EXHIBIT 4.28
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 Xx. Xxxxx X. Xxxxxxxxxxx ("Holder") to provide Holder with
certain registration rights relative to 133,333 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
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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.
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(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
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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
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shall so advise the Holders. In such event, the right of any such Holder's
Registrable Securities to be included in a registration pursuant to this
Section 1.02 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in
the underwriting to the extent provided herein. All Holders proposing to
distribute their Registrable Securities through such underwriting shall
enter into an underwriting agreement in customary form with the managing
underwriter or underwriter(s) selected for such underwriting.
Notwithstanding any other provision of this Agreement, if the managing
underwriter(s) determine(s) in good faith that marketing factors require a
limitation of the number of shares to be underwritten, then the managing
underwriter(s) may exclude shares (including Registrable Securities) from
the registration and the underwriting, and the number of shares that may be
included in the registration and the underwriting shall be allocated,
first, to the Company, and second, the maximum number of Registrable
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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.
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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.
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Section 1.04 Obligations of the Holders.
(a) It shall be a condition precedent to the obligations of the
Company to take any action pursuant to Section 1.02 that the selling
Holders furnish to the Company such information regarding themselves, the
Registrable Securities held by them, and the intended method of disposition
of such securities as is required to timely effect the registration of
their Registrable Securities.
(b) Each Holder delivering a written request to participate in an
underwritten registered offering in accordance with Section 1.02 shall, if
requested by the Company, as soon as practicable after such delivery,
execute and deliver to the Company a custody agreement and power of
attorney in customary form satisfactory to the Company and any managing
underwriter with respect to the Registrable Securities identified for sale
by such Holder (a "Custody Agreement" and "Power of Attorney,"
respectively). Each Custody Agreement and Power of Attorney shall provide,
among other things, that such Holder will deliver to and deposit in custody
with the custodian named therein (which shall be designated by the Company)
a certificate or certificates representing such Registrable Securities
(duly endorsed in blank by the registered owner or owners thereof or
accompanied by duly executed stock powers in blank) and irrevocably appoint
such custodian and attorney-in-fact with full power and authority to act
under the Custody Agreement and Power of Attorney, respectively, on the
Holder's behalf with respect to matters specified therein, including the
execution and delivery of an underwriting agreement.
(c) Each Holder that has Registrable Securities included in any
Registration Statement shall not (until further notice from the Company)
effect sales thereof after receipt of notice from the Company to suspend
sales to permit the Company to correct or update any Registration
Statement, including any prospectus.
Section 1.05. Delay of Registration. No Holder shall have any right to
obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Article I.
Section 1.06 Indemnification. In the event any Registrable Securities are
included in a Registration Statement pursuant to Section 1.02:
(a) By the Company. To the extent permitted by law, the Company will
indemnify and hold harmless each Holder, the partners, officers, directors,
legal counsel and accountants of each Holder, any underwriter (as defined in the
Securities Act) for such Holder and each person, if any, who controls such
Holder or underwriter within the meaning of the Securities Act or the Exchange
Act against any losses, claims, expenses, damages, or liabilities (joint or
several) to which they may become subject under the Securities Act, the Exchange
Act or any other securities or other law of any jurisdiction, common law or
otherwise, insofar as such losses, claims, expenses, damages, or liabilities (or
actions proceedings or settlements in respect
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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,
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however, that the indemnity agreement contained in this subsection 1.06(a)
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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
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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
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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,
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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
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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,
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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
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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
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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.
0000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Chief Financial Officer
Holder: Xx. Xxxxx X. Xxxxxxxxxxx
0000 Xxxxx 00/xx/ Xxxxxx
Xxxxxxxxx, XX 00000
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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]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first written above.
THE COMPANY:
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KFX INC.
By:_________________________________
Name:____________________________
Title:___________________________
HOLDER:
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XX. XXXXX X. XXXXXXXXXXX
____________________________________
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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