EX-10.61.1
LICENSE AND BINDER PURCHASE AGREEMENT W/ COVOL


                      LICENSE AND BINDER PURCHASE AGREEMENT


         THIS LICENSE AND BINDER PURCHASE AGREEMENT (the  "Agreement"),  is made
and entered into as of August 27, 1999 by and between DTE River Hill,  L.L.C., a
Delaware limited  liability company (the  "Licensee"),  and Covol  Technologies,
Inc., a Delaware corporation (the "Licensor").

         WHEREAS  Licensor  has  developed  a  proprietary  process  to  produce
synthetic coal fuel extrusions,  pellets, and briquettes  (collectively referred
to herein as  "briquettes")  from  waste  coal  dust,  coal fines and other coal
derivatives,  and Licensor is entitled to license the synthetic Coal Briquetting
Technology (as defined below) to Licensee;

         WHEREAS Licensor has constructed a synthetic fuel  manufacturing  plant
(the  "Facility")  located near Karthus,  Clearfield  County,  Pennsylvania,  on
property  leased from River Hill Coal  Company,  Inc.  and  Licensee has or will
acquire the Facility  from  Licensor as  contemplated  by that certain  Purchase
Agreement dated as of August 27, 1999, by and between Licensor and Licensee (the
"Purchase Agreement");

         WHEREAS  Licensee  wishes to  obtain  and  Licensor  wishes to grant to
Licensee a license for the synthetic Coal  Briquetting  Technology to be used in
connection  with the  Facility  on the  terms and  conditions  set forth in this
Agreement, and Licensee wishes to obtain and Licensor wishes to sell to Licensee
the  Proprietary  Binder Material (as defined below) for use in the operation of
the Facility.

         NOW, THEREFORE,  in consideration of the foregoing premises, the mutual
covenants  and  agreements  hereinafter  set forth,  and other good and valuable
consideration,  the receipt  and  sufficiency  of which is hereby  acknowledged,
Licensor and Licensee each agree as follows:

         Section 1.  Definitions.

         "Coal Briquetting Technology" means all intellectual property,  patents
(including but not limited to United States Patent Numbers 5,599,361; 5,487,764;
and  5,453,103) and  applications  therefor,  printed and not printed  technical
data,  know-how,  trade  secrets,  copyrights  and other  intellectual  property
rights, inventions,  discoveries,  techniques, works, processes, methods, plans,
software, designs, drawings, schematics, specifications, communications

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protocols,  source and object code and modifications,  test procedures,  program
cards,  tapes,   disks,   algorithms  and  all  other  scientific  or  technical
information in whatever form including "Developed Technology" and "Improvements"
relating to,  embodied in or used in the process to produce  synthetic coal fuel
briquettes from waste coal dust, coal fines, run of mine coal, and other similar
coal derivatives,  including all such information in existence as of the date of
this  Agreement  as well as related  information  later  developed  by Licensor;
provided, however, that the defined term "Coal Briquetting Technology" shall not
include the proprietary  process/method  or other binder material or composition
developed by Licensor to produce  synthetic  coke  briquettes  from coke breeze,
iron revert materials,  or any technology used in any application other than the
processing  and production of synthetic  coal fuel  briquettes.  Nothing in this
Agreement  is  intended  to  grant to  Licensee  the  right  to  apply  the Coal
Briquetting  Technology  to  produce  anything  other than  synthetic  coal fuel
intended to qualify for tax credits  under Section  29(c)(1)(C)  of the Internal
Revenue Code.

         "Code" means the Internal Revenue Code of 1986, as amended.

         "Developed   Technology"   means  any  inventions,   "Improvement,"  or
technology that Licensor may conceive,  make,  invent,  or suggest in connection
with Licensor's disclosure to Licensee of the Coal Briquetting  Technology,  all
of which the  parties  hereto  acknowledge  and agree  constitutes  the sole and
exclusive   property  of  Licensor.   "Developed   Technology"  also  means  any
inventions,  "Improvement,"  or new  technology  directly  related  to the  Coal
Briquetting  Technology that Licensor or Licensee may conceive,  make, invent or
suggest  relating  to the Coal  Briquetting  Technology  during the Term of this
Agreement; provided, however, that "Developed Technology" shall not include coal
fines recovery,  coal fines washing,  material  handling,  or product  marketing
techniques or technologies  conceived,  made, invented, or suggested by Licensee
that are  generally  applicable  to the coal  industry but which are used at the
Facility in connection with the Coal Briquetting Technology.

         "Effective Date" means the date of this Agreement set forth above.

         "Facility" has the meaning set forth in the preamble.

         "Improvement"  means an  alteration  or  addition  to an  invention  or
discovery  which may  enhance  performance  or  economics  while  maintaining  a
product's,   device's,   or  method's  essential  identity  and  character.   An
Improvement  may  comprise  alterations  or  additions  to  either  patented  or
unpatented inventions,  discoveries,  technology, or devices, and may or may not
be patentable;  provided,  however,  that  "Improvement"  shall not include coal
fines recovery,  coal fines washing,  material  handling,  or product  marketing
techniques or technologies  conceived,  made, invented, or suggested by Licensee
that are  generally  applicable  to the coal  industry but which are used at the
Facility in connection with the Coal Briquetting Technology.

         "Licensee" has the meaning set forth in the preamble.

         "Licensor" has the meaning set forth in the preamble.

         "Proprietary  Binder  Material" means and refers to the binder compound
necessary  for the  production,  by Licensee,  of synthetic  coal  briquettes as
contemplated  under the Purchase  Agreement and which  briquettes are reasonably
expected to constitute "qualified fuels" pursuant

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to the  terms of  Section  29(c)(1)(C)  of the Code  and with  respect  to which
Section 29 is applicable pursuant to Section 29(f) and 29(g) of the Code.

         "Purchase Agreement" has the meaning set forth in the preamble.

         "Royalty" has the meaning set forth in Section 3.

         Section 2.  License Grant.

         2.1 General. Licensor hereby grants to Licensee a non-exclusive license
to use the Coal Briquetting  Technology,  including Developed  Technology and/or
Improvements relating to the Coal Briquetting Technology, throughout the term of
this  Agreement,  for the  purpose of  commercial  exploitation,  including  the
non-exclusive  right to make,  have made or use at the  Facility and to offer to
sell and to sell or otherwise transfer products that have been manufactured with
the Coal  Briquetting  Technology,  subject to the terms and  conditions of this
Agreement.  Licensee  hereby  accepts the license on the terms hereof.  Licensee
shall not have the right to sublicense the Coal Briquetting Technology.

         2.2  Licensor's  Ownership  of  Developed  Technology.   All  Developed
Technology  and/or   Improvements  are  and  shall  become  Licensor's  absolute
property,  subject to the terms of this  Agreement.  Licensee  shall at any time
during the Term of this  Agreement  and  thereafter,  at  Licensor's  reasonable
request,  execute any patent papers  covering such Developed  Technology  and/or
Improvements as well as any other documents that Licensor may consider necessary
or  helpful  in the  prosecution  of  applications  for a patent  thereon  or in
connection  with  any  litigation  or  controversy  related  thereto;  provided,
however,  that all expenses  incident to the filing of such applications and the
prosecution  thereof  and the  conduct  of such  litigation  shall  be  borne by
Licensor.

         2.3  Exclusive  Technology.  Licensee  agrees  to  use  only  the  Coal
Briquetting  Technology  at the Facility and not to use any other  technology at
the Facility,  except to the extent other or additional technology is necessary.
Licensee shall not use any process or  methodology  that is not part of the Coal
Briquetting Technology, except to the extent that other or additional technology
is  necessary,  and shall not use any  materials in the  production of Synthetic
Fuel at the Facility that are not Proprietary  Binder Material as determined and
approved by Licensor.  Licensee (i) shall not make or have made  products  using
the Coal Briquetting Technology or similar technology except at the Facility and
(ii)  shall  only  make and  have  made  products  using  the  Coal  Briquetting
Technology at the Facility  under this License  Agreement,  except to the extent
other or additional technology is necessary.  Licensee further agrees to use the
Coal Briquetting  Technology only under authority of this License Agreement with
Licensor.

         2.4  Non-licensed  Technology.  Licensor  retains the absolute right to
fully exploit its technologies including, but not limited to, the application of
such technology embodied in the Coal Briquetting  Technology to produce,  market
and use synthetic coke briquettes from coke breeze,  iron revert materials,  and
any other materials to which Licensor's technology can be applied.

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         2.5  Confidentiality.  Each of the parties hereby agree to maintain the
Coal  Briquetting   Technology   confidential  and  not  to  disclose  the  Coal
Briquetting  Technology,   or  any  aspect  thereof,   including  the  Developed
Technology  or  Improvements  (collectively,  the  "Confidential  Information").
Notwithstanding  the foregoing,  information  which (i) is or becomes  generally
available to the public other than as a result of an unauthorized  disclosure by
the parties or their respective agents, employees, directors or representatives,
(ii) was available to the party receiving disclosure on a non-confidential basis
prior to its receiving disclosure hereunder, (iii) lawfully becomes available to
the party receiving  disclosure on a  non-confidential  basis from a third party
source (provided that such source is not known by the party receiving disclosure
or its agents,  employees,  directors or  representatives  to be prohibited from
transmitting the information),  or (iv) a party is compelled by legal process by
any court or other  authority  to disclose  shall not be subject to the terms of
this Section 2.5. In the case of (iv) above,  the compelled party shall give the
other  party  prompt  written  notice of such  legal  process  in order  that an
appropriate  protective  order can be sought and each party agrees not to oppose
the other party's efforts to prevent the disclosure of Confidential Information.
At the termination of this Agreement, all copies of any Confidential Information
(including,  without limitation,  any reports or memoranda) shall be returned by
the  party  receiving  disclosure.  Nothing  in this  Agreement  shall  prohibit
Licensee  from  disclosing  the  Confidential  Information  to  others as may be
reasonably  necessary  for  Licensee  to  exploit  Licensee's  rights  under the
Purchase  Agreement,  and/or this Agreement;  provided that the recipient of any
such Confidential  Information executes a Confidentiality  Agreement restricting
further disclosure of the Confidential Information.

         2.6 Know-How and  Assistance.  To enable Licensee to benefit fully from
the license of the Coal Briquetting Technology, Licensor shall provide access to
all  relevant  documentation,  drawings,  engineering  specifications  and other
know-how in its possession, reasonable access to its employees or agents who are
familiar  with  the  Coal  Briquetting  Technology,  Developed  Technology,  and
Improvements  and shall  provide such  technical  assistance  and training as is
requested  by  Licensee.  If  Licensor  does  not  have  responsibility  for the
operation of the Facility,  Licensee  shall  reimburse  Licensor for  reasonable
travel and other  similar  out-of-pocket  expenses  of  Licensor  in  performing
services under this Section 2.6;  provided  however,  that Licensor shall obtain
the prior approval of Licensee for any expenditures in excess of $5,000.

         Section 3.  Royalty.

         3.1 Royalty Payments.  Subject to adjustment as described below, during
the term of this  Agreement,  Licensee  shall pay to  Licensor  a royalty  in an
amount  equal to ** per ton of Section 29 Product  (as  defined in the  Purchase
Agreement) produced at the Facility and sold during the period commencing on the
effective  date  hereof and ending on  December  31,  2000,  and a royalty in an
amount  equal to ** per ton of Section 29 Product  produced at the  Facility and
sold  during the  period  commencing  on  January  1, 2001 and  ending  upon the
expiration of the term (or earlier termination) of this Agreement.  Such royalty
shall be paid quarterly on the last day of January,  April,  July and October of
each year for the Section 29 Product sold during the previous calendar quarter.

         3.2 Royalty Advance  Payment Option.  At any time prior to July 1, 2000
at which  Licensor  demonstrates  to  Licensee's  reasonable  satisfaction  that
Purchase  Commitments  (as  defined  below)  for  Section  29  Product  (whether
delivered as a blended product or otherwise) are

**       This  exhibit  contains  confidential  material  which has been omitted
         pursuant to a Confidential  Treatment Request.  The omitted information
         has been filed separately with the Securities and Exchange Commission.

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in place for  minimum  annual  tonnage in excess of ** tons,  Licensor  shall be
entitled to exercise an option  (the  "Option")  to receive an advance  lump-sum
payment of a portion of the  royalties  provided in Section  3.1 (the  "Lump-Sum
Royalty Payment") as provided herein. For purposes hereof, "Purchase Commitment"
shall mean a binding  contract  whereby  the  customer  is  required to purchase
Section 29 Product (whether delivered as a blended product or otherwise),  which
contract has a duration of at least three years,  and contains force majeure and
other terms,  conditions and product  specifications that are  industry-standard
and customary for coal purchase contracts in the central Pennsylvania region and
which can  reasonably  be  expected  to be met by the  product  produced  at the
Facility, when blended with River Hill Coal Company supplied coal, if applicable
all as determined by Licensee to its reasonable satisfaction.  The Option may be
exercised  more than once but must be  exercised,  if at all, by written  notice
given by Licensor to Licensee of such  exercise,  together with such  supporting
evidence and necessary  documentation,  on or before June 30, 2000.  The maximum
amount of the Lump-Sum  Royalty  Payment  available  upon exercise of the Option
shall  be (i)  **,  to the  extent  that  Licensor  demonstrates  to  Licensee's
satisfaction  (pursuant to testing and operating  procedures or protocols agreed
to by the  parties)  production  of 10,000  tons of  Section  29  Product at the
Facility within any ten consecutive day period (the "Ten Day  Threshold"),  less
(ii) an amount  equal to ** times the  aggregate  number of tons of  Section  29
Product  produced at the Facility  prior to the initial  exercise of the Option,
for which  royalties were  previously  paid pursuant to Section 3.1 hereof.  The
maximum Lump-Sum Royalty Payment  available upon exercise of the Option prior to
achieving the Ten Day Threshold shall be ** (the "Initial Cap"). At any time the
Option is exercised,  the Lump-Sum Royalty Payment will equal (i) the product of
(X) **  reduced by ** times the  aggregate  number of tons of Section 29 Product
produced at the Facility prior to the initial exercise of the Option,  for which
royalties  were  previously  paid  pursuant  to  Section  3.1  hereof  and (Y) a
fraction,  the  numerator  of which is the  aggregate  amount by which  Purchase
Commitments  exceed ** tons and the  denominator  of which is **;  less (ii) the
aggregate amount already paid in respect of any previous exercise of the Option;
provided, however, that such aggregate amounts shall not exceed the Initial Cap,
if  applicable.  Upon  achievement  of the Ten Day  Threshold,  the Cap shall be
eliminated  as to the  calculation  of the  Lump-Sum  Royalty  Payment  for  any
exercise  of the  Option  following  such  achievement,  and the  portion of the
Lump-Sum  Royalty Payment not previously paid by reason of the Initial Cap shall
then become payable.  Upon initial exercise of the Option,  the royalty payments
provided  for in  Section  3.1  shall be  reduced  to ** per ton for the  period
commencing on the  effective  date hereof and ending on December 31, 2000 and **
per ton for the period  commencing on January 1, 2001 ending upon the expiration
of the term (or earlier termination) of this Agreement.

         3.3  Termination by Licensee.  Licensees'  obligations to pay royalties
under this  Section 3 are  subject to the terms of Section  5.9 of the  Purchase
Agreement.

         Section 4.  Sales of Binder.

         4.1 Sale and Purchase.  Licensor  shall sell to Licensee,  and Licensee
shall  purchase from  Licensor,  all of Licensee's  requirements  of Proprietary
Binder  Material  required to operate the Facility.  Licensor  shall deliver the
Proprietary  Binder  Material at such times and in such  amounts as requested by
Licensee.  Licensor  shall  invoice  Licensee for  Proprietary  Binder  Material
monthly.  Payments for Proprietary  Binder Material delivered by Licensor during
any

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calendar month shall be due and payable to Licensor on the tenth business day of
the immediately succeeding month.

         4.2  Price.  The price  which  Licensee  shall pay for the  Proprietary
Binder Material delivered by Licensor shall be an amount equal to (i) Licensor's
direct and actual costs  (including,  but not limited to,  material,  labor, and
transportation  costs) and a percentage of the total  overhead costs of Licensor
reasonably  reflecting  the  ratio  of  the  administrative  costs  incurred  in
connection  with the  manufacture  and sale of the  Proprietary  Binder Material
(estimated at the date hereof to be ** per unit of Proprietary  Binder  Material
necessary to create one (1) ton of synthetic  fuel  product),  payable within 30
days of  receipt of an invoice  therefor,  plus (ii) ** per unit of  Proprietary
Binder  Material  necessary  to create one (1) ton of  synthetic  fuel  product,
payable for the preceding  calendar  quarter on the last day of January,  April,
July and October of each year.

         4.3  Licensor  Representations  and  Warranties.  Licensor  represents,
warrants and covenants as follows:

                  (a)  Licensor  shall  convey  to  Licensee  good  title to all
         Proprietary   Binder  Material  purchased  by  Licensee  from  Licensor
         hereunder, free and clear of any and all liens, claims and encumbrances
         of any type whatsoever.

                  (b) No Proprietary Binder Material shall contain any hazardous
         material in violation of applicable laws and governmental regulations.

                  (c) At Licensee's reasonable request,  Licensor shall replace,
         or refund the purchase price of, all non-conforming Proprietary Binding
         Material.

                  (d) Proper use of the Coal Briquetting  Technology,  including
         use at an adequate, qualified facility and with adequate feedstocks and
         other raw materials, will enable Licensor to produce a product which is
         reasonably  expected to constitute  "qualified  fuels"  pursuant to the
         terms of Section 29(c)(1)(C) of the Code.

         4.4 Order  Procedure.  Licensee  shall deliver all purchase  orders for
Proprietary  Binder  Materials at least thirty (30) days in advance of the first
day of the  month in which  delivery  of such  Proprietary  Binder  Material  is
required  under such  purchase  order.  (For example,  Licensee  shall deliver a
purchase order for December  delivery by no later than November 1st).  Each such
purchase order shall be delivered  either (i) in writing  (including by fax), or
(ii) orally by  telephone  by an  authorized  agent of Licensee  (subject to the
condition that it is followed by a written purchase order within 24 hours). Such
purchase  orders  shall be sent to  Licensor at such  address as Licensor  shall
direct.

         4.5 Delivery and Acceptance.  All Proprietary Binder Material purchased
hereunder shall be delivered F.O.B. the Facility. Licensor shall arrange for any
necessary  transportation  of the  Proprietary  Binder Material to the Facility.
Licensee shall bear the expense of unloading of Proprietary Binder Material from
the trucks.  Licensee shall have a reasonable  opportunity to sample Proprietary
Binder  Material  delivered to it  hereunder  to confirm  that such  Proprietary
Binder  Material  conforms to the terms and  requirements  hereof,  and Licensee
shall not be

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deemed or required to accept any such  Proprietary  Binder Material prior to the
completion of such sampling.

         4.6 Delivery Of Binder Material.  If Licensor's  ability to deliver the
Proprietary  Binder  Material to Licensee will be  interrupted or terminated for
any  reason,  Licensor  shall  give not less than  ninety  (90)  days  notice to
Licensee.  Subject to giving notice of its inability to deliver the  Proprietary
Binder  Material to Licensee  (or,  in the  absence of such  notice,  the actual
failure to deliver the Proprietary Binder Material for at least twenty (20) days
after  Licensee  gives written  notice of  non-delivery  to Licensor),  Licensor
hereby grants to Licensee a nonexclusive  license for the term of this Agreement
(or such shorter period as provided in the proviso hereto) to use the technology
used to manufacture the Proprietary Binder Material, and the copy of the Formula
delivered in escrow  pursuant to Section  4.7, to  manufacture  the  Proprietary
Binder  Material  in  sufficient  quantities  to operate  the  Facility  to full
capacity, and such technology shall be deemed "Coal Briquetting  Technology" for
the purposes of this Agreement;  provided,  however, that the license granted to
Licensee under this Section 4.6 shall cease (subject to  reinstatement  upon the
reoccurrence of the events  contemplated  above) and sales of Proprietary Binder
Material under the terms of this Agreement shall be reinstated, in each case, on
a date not less than ninety (90) days after  Licensor  gives notice to Licensee,
together with evidence reasonably satisfactory to Licensee that Licensor is able
to deliver the Proprietary Binder Material in accordance with this Agreement. No
additional  fee or royalty shall be payable to Licensor in  connection  with the
License  granted  pursuant to this Section and Licensor shall be responsible for
any additional  out-of-pocket  costs incurred by Licensee in connection with the
production of Proprietary Binder Material pursuant to this Section.

         4.7 Escrow of Binder Material Formula.

         As a material  inducement for Licensee entering into this Agreement and
for the Buyer under the Purchase Agreement entering into the Purchase Agreement,
and in order to provide  assurance  to  Licensee of access to and  adequate  and
continuing  supply of the  Proprietary  Binder  Material during the term of this
Agreement,  Licensor  agrees to place in escrow  with  Licensee  the formula and
technology used to manufacture  the Proprietary  Binder Material (the "Formula")
as provided  herein.  In connection  therewith,  Licensor agrees to deposit with
Licensee,  within  ten (10)  days of the date of this  Agreement,  a copy of the
Formula.  During the term of this Agreement,  Licensor shall keep the Formula in
escrow fully current by depositing all updates and revisions thereto and related
materials,  as the  Formula  may be updated or revised  from time to time.  Such
supplemental  deposits  will be  completed no later than ten (10) days after the
date of use of such  revised  Formula by  Licensor.  Title to the Formula  shall
remain in  Licensor,  but title to the copy  thereof to be  deposited  in escrow
hereunder  shall, in the event the Formula shall be released for use to Licensee
as provided in Section 4.6,  pass to and vest in Licensee.  Licensee  shall hold
such  copy  of the  Formula  and  any  supplements  in a  safe-deposit  box at a
financial   institution  located  in  the  Detroit/Ann  Arbor,  Michigan  region
designated by Licensee and reasonably approved by Licensor.  Notwithstanding its
ownership of a copy of the Formula in such event,  Licensee's use of the Formula
shall remain subject to the terms of this Agreement.

         Section 5.  Records;  Inspection;  Confidentiality.  Each party  hereto
shall keep accurate  records  containing  all data  reasonably  required for the
computation and verification of the amounts to be paid by the respective parties
under  this  Agreement,  and shall  permit  each other

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party or an  independent  accounting  firm  designated  by such  other  party to
inspect and/or audit such records during normal  business hours upon  reasonable
advance  notice.  All costs and expenses  incurred by a party in connection with
such  inspection  shall be borne by it. Each party  agrees to hold  confidential
from all third parties all  information  contained in records  examined by or on
behalf of it pursuant to this Section 5;  provided,  however,  that  information
which (i) is or becomes generally available to the public other than as a result
of an  unauthorized  disclosure  by the  parties  or  their  respective  agents,
employees,  directors  or  representatives,  (ii)  was  available  to the  party
receiving  disclosure  on  a  non-confidential  basis  prior  to  its  receiving
disclosure  hereunder,  (iii) lawfully becomes  available to the party receiving
disclosure on a non-confidential  basis from a third party source (provided that
such  source is not  known by the  party  receiving  disclosure  or its  agents,
employees,  directors or  representatives to be prohibited from transmitting the
information),  or (iv) a party is  compelled  by legal  process  by any court or
other authority to disclose shall not be subject to the terms of this Section 5.
In the case of (iv) above, the compelled party shall give the other party prompt
written  notice of such legal  process in order that an  appropriate  protective
order can be sought  and each  party  agrees  not to  oppose  the other  party's
efforts to prevent the  disclosure of such  information.  At the  termination of
this Agreement,  all copies of such information (including,  without limitation,
any reports or memoranda) shall be returned by the party receiving disclosure.

         Section 6. Enforcement Of Proprietary Rights.  Licensee shall cooperate
in good faith,  with Licensor's  efforts to enforce its  proprietary  patent and
trade secret rights.

         Section 7.  General Representations and Warranties.

         7.1  Authority.  Each of Licensee and Licensor  represents and warrants
that (i) the  execution,  delivery and  performance  of this  Agreement  and the
consummation of the transactions  contemplated  hereby have been duly authorized
on its behalf by all requisite action,  corporate or otherwise,  (ii) it has the
full right,  power and  authority to enter into this  Agreement and to carry out
the terms of this  Agreement,  (iii) it has duly  executed  and  delivered  this
Agreement,  and (iv) this  Agreement  is a valid and  binding  obligation  of it
enforceable in accordance with its terms.

         7.2 No Consent.  Each of Licensee and Licensor  represents and warrants
that no approval, consent,  authorization,  order, designation or declaration of
any court or regulatory  authority or  governmental  body or any  third-party is
required to be obtained by it, nor is any filing or registration  required to be
made therewith by it for the consummation by it of the transactions contemplated
under this Agreement.

         7.3 Intellectual  Property  Matters.  Licensor  represents and warrants
that (i) it owns, free and clear of all liens and encumbrances,  patents related
to the Coal Briquetting Technology (including, but not limited to, United States
Patent  Numbers  5,599,361,  5,487,764 and 5,453,103) and has developed the Coal
Briquetting Technology,  including,  but not limited to, printed and not printed
technical data,  know-how,  trade secrets,  copyrights,  and other  intellectual
property  rights and all other  scientific or technical  information in whatever
form relating to,  embodied in or used in the process to produce  synthetic coal
fuel  briquettes  from waste coal dust,  coal fines,  run of mine coal and other
similar coal  derivatives,  and, the right to freely make, use, sell and exploit
Proprietary Binder Material used in manufacturing synthetic coal fuel briquettes
from waste coal dust, coal fines and other similar coal derivatives, (ii) it has
the right and power

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to grant to Licensee the licenses  granted herein,  and (iii) the sale or use of
the rights,  Proprietary  Binder  Material  and/or  licenses  granted  herein as
contemplated by this Agreement will not infringe any third-party's  intellectual
property rights.

         7.4  Indemnification.  Each party agrees to indemnify,  defend and hold
harmless the other party and its partners, directors, officers, members, agents,
representatives,  subsidiaries  and  affiliates  from  and  against  any and all
claims,  demands or suits (by any party,  including  any  governmental  entity),
losses,  liabilities,   damages,  obligations,   payments,  costs  and  expenses
(including  the  costs  and  expenses  of  enforcing  this  indemnification  and
defending  any and all actions,  suits,  proceedings,  demands and  assessments,
which shall include reasonable  attorneys' fees and court costs) resulting from,
relating to, arising out of, or incurred in connection with any breach of any of
the representations, warranties and/or covenants contained in this Agreement.

         Section  8.  Term.  The term of this  Agreement  is (a) for the  period
commencing  on the  Effective  Date of this  Agreement and ending on 31 December
2007,  (b) for the full term of Section 29 of the Code, or (c) for the full life
of the last to expire of the U.S.  patents in existence at the effective date of
this  Agreement  that disclose and claim Covol's  proprietary  Coal  Briquetting
Technology as defined  herein,  whichever  date is later.  Any extension of this
Agreement must be in writing, signed by both parties.

         Section  9.  Termination.  This  Agreement  shall  terminate  upon  the
termination  date set forth in Section 8,  unless the  Agreement  is  terminated
sooner pursuant to this Section 9.

         9.1  Termination  for Cause. In addition to any other remedies that may
exist,  either party may  terminate  this  Agreement  for cause in the event the
other party  commits a material  breach of any  provision  of this  Agreement by
giving the other  party at least  sixty (60) days prior  written  notice of such
termination, unless such default or breach is cured within said sixty (60) days.
If either party  terminates this Agreement  pursuant to this Section 9, Licensee
shall  promptly  return and cause all agents of Licensee  to promptly  return to
Licensor all Confidential  Information and all Coal Briquetting  Technology then
in Licensee's  possession,  and Licensee  shall not  thereafter  use for its own
commercial benefit or disclose to any third person any Confidential  Information
or Coal Briquetting Technology during the period ending three (3) years from the
date of such termination.  Notwithstanding the foregoing,  information which (i)
is or becomes  generally  available  to the public  other than as a result of an
unauthorized  disclosure  by the  Licensee or its  respective  members,  agents,
employees, directors or representatives, (ii) was available to the Licensee on a
non-confidential  basis  prior  to its  receiving  disclosure  hereunder,  (iii)
lawfully becomes  available to the Licensee on a  non-confidential  basis from a
third party  source  (provided  that such source is not known by the Licensee or
its members,  agents,  employees,  directors or representatives to be prohibited
from transmitting the  information),  or (iv) the Licensee is compelled by legal
process by any court or other  authority to disclose shall not be subject to the
terms of the duty to protect Confidential Information set forth in this section.
In the case of (iv) above,  the Licensee shall give the Licensor  prompt written
notice of such legal process in order that an appropriate  protective  order can
be sought and Licensee  agrees not to oppose  Licensor's  efforts to prevent the
disclosure of Confidential Information.

         9.2 Termination for Insolvency or Ceasing Business.  This Agreement may
be terminated by Licensor if:

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<PAGE>

                  (a) Licensee  becomes  insolvent or is unable to pay its debts
         as they fall due, seeks protection  voluntarily or involuntarily  under
         any   law   relating   to   bankruptcy,    receivership,    insolvency,
         administration,   liquidation,   dissolution  or  similar  law  of  any
         jurisdiction  (other than for the purposes of a  reorganization  with a
         view to  continuing  the  business as a going  concern  under  relevant
         bankruptcy  or  insolvency   proceedings)  or  enters  into  a  general
         assignment or arrangement  or a composition  with or for the benefit of
         its creditors; or

                  (b)  Licensee   takes  any  step   (including  the  filing  or
         presentation of a petition, the convening of a meeting or the filing of
         an application or consent) in any jurisdiction  for, or with a view to,
         the appointment of an  administrator,  liquidator,  receiver,  trustee,
         custodian  or  similar  official  (other  than  for the  purposes  of a
         reorganization  with a view  to  continuing  the  business  as a  going
         concern  under  relevant  bankruptcy  or  insolvency  proceedings)  for
         Licensee  and/or  the whole or any part of the  business,  undertaking,
         property,  assets, receiver or uncalled capital of Licensee or any such
         person is appointed.

         9.3 Effect of  Termination.  Upon  termination of this  Agreement,  all
rights granted to and future obligations of the parties shall immediately cease;
however  termination  shall not relieve either party of its obligations  accrued
during the term of this  Agreement  (including  any  pre-termination  obligation
Licensee  may  have to pay  Licensor)  which  has not  been  fulfilled,  and all
representations,  warranties,  indemnification  obligations and  confidentiality
agreements made herein shall survive termination of this Agreement.

         Section 10. Waiver. The failure of any party to enforce at any time any
provision of this Agreement shall not be construed as a waiver of such provision
or the right  thereafter to enforce each and every  provision.  No waiver by any
party, either express or implied, of any breach of any of the provisions of this
Agreement  shall be  construed  as a waiver of any other  breach of such term or
condition.

         Section 11.  Severability.  If any provision of this Agreement shall be
held by a court of competent  jurisdiction to be invalid or unenforceable in any
respect for any reason, the validity and enforceability of any such provision in
any other respect and of the remaining provisions of this Agreement shall not be
in any way impaired.

         Section  12.  Notices.  All  notices  required  or  authorized  by this
Agreement shall be effective upon receipt and given to the parties in writing by
fax, mail, or courier as follows:

         To Licensor:      Brent M. Cook, President
                           Covol Technologies, Inc.
                           3280 North Frontage Road
                           Lehi, UT  84043
                           Fax:  (801) 768-4481

         To Licensee:      DTE RIVER HILL, L.L.C.
                           425 South Main Street
                           Suite 201
                           Ann Arbor, Michigan 48107
                           Fax:  (734) 668-9739
                           Attn: Gary Quantock

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<PAGE>

         With a copy to:   DTE Energy Services
                           425 South Main Street
                           Suite 201
                           Ann Arbor, Michigan 48107
                           Fax: (734) 668-1028
                           Attn:  General Counsel

         Section 13. Remedies Cumulative. Remedies provided under this Agreement
shall be  cumulative  and in  addition to other  remedies  provided by law or in
equity.

         Section  14.  Entire  Agreement.  This  Agreement,  together  with  the
Transaction  Documents (as defined in the Purchase  Agreement),  constitutes the
entire agreement of the parties relating to the subject matter hereof. There are
no promises,  terms,  conditions,  obligations,  or warranties  other than those
contained  herein and therein.  This  Agreement  and the  Transaction  Documents
supersede  any and all prior  communications,  representations,  or  agreements,
verbal or written,  between the parties  relating to the subject  matter hereof.
This  Agreement  may not be  amended  except in  writing  signed by the  parties
hereto.

         Section  15.  Governing  Law.  This  Agreement  shall  be  governed  in
accordance with the laws of the State of New York,  exclusive of its conflict of
laws rules.

         Section 16. Assignment. This Agreement may not be assigned, in whole or
in part,  by any party  without the written  consent of the other  party,  which
consent shall not be  unreasonably  withheld,  except that Licensor and Licensee
shall have the right to assign their  respective  rights and  obligations  under
this Agreement to any entity which is controlled by Licensor or Licensee, as the
case may be,  and of  which  Licensor  or  Licensee,  as the case may be,  owns,
directly  or  indirectly,  at least  fifty  percent  (50%) of each  class of its
outstanding securities,  provided that no such assignment shall release Licensor
or Licensee, as the case may be, from their respective obligations hereunder.

         Executed by the duly  authorized  representative  of the parties on the
date and year first above written.

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<PAGE>

COVOL TECHNOLOGIES, INC.                    DTE RIVER HILL, L.L.C.


By:  /s/ Kirk A. Benson                     By:   /s/ Kent McCargar
    -------------------------                    ---------------------------
Name:  Kirk A. Benson                       Name:  Kent McCargar
Title: CEO                                  Title: VP and CFO

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