company will
indemnify and hold harmless each Holder, the partners, officers, directors,
legal counsel and accountants of each Holder, any underwriter (as defined in the
Securities Act) for such Holder and each person, if any, who controls such
Holder or underwriter within the meaning of the Securities Act or the Exchange
Act against any losses, claims, expenses, damages, or liabilities (joint or
several) to which they may become subject under the Securities Act, the Exchange
Act or any other securities or other law of any jurisdiction, common law or
otherwise, insofar as such losses, claims, expenses, damages, or liabilities (or
actions proceedings or settlements in respect thereof) arise out of or are based
upon any of the following statements, omissions or violations (collectively,
"Violations" and, individually, a "Violation"):

                                       5
<PAGE>

             (i)    any untrue statement or alleged untrue statement of a
          material fact contained in or incorporated by reference in any
          Registration Statement, including any preliminary prospectus or final
          prospectus contained therein or any amendments or supplements thereto
          or any document incorporated by reference therein;

             (ii)   the omission or alleged omission to state therein a material
          fact required to be stated therein, or necessary to make the
          statements therein not misleading, or

             (iii)  any violation or alleged violation by the Company of the
          Securities Act, the Exchange Act, or any other securities or other law
          of any jurisdiction, common law or otherwise, or any rule or
          regulation promulgated under the Securities Act, the Exchange Act or
          any such other laws, in connection with the offering covered by such
          Registration Statement;

     and the Company will reimburse each such Holder, partner, officer or
     director, underwriter or controlling person for any legal or other expenses
     reasonably incurred by them, as incurred, in connection with investigating
     or defending any such loss, claim, damage, liability or action; provided,
                                                                     --------
     however, that the indemnity agreement contained in this subsection 1.06(a)
     -------
     shall not apply to amounts paid in settlement of any such loss, claim,
     damage, liability or action if such settlement is effected without the
     consent of the Company (which consent shall not be unreasonably withheld),
     nor shall the Company be liable in any such case for any such loss, claim,
     damage, liability or action to the extent that it arises out of or is based
     upon a Violation which occurs in reliance upon and in conformity with
     written information furnished expressly for use in connection with such
     registration by such Holder, partner, officer, director, underwriter or
     controlling person of such Holder.

          (b) By Selling Holders.  To the extent permitted by law, each selling
     Holder, severally and not jointly, will indemnify and hold harmless the
     Company, each of its directors, each of its officers who have signed the
     Registration Statement, each person, if any, who controls the Company
     within the meaning of the Securities Act, its legal counsel, its
     accountants, any underwriter and any other Holder selling securities under
     such Registration Statement or any of such other Holder's partners,
     directors or officers or any person who controls such Holder within the
     meaning of the Securities Act or the Exchange Act, against any losses,
     claims, damages or liabilities (joint or several) to which the Company or
     any such director, officer, controlling person, legal counsel, accountant,
     underwriter or other such Holder, partner or director, officer or
     controlling person of such other Holder may become subject under the
     Securities Act, the Exchange Act or any other securities or other law of
     any jurisdiction, common law or otherwise, insofar as such losses, claims,
     expenses, damages or liabilities (or actions in respect thereto) 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 by such Holder expressly for use in
     connection with such registration; and each such Holder will reimburse any
     legal or other expenses reasonably incurred by the Company or any such
     director, officer, controlling person, legal counsel,

                                       6
<PAGE>

     accountant, underwriter or other Holder, partner, officer, director, legal
     counsel, accountant or controlling person of such other Holder in
     connection with investigating or defending any such loss, claim, damage,
     liability or action; provided, however, that the indemnity agreement
                          --------  -------
     contained in this subsection 1.06(b) shall not apply to amounts paid in
     settlement of any such loss, claim, damage, liability or action if such
     settlement is effected without the consent of the Holder, which consent
     shall not be unreasonably withheld; and provided, further, that the total
                                             --------  -------
     amounts payable by a Holder under this Section 1.07 in respect of any
     Violation shall not exceed the net proceeds received by such Holder in the
     registered offering out of which such Violation arises.

          (c) Notice.  Promptly after receipt by an indemnified party under this
     Section 1.07 of notice of the commencement of any action (including any
     governmental action), such indemnified party will, if a claim in respect
     thereof is to be made against any indemnifying party under this Section
     1.06, 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 the
     defense thereof with counsel mutually satisfactory to the parties;
     provided, however, that an indemnified party shall have the right to retain
     --------  -------
     its own counsel, with the fees and expenses to be paid by the indemnifying
     party, if representation of such indemnified party by the counsel retained
     by the indemnifying party would be inappropriate due to actual or potential
     conflict of interests between such indemnified party and any other party
     represented by such counsel in such proceeding or if, and for such period,
     such indemnified party was required to retain counsel prior to the
     indemnifying party's retention of counsel.  The failure to deliver written
     notice to the indemnifying party within a reasonable time of the
     commencement of any such action shall relieve such indemnifying party of
     its liability to the indemnified party under this Section 1.06 only if and
     to the extent it is prejudicial to its ability to defend such action, and
     the omission to so deliver written notice to the indemnifying party will
     not relieve it of any liability that it may have to any indemnified party
     otherwise than under this Section 1.06.

          (d) Defect Eliminated in Final Prospectus.  The foregoing indemnity
     agreements of the Company and Holders are subject to the limitation that,
     insofar as they relate to any Violation made in a preliminary prospectus
     but eliminated or remedied in the amended prospectus on file with the SEC
     at the time the Registration Statement in question becomes effective or the
     amended prospectus filed with the SEC pursuant to SEC Rule 424(b) (the
     "Final Prospectus"), such indemnity agreement shall not inure to the
     benefit of any person if a copy of the Final Prospectus was furnished to
     the indemnified party and was not furnished to the person asserting the
     loss, liability, claim or damage at or prior to the time such action is
     required by the Securities Act.

          (e) Contribution.  In order to provide for just and equitable
     contribution to joint liability under the Securities Act, in any case in
     which either (i) any Holder exercising rights under this Agreement, or any
     controlling person of any such Holder, makes a claim for indemnification
     pursuant to this Section 1.06 but it is judicially determined (by the entry
     of a final judgment or decree by a court of competent jurisdiction and the
     expiration of time to appeal or the denial of the last right of appeal)

                                       7
<PAGE>

     that such indemnification may not be enforced or is otherwise unavailable
     in such case notwithstanding the fact that this Section 1.06 provides for
     indemnification in such case, or (ii) contribution under the Securities Act
     may be required on the part of any such selling Holder or any such
     controlling person in circumstances for which indemnification is provided
     under this Section 1.06; then, and in each such case, the Company and such
     Holder will contribute to the aggregate losses, claims, damages or
     liabilities to which they may be subject (after contribution from others)
     in such proportion so that such Holder is responsible for the portion
     represented by the percentage that the public offering price of its
     Registrable Securities offered by and sold under the Registration Statement
     bears to the public offering price of all securities offered by and sold
     under such Registration Statement, and the Company and other selling
     Holders are responsible for the remaining portion; provided, however, that,
                                                        --------  -------
     in any such case, (A) no such Holder will be required to contribute any
     amount in excess of the net proceeds received from the sale of all such
     Registrable Securities offered and sold by such Holder pursuant to such
     Registration Statement; and (B) no person or entity guilty of fraudulent
     misrepresentation (within the meaning of Section 11(f) of the Securities
     Act) will be entitled to contribution from any person or entity who was not
     guilty of such fraudulent misrepresentation.

          (f) Survival; Release.  The obligations of the Company and Holders
     under this Section 1.06 shall survive the completion of any offering of
     Registrable Securities in a Registration Statement and otherwise.  No
     indemnifying party, in the defense of any such claim or litigation, shall,
     except with the consent of each indemnified party, consent to entry of any
     judgment or enter into any settlement which admits fault on behalf of the
     indemnified party or which does not include as an unconditional term
     thereof the giving by the claimant or plaintiff to such indemnified party
     of a release from all liability in respect to such claim or litigation.

     Section 1.07. "Market Stand-Off" Agreement. Each Holder hereby agrees that
it shall not, to the extent requested by the Company or an underwriter of
securities of the Company, sell or otherwise transfer or dispose of any
Registrable Securities or other shares of stock of the Company then owned by
such Holder (other than to donees of the Holder who agree to be similarly bound)
for up to ninety (90) days following the effective date of a Registration
Statement of the Company for an underwritten offering filed under the Securities
Act; provided that all officers and directors of the Company have entered into
similar agreements. In order to enforce the foregoing covenant, the Company
shall have the right to place restrictive legends on the certificates
representing the shares subject to this Section and to impose stop transfer
instructions with respect to the Registrable Securities and such other shares of
each Holder (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period.

     Section 1.08. Termination of the Company's Obligations. The Company shall
have no obligations pursuant to Section 1.02 with respect to any Registrable
Securities proposed to be sold by a Holder in a registration pursuant to Section
1.02 if, in the opinion of counsel to the Company, all such Registrable
Securities proposed to be sold by a Holder and all other Common Shares then
owned by such Holder may be sold in a three-month period without registration
under the Securities Act pursuant to Rule 144 under the Securities Act. In such
event, such Holder shall not be subject to the provisions of Section 1.07.

                                       8
<PAGE>

                                  ARTICLE II

                                   AMENDMENT


     Section 2.01.  Amendment. Any provision 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 Holders holding Registrable Securities representing
more than fifty percent (50%) of all the Registrable Securities (on an as-
converted basis). Any amendment or waiver effected in accordance with this
Section 2.01 shall be binding upon each Holder and the Company.

                                  ARTICLE III

                              GENERAL PROVISIONS

     Section 3.01. Notices. Any and all notices required or permitted to be
given to a party pursuant to the provisions of this Agreement must be in writing
and will be effective and deemed to provide such party sufficient notice under
this Agreement on the earliest of the following: (i) at the time of personal
delivery, if delivery is in person; (ii) at the time of transmission by
facsimile, addressed to the other party at its facsimile number, with
confirmation of receipt made by both telephone and printed confirmation sheet
verifying successful transmission of the facsimile; (iii) one (1) business day
after deposit with an express overnight courier for deliveries within a country,
or three (3) business days after such deposit for international deliveries or
(iv) three (3) business days after deposit in mail by certified mail (return
receipt requested) or equivalent for deliveries within a country.

     All notices for international delivery will be sent by facsimile or by
express courier.  All notices not delivered personally or by facsimile will be
sent with postage and/or other charges prepaid and properly addressed to the
party to be notified at the following address or facsimile number:

     Company:  KFx Inc.
               3300 East First Avenue, Suite 290
               Denver, Colorado 80206
               Facsimile:  (303) 293-8430
               Attention:  Chief Financial Officer

     Holder:   U. S. Global, LLC
               c/o  Tellus Capital
               51 JFK Parkway, Second Floor
               Short Hills, NJ 07078

     Any party may by notice so given change its address for future notices
hereunder.  Notice shall conclusively be deemed to have been given in the manner
set forth above.

                                       9
<PAGE>

     Section 3.02. Entire Agreement. This Agreement and the Warrant constitute
and contain the entire agreement and understanding of the parties with respect
to the subject matter hereof and supersedes any and all prior negotiations,
correspondence, agreements, understandings, duties or obligations between the
parties respecting the subject matter hereof.

     Section 3.03. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware.

     Section 3.04. No Third Party Beneficiaries. This Agreement shall be binding
upon and inure solely to the benefit of the parties hereto and their permitted
assigns and nothing herein, express or implied, is intended to or shall confer
upon any other person any legal or equitable right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement.

     Section 3.05. Successors and Assigns. The provisions of this Agreement
shall inure to the benefit of, and shall be binding upon, the successors and
permitted assigns of the parties hereto.

     Section 3.06. Headings. The descriptive headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.

     Section 3.07. Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.

     Section 3.08. Expenses. All costs and expenses, including, without
limitation, fees and disbursements of counsel, financial advisors and
accountants, incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such costs and
expenses.

     Section 3.09. Construction. Words used herein, regardless of the gender
specifically used, shall be deemed and construed to include any other gender,
masculine, feminine or neuter, as the context requires.

                 [Remainder of Page Intentionally Left Blank]

                                       10
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first written above.


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

                                            KFX INC.



                                            By: ________________________________
                                                Name: __________________________
                                                Title: _________________________



                                            HOLDER:
                                            ------

                                            U. S. GLOBAL, LLC

                                            ____________________________________



               [SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

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