TECHNOLOGY LICENSE AND BINDER PURCHASE AGREEMENT


         THIS   TECHNOLOGY   LICENSE   AND  BINDER   PURCHASE   AGREEMENT   (the
"Agreement"),  is  made  and  entered  into  as of May 5,  1998  by and  between
Mountaineer   Synfuel,   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 to Licensee;

         WHEREAS  Licensor has or will purchase a synthetic  fuel  manufacturing
plant  under  a  binding  construction  contract  with  Centerline   Engineering
Corporation (the "Facility")  located near  Tallmansville,  Upshur County,  West
Virginia on property owned by Upshur Property, Inc. (the "Project");

         WHEREAS  Licensee  wishes to  obtain  and  Licensor  wishes to grant to
Licensee a license for the synthetic Coal  Briquetting  Technology in connection
with the Project 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)  manufactured by Licensor for use
in the operation of the Project.

         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.

                  "Applicable  Percentage"  means the Licensor's  Earned Royalty
rate per MM Btu as set forth in Section  3.3 divided by the amount of Section 29
Tax Credit per MM Btu.

                  "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
protocols,  source and object code and modifications,  test procedures,  program
cards,  tapes,   disks,   algorithms  and  all  other  scientific  or  technical
information in whatever form relating to, embodied in or used in the proprietary
process to produce  synthetic coal fuel  briquettes  from waste coal dust,  coal
fines 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

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coke briquettes from coke breeze,  iron revert materials,  or any technology for
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
new  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.  "Improvement"  means an  alteration  or addition to an  invention or
discovery  which  enhances,  to some extent,  performance  or economics  without
changing or destroying a product's,  device's,  or method's  basic  identity and
essential  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.

                  "Earned Royalty" has the meaning set forth in Section 3.3.

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

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

                  "Final  Determination"  has the  meaning  set forth in Section
3.5(3).

                  "Initial Royalty" has the meaning set forth in Section 3.2.

                  "IRS" means the Internal Revenue Service.

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

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

                  "Maximum Tax Credit  Amount at Risk" has the meaning set forth
in Section 3.5(4).
                  "Project" 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/or the  Limited  Liability

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Company  Agreement of Licensee and which  briquettes are reasonably  expected to
constitute "qualified fuels" pursuant 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.  The  parties  acknowledge  and  agree  that the
Proprietary  Binder  Material is not a staple  article of commerce  suitable for
substantial  non-infringing uses, but rather is an integral and inseparable part
of the Coal Briquetting Technology and developed technology owned by Licensor.

                  "Royalty" means the Initial Royalty and the Earned Royalty.

                  "Tax Credit" means tax credit for federal  income tax purposes
pursuant to Section 29 of the Internal Revenue Code, as amended.

         Terms  used  herein and not  defined  herein  shall  have the  meanings
assigned  thereto in the Asset Purchase  Agreement of even date herewith between
the Licensor and the Licensee.

         Section 2.  License Grant.

                  2.1  General.  Subject  to the  terms and  conditions  of this
Agreement,  Licensor  hereby  grants to  Licensee,  for the full and entire term
hereof,  a  non-exclusive  license to use the Coal  Briquetting  Technology  for
commercial  exploitation (and not for research development purposes),  including
the non-exclusive right to make, have made or use at the Facility and to sell or
otherwise   transfer  products  which  have  been  manufactured  with  the  Coal
Briquetting Technology.  Licensee hereby accepts the license on the terms hereof
and agrees to make and have made products using the Coal Briquetting  Technology
at the Facility only under this License  Agreement.  Licensee  shall not make or
have made products using the Coal Briquetting  Technology or similar  technology
except at the Facility. Licensee shall not have the right to sublicense the Coal
Briquetting Technology.

                  2.2  Licensor's  Ownership of Developed  Technology.  Licensee
shall have the right and is hereby  granted a  non-exclusive  license to use all
Developed  Technology  and/or  Improvements  relating  to the  Coal  Briquetting
Technology   without  payment  of  any  additional   compensation  to  Licensor,
throughout  the  Term  of  this  Agreement,  subject  to  the  restrictions  and
limitations  in this Section 2. All  Developed  Technology  and/or  Improvements
shall become Licensor's absolute property. 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 and the Developed  Technology at the Facility and not to
use any other  technology for the production of solid synthetic fuel intended to
qualify for tax credits under Section  29(c)(1)(C) of the Code. Licensee further
agrees to use the Coal Briquetting Technology only under


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authority of this License  Agreement with  Licensor.  Licensee shall act in good
faith to comply with the Exclusive Technology provisions of this Agreement so as
to preserve Licensor's ownership of the proprietary Developed Technology.

                  2.4  Non-licensed  Technology.  Licensor  retains the absolute
right to fully exploit its proprietary  technology and processes,  including but
not  limited  to the  application  of  such  technology  embodied  in  the  Coal
Briquetting  Technology  together  with any  improvements  thereto,  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.

                  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, or the Developed Technology
or  Improvements,  or  any  aspect  thereof  (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 1.5. 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.

                  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 reasonably  requested by Licensee  relevant to the
provisions of this  Agreement.  Licensee shall reimburse the Licensor the travel
and other  similar  out-of-pocket  expenses of Licensor in  performing  services
under this  section;  provided  however,  that  Licensee  shall obtain the prior
approval of Licensee for any expenditures in excess of $5,000.

         Section 3.  License Fee and Royalty.

                  3.1 License Fee.  Licensee  shall pay the Initial  Royalty and
Earned Royalty as a license fee to Licensor.

                  3.2 Initial Royalty.  Upon  the  execution of  this Agreement,
Licensee  shall pay * dollars ($*) to Licensor in  immediately  available  funds
(the "Initial Royalty") as an initial

            *    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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royalty  payment.  Licensor  shall  thereupon  lend such amount to Licensee as a
working capital loan, such loan to be repaid out of cash available after payment
of operating expenses on the basis set forth for subordinated payments of Earned
Royalty under Section 3.3.

                  3.3      Earned Royalty.

                           (a)  Licensee shall be  obligated to  pay to Licensor
quarterly  earned royalty  payments  ("Earned  Royalty")  which shall be due and
payable on each Quarterly Payment Date and on the Final Adjustment Date (subject
to Section 3.4). With respect to each Calendar  Quarter,  the Earned Royalty due
on the Quarterly Payment Date immediately  following such Calendar Quarter shall
be an amount equal to the sum of (i) * % of the aggregate  Estimated Tax Credits
generated by the Project  during such Calendar  Quarter and (ii) with respect to
the Earned Royalty due on any Adjustment Date, plus or minus *.  Notwithstanding
the  foregoing,  the  Licensor  agrees  that  the  Licensee  shall  not have any
obligation to make any Quarterly Payments of Earned Royalty unless and until the
date the conditions  set forth in Section  3.1(g) in the Company  Agreement have
been  satisfied or waived.  The final Earned  Royalty  shall be due on the Final
Adjustment  Date and shall be in the  amount of the Final  Adjustment  Amount if
such Final Adjustment Amount is a positive amount.

                           (b)  The  Manager  of  Licensee   shall  prepare  its
calculation  of the  Estimated  Tax  Credits  and the  Earned  Royalty  for each
Calendar  Quarter at the same time that the Manager  prepares its calculation of
the amount of the Quarterly  Contribution  as provided in Section  3.1(e) of the
Company  Agreement and shall submit a report  showing the  determination  of the
Earned  Royalty to the  Licensor  at the same time as the  Manager  submits  the
report  described  in Section  3.1(f) of the Company  Agreement  to the Members'
Accountant for review.

                           (c)  If  the   Licensor  objects  to   the  Manager's
calculation  of any Earned  Royalty,  the Licensor  shall  notify the  Purchaser
within two weeks after the  Purchaser  has submitted the report to the Licensor.
If the Licensor disputes the Purchaser's  calculations,  the Purchaser shall, in
good faith,  consider  the issues  raised or in dispute and discuss  such issues
with the Licensor and attempt to reach a mutually satisfactory agreement, taking
into account as well,  any issues raised by the Members'  Accountant and if such
dispute is  promptly  resolved,  the  adjusted  amount  agreed upon shall be the
Earned Royalty due. If the dispute is not promptly resolved, the Purchaser shall
pay, on the Quarterly Payment Date, the amount not in dispute.  Thereafter,  the
Licensor,  the Manager and the  Members'  Accountant  shall  promptly  select an
independent  entity  qualified  and  knowledgeable  in the  area  who  shall  be
instructed to resolve the dispute  promptly and, upon resolution of the dispute,
if it is determined that  additional  Quarterly  Contributions  are due from the
Members,  the  corresponding  additional  amount  shall be paid to the  Licensor
within  ten  days of the  date of such  determination,  together  with  interest
thereon from the date sixty days after the relevant  Quarterly  Payment Date, at
the rate of 6% per annum.

            *    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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                  3.4      Payment Terms.

                           (a)  The  Earned   Royalty  with  respect   to   each
Calendar Quarter shall be due to the Licensor not later than five days after the
Quarterly  Contribution  for such Calendar  Quarter is due to the Purchaser from
the Members under the terms of Section 3.1(f) of the Company Agreement. Such due
date for Earned  Royalty,  being the date which is five days after the Quarterly
Contribution Date, is herein referred to as the "Quarterly Payment Date.

                           (b) *.

                  3.5      Tax Event.  (1) *:

                           (i) *

                           (ii) *.

         (2)      For purposes of this Agreement, "Tax Event'"means *.

         (3) For purposes of this Agreement,  "Final  Determination" means, with
respect to Tax Credits related to the Licensee,

                  (i) unless an  adjustment is proposed with respect to any such
         Tax Credits, the expiration of the applicable statute of limitations;

                  (ii) unless an administrative  appeal or a judicial proceeding
         is initiated by the  Licensee or the affected  Member,  the date ninety
         days after the issuance of a notice of deficiency;

                  (iii)  unless  judicial   proceedings  are  initiated  by  the
         Licensee or the affected  Member,  a final decision with respect to the
         proposed  adjustment  by an IRS appeals  officer,  as  evidenced by the
         issuance of a 90-day  letter,  870-AD or like notice and the expiration
         of the period for initiating judicial proceedings;

                  (iv) unless appealed by the Licensee or the affected Member, a
         final  decision  with respect to the proposed  adjustment by the United
         States Tax Court,  Court of Federal Claims or the  appropriate  Federal
         District Court and the expiration of the period for filing an appeal of
         such decision;

                  (v) a final  decision of a United States Court of Appeals with
         respect to the proposed adjustment, unless a petition for certiorari to
         the United States  Supreme Court has been applied for and is pending or
         has been granted with respect to such decision;

                  (vi)  denial  of certiorari  by,  or  final decision  of,  the
         United States Supreme Court;  or

            *    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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<PAGE>

                  (vii) the settlement of a proposed adjustment as evidence by a
closing agreement.

                  (4) For purposes of this Agreement, "Maximum Tax Credit Amount
at Risk" means the amount  reasonably  determined  by any affected  Member to be
potentially  subject to disallowance by the Internal Revenue Service following a
Tax Event, plus interest and substantial  understatement penalties, which amount
shall not exceed the  product of (x) and sum of (I) the Tax  Credits  claimed by
such Member with  respect to the  operations  of the  Licensee  for all open tax
years (so long as such  claims  are  consistent  with the  applicable  final tax
return of the Licensee as to any such tax year),  it being  understood that such
amount is not limited to amounts directly  implicated by the Tax Event (since an
audit of one issue  related to Tax Credits  could  result in a  disallowance  of
other such discovered  later),  plus (II) any interest and penalties  payable by
such affected Member (to the extent attributable to Tax Credits arising from the
Licensee, multiplied by (y) the Applicable Percentage.

                  (5) Each of the Licensor and the Licensee  agrees that,  after
obtaining  knowledge thereof and subject to restrictions or limitations that may
exist under confidentiality agreements with other licensees, it will give prompt
notice  of any  matter  that is or could  become a Tax Event or that the IRS has
commenced  an  examination  of  any  other  synthetic  fuel  production  project
utilizing the proprietary process licensed under this Agreement, and the parties
as  promptly  thereafter  as  practicable  shall  meet to  discuss in good faith
whether a Tax Event in fact  exists or will  likely  occur and the  consequences
thereof.

         Section 4.  Sales of Binder.

                  4.1 Sale and Purchase.  Licensor  shall sell to Licensee,  and
Licensee shall purchase from Licensor,  Licensee's  requirements  of Proprietary
Binder  Material  required to operate the Project.  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  calendar  month shall be due and payable to Licensor on the tenth  Business
Day of the immediately succeeding month. Payments after the applicable due dates
shall accrue interest at the rate of one percent per 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,
plus (ii) * ($ * ) per ton of synthetic fuel product (based upon 2% binder).

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

            *    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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<PAGE>




                  (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) All  Proprietary  Binder  Material  shall be  delivered in
         compliance  with  applicable   environmental   laws  and   governmental
         regulations.

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

                  (d) There will be available at the Facility  from time to time
         as  reasonably  requested  by  Licensee  sufficient  quantities  of the
         Proprietary  Binder Material to supply the requirements of the Licensee
         for the  production  of up to 480,000 tons of Product per year from the
         date hereof until at least December 31, 2007.

                  (e) The  Proprietary  Binder Material may be produced from the
         ETG-400 mix of monomers; other monomers may be substituted in such mix,
         to produce  Proprietary  Binder  Material  that will  achieve  the same
         reaction and resulting  polymerization  pursuant to Licensor's patented
         Coal  Briquetting  Technology,  that will achieve the same  significant
         chemical  change,  and that will  result in an end  product  chemically
         indistinguishable   other  than  for  trace  substances  that  have  an
         immaterial  effect on the net change,  in each case  compared to an end
         product  that  is  produced  using  the  Proprietary   Binder  Material
         incorporating  the  ETG-400  formula.  Prior to and as a  condition  to
         substituting  other monomers for ETG-400,  the Licensor will provide to
         the Licensee a written  report of Craig N. Eatough,  Ph.D.,  or another
         third party fuels  expert  reasonably  acceptable  to the  Licensor and
         Licensee  to the  effect  that  (in  such  third  party's  professional
         judgment)  the monomers so to be  substituted  will achieve the results
         set forth in the first sentence of this Section 4.3(e).

                  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,  and all such purchase orders received by
Licensor during the term of this Agreement shall be deemed to have been accepted
by Licensor. (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


                                      - 8 -

<PAGE>




not be 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
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  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 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 Licensee shall be responsible for
its own direct  out-of-pocket  operating  costs incurred in connection  with the
production of Proprietary  Binder  Material  pursuant to this Section.  Licensor
will  deliver to a safety  deposit  box  maintained  by  Licensor at the Bank of
American Fork,  Highland Branch,  with a mutually agreed upon trustee, a written
copy of the formula  used by  Licensor to  manufacture  the  proprietary  binder
material and any Improvements  thereon.  Such trustee shall agree to provide the
formula to Licensee upon Licensee's  certifying to the trustee that Licensee has
a right  of  access  to  such  formula  pursuant  to this  Section  4.6  because
Licensor's  ability to deliver the  Proprietary  Binder Material to Licensee has
been interrupted or terminated.

         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  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.

         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.  Representations and Warranties.



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                  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 to its best knowledge and good faith belief that it (i) owns,  free and
clear of all liens and encumbrances,  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 and
all other  scientific  or technical  information  in whatever  form relating to,
embodied in or used in the  proprietary  process to produce  synthetic coal fuel
briquettes from waste coal dust, coal fines 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) has the right and power to grant
to Licensee the licenses  granted  herein,  (iii) has not made and will not make
any agreement with another in conflict with the rights granted herein,  and (iv)
has no knowledge that the sale or use of the rights, Proprietary Binder Material
and/or licenses  granted herein as contemplated by this Agreement would 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  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 January 1, 2008
(or, if later,  the last day on which sales of  synthetic  fuel can generate Tax
Credits);  or (b) for the full life of the last  U.S.  Patents  to expire  which
disclose and claim Covol's proprietary Coal Technology, defined below, whichever
date is earlier.  Any extension of this Agreement must be in writing,  signed by
both parties.


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         Section 9. 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 10.  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  11.  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:      Covol Technologies, Inc.
                           3280 North Frontage Road
                           Lehi, UT 84043
                           Fax:  (801) 768-4483
                           Attention:  President

         To Licensee:      Mountaineer Synfuel, L.L.C.
                           c/o Covol Technologies, Inc.
                           3280 North Frontage Road
                           Lehi, UT  84043
                           Fax:  (801) 768-4483
                           Attention:  President

         Section 12. Remedies Cumulative. Remedies provided under this Agreement
shall be  cumulative  and in  addition to other  remedies  provided by law or in
equity.

         Section 13. Entire  Agreement.  This 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.  This Agreement  supersedes 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  14.  Governing  Law.  This  Agreement  shall  be  governed  in
accordance with the laws of the State of Utah, exclusive of its conflict of laws
rules.

         Section 15. 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



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


COVOL TECHNOLOGIES, INC.             MOUNTAINEER SYNFUEL, L.L.C.

                                     By:  COVOL TECHNOLOGIES, INC.


By:    /s/ Stanley M. Kimball        By:    /s/ Brent M. Cook
       Name: Stanley M. Kimball             Name: Brent M. Cook
       Title:    CFO                        Title:    President






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