MODIFICATION AND EXTENSION AGREEMENT

         THIS  MODIFICATION AND EXTENSION  AGREEMENT is made and entered into as
of April 30, 2000  between  COVOL  TECHNOLOGIES,  INC.,  a Delaware  corporation
("Covol") and CHEROKEE  ASSOCIATES  LLC, a Colorado  limited  liability  company
("Cherokee").

                                    RECITALS

         A. Covol is a party to a Loan and Security  Agreement  dated as of June
12, 1998 (the "Security  Agreement") in which Trans Pacific Stores, Ltd. ("TPS")
appears as the "Lender",  together with the related Secured Draw Down Promissory
Note in the original  principal amount of $4 Million (the "Note").  The Security
Agreement,  the Note and the related Common Stock Purchase  Warrants dated as of
October 12, 1998 to purchase  100,000 shares of Covol common stock are sometimes
referred to herein as the "Loan  Documents".  The Loan Documents have previously
been modified by a Letter Amendment dated May 6, 1999.

         B. TPS has  assigned  all of its right,  title and interest in the Loan
Documents to Cherokee.

         C. As currently  written,  the principal balance of the Note is due and
payable  on April 30,  2000.  Covol  and  Cherokee  desire  to  modify  the Loan
Documents  to provide for (i) the  repayment  of $2.0  Million of the  principal
balance  of the Note  through  the  issuance  of Covol  common  stock,  (ii) the
extension of the maturity date of the remaining $1.0 Million  principal  balance
of the Note, and (iii) certain other changes as set forth herein.

         NOW  THEREFORE,  in  consideration  of the premises,  the covenants and
condition  contained  herein  and other  good and  valuable  consideration,  the
receipt and sufficiency of which is hereby acknowledged, the parties agree to be
legally bound as follows:

         1.  Acknowledgment of Amounts Owed. Covol and Cherokee  acknowledge and
agree that as of April 30, 2000 the total  amount owed by Covol  pursuant to the
Note and other Loan Documents is (i) the principal balance of $3.0 Million, plus
(ii) accrued interest for the month of April, 2000 in the amount of $34,520.55.

         2.  Modification  of Note.  Section 2 of the Note is hereby modified to
provide  that (i) $2.0  Million of the  principal  balance  shall be paid on the
effective date of this  Agreement  through the issuance of Covol common stock as
set forth in  paragraph  4 below,  (ii) the  remaining  $1.0  Million  principal
balance shall be due and payable, together with any accrued but unpaid interest,
on April 30, 2001.  Interest on the  principal  balance  shall  continue to bear
interest at 14% per annum, payable monthly in arrears. This Agreement,  together
with the May 6, 1999 Letter Amendment  referred to in the Recitals above,  shall
be affixed to the original Note.

         3.  Payment  of  Accrued  Interest.   Cherokee  agrees  that,  in  full
satisfaction of accrued

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interest  due  under  the Note  through  April  30,  2000,  Covol  shall pay (i)
$19,561.64 to TPS, representing interest accrued through April 17, 2000 and (ii)
$14,958.91 to Cherokee. Such payments shall be by Covol check.

         4. Payment of Principal in Stock. Covol shall deliver to Cherokee,  and
Cherokee shall accept from Covol,  1,185,818 shares of Covol's restricted common
stock,  $.001 par value (the "Shares") in full payment and  satisfaction  of the
$2.0 Million of principal due on April 30, 2000.

         5. Partial Release of Collateral.  Cherokee hereby releases any and all
interest  it may have  pursuant  to the  Security  Agreement  or the other  Loan
documents in and to the Promissory Note between Covol and Gerald M. Larson dated
August,  1996 and referred to in paragraph 3.2 of the Security  Agreement in the
original principal amount of $5,000,000.00.  Cherokee shall deliver, or cause to
be  delivered,  to Covol the original of such  Promissory  Note,  including  the
related  Guaranty  of  Gerald  M.  Larson  dated  April  29,  1998,  as  soon as
practicable  after the  effective  date of this  Agreement,  but in any event no
later than May 19, 2000.

         6.  Consideration  for  Modification.  As additional  consideration for
Cherokee's agreement to accept the Shares in payment of principal and modify the
Note as set forth herein,  Covol shall issue to Cherokee  Common Stock  Purchase
Warrants (the "Warrants") entitling Cherokee to purchase up to 296,454 shares of
Covol  restricted  common stock (the "Warrant  Shares") at an exercise  price of
$2.10 per share.  The Warrants will expire April 30, 2005.  The Warrants will be
in substantially the form attached hereto as Exhibit "A".

         7. Cherokee  Representations  and Warranties.  Cherokee  represents and
warrants to Covol as follows:

                  a.  Cherokee  acknowledges  receipt  of the  summary  of  risk
         factors (the "Risk Factors")  attached as Exhibit "B" to this Agreement
         and has access to and has  reviewed  the  publicly  filed  reports (the
         "Public  Filings")  of Covol  listed on Exhibit "C" to this  Agreement.
         Cherokee   further   acknowledges   that  it  has  read  carefully  and
         understands  the Risk Factors and the Public  Filings,  and has had the
         opportunity  to meet with officers of Covol to ask questions and, prior
         to its  execution  of this  Agreement,  was  given  full  access to all
         information  which Covol possesses or can acquire without  unreasonable
         effort  or  expense  that  is  necessary  to  verify  the  accuracy  of
         information  furnished to Cherokee,  and all such questions,  if asked,
         have been answered satisfactorily and such documents, if examined, have
         been  found to be fully  satisfactory.  Cherokee  further  acknowledges
         that,  in making its  investment  decision,  it is relying upon its own
         investment  judgment and the Risk Factors and Public Filings.  No other
         representations  have  been  made  to,  or  authorized  to be made  to,
         Cherokee.  Cherokee agrees to keep  confidential and not to disclose to
         third  parties  any  non-public  information  concerning  Covol that it
         receives in connection with the purchase of the Shares and Warrants.

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                  b. The Shares and Warrants are being  acquired by Cherokee for
         its own account,  for  investment  only and not  presently  with a view
         toward  resale  or   distribution  in  a  manner  which  would  require
         registration of such  securities  under the Securities Act of 1933 (the
         "Securities Act").

                  c. Cherokee is  authorized  and  otherwise  duly  qualified to
         purchase and hold the Shares and Warrants.  Cherokee certifies that all
         of its equity owners are "accredited  investors" as defined in Rule 501
         promulgated  under the Securities Act. Upon request of Covol.  Cherokee
         will provide a list of its equity  owners and  questionnaires  or other
         proof of the  accredited  investor  status  of each.  Cherokee  was not
         formed  for the  specific  purpose  of  acquiring  the Note,  Shares or
         Warrants.

                  d. Cherokee  understands that the Shares, the Warrants and the
         Warrant  Shares  have not been  registered  under the  Securities  Act.
         Cherokee is fully aware of the  restrictions  on sale,  transferability
         and assignment of the Shares,  Warrants and Warrant Shares as set forth
         in this Agreement and the  certificates  of such  securities,  and that
         Cherokee must bear the economic risk of Cherokee's  investment in Covol
         for an  indefinite  period of time  because the  offering  has not been
         registered  under the Securities  Act, and,  therefore,  the securities
         cannot be offered or sold unless they are subsequently registered under
         the Securities Act or an exemption from such registration is available.
         Cherokee  further  understands  that the Shares,  Warrants  and Warrant
         Shares will bear an appropriate legend to this effect.

                  e. Cherokee is aware of the following:

                           i.  The  Shares,  Warrants  and  Warrant  Shares  are
         speculative  investments which involve a high degree of risk, including
         those risks outlined in Exhibit "B" and Exhibit "C"; and

                           ii.  There  are   substantial   restrictions  on  the
         transferability  of the  securities.  The Shares,  Warrants and Warrant
         Shares  have not  been,  and  except  as set  forth  in this  Agreement
         shareholders  have no  rights  to  require  that  such  securities  be,
         registered  under the  Securities  Act and it may not be  possible  for
         Cherokee to liquidate Cherokee's  investment in Covol. Cherokee further
         agrees to be responsible for compliance with all conditions on transfer
         imposed by any state blue sky or securities law.

                  f. Cherokee warrants and represents that it has such knowledge
         and experience in financial and business  matters that it is capable of
         evaluating  the  merits  and  risks of an  investment  in Covol and the
         Shares,  Warrants and Warrant Shares, and that Cherokee is able to bear
         the economic risks of the  investment for an indefinite  period of time
         and  at  the  present  time  could  afford  a  complete  loss  of  such
         investment.

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<PAGE>

                  g. Cherokee originally acquired the Note from TPS in a private
         transaction  between related  entities which did not involve any public
         offering, general advertising or general solicitation.

         8. Covol Representations and Warranties.  Covol represents and warrants
to Cherokee as follows:

                  a.  Covol  is a  corporation  duly  incorporated  and in  good
         standing under the laws of the State of Delaware.

                  b. Covol's execution of this Agreement and the issuance of the
         Shares and Warrants have been duly authorized. The Shares will be, when
         issued as set forth herein, duly issued, fully paid and non-assessable.
         When the Warrants are  exercised  and the full  exercise  price paid as
         provided therein, the Warrant Shares issued on exercise of the Warrants
         will be duly issued, fully paid and non-assessable.

                  c. Covol has  completed  the sale of its  Mountaineer  synfuel
         facility.  Except as set forth  herein,  there has not been a  material
         adverse  change to the business or  financial  condition of Covol since
         the date of the most recent Public Filing described on Exhibit "C".

         9. Registration Rights Under Securities Act.

                  a. Covol agrees to use its best reasonable  efforts to file at
         its  expense,  no  later  than 15 days  following  the date  hereof,  a
         registration  statement  on Form S-3  including  the Shares and Warrant
         Shares for resale.  Covol will use its best reasonable efforts to cause
         such registration statement to become effective as soon as practicable,
         and will take all other  reasonable  action necessary under any Federal
         or state law or regulation of any governmental  authority to permit all
         such  Shares  and  Warrant   Shares  which  it  has  included  in  such
         registration  statement to be sold or  otherwise  disposed of, and will
         use its best  reasonable  efforts to maintain such compliance with each
         such Federal and state law and regulation of any governmental authority
         for the earlier of (A) twelve months from the date of  effectiveness of
         such  registration  statement under the Securities Act and (B) the date
         upon which Cherokee has completed the sale or other  disposition of all
         of the  Shares.  Covol  may  include  securities  being  sold by  other
         stockholders  in  such  registration   statement.   Cherokee  shall  be
         responsible  for the costs of any separate  counsel  retained by it and
         for any underwriting discounts or commissions incurred by it.

                  b. Cherokee shall promptly provide Covol with such information
         regarding  Cherokee and Cherokee's  plan of  distribution  as Covol may
         reasonably  request in order to  prepare  the  registration  statement.
         Covol's  obligation  to obtain and  maintain the  effectiveness  of any
         registration statement is conditioned on Covol's continued ability to

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         utilize Form S-3 (or any successor short form  registration  statement)
         for secondary  offerings.  If Covol determines in good faith that it is
         necessary  or  in  Covol's  best   interest  to  amend  any   effective
         registration  statement, it shall so notify Cherokee and Cherokee shall
         suspend  all sales  under the  registration  statement  until Covol has
         either  amended the  registration  statement or notified  Cherokee that
         sales can resume.  The twelve month period referred to in paragraph 9.a
         shall be extended by any period for which sales were so suspended.

                  c.  If  Covol   fails  or  is  unable   to  file  and   obtain
         effectiveness  of the Form S-3  registration  statement  as provided in
         paragraph described 9.a, Covol shall grant Cherokee, as Cherokee's sole
         and exclusive remedy, the piggy-back registration rights as provided in
         Exhibit  "D"  attached  hereto,  subject to the  existing  registration
         rights previously granted by Covol to other persons.

                  d. In connection with any registration statement including the
         Shares or Warrant  Shares,  Covol shall (i) furnish to Cherokee and any
         underwriter  designated  by  Cherokee,  such copies of the  prospectus,
         including the preliminary prospectus,  conforming to the Securities Act
         (and such other  documents  as  Cherokee or each such  underwriter  may
         reasonably  request) in order to facilitate the sale or distribution of
         the Shares or Warrant Shares,  (ii) use its best reasonable  efforts to
         register or qualify the Shares and  Warrant  Shares  under the blue sky
         laws (to the extent  applicable) of such  jurisdiction or jurisdictions
         as Cherokee and any appointed  underwriter shall reasonably request and
         (iii)  take  such  other  actions  as may be  reasonably  necessary  or
         advisable to enable  Cherokee and such  underwriters  to consummate the
         sale or distribution in such  jurisdiction  or  jurisdictions  in which
         Cherokee shall have reasonably requested.

         10.  Notice  Addresses.  For  purposes of this  Agreement  and the Loan
Documents,  the notice address of Cherokee is 555 Zang St., Suite 300, Lakewood,
Colorado 80228. Covol's notice address remains 3280 N. Frontage Road, Lehi, Utah
84043.

         11. Continued  Validity.  Except as modified herein and as necessary to
reflect the assignment by TPS to Cherokee,  the Loan  Documents  shall remain in
full force and effect.

         12. Further Assurances. Covol and Cherokee hereby covenant and agree to
execute and deliver,  or cause to be executed and delivered,  and to do or make,
or cause to be done or made, upon the reasonable  request of the other,  any and
all instruments,  papers, deeds, acts or things,  supplemental,  confirmatory or
otherwise,  as may be  reasonably  required  by such  party for the  purpose  of
effecting the modification described herein.

         13. Merger. This Agreement and the Loan Documents constitute the entire
agreement between the parties hereto as to the transactions  contemplated hereby
and supersedes all prior  discussions,  understandings or agreements between the
parties hereto.

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         14. Successors and Assigns.  This Agreement shall bind and inure to the
benefit of the parties hereto and their respective successors and assigns.

         15. Governing Law. This Agreement and all other instruments referred to
herein shall be governed by, and shall be  construed  according  to, the laws of
the State of Utah.

         16.  Counterparts.  To  facilitate  execution,  this  Agreement  may be
executed in as many  counterparts as may be required.  It shall not be necessary
that the signature on behalf of the parties  hereto  appear on each  counterpart
hereof,  and it shall be  sufficient  that the signature on behalf of each party
hereto  appear  on  one  or  more  such  counterparts.  All  counterparts  shall
collectively constitute a single agreement.

         IN WITNESS  WHEREOF,  the  parties  have caused  this  Agreement  to be
executed as of the date and year first above written.

         Cherokee:                  CHEROKEE ASSOCIATES LLC


                                    By /s/ John P. Hill, Jr.
                                       -----------------------------
                                       John P. Hill, Jr.
                                       Its Manager


         Covol:                     COVOL TECHNOLOGIES, INC.

                                    By /s/ Steven G. Stewart
                                       -----------------------------
                                       Steven G. Stewart
                                       Its: Chief Financial Officer

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