MOUNTAINEER FUELS

                            ASSET PURCHASE AGREEMENT

                                 by and between

                                DTE KENTUCKY, LLC

                                       and

                            COVOL TECHNOLOGIES, INC.

                             MOUNTAINEER FUELS, LLC

                            SYNFUEL INVESTMENTS, INC.

                                 April 17, 2000


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                                TABLE OF CONTENTS

                                                                          Page

ARTICLE I DEFINITIONS.......................................................1
         1.1. Acknowledgment and Release....................................1
         1.2. Affiliate.....................................................1
         1.3. Agreement.....................................................1
         1.4. As-Built Drawings.............................................1
         1.5. Assets........................................................2
         1.6. Assignment Agreement..........................................2
         1.7. Bill of Sale..................................................2
         1.8. Books and Records.............................................2
         1.9. Buyer's Closing Certificate...................................2
         1.10. Closing......................................................2
         1.11. Closing Date.................................................2
         1.12. Code.........................................................2
         1.13. Confidentiality Agreement....................................2
         1.14. Contracts....................................................2
         1.15. Covol........................................................2
         1.16. Covol Process................................................2
         1.17. Effective Time...............................................3
         1.18. Excluded Assets..............................................3
         1.19. Facility.....................................................3
         1.20. Facility Site................................................3
         1.21. Fixed Assets.................................................3
         1.22. GAAP.........................................................3
         1.23. Holdback Amount..............................................3
         1.24. HSR Act......................................................3
         1.25. Improvements.................................................3
         1.26. Initial Purchase Consideration...............................3
         1.27. IRS..........................................................3
         1.28. Knowledge of Buyer...........................................3
         1.29. Knowledge of Sellers.........................................3
         1.30. Law..........................................................3
         1.31. License and Binder Purchase Agreement........................4
         1.32. Lien.........................................................4
         1.33. Loss.........................................................4
         1.34. Material Adverse Effect......................................4
         1.35. Opinion of Sellers' Counsel..................................4
         1.36. Permitted Liens..............................................4
         1.37. Plans and Specifications.....................................4
         1.38. Product......................................................4
         1.39. Purchase Consideration.......................................4
         1.40. Required Consents............................................4
         1.41. Section 29 Product...........................................5

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         1.42. Sellers' Closing Certificate.................................5
         1.43. Site.........................................................5
         1.44. Transaction Documents........................................5

ARTICLE II PURCHASE AND SALE................................................5
         2.1. Purchase and Sale.............................................5
         2.2. Payment of the Initial Purchase Consideration; Holdback
                Amount......................................................5
         2.3. Deliveries at Closing.........................................6
         2.4. Allocation of Purchase Price..................................7
         2.5. No Assumption of Liabilities..................................7
         2.6. Sales Tax Exemption...........................................7

ARTICLE III REPRESENTATION AND WARRANTIES OF SELLERS........................7
         3.1. Corporate Standing............................................7
         3.2. Authorizations; Binding Agreements............................8
         3.3. No Actions Affecting Enforcement of the Agreement and
                the other Transaction Documents.............................8
         3.4. Taxes.........................................................9
         3.5. Brokers or Finders Fees.......................................9
         3.6. No Imposition of Liens........................................9
         3.7. Title to Assets...............................................9
         3.8. Condition of Assets...........................................9
         3.9. Pending Litigation...........................................10
         3.10. Compliance With Laws........................................10
         3.11. Status of Contracts.........................................10
         3.12. Consents....................................................11
         3.13. Books and Records...........................................11
         3.14. Environmental Conditions....................................11
         3.15. Liabilities.................................................12
         3.16. Agreements with Related Persons.............................12
         3.17. Adequacy of the Purchased Assets............................12
         3.18. No Default..................................................12
         3.19. Production Capacity.........................................12
         3.20. Section 29 Issues...........................................12

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER.........................13
         4.1. Organization and Standing....................................13
         4.2. Authorizations; Binding Agreements...........................13
         4.3. Brokers or Finders Fees......................................13
         4.4. No Action Affecting Enforcement of the Agreement and
                the other Transaction Documents............................13

ARTICLE V CERTAIN UNDERSTANDINGS AND AGREEMENTS............................14
         5.1. Best Efforts.................................................14
         5.2. Public Announcements.........................................14
         5.3. Confidentiality..............................................14

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         5.4. Taxes........................................................14
         5.5. Private Letter Ruling Repurchase Option......................14
         5.6. Solvency Representations and Covenants.......................15
         5.7. Removal and Delivery of Facility.............................15
         5.8. Software Reinstallation......................................16

ARTICLE VI CONDITIONS PRECEDENT TO THE PAYMENT OBLIGATIONS OF BUYER........16
         6.1. Compliance with Agreement....................................16
         6.2. Proceedings and Instruments Satisfactory.....................16
         6.3. No Litigation................................................16
         6.4. Representations and Warranties...............................16
         6.5. Consents.....................................................16
         6.6. Tax Opinion..................................................17
         6.7. Antitrust Filings............................................17

ARTICLE VII CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLERS.............17
         7.1. Compliance with Agreement....................................17
         7.2. Proceedings and Instruments Satisfactory.....................17
         7.3. No Litigation................................................17
         7.4. Representations and Warranties...............................17
         7.5. Required Consents............................................17
         7.6. Antitrust Filings............................................18

ARTICLE VIII INDEMNITIES AND ADDITIONAL COVENANTS..........................18
         8.1. Sellers' Indemnity...........................................18
         8.2. Buyer's Indemnity............................................19
         8.3. Bulk Sales Compliance........................................20
         8.4. Additional Instruments.......................................20
         8.5. Access to Books, Records and Employees.......................21

ARTICLE IX TERMINATION.....................................................21
         9.1. Termination..................................................21
         9.2. Rights on Termination; Waiver................................21

ARTICLE X MISCELLANEOUS....................................................22
         10.1. Entire Agreement; Amendment.................................22
         10.2. Expenses....................................................22
         10.3. Governing Law; Consent to Jurisdiction......................22
         10.4. Assignment..................................................23
         10.5. Notices.....................................................23
         10.6. Counterparts; Headings......................................24
         10.7. Interpretation..............................................24
         10.8. Severability................................................24
         10.9. No Reliance.................................................24
         10.10. Parties in Interest........................................24
         10.11. Specific Performance.......................................25

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                             EXHIBITS AND SCHEDULES

SCHEDULE 1.14     Contracts
SCHEDULE 1.18     Excluded Assets
SCHEDULE 1.21     Fixed Assets
SCHEDULE 1.28     Knowledge of Buyer
SCHEDULE 1.29     Knowledge of Sellers

SCHEDULE 1.35     Opinion of Sellers' Counsel
SCHEDULE 1.36     Permitted Liens
SCHEDULE 1.40     Required Consents
SCHEDULE 2.2      Third Party Engineers
SCHEDULE 3.3      Pending Actions
SCHEDULE 3.5      Brokers or Finders Fees of Sellers
SCHEDULE 3.7      Exceptions to Title
SCHEDULE 3.8      Condition of Assets
SCHEDULE 3.9      Pending Litigation
SCHEDULE 3.11     Status of Contracts
SCHEDULE 3.14     Environmental Conditions
SCHEDULE 3.16     Agreements with Related Persons

EXHIBIT A         Assignment Agreement
EXHIBIT B         Bill of Sale
EXHIBIT C         Buyer's Closing Certificate
EXHIBIT D         Sellers' Closing Certificate
EXHIBIT E         License and Binder Purchase Agreement
EXHIBIT F         Allocation of Purchase Price

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                            ASSET PURCHASE AGREEMENT

         ASSET PURCHASE AGREEMENT, made as of April 17, 2000, by and between DTE
KENTUCKY,  LLC,  a  Delaware  limited  liability  company  ("Buyer"),  and COVOL
TECHNOLOGIES,  INC.,  a Delaware  corporation,  MOUNTAINEER  FUELS,  LLC, a Utah
limited liability  company,  and SYNFUEL  INVESTMENTS,  INC., a Utah corporation
("Sellers").

                                    RECITALS

         WHEREAS,  Mountaineer  Fuels,  LLC  owns  the  Assets  comprised  of  a
processing  Facility to produce  solid  synthetic  fuel  pellets from coal fines
located  near  Tallmansville,  West  Virginia  and  Mountaineer  Fuels,  LLC  is
controlled by the other Sellers; and

         WHEREAS, Sellers desire to sell the Assets and assign the Contracts (as
defined  herein) to Buyer and Buyer desires to purchase the Assets from Sellers,
all on the terms and subject to the conditions set forth herein.

         NOW,  THEREFORE,  in  consideration  of the  Recitals and of the mutual
covenants,  conditions  and  agreements  set forth herein and for other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged, it is hereby agreed that:

                                    ARTICLE I
                                   DEFINITIONS

         When  used in this  Agreement,  the  following  terms  shall  have  the
meanings specified:

         1.1.  Acknowledgment and Release shall mean that certain Acknowledgment
and Release,  made as of April 17, 2000,  by and between  Covol and  Mountaineer
Synfuel, L.L.C.

         1.2. Affiliate shall mean, as to any person, any other person or entity
that, directly or indirectly through one or more  intermediaries,  controls,  is
controlled by or is under common control with such person.  For purposes of this
definition,  "control" (including,  with correlative meanings,  the terms "under
common control with" and  "controlled  by"), as used with respect to any Person,
means the  possession,  directly or indirectly,  of the power to direct or cause
the direction of the management or policies of such Person,  whether through the
ownership of voting stock or other equity interests, by contract or otherwise.

         1.3.  Agreement shall mean this Purchase  Agreement,  together with the
Exhibits and Schedules  attached hereto, as the same may be amended from time to
time in accordance with the terms hereof.

         1.4.  As-Built   Drawings  shall  mean  as-built  drawings   reflecting
necessary revisions on the original tracings of the Plans and Specifications and
related  drawings  relating to the  Facility

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necessary  to indicate  such field  changes as may have been found  necessary to
suit  conditions at the Facility Site and any other revisions made in the course
of construction of the Facility.

         1.5. Assets shall mean, collectively,  the Improvements,  the Books and
Records,  and the Fixed Assets,  together with all goodwill  associated with the
Facility.

         1.6. Assignment  Agreement shall mean the Assignment  Agreement between
Sellers and Buyer  relating to the  Contracts  in the form of Exhibit A attached
hereto.

         1.7.  Bill of Sale  shall  mean the Bill of Sale from  Sellers to Buyer
relating to the Assets, in the form of Exhibit B attached hereto.

         1.8. Books and Records shall mean original or true and complete  copies
of all of the books, records, files, data and information of Sellers relating to
the design,  construction  and  operation of the  Facility and  operation of the
business prior to the Effective  Time,  which are relevant to Buyer's use of the
Assets,  performance  under the  Contracts and operation of the Facility and the
Business  after the  Effective  Time,  including  without  limitation  Plans and
Specifications,  all original  tracings of the related  drawings and designs and
the As-Built Drawings.

         1.9.  Buyer's Closing  Certificate  shall mean the certificate of Buyer
substantially in the form of Exhibit C attached hereto.

         1.10.  Closing shall mean the meeting of the parties to be held at 9:00
a.m.,  local  time,  on the Closing  Date,  at the offices of Hunton & Williams,
Riverfront Plaza, East Tower, 951 East Byrd Street, Richmond,  Virginia, or such
other time and place as the parties may mutually agree in writing.

         1.11. Closing Date shall mean April 17, 2000, or such other date as the
parties may mutually agree in writing.

         1.12.  Code shall mean the Internal  Revenue Code of 1986,  as amended,
and the regulations thereunder.

         1.13.  Confidentiality Agreement shall mean the Letter Agreement, dated
April 27, 1999, between Sellers and DTE Energy Services Company.

         1.14. Contracts shall mean all construction  agreements relating to the
Facility and the Improvements,  or components thereof, all as listed on Schedule
1.14 attached  hereto or as otherwise  agreed upon by Buyer prior to the Closing
Date.

         1.15. Covol shall mean Covol Technologies, Inc.

         1.16. Covol Process shall mean Covol's proprietary  synthetic coal fuel
production process for manufacturing  solid synthetic fuel from coal fines which
is defined in and is the subject of the License and Binder Purchase Agreement.

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         1.17.  Effective  Time shall  mean 12:01  a.m.,  Eastern  Time,  on the
Closing Date.

         1.18.  Excluded  Assets  shall mean the items  listed on Schedule  1.18
attached hereto.

         1.19. Facility shall mean the solid synthetic fuel pellet manufacturing
Facility  and  related  support   facilities  owned  by  Sellers  and  currently
dismantled  and stored at the  Buccaneer  Storage Yard,  Buccaneer  Enterprises,
Inc., Route 10, Box 393, Buckhannon, West Virginia.

         1.20.  Facility Site shall mean the Buccaneer  Storage Yard,  Buccaneer
Enterprises,  Inc.,  Route 10, Box 393,  Buckhannon,  West  Virginia,  where the
Facility is currently stored.

         1.21. Fixed Assets shall mean all tangible personal property  currently
located at the Facility Site which  constitute  part of, or are otherwise  owned
and used by  Sellers  in the  operation  of, the  Facility,  including,  but not
limited to, all fixed assets, chattels, machinery, equipment, computer hardware,
fixtures, furniture,  furnishings,  handling equipment, implements, spare parts,
tools and  accessories  of all kinds which are listed on Schedule  1.21 attached
hereto;  provided,  however, that Fixed Assets shall exclude (a) leased items of
property and (b) the Excluded Assets.

         1.22. GAAP shall mean generally accepted  accounting  principles of the
United States as applied by Sellers in a manner consistent with prior periods.

         1.23.  Holdback  Amount  shall have the  meaning  given to such term in
Section 2.2(a) hereof.

         1.24. HSR Act shall mean the Hart-Scott-Rodino  Antitrust  Improvements
Act of 1976, as amended.

         1.25.   Improvements   shall  mean  the   structures,   buildings   and
improvements  now standing on the  Facility  Site and  constituting  part of the
Facility,  and replacements thereof,  including,  without limitation,  all plant
equipment,  apparatus,  and machinery of every kind and nature forming a part of
such Facility, buildings, and improvements.

         1.26.  Initial Purchase  Consideration  shall have the meaning given to
such term in Section 2.2 hereof.

         1.27. IRS shall mean the Internal Revenue Service

         1.28.  Knowledge  of Buyer shall mean the actual  knowledge,  after due
inquiry, of any person listed on Schedule 1.28 attached hereto.

         1.29.  Knowledge of Sellers shall mean the actual knowledge,  after due
inquiry, of any person listed on Schedule 1.29 attached hereto.

         1.30.  Law  shall  mean any  federal,  state,  local  or  other  law or
governmental  requirement  of any kind,  and the rules,  regulations  and orders
promulgated thereunder.

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<PAGE>

         1.31.  License and Binder  Purchase  Agreement  shall mean that certain
License and Binder  Purchase  Agreement  to be entered  into by Buyer and Covol,
relating to the  licensing by the Buyer of Covol's  proprietary  synthetic  coal
fuel extrusion,  pellet and briquette  production process for the Facility,  and
substantially in the form of Exhibit E attached hereto.

         1.32. Lien shall mean any interest in property  securing an obligation,
whether such interest is based on common law, statute or contract, and including
any  restriction  on the use,  voting,  transfer,  receipt  of  income  or other
exercise of any attributes of ownership,  any security  interest or lien arising
from a mortgage,  claims,  encumbrance,  pledge,  charge,  easement,  servitude,
security agreement, conditional sale or trust receipt or a lease, consignment or
bailment for security purposes. The term "Lien" shall also include reservations,
exceptions,  covenants, conditions,  restrictions,  leases, subleases, licenses,
occupancy  agreements,  pledges,  equities,  charges,  assessments,   covenants,
reservations, defects in title, encroachments and other burdens, and other title
exceptions and encumbrances affecting property of any nature, whether accrued or
unaccrued, or absolute or contingent.

         1.33. Loss shall have the meaning given to such term in Section 8.1(a).

         1.34.  Material  Adverse Effect shall mean a material adverse effect on
the Assets and  Contracts,  taken as a whole,  the  business to be  conducted by
Buyer with the Assets or the maintenance and operation of the Facility.

         1.35.  Opinion of Sellers' Counsel shall mean the opinion of Pillsbury,
Madison & Sutro,  LLP,  counsel  to  Sellers,  and Harlan M.  Hatfield,  general
counsel of Covol Technologies, Inc., substantially in the form of Schedule 1.35.

         1.36.  Permitted  Liens  shall mean Liens (but only for amounts not yet
due and payable) securing taxes,  assessments or governmental charges or levies,
Liens of an immaterial  nature which could not reasonably be expected to have an
adverse effect on the  maintenance and operation of the Facility or the good and
marketable title of the Assets or the enforceability of the Contracts, and Liens
disclosed on Schedule 1.36 attached hereto.

         1.37. Plans and Specifications  shall have the meaning given such terms
in the Contracts.

         1.38.  Product  shall  mean the solid  synthetic  fuel  pellet  product
produced at the Facility using and pursuant to the Covol Process.

         1.39. Purchase  Consideration shall have the meaning given to such term
in Section 2.2 hereof.

         1.40.  Required  Consents  shall mean  those  consents,  approvals  and
waivers required from parties to the Contracts or from governmental  authorities
or other third  parties that are  necessary or required in order to transfer the
Assets and  Contracts  to Buyer and  otherwise  give effect to the  transactions
contemplated  herein (other than such consents,  the failure of which to obtain,
taken as a whole,  could not  reasonably be expected to have a Material  Adverse
Effect) and that are specifically identified on Schedule 1.40 attached hereto.

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<PAGE>

                  1.41.   Section  29  Product   shall  mean  Product  which  is
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 the terms of Sections 29(f) and 29(g) of the Code.

         1.42.  Sellers'  Closing  Certificate  shall  mean the  certificate  of
Sellers substantially in the form of Exhibit D attached hereto.


         1.43.  Site shall mean the  location  designated  by Buyer as  provided
herein for delivery of the Assets by the Sellers.

         1.44.  Transaction  Documents  shall mean this  Agreement,  the Bill of
Sale,  the Assignment  Agreement,  and those  agreements  and  instruments to be
executed and delivered as provided in Section 2.3.

                                   ARTICLE II
                                PURCHASE AND SALE

         2.1. Purchase and Sale.

                  (a) Buyer and Sellers  hereby agree that at the  Closing,  and
upon all of the terms and subject to all of the  conditions  of this  Agreement,
Sellers  shall  sell,  convey,  transfer  and assign to Buyer,  and Buyer  shall
purchase  and accept  from  Sellers,  all of the  Assets,  free and clear of all
Liens.

                  (b) Buyer and Sellers  hereby agree that at the  Closing,  and
upon all of the terms and subject to all of the  conditions  of this  Agreement,
Sellers shall assign to Buyer the Contracts and all rights arising thereunder.

         2.2. Payment of the Initial Purchase Consideration; Holdback Amount.

                  (a) In consideration of Sellers' sale,  conveyance,  transfer,
delivery and assignment of the Assets and Contracts, at the Closing, Buyer shall
(i) pay to the Sellers Nine  Million Six Hundred  Eighty-Five  Thousand  Dollars
($9,685,000.00)  (the  "Initial  Purchase  Consideration")  and  (ii)  hold in a
non-segregated  account the amount of Three  Hundred  Fifteen  Thousand  Dollars
($315,000.00)  (the  "Holdback  Amount"),  which  amount  shall be  disbursed in
accordance with Section 2.2(b) hereof.  The Initial Purchase  Consideration  and
the  Surplus  (as  defined   below),   if  any   (collectively,   the  "Purchase
Consideration"),  shall  be paid to the  Sellers  by wire  transfer  in  readily
available  funds to First Security Bank;  Salt Lake City,  Utah; 18A 124 000012;
for the account of Covol Technologies, Inc.; Acct. #0600019939.

                  (b) At the time of  Sellers'  delivery  of the  Assets  to the
Site,  Buyer shall  inspect the Assets and notify  Sellers,  in writing,  of any
missing  equipment or damage to the Assets.  Upon  completion of the assembly of
the Facility (including any required repairs), Buyer shall present Seller with a
notice (the  "Holdback  Claim  Notice")  stating the costs of such  repairs (the
"Holdback  Claim").  The amount of the Holdback  Claim shall be applied by Buyer
against the Holdback Amount by notice by Buyer to Sellers.  If the amount of the
Holdback  Claim made by Buyer is less than the Holdback  Amount (the  difference
being referred to herein as a "Surplus"), Buyer shall pay an amount equal to the
Surplus to Sellers  within five days of the  determination  of the amount of the
Surplus.  If the amount of the Holdback  Claim made by Buyer is greater than the
Holdback  Amount (the  difference  being referred to herein as a

                                       5
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"Deficiency"),  Sellers shall pay to Buyer the amount of such Deficiency  within
five days of the  determination of the amount of the Deficiency.  Alternatively,
if the  payment of the  Deficiency  is not paid by Sellers to Buyer  within five
days of the determination of the amount of the Deficiency,  Buyer shall have the
right to set-off the amount of the Deficiency  against any royalty payments that
Buyer may become  obligated to pay to Covol pursuant to Section 3 of the License
and Binder Purchase Agreement.

                  (c) Notwithstanding the foregoing,  if Sellers notify Buyer of
their  disagreement with the Holdback Claim Notice within seven business days of
receiving  such notice,  a committee  consisting  of two officers  designated by
Buyer and two  officers  designated  by Sellers  shall meet and  attempt in good
faith to resolve such dispute.  If such  committee  does not resolve the dispute
within seven business days following their initial meeting,  then a single third
party engineer (the "Third Party  Engineer") shall be designated to consider and
decide the issues raised by such  dispute,  unless both parties  determine  that
further  discussions  by the committee are merited.  The selection of such Third
Party  Engineer  shall be made from the list of engineers  set forth in Schedule
2.2 attached hereto. In selecting the Third Party Engineer, each party (starting
with Sellers for the first dispute and alternating between Sellers and Buyer for
each dispute  thereafter)  shall alternate in deleting one name from the list of
engineers until only one such engineer shall remain,  which  remaining  engineer
shall be the Third Party Engineer.  The Third Party Engineer shall be designated
from such list not later than the third business day following the expiration of
the second seven business day period described above and such designation  shall
become  effective on the third business day following such  designation.  In the
event that the Third Party Engineer so designated does not or is unable to serve
as such,  the  selection  process  shall be commenced  again until a replacement
Third  Party  Engineer  is so  designated.  Within  ten  business  days  of  the
effectiveness  of the designation of a Third Party  Engineer,  each of the Buyer
and  Sellers  shall  submit to the Third  Party  Engineer a notice (a  "Position
Notice")  setting forth in detail such party's position in respect of the issues
in dispute.  Such Position  Notice shall include  supporting  documentation,  if
appropriate.

                  (d) The Third Party Engineer  shall  complete all  proceedings
and issue its  decision  with  regard to the issues in dispute,  which  decision
shall be binding on the parties, as promptly as reasonably possible,  but in any
event within ten business  days of the date on which both  Position  Notices are
submitted, unless the Third Party Engineer reasonably determines that additional
time is required in order to give adequate  consideration  to the issues raised.
In such case,  the Third Party  Engineer  shall state in writing his reasons for
believing that additional time is needed and shall specify the additional period
required,  which  period  shall not  exceed ten days  without  the  Buyer's  and
Sellers' agreement.

         2.3. Deliveries at Closing.

                  (a) By Sellers to Buyer.  At the  Closing,  in addition to the
Assets,  Sellers  shall  deliver the  following  items to Buyer,  each  properly
executed and dated as of the Closing  Date by Sellers and in form and  substance
reasonably acceptable to Buyer: (i) the Assignment

                                       6
<PAGE>

Agreement,  (ii)  the  Bill of Sale,  (iii)  the  License  and  Binder  Purchase
Agreement,  (iv) all Required Consents applicable to Sellers, (v) the Opinion of
Sellers' Counsel,  (vi) Sellers' Closing  Certificate,  (vii) the Acknowledgment
and Release,  (viii) UCC-3 termination  statements with respect to the Facility,
(ix) a certificate of insurance containing an endorsement, in form and substance
acceptable  to Buyer,  showing  loss payment to Buyer as its interest may appear
and (x) a certificate  of the corporate  secretary of Sellers as to such matters
as may reasonably be requested by Buyer.

                  (b) By Buyer to Sellers.  At the Closing,  Buyer shall deliver
the Initial  Purchase  Consideration  and the following  items to Sellers,  each
properly  executed  and  dated as of the  Closing  Date by Buyer and in form and
substance reasonably acceptable to Sellers: (i) the Assignment  Agreement,  (ii)
the  License  and  Binder  Purchase  Agreement,   (iii)  all  Required  Consents
applicable to Buyer,  (iv) Buyer's Closing  Certificate and (v) a certificate of
the corporate secretary (or equivalent  official) of Buyer as to such matters as
may reasonably be requested by Sellers.

         2.4. Allocation of Purchase Price.

         On the Closing Date,  or at a later time agreed to by the parties,  not
to exceed 30 days  following  the  Closing  Date,  the  purchase  price shall be
allocated  among the Assets and Contracts in accordance  with Exhibit F attached
hereto.  Such  allocation  shall be intended to comply with the  requirements of
Section 1060 of the Code, and no party shall take any position inconsistent with
such allocation for income tax purposes, except that Buyer's cost for the Assets
and Contracts may differ from the amount so allocated to the extent necessary to
reflect Buyer's capitalized  acquisition costs other than the amount realized by
Sellers.

         2.5. No Assumption of Liabilities.

         Buyer does not and will not assume any  liability or  obligation of any
kind  of  Sellers,  or any  obligation  relating  to the  use of the  Assets  or
performance by Sellers under the Contracts prior to the Effective Time,  whether
absolute or contingent,  accrued or unaccrued,  asserted or unasserted, known or
unknown, or otherwise.

         2.6. Sales Tax Exemption.

         To the extent applicable, at the Closing, Buyer will deliver to Sellers
appropriate  and  customary  sales tax  exemption  certificates  relating to the
transfer of the Assets and the assignment of the Contracts contemplated hereby.

                                   ARTICLE III
                    REPRESENTATION AND WARRANTIES OF SELLERS

         Sellers jointly and severally represent and warrant to Buyer that:

         3.1. Corporate Standing.

                                       7
<PAGE>

         Sellers are corporations or a limited  liability company duly organized
and validly  existing  and in good  standing  under the laws of their  states of
organization  as indicated  in the  introductory  paragraph  of this  agreement.
Sellers  have the power to own  their  property,  and to  execute,  deliver  and
perform this Agreement and each of the Transaction  Documents  applicable to it,
and to  carry  on  their  business  as now  being  conducted.  Sellers  are duly
qualified to do business in and are in good standing as foreign  corporations or
limited  liability  companies,  authorized to do business  under the laws of the
State of West Virginia.

         3.2. Authorizations; Binding Agreements.

         The execution, delivery and performance of this Agreement and the other
Transaction Documents by Sellers and each conveyance, assignment, agreement, and
other document  herein  contemplated  to be executed by Sellers,  have been duly
authorized by all necessary  corporate and limited  liability company action, as
the case may be. This  Agreement  and the other  Transaction  Documents  and the
conveyances, assignments, agreements, and other documents herein contemplated to
be executed,  delivered and performed by Sellers are, or will be upon execution,
legal,  valid and binding  obligations  of  Sellers,  duly  enforceable  against
Sellers in  accordance  with their terms  (subject,  however,  to the effects of
bankruptcy, insolvency,  reorganization,  moratorium, and similar laws from time
to time in effect relating to the rights and remedies of creditors as well as to
general  principles  of  equity).  This  Agreement  and  the  other  Transaction
Documents and the  conveyances,  assignments,  agreements,  and other  documents
herein  contemplated  to be executed,  delivered and performed by Sellers (i) do
not and will not result in any violation of,  conflict with or default under the
terms of any of Sellers'  organizational  documents  (nor,  to the  Knowledge of
Sellers,  does there exist any  condition  which upon the passage of time or the
giving of notice  would cause such  violation,  conflict or  default),  and (ii)
subject  only to the  Required  Consents,  do not and  will  not  result  in any
violation of,  conflict with or default under any Contract or any other material
permit, lease, venture,  indenture,  mortgage,  agreement,  contract,  judgment,
order or other  obligation or  restriction  to which  Sellers,  the Assets,  the
Contracts or the conduct of the maintenance and operation of the Facility may be
bound or  encumbered  (nor,  to the  Knowledge of Sellers,  does there exist any
condition  which upon the  passage of time or the giving of notice  would  cause
such violation, conflict or default).

         3.3. No Actions  Affecting  Enforcement  of the Agreement and the other
Transaction Documents.

         Except as set forth in Schedule 3.3,  there are no actions,  suits,  or
proceedings  pending,  or, to the  Knowledge  of  Sellers,  threatened,  against
Sellers in any court, or  administrative  governmental body or agency which will
affect in any  adverse  manner the  ability of Sellers to  execute,  deliver and
perform this Agreement and the other Transaction Documents.  Subject only to the
Required  Consents  and such  consents  which the  failure  to obtain  could not
reasonably be expected to have a Material Adverse Effect,  Sellers have obtained
all  permits,  licenses,  franchises,  authorizations,   variances,  exemptions,
concessions,  leases, instruments, orders, consents or approvals of governmental
entities  and third  parties  necessary to  construct,  maintain and operate the
Facility  and to  execute,  deliver  and perform  this  Agreement  and the other
Transaction Documents.

                                       8
<PAGE>

         3.4. Taxes.

         All tax returns and reports  relating to the Assets,  the Contracts and
the conduct of the  construction,  maintenance  and  operation  of the  Facility
required by law (including all federal, state, and local property tax, severance
and  franchise  tax laws) to be filed by Sellers  prior to the Closing have been
timely filed or will be caused to be timely filed,  including  those tax returns
relating  to  periods  prior to  Closing  that are not yet due,  except for such
returns and reports  which the failure to file could not  reasonably be expected
to  have  a  Material  Adverse  Effect  on  the  Assets,  the  Contracts  or the
maintenance  and  operation  of the  Facility.  All  taxes,  assessments,  fees,
interest,  penalties and other governmental  charges relating to the Assets, the
Contracts or the conduct of the  construction,  maintenance and operation of the
Facility  prior to Closing  have been paid when due and  payable or payment  has
been provided for, except for such taxes, assessments, fees, interest, penalties
and other governmental  charges which the failure to pay could not reasonably be
expected to have a material  adverse effect on the Assets,  the Contracts or the
construction, maintenance and operation of the Facility.

         3.5. Brokers or Finders Fees.

         Except  as set  forth  in  Schedule  3.5,  there  is no  obligation  or
liability,  contingent  or  otherwise,  for brokers or finders  fees  created by
Sellers with respect to the matters provided for in this Agreement and the other
Transaction  Documents.  No  obligation or liability for brokers or finders fees
created by Sellers  with respect to the matters  provided for in this  Agreement
and the other  Transaction  Documents shall be imposed upon Buyer, the Assets or
the Contracts.

         3.6. No Imposition of Liens.

         The execution, delivery and performance of this Agreement and the other
Transaction Documents by Sellers shall not result in the imposition of any Lien,
other than Permitted  Liens,  upon any of the Assets,  the Contracts or by which
the maintenance and operation of the Facility may be bound or encumbered.

         3.7. Title to Assets.

         Except as set forth on Schedule

         3.7, as of the date hereof,  Mountaineer  Fuel, LLC owns, and as of the
Effective  Time, it will own,  good,  valid and  marketable  title to all of the
Assets,  free and clear of any and all Liens,  except for Permitted Liens. As of
the  Effective  Time and upon  Buyer's  payment  of the  Purchase  Consideration
pursuant  hereto,  good,  valid and  marketable  title to the Assets and holds a
fully enforceable leasehold interest in the Facility Site, free and clear of all
Liens, except for Permitted Liens, shall pass to Buyer.

         3.8. Condition of Assets.

         Except as set forth on Schedule 3.8, as of the Closing Date,  the Fixed
Assets,  taken as a whole,  will be in good  operating  condition and repair and
substantially  fit for the production of Section 29 Product at a rate of 360,000
tons per year, and the Facility has been  constructed  in

                                       9
<PAGE>

conformance  with that  degree  of skill  and  judgment  normally  exercised  by
recognized  engineering and construction firms of similar size and experience to
that of the  contractors  under the  Contracts,  and the Assets  comprising  the
Facility  conform to the  standards of material and  workmanship  prevailing  in
applicable industries and are free from material defects in design, material and
workmanship and are of good quality.

         3.9. Pending Litigation.

         Except as  disclosed  on Schedule  3.9,  there are no  actions,  suits,
arbitrations or proceedings  currently  pending or, to the Knowledge of Sellers,
threatened  against the Assets or the  Contracts.  There are no  outstanding  or
unsatisfied judgments, orders or decrees to which Sellers are bound.

         3.10. Compliance With Laws.

         To the Knowledge of Sellers, Sellers are in compliance with all orders,
writs, injunctions,  decrees, judgments,  rulings, laws, rules or regulations of
any  governmental  entity to which  Sellers,  the  Assets or the  Contracts  are
subject,  the violation of which could reasonably be expected to have a Material
Adverse Effect.

         3.11. Status of Contracts.

         Schedule 1.14 is a true,  correct and complete list of all the material
contracts  entered into by Sellers relating  primarily to the Assets.  Except as
described in the Schedule  3.11,  the Contracts are valid and in good  standing,
and there is no violation of, conflict with or default under the Contracts,  the
consequence  of which could  reasonably  be expected to have a Material  Adverse
Effect. Sellers have not received any notice from any party to any Contract that
such party intends to terminate, cancel or refuse to renew the same or that such
party  intends to offset any amount due  thereunder or assert any defense to the
enforceability thereof.

                                       10
<PAGE>

         3.12. Consents.

         Schedule  1.40 is a true,  correct and  complete  list of all  Required
Consents.

         3.13. Books and Records.

         As of the Closing  Date,  the Books and Records  shall be complete  and
correct in all material respects.

         3.14. Environmental Conditions.

                  (a) Definitions. When used in this Section:

                           (i)  "Environmental  Laws" shall mean all  applicable
laws (including common law), rules, orders, regulations,  statutes,  ordinances,
codes,  decrees  and  requirements  of any  Governmental  Authority  regulating,
relating to or imposing liability  standards of conduct concerning any Hazardous
Materials or environmental protection.

                           (ii) "Governmental Authority" shall mean any federal,
state, local,  municipal or other governmental  department,  commission,  board,
bureau,   agency  or  instrumentality,   or  any  court,  in  each  case  having
jurisdiction over the applicable matter.

                           (iii)  "Hazardous  Materials"  shall  mean any  solid
waste,  petroleum or petroleum  product,  hazardous  material,  hazardous waste,
infectious  medical waste, or hazardous or toxic substance  defined or regulated
as such in any Environmental Law.

                  (b) Environmental  Representations  and Warranties.  Except as
set forth on Schedule 3.14 attached hereto:

                           (i)  Sellers   have  not  operated  the  Facility  or
conducted  business or other  activities at or from the Facility,  in connection
with the construction of the Facility or otherwise, in a manner that constituted
or constitutes a violation of any applicable Environmental Law;

                           (ii) There has been no  off-site  shipment or release
of any  Hazardous  Materials  by the Sellers on,  under,  at, from or in any way
affecting the Facility or any part thereof,  which off-site  shipment or release
gives rise to liabilities or obligations  under applicable  Environmental  Laws;
and

                           (iii) Sellers have not received any notices or claims
that  they are a  responsible  party in  connection  with  any  claim or  notice
asserted pursuant to 42 U.S.C. Section 9601 et seq., or any state superfund law,
in connection with the Facility.

                           (iv)  Seller  has  received  all  permits  as  may be
required under applicable  Environmental  Laws to operate the Facility as of the
Effective  Time,  and Seller is in compliance in all material  respects with the
terms and conditions of each such permits. Such permits shall be

                                       11
<PAGE>

transferable to Buyer and will be effective  immediately (or, subject to Section
5.1, as soon as practicable) after the Closing.

         3.15. Liabilities.

         Except for liabilities underlying any Permitted Liens, the Sellers have
no  liabilities  which could  reasonably be expected to have a Material  Adverse
Effect  following  the  Closing,  nor has any  condition  existed  or any  event
occurred which could reasonably be expected to give rise to any such liability.

         3.16. Agreements with Related Persons.

         There are no contracts,  licenses,  agreements or arrangements with any
Affiliate of Sellers in connection with the construction, maintenance, ownership
and operation of the Facility, other than as disclosed on Schedule 3.16.

         3.17. Adequacy of the Purchased Assets.

         Except as  described  in Schedule  3.8,  the Assets and the  Contracts,
together with (i) the  technology  and know-how being licensed to Buyer by Covol
under the License and Binder Purchase Agreement,  (ii) the chemical binder to be
supplied to Buyer by Covol under the License and Binder Purchase Agreement,  and
(iii) rights and assets  required for the relocation of the Facility to the site
selected  by  Buyer  (including  but  not  limited  to  relocation  construction
contracts,  feedstock raw materials,  applicable real property rights,  permits,
etc.) which Buyer may arrange for but which are not the subject of this Purchase
Agreement,  constitute  all of  the  assets  and  technology  rights  reasonably
expected to be necessary  for the  production  by Buyer of Section 29 Product at
the rate of 360,000 tons per year.

         3.18. No Default.

         Covol has not defaulted in the  performance of any covenant,  agreement
or  condition  contained in the Deed of Ground  Lease,  dated as of May 5, 1998,
between Upshur Property, Inc. and Covol (the "Lease"), and no event has occurred
and no condition exists or existed which,  with the giving of notice or lapse of
time, or both, did or would  constitute a default by Covol under the Lease.  The
Lease terminated in accordance with its terms on September 24, 1999.

         3.19. Production Capacity.

         The  Facility  has a rated  capacity to produce  Product at the rate of
360,000 tons per year.

         3.20. Section 29 Issues.

         The  Facility was placed "in service" for purposes of the Code prior to
July 1, 1998  pursuant to a binding  contract  entered  into prior to January 1,
1997 and effective at all times thereafter.

                                       12
<PAGE>

                                   ARTICLE IV
                     REPRESENTATIONS AND WARRANTIES OF BUYER

         Buyer hereby represents and warrants to Sellers that:

         4.1. Organization and Standing.

         Buyer is a limited liability company duly organized,  validly existing,
and in good  standing  under the laws of the State of Delaware and has the power
to own its own property, and to execute,  deliver and perform this Agreement and
each of the  Transaction  Documents,  and to carry on its  business as now being
conducted.

         4.2. Authorizations; Binding Agreements.

         The  execution,  delivery,  and  performance  of this Agreement and the
other  Transaction  Documents  by  Buyer  and of  each  conveyance,  assignment,
agreement,  and other document herein  contemplated to be executed by Buyer have
been fully authorized by all necessary limited  liability  company action.  This
Agreement and the other Transaction Documents and the conveyances,  assignments,
agreements,  and other documents herein  contemplated to be executed,  delivered
and performed by Buyer are, or will be upon execution,  legal, valid and binding
obligations of Buyer,  duly  enforceable  against Buyer in accordance with their
terms   (subject,   however,   to  the   effects  of   bankruptcy,   insolvency,
reorganization,  moratorium,  and  similar  laws  from  time to  time in  effect
relating  to the  rights  and  remedies  of  creditors  as  well  as to  general
principles of equity).  This Agreement and the other  Transaction  Documents and
the   conveyances,   assignments,   agreements,   and  other  documents   herein
contemplated  to be executed,  delivered  and  performed by Buyer (i) do not and
will not result in any violation of, conflict with or default under the terms of
Buyer's  organizational  documents,  and  (ii)  subject  only  to  the  Required
Consents,  do not and will not  result in any  violation  of,  conflict  with or
default  under  any  material  permit,  lease,  venture,  indenture,   mortgage,
agreement, contract, judgment, order or other obligation or restriction to which
Buyer is bound (nor, to the  Knowledge of Buyer,  does there exist any condition
which  upon the  passage  of time or the  giving  of  notice  would  cause  such
violation, conflict or default).

         4.3. Brokers or Finders Fees.

         No  obligation or  liability,  contingent or otherwise,  for brokers or
finders fees  created by Buyer with respect to the matters  provided for in this
Agreement shall be imposed upon Sellers.

         4.4. No Action  Affecting  Enforcement  of the  Agreement and the other
Transaction Documents.

         There  are no  actions,  suits,  or  proceedings  pending,  or,  to the
Knowledge of Buyer,  threatened,  against Buyer in any court, or  administrative
governmental  body or agency which will affect in any adverse manner the ability
of  Buyer  to  execute,  deliver  and  perform  this  Agreement  and  the  other
Transaction Documents.

                                       13
<PAGE>

                                    ARTICLE V
                      CERTAIN UNDERSTANDINGS AND AGREEMENTS

         5.1.     Best Efforts.

         Subject  to the  terms  and  conditions  herein  provided,  each of the
parties  hereto agrees to use its  commercially  reasonable  efforts to take, or
cause to be  taken,  all  action,  and to do,  or cause to be done,  all  things
necessary, proper and advisable under applicable Law, and to obtain the Required
Consents,   necessary  to  consummate  and  make   effective  the   transactions
contemplated by this Agreement. In case at any time after the Effective Time any
further  action is  necessary  or  desirable  to carry out the  purposes of this
Agreement,  the proper  officers and  directors of each party to this  Agreement
shall  take all such  necessary  action.  Buyer and  Sellers  will  execute  any
additional  instruments  necessary to consummate the  transactions  contemplated
hereby. To the extent that any permits referenced in Section 3.14(b)(iv) are not
transferred  at the  Closing  Date,  Sellers  will use  commercially  reasonable
efforts to cause such transfer to Buyer as soon as practicable after the Closing
Date.

         5.2. Public Announcements.

         Buyer and Sellers will consult with each other before issuing any press
release or otherwise  making any public statement with respect to this Agreement
and the  transactions  contemplated  herein,  and shall not issue any such press
release or make any such public  statement  prior to such  consultation or as to
which the other party reasonably objects, except as may be required by Law or by
obligations  pursuant  to any listing  agreement  with any  national  securities
exchange or inter-dealer quotation system.

         5.3. Confidentiality.

         Notwithstanding  the execution of this Agreement,  the  confidentiality
provisions  of the  Confidentiality  Agreement  shall  remain in full  force and
effect and shall survive the Closing.

         5.4. Taxes.

         Following  Closing,  Sellers  shall  timely  file all tax  returns  and
reports  relating  to  the  Assets,   the  Contracts  and  the  conduct  of  the
construction,  maintenance  and operation of the Facility prior to Closing which
have not  been  filed or were  not yet due to be  filed  prior to  Closing,  and
Sellers shall timely pay all taxes, assessments,  fees, interest,  penalties and
governmental charges relating to the Assets, the Contracts or the conduct of the
construction,  maintenance  and operation of the Facility prior to Closing which
have not been paid or were not yet due and payable prior to Closing.

         5.5. Private Letter Ruling Repurchase Option.

         Following Closing, Buyer plans to seek a Private Letter Ruling from the
IRS as to matters  relating to the Facility and Section 29 of the Code.  Sellers
shall  cooperate  with and assist Buyer,  as reasonably  requested by Buyer,  in
connection with seeking such Private Letter Ruling. In the event that Buyer does
seek such a Private  Letter Ruling and the IRS refuses or fails to issue it in a

                                       14
<PAGE>

form that is  satisfactory in the sole and absolute  discretion of Buyer,  Buyer
shall be entitled to elect (by giving  written notice to Sellers to such effect)
to terminate the obligation to make further royalty  payments under Section 3 of
the License and Binder Purchase Agreement and, in such event, Sellers shall have
the option to purchase,  within one year following  such notice,  the Assets and
Contracts (and assume obligations under the Contracts) from Buyer at the greater
of (i) the amount of Purchase  Consideration  theretofore paid by Buyer plus the
amount of any capital expenditures made by Buyer in connection with the Facility
and Assets  plus any  obligations  of Buyer in respect of the  Facility  and the
Assets  and  Contracts,  or (ii)  the  fair  market  value  of such  Assets  and
Contracts.

         5.6. Solvency Representations and Covenants.

         Each Seller  hereby  represents  and  warrants (as to itself only) that
prior to consummating the transactions  contemplated  herein,  (i) the aggregate
fair market value of such Seller's  assets exceeds the aggregate  amount of such
Seller's  liabilities,   including  contingent  liabilities  discounted  by  the
probability of their  occurrence,  (ii) such Seller is able to pay and is paying
its  debts  generally  as and when they  become  due in the  ordinary  course of
business,  (iii) such  Seller is  adequately  capitalized  for its  current  and
contemplated  business   undertakings,   and  (iv)  the  Purchase  Consideration
constitutes reasonably equivalent value and fair consideration for the Assets.

         Each  Seller   hereby   covenants   (as  to  itself  only)  that  after
consummating  the transaction  contemplated by the Purchase  Agreement,  (i) the
aggregate  fair market value of such  Seller's  assets will exceed the aggregate
amount of such Seller's liabilities, including contingent liabilities discounted
by the probability of their occurrence, (ii) such Seller will be able to pay and
will pay its debts  generally as and when they become due in the ordinary course
of  business,  and (iii) such  Seller will not be left with  unreasonably  small
capital for its then-current and contemplated business undertakings.

         5.7. Removal and Delivery of Facility.

         As of the date hereof,  Sellers and their contractors have disassembled
and stored  the  Facility  at the  Facility  Site in  preparation  for  Sellers'
relocation  of the Facility to the Site.  Sellers  shall use their  commercially
reasonable efforts to deliver the disassembled  Facility and the other Assets to
Buyer at the Site within two weeks of written  notice  given by Buyer  notifying
Sellers of the location of the Site.  Except as provided below, all risk of loss
to the  Assets  shall  pass to the  Buyer  upon  the  earlier  to  occur  of (a)
acceptance of the Assets by Buyer at the Site or (b) the 121st day following the
Closing  Date if the Assets are still  located at the Facility  Site;  provided,
however, that,  notwithstanding the foregoing, in all cases, all risk of loss to
the Assets shall be borne by Sellers during the  transportation  and delivery of
the Facility to the Site. In addition to the Initial Purchase  Consideration set
forth in Section 2.2(a) herein,  and subject to the provisions of Section 2.2(b)
hereof,  Buyer shall  reimburse  Sellers  for any  reasonable  and actual  costs
incurred  by Sellers for the  disassembly,  removal  and  transportation  of the
Facility,  not to exceed Seven Hundred and Fifty  Thousand  Dollars  ($750,000),
within 30 days of the presentation of an invoice by Sellers therefore.

                                      15
<PAGE>

         5.8. Software Reinstallation.

         Upon the reasonable request of Buyer, Covol agrees to provide from time
to time during the ____ day period  following  delivery of the Facility to Buyer
at the Site, the services of Brent Atkins (or his successor) in connection  with
the  reinstallation  of the Facility  Control  Systems  Software  related to the
Facility.

                                   ARTICLE VI
            CONDITIONS PRECEDENT TO THE PAYMENT OBLIGATIONS OF BUYER

         Each and every  obligation of Buyer to be performed on the Closing Date
shall  be  subject  to the  satisfaction,  prior  to or at the  Closing,  of the
following express conditions precedent:

         6.1. Compliance with Agreement.

         Sellers shall have performed and complied in all material respects with
all of their  obligations  under this  Agreement  which are to be  performed  or
complied with by them prior to or on the Closing Date.

         6.2. Proceedings and Instruments Satisfactory.

         All  proceedings,  corporate  or  other,  to be  taken  by  Sellers  in
connection  with  the  transactions  contemplated  by  this  Agreement,  and all
documents  incident  thereto,  shall  be  reasonably  satisfactory  in form  and
substance to Buyer.

         6.3. No Litigation.

         No investigation, suit, action or other proceedings (including, without
limitation,  any petition  relating to any of the Sellers  under the  Bankruptcy
Code or similar  federal or state law) shall be threatened or pending before any
court or governmental agency that seeks restraint, prohibition, damages or other
relief in connection with this Agreement or the consummation of the transactions
contemplated hereby or in connection with obligations to creditors.

         6.4. Representations and Warranties.

         The  representations  and warranties  made by Sellers in this Agreement
shall be true and correct in all respects (as to representations  and warranties
qualified or limited by the term "Material Adverse Effect," the word "material,"
or phrases of like import),  and in all material respects (as to representations
and warranties not so qualified or limited) as of the Closing Date with the same
force and effect as though said  representations and warranties had been made on
the Closing Date.

         6.5. Consents.

         All Required Consents applicable to Sellers shall have been obtained.

                                       16
<PAGE>

         6.6. Tax Opinion.

         Buyer shall have  received an opinion of Hunton & Williams,  counsel to
Buyer,  in form and  substance  satisfactory  to Buyer,  with respect to matters
related to Section 29 of the Code.

         6.7. Antitrust Filings.

         The HSR Act and the regulations  promulgated thereunder shall have been
complied with,  and all waiting  periods under the HSR Act shall have expired or
been terminated.

                                   ARTICLE VII
               CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLERS

         Each and every  obligation  of Sellers to be  performed  on the Closing
Date  shall be  subject to the  satisfaction  prior to or at the  Closing of the
following express conditions precedent:

         7.1. Compliance with Agreement.

         Buyer shall have  performed and complied in all material  respects with
all of its  obligations  under  this  Agreement  which  are to be  performed  or
complied with by it prior to or on the Closing Date.

         7.2. Proceedings and Instruments Satisfactory.

         All proceedings, corporate or other, to be taken by Buyer in connection
with the transactions contemplated by this Agreement, and all documents incident
thereto, shall be reasonably satisfactory in form and substance to Sellers.

         7.3. No Litigation.

         No investigation,  suit, action or other proceeding shall be threatened
or  pending  before  any court or  governmental  agency  that  seeks  restraint,
prohibition,  damages or other relief in connection  with this  Agreement or the
consummation of the transactions contemplated hereby.

         7.4. Representations and Warranties.

         The  representations  and  warranties  made by Buyer in this  Agreement
shall be true and correct in all respects (as to representations  and warranties
qualified or limited by the term "Material Adverse Effect," the word "material,"
or phrases of like import),  and in all material respects (as to representations
and warranties not so qualified or limited) as of the Closing Date with the same
force and effect as though such  representations and warranties had been made on
the Closing Date.

         7.5. Required Consents.

         All Required Consents applicable to Buyer shall have been obtained.

                                       17
<PAGE>

         7.6. Antitrust Filings.

         The HSR Act and the regulations  promulgated thereunder shall have been
complied with,  and all waiting  periods under the HSR Act shall have expired or
been terminated.

                                  ARTICLE VIII
                      INDEMNITIES AND ADDITIONAL COVENANTS

         8.1. Sellers' Indemnity.

                  (a) Sellers  hereby  jointly and severally  indemnify and hold
Buyer  harmless from and against,  and agree to defend  promptly Buyer from, and
reimburse Buyer for, any and all losses, damages, costs, expenses,  liabilities,
obligations and claims of any kind, including, without limitation, environmental
liabilities  (whether involving personal injury or property damage),  reasonable
attorneys'  fees and other legal  costs and  expenses  (hereinafter  referred to
collectively as "Losses"), that Buyer and any Affiliate of Buyer may at any time
suffer or incur, or become subject to, as a result of or in connection with: (i)
any breach or inaccuracy of any of the  representations  and warranties  made by
Sellers in this  Agreement  or any other  agreement or  instrument  delivered by
Sellers  pursuant  hereto;  (ii) any  failure of Sellers to carry out,  perform,
satisfy  and  discharge  any  of  its   covenants,   agreements,   undertakings,
liabilities or  obligations  under this Agreement or under any of the agreements
and instruments delivered by Sellers pursuant to this Agreement; (iii) claims by
third parties (including governmental authorities) against Buyer relating to the
construction,  operation  and  ownership  by  Sellers  of  the  Assets  and  the
performance  by Sellers under the Contracts in each case under this clause (iii)
for the period prior to the Effective Time including,  without  limitation,  any
claim of  landlord's  statutory  lien;  (iv) any  violations  of, or  failure to
operate in accordance with,  necessary  permits prior to the Effective Time; and
(v) any and all liabilities and obligations of Sellers;

                  (b) In the  event a claim  against  Buyer  arises  that  Buyer
reasonably believes is covered by the indemnity  provisions of Section 8.1(a) of
this  Agreement,  notice shall be given promptly by Buyer to Sellers  containing
detail reasonably sufficient for Sellers to identify the nature and basis of the
claim.  Provided  that  Sellers  admit in  writing  to Buyer  that such claim is
covered by the indemnity provisions of Section 8.1(a) hereof, Sellers shall have
the right to contest and defend by all appropriate  legal proceedings such claim
and to  control  all  settlements  (unless  Buyer  agrees to assume  the cost of
settlement and to forgo such indemnity) and to select lead counsel to defend any
and all such claims at the sole cost and expense of Sellers; provided,  however,
that  Sellers  may not effect  any  settlement  that  could  result in any cost,
expense  or  liability  to  Buyer  unless  Buyer  consents  in  writing  to such
settlement  and Sellers  agree to  indemnify  Buyer  therefor.  Buyer may select
counsel to participate with Sellers' counsel in any such defense, in which event
Buyer's  counsel shall be at its own sole cost and expense.  In connection  with
any such claim,  action or  proceeding,  the parties shall  cooperate  with each
other and provide each other with access to relevant  books and records in their
possession.

                  (c)  Sellers  shall  not be  required  to  indemnify  and hold
harmless  Buyer  pursuant  to  Section   8.1(a)(i)  hereof  in  respect  of  the
representations  and  warranties  made by Sellers  herein  unless  such right to
indemnification  is asserted by Buyer  (whether or not such

                                       18
<PAGE>

Losses have actually been  incurred) by notice to Sellers within 12 months after
the Closing Date, with the exception of (i) the  representations  and warranties
set forth in Sections  3.4 and 3.20,  which must be asserted by Buyer within the
applicable  statute of  limitations or any  extensions  thereof  required by any
applicable  authority  relating to the taxes or  assessments  giving rise to the
Loss, plus 60 days, (ii) the representations and warranties set forth in Section
3.10,  which  must be  asserted  by  Buyer  within  the  applicable  statute  of
limitations for the violation of the underlying law that forms the basis of such
claim,  plus 60 days,  (iii) the  representations  and  warranties  set forth in
Sections 3.1, 3.2, and 3.7, which shall be without time limitation, and (iv) the
representations  and warranties set forth in Section 3.14 hereof,  which must be
asserted within 24 months after the Closing Date.

                  (d)  Notwithstanding  the  foregoing,  Sellers  shall  not  be
required  to  indemnify  Buyer  under  Section   8.1(a)(i)  in  respect  of  the
representations  and warranties  made by Sellers unless the amount of all Losses
for which indemnification is sought by Buyer under Section 8.1(a)(i) exceeds, in
the aggregate, $250,000, in which event, Sellers' indemnity obligation hereunder
would apply to all such Losses.  Sellers' aggregate  indemnification  obligation
pursuant  to  Section   8.1(a)(i)   shall  in  no  event   exceed  the  Purchase
Consideration described in Section 2.2 and paid to Sellers.

                  (e)  The   indemnification   provided  in  this  Section  8.1,
including the limitations  with respect  thereto,  shall be the exclusive remedy
for Buyer  with  respect  to Losses  as a result  of or in  connection  with the
matters described in Section 8.1(a)(i),  notwithstanding  any provisions in this
Agreement or any other such agreement or instrument to the contrary.

         8.2. Buyer's Indemnity.

                  (a) Buyer hereby  indemnifies and holds Sellers  harmless from
and against,  and agrees to defend promptly  Sellers from and reimburse  Sellers
for, any and all Losses that Sellers may at any time suffer or incur,  or become
subject to, as a result of or in connection  with:  (i) any breach or inaccuracy
of any of the  representations and warranties made by Buyer in this Agreement or
any other agreement or instrument  delivered by Buyer pursuant hereto;  (ii) any
failure  by  Buyer to carry  out,  perform,  satisfy  and  discharge  any of its
covenants,  agreements,  undertakings,  liabilities  or  obligations  under this
Agreement  or under any of the  agreements  and  instruments  delivered by Buyer
pursuant  to this  Agreement;  and  (iii)  claims  by third  parties  (including
governmental   authorities)  against  Sellers  relating  to  the  operation  and
ownership by Buyer of the Assets for the period following the Effective Time.

                  (b) In the  event  a  claim  against  Sellers  arises  that is
covered by the  indemnity  provisions of Section 8.2 of this  Agreement,  notice
shall  be given  promptly  by  Sellers  to Buyer  containing  detail  reasonably
sufficient  for Buyer to  identify  the nature and basis of the claim.  Provided
that  Buyer  admits in  writing  to  Sellers  that such  claim is covered by the
indemnity  provisions  of  Section  8.2  hereof,  Buyer  shall have the right to
contest  and  defend by all  appropriate  legal  proceedings  such  claim and to
control all settlements  (unless Sellers agrees to assume the cost of settlement
and to forgo such  indemnity)  and to select lead  counsel to defend any and all
such claims at the sole cost and expense of Buyer; provided, however, that Buyer
may not  effect  any  settlement  that  could  result  in any cost,  expense  or
liability to Sellers unless Sellers

                                       19
<PAGE>

consents in writing to such  settlement  and Buyer agrees to  indemnify  Sellers
therefor.  Sellers may select counsel to participate with Buyer's counsel in any
such  defense,  in which event  Sellers'  counsel  shall be at the sole cost and
expense of Sellers. In connection with any such claim, action or proceeding, the
parties  shall  cooperate  with each other and provide each other with access to
relevant books and records in their possession.

                  (c) Buyer shall not be required to indemnify and hold harmless
Sellers pursuant to Section  8.2(a)(i) hereof in respect of the  representations
and  warranties  made by Buyer herein  unless such right to  indemnification  is
asserted by Sellers  (whether or not such Losses have actually been incurred) by
notice to the Buyer within 12 months after the Closing Date,  with the exception
of the  representations and warranties set forth in Sections 4.1 and 4.2 hereof,
which shall be without time limitation.

                  (d) Notwithstanding the foregoing, Buyer shall not be required
to indemnify Sellers under Section  8.2(a)(i) in respect of the  representations
and  warranties  made by  Buyer  unless  the  amount  of all  Losses  for  which
indemnification  is sought by Sellers under Section  8.2(a)(i)  exceeds,  in the
aggregate,  $250,000,  in which event,  Buyer's indemnity  obligation  hereunder
would apply to all such Losses.

                  (e)  The   indemnification   provided  in  this  Section  8.2,
including the limitations  with respect  thereto,  shall be the exclusive remedy
for  Sellers  with  respect to Losses as a result of or in  connection  with the
matters described in Section 8.2(a)(i),  notwithstanding  any provisions in this
Agreement or any other such agreement or instrument to the contrary.

         8.3. Bulk Sales Compliance.

         To the extent  applicable,  Buyer hereby  waives  compliance by Sellers
with the provisions of the bulk sales law of any U.S.  jurisdiction,  and in any
event,  Sellers covenants and agrees to pay and discharge when due all claims of
any  governmental  entities and creditors of Sellers and its  subsidiaries  that
could be asserted against Buyer by reason of such non-compliance.  Sellers agree
to  indemnify  and hold  Buyer  harmless  from and  against  and shall on demand
reimburse  Buyer for any and all Losses  suffered by Buyer by reason of Sellers'
failure to pay and discharge any such claims.

         8.4. Additional Instruments.

         At any time and from time to time after the Closing,  at either party's
request and without further consideration, Sellers or Buyer, as the case may be,
shall execute and deliver such other instruments of sale, transfer,  conveyance,
assignment and  confirmation  and take such other action as Sellers or Buyer may
reasonably  deem necessary or desirable in order to more  effectively  transfer,
convey,  and assign to Buyer,  and confirm  Buyer's title to and interest in and
responsibility  and liability for, the Assets and Contracts and the consummation
of the transactions  contemplated herein. Without limiting the generality of the
foregoing,  Sellers  will  cooperate  with  and  assist  Buyer in  renewing,  or
transferring,  into Buyer's  name those  Permits for which Buyer  requests  such
assistance and cooperation at the appropriate  time for such renewal or transfer
as determined by Buyer.

                                       20
<PAGE>

         8.5. Access to Books, Records and Employees.

         From and after the  Closing  Date,  Buyer  will  authorize  and  permit
Sellers and its respective representatives to have access during normal business
hours, upon reasonable notice and for reasonable  purposes and in such manner as
will not unreasonably  interfere with the conduct of Buyer's business,  to Books
and Records  within the control of Buyer that relate to the  Facility.  From and
after  the  Closing  Date,  Sellers  will  authorize  and  permit  Buyer and its
representatives  to have access during normal  business  hours,  upon reasonable
notice and for reasonable  purposes and in such manner as will not  unreasonably
interfere  with the  conduct of  Sellers'  business,  to all books and  records,
files,  documents and other correspondence  related to the Facility prior to the
Effective  Time,  which are not included among the Books and Records.  Buyer and
Sellers  agree to  maintain  all  books,  records,  files,  documents  and other
correspondence related to the Facility prior to the Effective Time in accordance
with their  respective  normal  document  retention  practices after the Closing
Date.

                                   ARTICLE IX
                                   TERMINATION

         9.1.     Termination.

         This  Agreement may be  terminated  and the  transactions  contemplated
hereby may be abandoned as follows: (a) at any time prior to the Closing Date by
mutual written agreement of Sellers and Buyer; or (b) by either Sellers or Buyer
if the  Effective  Time shall not have  occurred  on or before  April 30,  2000;
provided,  however,  that the right to terminate this Agreement pursuant to this
clause (b) shall not be  available  to any party  whose  failure to fulfill  any
obligation  under  this  Agreement  has been the cause of, or  resulted  in, the
failure of the Effective Time to occur prior to such date.

         9.2. Rights on Termination; Waiver.

                  (a) If this  Agreement is terminated  pursuant to Section 9.1,
all further obligations of the parties under or pursuant to this Agreement shall
terminated.

                  (b) If any of the  conditions  set forth in Article VI of this
Agreement have not been satisfied,  Buyer may  nevertheless  elect to waive such
conditions and proceed with the  consummation of the  transactions  contemplated
hereby. If any of the conditions set forth in Article VII of this Agreement have
not been satisfied,  Sellers may nevertheless elect to waive such conditions and
proceed with the  consummation  of the  transactions  contemplated  hereby.  The
election by Buyer or Sellers to terminate this Agreement pursuant to Section 9.1
(b) shall not in any way affect the rights of such party against the other party
for any breach or default under this Agreement.

                                       21
<PAGE>

                                    ARTICLE X
                                  MISCELLANEOUS

         10.1.    Entire Agreement; Amendment.

         This Agreement and the documents referred to herein and to be delivered
pursuant hereto constitute the entire agreement  between the parties  pertaining
to the  subject  matter  hereof,  and  supersede  all prior and  contemporaneous
agreements, understandings, negotiations and discussions of the parties, whether
oral  or  written,  and  there  are  no  warranties,  representations  or  other
agreements  between the parties in connection  with the subject  matter  hereof,
except as specifically  set forth herein or therein.  No amendment,  supplement,
modification,  waiver or termination  of this Agreement  shall be binding unless
executed  in writing by the party to be bound  thereby.  No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provision of this Agreement, whether or not similar, nor shall such waiver
constitute  a  continuing  waiver  unless  otherwise  expressly  provided.   The
representations  and  warranties  of each  party  hereto  shall be  deemed to be
material and to have been relied upon by the other party.  The  representations,
warranties, covenants and agreements of Sellers and Buyer contained herein shall
survive the execution and delivery of this  Agreement  and  consummation  of the
transactions  contemplated hereby and, as to the representations and warranties,
shall be effective  until the relevant time  limitation for making any indemnity
claim with respect to such representations and warranties under Sections 8.1 and
8.2 and shall have been reached and no longer.  All agreements,  understandings,
representations,  warranties and covenants made by Sellers herein shall be joint
and several obligations of Sellers.

         10.2. Expenses.

         Except as otherwise  specifically  provided herein, each of the parties
hereto shall pay the fees and expenses of their respective counsel,  accountants
and other  experts  and the  other  expenses  incident  to the  negotiation  and
preparation of this Agreement and consummation of the transactions  contemplated
hereby.

         10.3. Governing Law; Consent to Jurisdiction.

         This Agreement shall be construed and interpreted according to the laws
of the State of New York,  without regard to the conflicts of law rules thereof;
provided,  however,  that Section 5-1401 of the New York General Obligations Law
shall apply to this Agreement.  Each of the parties hereto, in respect of itself
and its properties,  agree to be subject to (and hereby irrevocably  submits to)
the  nonexclusive  jurisdiction  of the  United  States  federal  court  for the
Southern  District of New York or New York state court sitting in the Borough of
Manhattan, New York, in respect of any suit, action or proceeding arising out of
or relating to this  Agreement  or the  transactions  contemplated  herein,  and
irrevocably  agrees  that all  claims in  respect  of any such  suit,  action or
proceeding  may be heard and  determined in any such court.  Each of the parties
hereto irrevocably  waives, to the fullest extent it may effectively do so under
applicable  Law,  any  objection  to the  laying of the venue of any such  suit,
action or proceeding brought in any such court and any claim that any such suit,
action  or  proceeding  brought  in  any  such  court  has  been  brought  in an
inconvenient  forum.  Either party hereto may make service on the other party by

                                       22
<PAGE>

sending  or  delivering  a copy of the  process to the party to be served at the
address  and in the manner  provided  for the giving of notices in Section  10.5
hereof. Nothing in this Section, however, shall affect the right of any party to
bring any action or proceeding  arising out of or relating to this  Agreement in
any other court or to serve legal  process in any other manner  permitted by law
or in equity.

         10.4. Assignment.

         This Agreement and each party's  respective rights hereunder may not be
assigned, by operation of law or otherwise, without the prior written consent of
the other party  provided,  however,  that Buyer may assign this Agreement to an
Affiliate of Buyer without the consent of Sellers.

         10.5. Notices.

         All  communications,  notices and disclosures  required or permitted by
this Agreement shall be in writing and shall be deemed to have been given at the
earlier  of the  date  (a)  when  delivered  personally  or by  messenger  or by
overnight delivery service to an officer of the other party, (b) five days after
being mailed by registered or certified  United  States mail,  postage  prepaid,
return  receipt  requested,  or (c) when received via  telecopy,  telex or other
electronic  transmission,  in all cases  addressed  to the person for whom it is
intended  at his  address  set forth  below or to such other  address as a party
shall have  designated  by notice in  writing  to the other  party in the manner
provided by this Section:

If to Buyer:          DTE Kentucky, LLC
                      425 South Main Street
                      Suite 201
                      Ann Arbor, Michigan 48104
                      Fax:  (734) 668-9739
                      Attn:  Manager of Assets

With a copy to:       DTE Energy Services
                      425 South Main Street
                      Suite 201
                      Ann Arbor, Michigan 48104
                      Fax:  (734) 668-1028
                      Attn:  General Counsel

If to Sellers:        Covol Technologies, Inc.
                      3280 North Frontage Road
                      Lehi, Utah 84043
                      Fax:  (801) 766-1979
                      Attn:  Brent M. Cook

                                       23
<PAGE>

With a copy to:       Covol Technologies, Inc.    Pillsbury Madison & Sutro LLP
                      3280 North Frontage Road    235 Montgomery Street
                      Lehi, Utah 84043            San Francisco, CA 94104
                      Fax:  (801) 766-1979        Fax:  (415) 983-1200
                      Attn:  General Counsel      Attn:  Linda C. Williams, Esq.


         10.6. Counterparts; Headings.

         This Agreement may be executed in several  counterparts,  each of which
shall be deemed an original, but such counterparts shall together constitute but
one and the same  Agreement.  The Table of  Contents  and  Article  and  Section
headings in this  Agreement are inserted for  convenience  of reference only and
shall not constitute a part hereof.

         10.7. Interpretation.

         Unless the context requires otherwise, all words used in this Agreement
in the singular number shall extend to and include the plural,  all words in the
plural  number  shall  extend to and include the  singular  and all words in any
gender shall extend to and include all genders.  All  references  to  contracts,
agreements,  leases or other  understandings or arrangements shall refer to oral
as well as written matters.  The specificity of any  representation  or warranty
contained  herein  shall  not be deemed  to limit  the  generality  of any other
representation or warranty contained herein.

         10.8. Severability.

         If any provision,  clause or part of this Agreement, or the application
thereof under  certain  circumstances,  is held  invalid,  the remainder of this
Agreement,  or the  application  of such  provision,  clause or part under other
circumstances, shall not be affected thereby.

         10.9. No Reliance.

         No  third  party  is  entitled  to rely on any of the  representations,
warranties and agreements contained in this Agreement.  Buyer and Sellers assume
no liability to any third party because of any reliance on the  representations,
warranties  and  agreements  of Buyer or Sellers  contained  in this  Agreement.
Nothing contained in this Agreement shall be construed as creating a partnership
or joint venture or any agency  relationship  between the parties hereto, or any
other relationship other than buyer and Sellers as provided herein.

         10.10. Parties in Interest.

         This Agreement shall be binding upon and inure solely to the benefit of
each party  hereto,  and  nothing in this  Agreement,  express  or  implied,  is
intended  to or shall  confer  upon any other  person any  rights,  benefits  or
remedies of any nature whatsoever under or by reason of this Agreement.

                                       24
<PAGE>

         10.11. Specific Performance.

         The parties  hereto  agree that  irreparable  damage would occur in the
event any of the  provisions of this  Agreement were not performed in accordance
with the  terms  hereof  and that the  parties  shall be  entitled  to  specific
performance  of the terms  hereof,  in  addition  to any other  remedy at law or
equity.

                [Remainder of this page intentionally left blank]

                                       25
<PAGE>

         IN  WITNESS  WHEREOF,  each  party  hereto  has  caused  this  Purchase
Agreement to be executed in its name by a duly authorized  officer as of the day
and year first above written.

                                     DTE KENTUCKY, LLC

                                     By: /s/  Kent L. McCargar
                                         --------------------------------------
                                     Its:  Vice President and Chief Financial
                                           Officer



                                     COVOL TECHNOLOGIES, INC.

                                     By: /s/  Kirk A. Benson
                                         ------------------------------------
                                     Its: Chairman and Chief Executive Officer




                                     SYNFUEL INVESTMENTS, INC.

                                     By: /s/ Brent M. Cook
                                         --------------------------------------
                                     Its:  President



                                     MOUNTAINEER FUELS, LLC

                                     By: /s/ Brent M. Cook, President
                                         --------------------------------------
                                         Covol Technologies, Inc.
                                     Its: Manager

                                       26