Document:

<PAGE>

                                                                    EXHIBIT 4.29

                                   KFX INC.

                 66,667 Warrants Each to Purchase One Share of
                           Common Stock of KFx Inc.

                                                            Warrants to Purchase
                                                                   66,667 Shares

          THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
     BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
     (THE "ACT"), OR ANY OF THE LAWS OF ANY STATE AND HAVE BEEN
     ISSUED PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
     ACT. THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT
     BE OFFERED, SOLD OR TRANSFERRED EXCEPT IF (A) COVERED BY AN
     EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND
     REGISTERED OR QUALIFIED UNDER APPLICABLE STATE SECURITIES
     LAWS, OR (B) THE CORPORATION HAS BEEN FURNISHED WITH AN
     OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE CORPORATION
     TO THE EFFECT THAT NO REGISTRATION OR QUALIFICATION IS
     LEGALLY REQUIRED FOR SUCH TRANSFER.

     FOR VALUE RECEIVED, KFx Inc., a Delaware corporation (the "Company"),
hereby certifies that William H. Walker, an individual or his registered assigns
as permitted herein (the "Holder") is entitled, subject to the provisions of
this Warrant Certificate, to purchase from the Company, at the times specified
herein, 66,667 fully paid and non-assessable shares of Common Stock of the
Company, par value $.001 per share (the "Common Stock"), at a purchase price per
share equal to the Exercise Price (as hereinafter defined) (the "Warrants").
The number of shares of Common Stock to be received upon the exercise of the
Warrants are subject to adjustment from time to time as hereinafter set forth.

                                   ARTICLE I

                                  DEFINITIONS

     The following terms, as used herein, have the following meanings:

     "Act" means the Securities Act of 1933.

     "Board" means the board of directors of the Company.

     "Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in the City of New York are authorized by law to close.

     "Commission" means the Securities and Exchange Commission.
<PAGE>

     "Common Stock" means the Company's common stock, $.001 par value per share.

     "Exercise Price" means $3.65 per Warrant Share, such Exercise Price to be
adjusted from time to time as provided herein.

     "Expiration Date" means the earlier of (i) 5:00 p.m. Denver, Colorado time
on November 29, 2006, and (ii) the date of its exercise in full.

     "Person" means an individual, a partnership, a corporation, a limited
liability company, a trust, a joint venture, an unincorporated organization and
a government or any department or agency thereof.

     "Warrant Shares" means the shares of Common Stock deliverable upon exercise
of the Warrants, as the number of such shares shall be adjusted from time to
time as provided herein, provided that if there is a change such that the
securities issuable upon exercise of the Warrants are issued by an entity other
than the Company or there is a change in the class of securities so issuable,
then the term "Warrant Shares" will mean the shares of the security issuable
upon exercise of the Warrants if such security is issuable in shares, or will
mean the smallest units in which such security is issuable if such security is
not issuable in shares.

                                  ARTICLE II

     Section 2.01.  Exercise of Warrants.

     (1)  The Holder is entitled to exercise the Warrants in whole or in part at
any time, or from time to time, until the Expiration Date or, if such day is not
a Business Day, then on the next succeeding day that shall be a Business Day.
To exercise the Warrants, the Holder shall execute and deliver to the Company a
Warrant Exercise Notice substantially in the form annexed hereto, together with
this Warrant Certificate and the payment of the applicable Exercise Price.  Upon
such delivery and payment, the Holder shall be deemed to be the holder of record
of the Warrant Shares subject to such exercise, notwithstanding that the stock
transfer books of the Company shall then be closed or that certificates
representing such Warrant Shares shall not then be actually delivered to the
Holder.

     (2)  The Exercise Price may be paid in cash or by certified or official
bank check or bank cashier's check payable to the order of the Company or by any
combination of such checks. In addition, the Holder of this Warrant may exercise
this Warrant by surrendering it to the Company to purchase a number of shares of
Common Stock equal to the number of such shares then purchasable upon exercise
hereof less the number of such shares equal to the quotient of the aggregate
Exercise Price of all such shares underlying this Warrant divided by the Fair
Market Price per Share. Fair Market Price per Share shall mean the average of
the closing sales prices, if available, or the average of the bid and asked
prices for the Common Stock (or its successor), on the principal market therefor
for the five trading days preceding the day which is one business day prior to
the day of exercise, or if no such price is available, as determined by the
Board. The Company shall pay any and all documentary, stamp or similar issue or
transfer taxes payable in respect of the issue or delivery of the Warrant
Shares.

                                       2
<PAGE>

     (3)  If the Holder exercises the Warrants in part, this Warrant Certificate
shall be surrendered by the Holder to the Company and a new Warrant Certificate
of the same tenor and for the unexercised number of Warrant Shares shall be
executed by the Company.  The Company shall register the new Warrant Certificate
in the name of the Holder or in such name or names of its transferees as may be
directed in writing by the Holder and deliver the new Warrant Certificate to the
Person or Persons entitled to receive the same.

     (4)  Upon surrender of this Warrant Certificate in conformity with the
foregoing provisions, the Company shall transfer to the Holder of this Warrant
Certificate appropriate evidence of ownership of the shares of Common Stock or
other securities or property (including any money) to which the Holder is
entitled, registered or otherwise placed in, or payable to the order of, the
name or names of the Holder or such transferee as may be directed in writing by
the Holder, and shall deliver such evidence of ownership and any other
securities or property (including any money) to the Person or Persons entitled
to receive the same, together with the amount in cash in lieu of any fraction of
a share as provided in Section 2.03 below.

     Section 2.02.  Restrictive Legend.  Certificates representing shares of
Common Stock issued pursuant to the Warrants shall bear a legend substantially
in the form of the legend set forth on the first page of this Warrant
Certificate.

     Section 2.03.  Fractional Shares.  No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of the Warrants
and in lieu of delivery of any such fractional share upon any exercise hereof,
the Company shall pay to the Holder an amount in cash equal to such fraction
multiplied by the then current market price per share of Common Stock.

     Section 2.04.  Loss or Destruction of Warrant.  Upon receipt by the Company
of evidence satisfactory to it (in the exercise of its reasonable discretion) of
the loss, theft, destruction or mutilation of this Warrant Certificate, and (in
the case of loss, theft or destruction) of reasonably satisfactory
indemnification, and upon surrender and cancellation of this Warrant
Certificate, if mutilated, the Company shall execute and deliver a new Warrant
Certificate of like tenor and date.

     Section 2.05.  Forfeiture.  Except as otherwise provided in this Warrant,
the Warrants may be exercised at any time through the close of business on
November 29, 2006.

     Section 2.06.  Effect of Reorganization, Reclassification, Consolidation,
Merger or Sale.  If at any time while this Warrant is outstanding there shall be
any reorganization or reclassification of the capital stock of the Company
(other than a stock split, stock dividend or other subdivision or combination of
shares) or any consolidation or merger of the Company with another corporation
(other than a consolidation or merger in which the Company is the surviving
entity and which does not result in any change in the Common Stock), or any sale
or other disposition by the Company of all or substantially all of its assets to
any other corporation, the Holder shall thereafter upon exercise of this Warrant
be entitled to receive the number of shares of stock or other securities or
property of the Company, or of the successor corporation resulting from such
consolidation or merger, as the case may be, to which the Warrant Shares
deliverable upon the exercise of this Warrant would have been entitled upon such
reorganization,

                                       3
<PAGE>

reclassification of capital stock, consolidation, merger, sale or other
disposition if this Warrant had been exercised immediately prior to such
reorganization, reclassification of capital stock, consolidation, merger, sale
or other disposition. In any such case, appropriate adjustment (as determined by
the Board) shall be made in the application of the provisions set forth in this
Warrant with respect to the rights and interests thereafter of the Holder to the
end that the provisions set forth in this Warrant (including those relating to
adjustments of the Exercise Price and the number of shares issuable upon the
exercise of this Warrant) shall thereafter be applicable, as near as reasonably
may be, in relation to any shares or other property thereafter deliverable upon
the exercise hereof as if this Warrant had been exercised immediately prior to
such reorganization, reclassification of capital stock, consolidation, merger,
sale or other disposition and the Holder hereof had carried out the terms of the
exchange as provided for by such reorganization, reclassification of capital
stock, consolidation or merger.

     Section 2.07.  Adjustments for Stock Events.  If at any time there shall
occur any stock split, stock dividend, reverse stock split or other subdivision
or combination of the Company's Common Stock (a "Stock Event"), then the number
of shares of Common Stock to be received by the holder of this Warrant shall be
appropriately adjusted such that the proportion of the number of shares issuable
hereunder to the total number of shares of the Company (on a fully diluted
basis) prior to such Stock Event is equal to the proportion of the number of
shares issuable hereunder after such Stock Event to the total number of shares
of the Company (on a fully-diluted basis) after such Stock Event.  No adjustment
to the Exercise Price shall be made in connection with any adjustment of the
number of shares of Common Stock receivable upon exercise of this Warrant,
except that the Exercise Price shall be proportionately decreased or increased
upon the occurrence of any Stock Event; however, in no event shall the Exercise
Price be less than the par value of the Common Stock.

     Section 2.08.  Reservation of Common Stock.  The Company will at all times
reserve and keep available for issuance upon the exercise of the Warrant such
number of its authorized but unissued shares of Common Stock as will be
sufficient to permit the exercise in full of the Warrant, and when issued upon
such exercise shall be validly issued, fully paid and nonassessable.

                                  ARTICLE III

                               NO VOTING RIGHTS

     Prior to the exercise of any Warrant, the Holder shall not, by virtue
hereof, be entitled to any rights as a stockholder of the Company, including,
without limitation, the right to vote, to receive dividends or other
distributions, to exercise any preemptive rights or to receive any notice of
meeting of stockholders or any notice of any proceedings of the Company except
as may be specifically provided for herein.

                                  ARTICLE IV

                           TRANSFER; REPRESENTATIONS

          (a)  Subject to the transfer conditions referred to in paragraph (b)
     below, this Warrant and all rights hereunder are transferable, in whole or
     in part, without charge to

                                       4
<PAGE>

     the Holder upon completion of the form of Assignment attached hereto as
     Exhibit B and surrender of this Warrant, together with such assignment, at
     the principal office of the Company.

          (b)  The Holder of this Warrant acknowledges and represents:

               (i)    that neither this Warrant nor the Warrant Shares have been
          registered under the Act, or any state securities law and agrees not
          to sell, pledge, distribute, offer for sale, transfer or otherwise
          dispose of this Warrant or any Warrant Shares issued upon its exercise
          in the absence of (A) an effective registration statement as to this
          Warrant or such Warrant Shares under the Act (or any similar statute
          then in effect) or any state securities law, or (B) an opinion of
          counsel for the Company to the effect that such registration is not,
          under the circumstances, required.

               (ii)   THE OFFER AND SALE OF THE SECURITIES EVIDENCED BY THIS
          CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE ACT, AND SUCH
          SECURITIES MAY NOT BE SOLD OR TRANSFERRED UNLESS THERE IS AN EFFECTIVE
          REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SALE OR TRANSFER
          OR THE COMPANY RECEIVES AN OPINION OF COUNSEL (WHICH MAY BE COUNSEL
          FOR THE COMPANY) STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE
          REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.

               (iii)  The Holder is acquiring this Warrant and the Warrant
          Shares for its own account for investment and not with a view to, or
          for sale in connection with, any distribution thereof; nor with any
          present intention of distributing or selling the same.

               (iv)   The Holder has made detailed inquiry concerning the
          Company, its business and its personnel; the officers of the Company
          have made available to the Holder any and all written information
          which it has requested and have answered to the Holder's satisfaction
          all inquiries made by the Holder, and the Holder has sufficient
          knowledge and experience in investing in companies similar to the
          Company so as to be able to evaluate the risks and merits of its
          investment in the Company and is able financially to bear the risks
          thereof.

          (c)  The Holder understands that the Company proposes to issue and
     deliver this Warrant and the Warrant Shares to the Holder pursuant to this
     Agreement without compliance with the registration requirements of the Act;
     that for such purpose the Company will rely upon the representations,
     warranties, covenants and agreements contained herein; and that such non-
     compliance with registration is not permissible unless such representations
     and warranties are correct and such covenants and agreements performed.
     The Holder is an "accredited investor" as such term is defined in Rule 501
     under the Act.

                                       5
<PAGE>

          (d)  The Holder understands that, under existing rules of the
     Commission, the Holder may be unable to sell this Warrant and the Warrant
     Shares except to the extent that this Warrant and the Warrant Shares may be
     sold (i) pursuant to an effective registration statement covering such
     securities pursuant to the Act or (ii) in a bona fide private placement to
     a purchaser who shall be subject to the same restrictions on any resale or
     (iii) subject to the restrictions contained in Rule 144 under the Act.

          (e)  The Holder (either alone or together with its advisors) has
     sufficient knowledge and experience in financial and business matters so as
     to be capable of evaluating the merits and risks of its investment in this
     Warrant and the Warrant Shares and the Holder is capable of bearing the
     economic risks of such investment.

                                   ARTICLE V

                                 NO IMPAIRMENT

     The Company will not, by amendment of its charter or through
reorganization, consolidation, merger, dissolution, sale of assets or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Holder of this
Warrant against impairment.

                                  ARTICLE VI

                             LIQUIDATING DIVIDENDS

     If the Company pays a dividend or makes a distribution on the Common Stock
payable otherwise than in cash out of earnings or earned surplus (determined in
accordance with generally accepted accounting principles), except for a stock
dividend payable in shares of Common Stock (a "Liquidating Dividend"), then the
Company will pay or distribute to the holder of this Warrant, upon the exercise
hereof, in addition to the Warrant Shares purchased upon such exercise, the
Liquidating Dividend which would have been paid to such holder if he had been
the owner of record of such shares of Common Stock immediately prior to the date
on which a record is taken for such Liquidating Dividend or, if no record is
taken, the date as of which the record holders of Common Stock entitled to such
dividend or distribution are to be determined.

                                  ARTICLE VII

                         NOTICES OF RECORD DATE, ETC.

     In case:

          (a)  the Company shall take a record of the holders of its Common
     Stock (or other stock or securities at the time deliverable upon the
     exercise of this Warrant) for the purpose of entitling or enabling them to
     receive any dividend or other distribution, or to receive any other right,
     or

                                       6
<PAGE>

          (b)  of any capital reorganization of the Company, any
     reclassification of the capital stock of the Company, any consolidation or
     merger of the Company with or into another corporation (other than a
     consolidation or merger in which the Company is the surviving entity), or
     any transfer of all or substantially all of the assets of the Company, or

          (c)  of the voluntary or involuntary dissolution, liquidation or
     winding-up of the Company,

     then, and in each such case, the Company will mail or cause to be mailed to
     the Holder of this Warrant a notice specifying as the case may be, (i) the
     date on which a record is to be taken for the purpose of such dividend,
     distribution or right, and stating the amount and character of such
     dividend, distribution or right, or (ii) the effective date on which such
     reorganization, reclassification, consolidation, merger, transfer,
     dissolution, liquidation or winding-up is to take place, and the time, if
     any is to be fixed, as of which the holders of record of Common Stock (or
     such other stock or securities at the time deliverable upon the exercise of
     this Warrant) shall be entitled to exchange their shares of Common Stock
     (or such other stock or securities) for securities or other property
     deliverable upon such reorganization, reclassification, consolidation,
     merger, transfer, dissolution, liquidation or winding-up.  Such notice
     shall be given at least ten (10) days prior to the record date or effective
     date for the event specified in such notice.

                                 ARTICLE VIII

                                 MISCELLANEOUS

     Section 8.01.  Amendment and Waiver.  The provisions of the Warrant may be
amended and the Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it upon the written consent
of the holders of a majority of the outstanding Warrants exercisable for a
majority of the Warrant Shares.

     Section 8.02.  Notices.  Any notices required to be sent to the Holder will
be delivered to the address of the Holder shown on the books of the Company.
All notices referred to herein will be delivered in person, sent by first-class
mail, postage prepaid, or by recognized express courier (such as Federal
Express).  Notice will be deemed to have been given upon personal delivery, one
business day after deposit with an express courier or two business days after
deposit in the mail.

     Section 8.03.  Descriptive Headings; Governing Law.  The descriptive
headings of the paragraphs of this Warrant are inserted for convenience only and
do not constitute a part of this Warrant.  The construction, validity and
interpretation of this Warrant will be governed by the laws of the State of
Delaware.

                                       7
<PAGE>

     IN WITNESS WHEREOF, the Company has caused this Warrant to be signed and
sealed by its duly authorized officers under its corporate seal this 29th day of
November, 2001.

                                             KFx Inc.

                                             By______________________________
                                             Name:___________________________
                                             Title:__________________________

                                       8
<PAGE>

                                   EXHIBIT A

                            WARRANT EXERCISE NOTICE

              (To be executed only upon exercise of the Warrants)

To:  KFx Inc.

     The undersigned irrevocably exercises the Warrants for the purchase of
__________ shares (the "Shares") of Common Stock, par value $.001 per share, of
KFx Inc. (the "Company") and agrees to make payment therefor [in the amount of
$______________] [in accordance with the cashless exercise provisions of Section
2.01(2) of the within Warrant Certificate], all on the terms and conditions
specified in the within Warrant Certificate, surrenders this Warrant Certificate
and all right, title and interest therein to the Company and directs that the
Shares deliverable upon the exercise of the Warrants be registered or placed in
the name and at the address specified below and delivered thereto.

Dated: ___________________, 20__.

                                        ________________________________
                                        (Signature of Owner)

                                        ________________________________
                                        (Street Address)

                                        ________________________________
                                        (City)      (State)   (Zip Code)
<PAGE>

Securities and/or check to be issued to:

Please insert social security or identifying number:

Name:

Street Address:

City, State and Zip Code:

Any unexercised portion of the Warrants evidenced by the within Warrant
Certificate to be issued to:

Please insert social security or identifying number:

Name:

Street Address:

City, State and Zip Code

                                       10
<PAGE>

                                   EXHIBIT B

                                  ASSIGNMENT

     FOR VALUE RECEIVED, _______________ hereby sells, assigns and transfers all
of the rights of the undersigned under the within Warrant, with respect to the
number of shares of Common Stock covered thereby set forth hereinbelow unto:

     Name of Assignee                Address             No. of Shares of
     ----------------                -------
                                                         Common Stock
                                                         ------------

     ______________________      ___________________    ___________________
                                 ___________________
                                 ___________________

Date:______________________      Name      ________________________________
                                           ________________________________
                                 Signature ________________________________
                                 Witness   ________________________________

     This Assignment must be completed and sent to:

                    KFx Inc.
                    3300 East First Avenue
                    Suite 290
                    Denver, CO 80206

                                       11<PAGE>

                                                                    EXHIBIT 4.30

                         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 William H. Walker ("Holder") to provide Holder with certain
registration rights relative to 66,667 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
<PAGE>

     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.

                                       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
<PAGE>

     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:   William H. Walker
               1100 Poydras Street
               Suite 3500
               New Orleans, LA 70163

     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:
                                   ------

                                   WILLIAM H. WALKER

                                   __________________________________________

               [SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

                                       11

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00038-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00038-of-00352.parquet"}]]