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                           LOAN AND SECURITY AGREEMENT


                                 By and Between

                            Covol Technologies, Inc.

                                       and

                           Trans Pacific Stores, Ltd.


















                                  June 12, 1998


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<PAGE>

                                TABLE OF CONTENTS

Section                                                                     Page

1.       Loan..................................................................1

2.       Warrants..............................................................1

3.       Security Agreement..................................................  1
         3.1.     Security Interest..........................................  1
         3.2.     Collateral. ...............................................  1
         3.3.     Cash Flow From Collateral. ................................  2
         3.4.     Release of Collateral. ....................................  2
         3.5.     Remedies Upon Default......................................  2

4.       Representations, Warranties and Covenants of Borrower...............  2
         4.1.     Corporate Existence; Compliance with Law...................  2
         4.2.     Corporate Power; Authorization; Enforceable Obligations....  3
         4.3.     Environmental Laws.........................................  3
         4.4.     Priority...................................................  3

5.       Representations, Warranties, and Covenants of the Lender............  3
         5.1.     Disclosure of Information..................................  3
         5.2.     Accredited Investor........................................  3

6.       Miscellaneous.......................................................  3
         6.1.     Survival of Warranties.....................................  3
         6.2.     Successors and Assigns.....................................  4
         6.3.     Governing Law..............................................  4
         6.4.     Counterparts...............................................  4
         6.5.     Titles and Subtitles.......................................  4
         6.6.     Notices....................................................  4
         6.7.     Expenses...................................................  4
         6.8.     Amendments and Waivers.....................................  4
         6.9.     Severability...............................................  4
         6.10.    Waiver of Trial by Jury....................................  4
         6.11.    Entire Agreement...........................................  5

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                           LOAN AND SECURITY AGREEMENT


         THIS LOAN AND SECURITY  AGREEMENT (the  "Agreement") is entered into as
of the 12th day of June, 1998, by and between COVOL  TECHNOLOGIES,  INC., a Utah
corporation,  (the "the Company"),  and TRANS PACIFIC  STORES,  LTD., a Delaware
corporation  ("Lender"),  and  evidences  the  obligation  of Lender to loan the
Company up to Four Million Dollars ($4,000,000.00), and Lender's acceptance of a
Secured Draw Down Promissory Note of even date herewith (the "Note").

         THE PARTIES HEREBY AGREE AS FOLLOWS:

         1 Loan.  Subject to the terms and  conditions of this Agreement and the
Secured Draw Down  Promissory  Note of even date herewith  (the "Note"),  Lender
agrees to lend, and the Company agrees to borrow,  the principal amount of up to
Four Million Dollars ($4,000,000) (the "Loan"), such amounts to be advanced over
time, by wire  transfer or check payable to the order of the Company  within two
(2) business  days of Lender's  receipt of a draw request (a "Draw  Request") in
the form attached to the Note. No Draw Requests can be made by the Company after
the  four-month  anniversary of the Note. The proceeds of the Loan shall be used
for operational and other expenses of the Company.

         2 Warrants.  As partial  consideration for the Loan, the Company grants
to Lender warrants (the "Warrants") to purchase  restricted  common stock of the
Company at an exercise  price  equal to the closing bid price on the  four-month
anniversary of the Loan ("Trigger Date"). The number of Warrants granted will be
equal to the  principal  amount  of the Loan  outstanding  on the  Trigger  Date
divided by Four Million Dollars  ($4,000,000) times 100,000. For example, if the
outstanding  balance of the Loan is $2,000,000 on the Trigger Date,  the Company
will grant to Lender 50,000 Warrants ($2,000,000/$4,000,000 x 100,000 = 50,000).
If the Loan has been paid in full by the  Trigger  Date,  the number of Warrants
granted  hereunder  will be zero.  Warrants  granted,  if any,  may be exercised
within two years of the date of  issuance  of such  Warrants.  The  Warrants  if
unexercised will expire on the two-year anniversary of the date of issuance.

         3  Security  Agreement.  Payment  of the Loan  shall be  secured to the
extent described below:

                  3.1.     Security Interest.   the  Company  hereby  grants  to
         Lender a security  interest in the property and the proceeds  described
         in Section  3.2 herein to secure the  Company's  obligations  under the
         Loan (the "Security Interest").

                  3.2.  Collateral.  The property in which the Security Interest
         is  granted  (the  "Collateral")  consists  of the  following:  (i) For
         $2,200,000  outstanding  at any time,  the  Collateral  is a continuing
         interest in that certain promissory note as amended ("Promissory Note")
         dated August 1996,  between the Company and Gerald M. Larson;  and (ii)
         The  Collateral for amounts in excess of $2,200,000 up to an additional
         $1,800,000 is a continuing interest in future cash flows payable to the
         Company pursuant

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         to the agreement  between A.T. Massey  ("Massey") and the Company dated
         December  4,  1997  for the  construction,  operation  and  sale of two
         360,000 ton synthetic fuel manufacturing facilities.  Upon execution of
         this  Agreement  or at the time the  Massey  cash flows  commence,  the
         Company shall execute and deliver to Lender any  documents,  notices or
         instruments reasonably requested by Lender to protect,  evidence,  give
         effect to or give notice of Lender's security  interest,  and shall pay
         all costs in connection therewith.

                  3.3.  Cash Flow From  Collateral.  If there is an  outstanding
         balance under this  Agreement as of the four month  anniversary  of the
         Agreement, the Company will assign payments to be paid thereafter under
         the  Collateral  directly to Lender.  Such payments will apply first to
         interest and then to principal.

                  3.4. Release of Collateral.  Notwithstanding  anything in this
         Agreement  to the  contrary,  Lender will release the  Promissory  Note
         Collateral  any  time  the  Loan  amount  is  equal  to  or  less  than
         $1,800,000,  provided  the  Massey  agreement  continues  to be held as
         Collateral  to  maintain  the  Loan  amount  at less  than or  equal to
         $1,800,000.

                  3.5. Remedies  Upon  Default.  In  the  event  of any Event of
         Default under the Note, Lender may do any one or more of the following:

                           3.5.1.   Declare  any  indebtedness  under  the  Loan
                           immediately due and payable;

                           3.5.2.  Enforce the security  interest  given in this
                           Agreement   under  the   provisions  of  the  Uniform
                           Commercial Code of the applicable  state or any other
                           equivalent law (the "Uniform Commercial Code");

                           3.5.3.  Exercise  any other  rights and remedies of a
                           secured  party under the Uniform  Commercial  Code of
                           the applicable  state or other applicable law, all of
                           which rights and  remedies  shall be  cumulative  and
                           non-exclusive, to the extent permitted by law.

         4 Representations, Warranties and Covenants of the Company. The Company
hereby represents, warrants, and covenants to Lender that:

                  4.1.  Existence;  Compliance  with Law.  The  Company (i) is a
         corporation  duly  organized,  validly  existing,  and in good standing
         under the laws of the State of  Delaware;  (ii) is duly  qualified as a
         foreign  corporation  and in  good  standing  under  the  laws  of each
         jurisdiction where its ownership or lease of property or the conduct of
         its business requires such qualification; (iii) has the requisite power
         and  authority  and the legal right under the laws of the state of Utah
         to own,  pledge,  mortgage,  or  otherwise  encumber  and  operate  its
         properties,  to lease the  property it  operates  under  lease,  and to
         conduct its business as now,  heretofore  and proposed to be conducted;
         (iv) has all material licenses, permits, consents, or approvals from or
         by, and has or will have made all  material  filings  with,  and has or
         will have given all material notices to, all

<PAGE>

         governmental  authorities having  jurisdiction,  to the extent required
         for such ownership,  operation,  and conduct;  and (v) is in compliance
         with its articles of incorporation.

                  4.2.  Power;  Authorization;   Enforceable  Obligations.   The
         execution,  delivery,  and performance by the Company of this Agreement
         and the Note (i) are within the  Company's  power under the laws of the
         state of Utah;  (ii) have  been duly  authorized  by all  necessary  or
         proper  action  under the laws of the  state of Utah;  (iii) are not in
         contravention   of  any   provision   of  the   Company   articles   of
         incorporation; (iv) to the Company's knowledge will not violate any law
         or  regulation,  or any order or  decree  of any court or  governmental
         instrumentality;  (v) will not conflict with or result in the breach or
         termination   of,   constitute  a  default  under,  or  accelerate  any
         performance required by, any indenture, mortgage, deed of trust, lease,
         agreement,  or other  instrument  to which the Company is a party or by
         which  the  Company  or any of  its  property  is  bound  (except  such
         conflict,  breach,  termination,  default, or acceleration as could not
         reasonably  be  expected  to  have a  material  adverse  effect  on the
         business  of the  Company);  (vi) will not  result in the  creation  or
         imposition  of any lien upon any of the  property of the Company  other
         than those in favor of the Lender; and (vii) do not require the consent
         or approval of any governmental  body,  agency,  authority or any other
         person.  At or prior to the funding of each Draw  Request,  each of the
         documents to be  delivered  at such time shall have been duly  executed
         and  delivered  by or on behalf of the  Company,  and each  shall  then
         constitute a legal, valid, and binding obligation of the Company to the
         extent it is a party thereto, enforceable against it in accordance with
         its terms,  subject to the effects of laws governing  creditors  rights
         generally and general principles of equity.

                  4.3.  Environmental  Laws. All premises and facilities  owned,
         leased,  used,  or operated by the Company or, to the  knowledge of any
         officer  of  the  Company   after  a  reasonable   investigation,   any
         predecessor in interest,  have been, and continue to be, owned, leased,
         used,  or operated in  compliance  in all  material  respects  with all
         applicable environmental laws.

                  4.4. Priority. The Company has not granted a security interest
         in the  Collateral  which is on a parity or  superior  to the  Security
         Interest of Lender.

         5  Representations,  Warranties,  and  Covenants of the Lender.  Lender
hereby represents, and warrants that:

                  5.1.  Disclosure of  Information.  Lender has received all the
         information it considers  necessary or appropriate for deciding whether
         to  grant  the  Loan.  Lender  further  represents  that  it has had an
         opportunity  to ask  questions  and  receive  answers  from the Company
         regarding the terms and conditions of the Loan.

                  5.2.  Accredited Investor.  Lender is an "accredited investor"
         within the definition set forth in Rule 501(a) under the Act.

         6        Miscellaneous.

<PAGE>

                  6.1. Survival of Warranties. The warranties,  representations,
         and  covenants  of the  Company  and the  Lender  contained  in or made
         pursuant to this Agreement  shall survive the execution and delivery of
         this  Agreement and the funding of any Draw Request and shall in no way
         be affected by any  investigation of the subject matter thereof made by
         or on behalf of Lender or the Company.

                  6.2.  Successors  and Assigns.  Except as  otherwise  provided
         herein,  the terms and conditions of this Agreement  shall inure to the
         benefit of and be binding upon the respective successors and assigns of
         the parties.

                  6.3.  Governing Law. This  Agreement  shall be governed by and
         construed  under the laws of the State of Utah without regard to choice
         of law principles.

                  6.4.     Counterparts.   This Agreement may be executed in one
         or more  counterparts,  each of which shall be deemed an original,  but
         all of which together shall constitute one and the same instrument.

                  6.5.  Titles and  Subtitles.  The titles and subtitles used in
         this  Agreement  are  used  for  convenience  only  and  are  not to be
         considered in construing or interpreting this Agreement.

                  6.6. Notices.  Unless otherwise provided,  any notice required
         or permitted  under this Agreement  shall be given in writing and shall
         be deemed  effectively  given upon personal delivery to the party to be
         notified or upon deposit with a reputable overnight courier or with the
         United States Post Office,  by registered  or certified  mail,  postage
         prepaid  and  addressed  to the  party to be  notified  at the  address
         indicated for such party on the signature page hereof, or at such other
         address as such party may  designate by ten (10) days  advance  written
         notice to the other parties.

                  6.7.     Expenses.   Each party shall bear its own expenses in
         connection with the transactions contemplated by this Agreement.

                  6.8. Amendments and Waivers. Any term of this Agreement may be
         amended and the  observance of any term of this Agreement may be waived
         only with the written consent of the Company and the Lender.

                  6.9. Severability. If one or more provisions of this Agreement
         are held to be unenforceable under applicable law, such provision shall
         be excluded from this Agreement and the balance of the Agreement  shall
         be  interpreted  as if such  provision  were so  excluded  and shall be
         enforceable in accordance with its terms.

                  6.10. Waiver of Trial by Jury.  BORROWER AND THE LENDER HEREBY
         WAIVE TRIAL BY JURY IN ANY ACTION, SUIT,  PROCEEDING OR COUNTERCLAIM OF
         ANY KIND  DIRECTLY  OR  INDIRECTLY  ARISING  OUT OF OR  RELATED TO THIS
         AGREEMENT OR THE LOAN OR ANY ACT OR OMISSION WHICH EITHER PARTY ASSERTS
         RESULTED IN ANY LIABILITY TO BORROWER,  THE LENDER OR THEIR  RESPECTIVE
         OFFICERS,

<PAGE>

         DIRECTORS,  STOCKHOLDERS,  PARTNERS,  EMPLOYEES, OR AGENTS, TO THE FULL
         EXTENT PERMITTED BY LAW.

                  6.11.  Entire  Agreement.  This Agreement,  the Note and other
         documents  delivered  pursuant  hereto  constitute  the full and entire
         understanding  and  agreement  between the  parties  with regard to the
         subjects hereof and thereof.

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

Address: 3280 North Frontage Road           COVOL TECHNOLOGIES, INC.
         Lehi, Utah 84043


                                              By:      /s/Stanley M. Kimball 
                                                  ------------------------------

                                              Name:       Stanley M. Kimball    
                                                    ----------------------------
                                              Title:       CFO                  
                                                     ---------------------------

Address: 555 Zang Street, Suite 300         TRANS PACIFIC STORES, LTD.
         Lakewood, CO 80228


                                               By:      /s/John P. Hill, Jr.  
                                                   -----------------------------

                                               Name:       John P. Hill, Jr.    
                                                     ---------------------------
                                               Title:      President            
                                                      --------------------------