Exhibit 4.6


                       REGISTRATION RIGHTS AGREEMENT


         This Registration Rights Agreement (this "Agreement") is made and
entered into as of May 25, 2001 by and between KFx Inc., a Delaware
corporation (the "Company"), and Mark S. Sexton ("Holder") to provide
Holder with certain registration rights relative to 33,333 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.

             (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 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 Registrable 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.

         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.


         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"):

                  (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, 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) 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.

                                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:           Mark S. Sexton
                           ___________________________________
                           ___________________________________
                           ___________________________________

         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.

         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]



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




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

                                  KFX INC.




                                  By: /s/ Seth L. Patterson
                                     -----------------------------------------
                                     Name:   Seth L. Patterson
                                     Title:  Executive Vice President & CFO



                                  HOLDER:
                                  -------




                                           /s/ Mark S. Sexton
                                  -------------------------------------------
                                  Mark S. Sexton


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