LICENSE AND BINDER PURCHASE AGREEMENT

         THIS LICENSE AND BINDER PURCHASE AGREEMENT (this "Agreement"), is made
and entered into as of January 21, 2000 by and between Premier Elkhorn Coal
Company, a Kentucky corporation ("Licensee"), and Covol Technologies, Inc., a
Delaware corporation ("Licensor").

                                    RECITALS

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

         WHEREAS, Mohave Fuel Company, L.L.C., a Utah limited liability company
("Mohave"), owns a solid synthetic fuel manufacturing plant located near
Laughlin, Clark County, Nevada (the "Facility");

         WHEREAS, Licensor and Mohave have entered into that certain Option
Agreement dated as of December 30, 1999, as amended pursuant to that certain
Extension of Option Agreement dated January 7, 2000, between Licensor and
Mohave, pursuant to which Mohave has granted to Licen1sor the exclusive right
and option to purchase the Facility (the "Option");

         WHEREAS, Licensor and Licensee have entered into that certain Option
and Purchase Agreement, dated as of the date hereof (the "Option and Purchase
Agreement"), pursuant to which Licensor has assigned to Licensee the Option;

         WHEREAS, Licensee has exercised the Option and purchased the Facility
pursuant to that certain Purchase and Sale Agreement dated as of the date
hereof, by and between Licensee and Mohave (the "Purchase and Sale Agreement");

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

<PAGE>

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

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

         Section 1. Definitions. Capitalized terms used herein shall have the
meanings specified in the Option and Purchase Agreement, unless otherwise
specified below:

         1.1 "Bankruptcy Code" has the meaning set forth in Section 16.

         1.2 "Claimant" has the meaning set forth in Section 3.2.

         1.3 "Coal Briquetting Technology" means all intellectual property,
patents (including, but not limited to, United States Patent Numbers 5,599,361;
5,487,764; and 5,453,103) and applications therefor, printed and not printed
technical data, know-how, trade secrets, copyrights and other intellectual
property rights, inventions, discoveries, techniques, works, processes, methods,
plans, software, designs, drawings, schematics, specifications, communications
protocols, source and object code and modifications, test procedures, program
cards, tapes, disks, algorithms and all other scientific or technical
information in whatever form including "Developed Technology" relating to,
embodied in or used in the process to produce synthetic coal fuel briquettes
from Coal Feedstock, including all such information in existence as of the date
of this Agreement as well as related information later developed by Licensor;
provided, however, that the defined term "Coal Briquetting Technology" shall not
include the proprietary process/method or other binder material or composition
developed by Licensor to produce synthetic coke briquettes from coke breeze,
iron revert materials, or any technology used in any application other than the
processing and production of synthetic coal fuel briquettes. Nothing in this
Agreement is intended to grant to Licensee the right to apply the Coal
Briquetting Technology to produce anything other than synthetic coal fuel
intended to qualify for tax credits under Section 29(c)(1)(C) of the Code.1.1

                                       2
<PAGE>

         1.4 "Code" means the Internal Revenue Code of 1986, as amended, and the
regulations thereunder.

         1.5 "Confidential Information" has the meaning set forth in Section
2.4.

         1.6 "Developed Technology" means any inventions, "Improvement" or
technology that Licensor may conceive, make, invent or suggest in connection
with or related to the Coal Briquetting Technology; provided, however, that
"Developed Technology" shall not include (i) coal fines recovery, coal fines
washing, material handling or product marketing techniques or technologies
conceived, made, invented or suggested by Licensee that are generally applicable
to the coal industry but which are used at the Facility in connection with the
Coal Briquetting Technology or (ii) any inventions, "Improvement" or technology
that Licensee may conceive, make, invent or suggest in connection with or
related to the Coal Briquetting Technology.

         1.7 "Dow Agreement" means that certain agreement between Dow Chemical
Company and Licensor, effective January 1, 1998.

         1.8 "Facility" has the meaning set forth in the Recitals.

         1.9 "Formula" has the meaning set forth in Section 4.7.

         1.10 "Hazardous Substances" means (a) any petrochemical or petroleum
products (provided that for purposes of this Agreement, the Proprietary Binder
Material shall not be considered to be a petrochemical or petroleum product),
oil or coal ash, radioactive materials, radon gas, asbestos in any form that is
or could become friable, urea formaldehyde foam insulation and transformers or
other equipment that contain dielectric fluid which may contain polychlorinated
biphenyls, (b) any chemicals, materials or substances defined as or included in
the definition of "hazardous substances," "hazardous wastes," "hazardous
materials," "hazardous constituents," "restricted hazardous materials,"
"extremely hazardous substances," "toxic substances," "contaminants,"
"pollutants," "toxic pollutants" or words of similar meaning and regulatory
effect under any applicable environmental law and (c) any other chemical,
material or substance, exposure to which is prohibited, limited or regulated by
any applicable environmental law.

                                       3
<PAGE>

         1.11 "Increased Cost of Manufacture" has the meaning set forth in
Section 4.2.

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

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

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

         1.15 "Mohave" has the meaning set forth in the Recitals.

         1.16 "Option" has the meaning set forth in the Recitals.

         1.17 "Option and Purchase Agreement" has the meaning set forth in the
Recitals.

         1.18 "Proprietary Binder Material" means and refers to the binder
compound derived from the Formula and used for the production of synthetic coal
briquettes by the Facility.

         1.19 "Reduced Cost of Manufacture" has the meaning set forth in Section
4.2.

         Section 2. License Grant.

                                       4
<PAGE>

         2.1 General. Licensor hereby grants to Licensee a non-exclusive license
to use the Coal Briquetting Technology, including Developed Technology relating
to the Coal Briquetting Technology, for the term of this Agreement, for the
purpose of commercial exploitation, including the non-exclusive right to make,
have made or use at the Facility and to offer to sell and to sell or otherwise
transfer products that have been manufactured with the Coal Briquetting
Technology, subject to the terms and conditions of this Agreement. Licensee
hereby accepts the license on the terms hereof. Licensee shall not have the
right to sublicense the Coal Briquetting Technology, except to any assignee,
transferee or purchaser in accordance with Section 18. Licensee further agrees
to use the Coal Briquetting Technology only under authority of this Agreement
with Licensor.

         2.2 Licensor's Ownership of Developed Technology. All Developed
Technology is and shall become Licensor's absolute property, subject to the
terms of this Agreement.

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

                                       5
<PAGE>

         2.4 Confidentiality. Each of the parties hereby agree to maintain the
Coal Briquetting Technology confidential and not to disclose the Coal
Briquetting Technology, or any aspect thereof, including, but not limited to,
the Developed Technology (collectively, the "Confidential Information").
Notwithstanding the foregoing, information which (i) is or becomes generally
available to the public other than as a result of an unauthorized disclosure by
the parties or their respective agents, employees, directors or representatives,
(ii) was available to the party receiving disclosure on a non-confidential basis
prior to its receiving disclosure hereunder, (iii) lawfully becomes available to
the party receiving disclosure on a non-confidential basis from a third party
source (provided that such source is not known by the party receiving disclosure
or its agents, employees, directors or representatives to be prohibited from
transmitting the information), (iv) a party is compelled by legal process by any
court or other authority to disclose or (v) is developed by Licensee
independently of (or which does not depend on the use of) Confidential
Information received from Licensor, shall not be subject to the terms of this
Section 2.4. In the case of (iv) above, the compelled party shall give the other
party prompt written notice of such legal process in order that an appropriate
protective order can be sought and each party agrees not to oppose the other
party's efforts to prevent the public disclosure of Confidential Information. At
the termination of this Agreement, each party receiving Confidential Information
shall use commercially reasonable efforts to return all copies of such
Confidential Information (including, without limitation, any reports or
memoranda), except to the extent such Confidential Information is necessary for
accounting, tax, regulatory or other similar purposes. Nothing in this Agreement
shall prohibit Licensee from disclosing the Confidential Information to
affiliates or to others as may be reasonably necessary for Licensee to exploit
Licensee's rights under the Transaction Documents and/or this Agreement,
provided that the recipient of any such Confidential Information executes a
confidentiality agreement restricting further disclosure of the Confidential
Information.

         2.5 Know-How and Assistance. To enable Licensee to benefit fully from
the license of the Coal Briquetting Technology, Licensor shall provide access to
all relevant documentation, drawings, engineering specifications and other
know-how in its possession, reasonable access to its employees or agents who are
familiar with the Coal Briquetting Technology, including, but not limited to,
Developed Technology, and shall provide such technical assistance and training
as is requested by Licensee. If Licensor does not have responsibility for the
operation of the Facility, Licensee shall reimburse Licensor for reasonable
travel and other similar out-of-pocket expenses of Licensor in performing
services under this Section 2.5; provided, however, that Licensor shall obtain
the prior approval of Licensee for any expenditures in excess of $5,000.

         Section 3. Royalty.

         3.1 Royalty Payments. Subject to adjustment as described below, during
the term of this Agreement, Licensee shall pay to Licensor a royalty in an
amount equal to $**** per ton of Section 29 Product produced at the Facility and
sold during the period commencing on the date of this Agreement and ending upon
the expiration of the term (or earlier termination) of this Agreement. Such
royalty shall be paid quarterly on the last business day of January, April, July
and October of each calendar year for the Section 29 Product produced at the
Facility and sold during the previous calendar quarter (commencing with the
calendar quarter which includes the date of this Agreement). To the extent
Licensee, at its option, does not purchase from Licensor and use the Proprietary
Binder Material to produce the Section 29 Product produced at the Facility and
sold and instead uses a binder or other compound obtained from one or more other
sources, the royalty amount payable to Licensor shall be reduced to $**** per
ton.

                                       6
<PAGE>

         3.2 Royalty Set-off. If any person ("Claimant") asserts a claim that
all or any part of the Coal Briquetting Technology is not the property of
Licensor and is instead the property of Claimant, Licensee may, pending
resolution of such claim, withhold from the royalty payment otherwise due
Licensor pursuant to Section 3.1, amounts equal to such licensee fees as
Claimant may demand for the use by Licensee of the Coal Briquetting Technology
allegedly owned by Claimant. Any amounts so withheld will be placed in escrow by
Licensee. Upon entrance of a final non-appealable order by a court of competent
jurisdiction that the Coal Briquetting Technology is the property of Licensor or
upon receipt of a release of Licensee from liability by Claimant, Licensee shall
pay to Licensor any amounts withheld pursuant to this Section 3.2. If a court of
competent jurisdiction enters a final non-appealable order that all or any
portion of the Coal Briquetting Technology is the property of the Claimant,
Licensee may pay to Claimant a reasonable license fee and set off any amounts so
paid against any amount withheld pursuant to this Section 3.2 and/or any other
royalty otherwise due Licensor without any further liability with respect
thereto. Nothing in this Section 3.2 shall be construed as limiting in any
respect Licensee's rights and remedies related to a breach by Licensor of the
representations and warranties contained in Section 7.3.

         Section 4. Sales of Binder.

         4.1 Sale and Purchase. Licensor shall sell to Licensee, and Licensee
shall purchase from Licensor, such amounts of Proprietary Binder Material as
Licensee may request from time to time to operate the Facility. Licensor shall
deliver the Proprietary Binder Material to Licensee at such times and in such
amounts as Licensee may request from time to time. Each calendar month Licensor
shall deliver an invoice to Licensee for the Proprietary Binder Material
delivered to Licensee during the immediately preceding calendar month. Payments
for Proprietary Binder Material delivered by Licensor to Licensee during any
calendar month shall be due and payable to Licensor within fifteen (15) days
following receipt of an invoice from Licensor with respect to such Proprietary
Binder Material. Notwithstanding anything in this Agreement to the contrary,
Licensee, at its option, may purchase and use binders or other compounds
obtained from other sources in lieu of, or in addition to, the Proprietary
Binder Material.

                                       7
<PAGE>

         4.2 Price. Subject to the next two preceding sentences, the price which
Licensee shall pay for the Proprietary Binder Material delivered by Licensor to
Licensee shall be an amount equal to $**** per unit of Proprietary Binder
Material (assuming 2% Proprietary Binder Material by weight) to produce one (1)
ton of synthetic fuel product. If during the term of this Agreement, Licensor
shall enter into one or more agreements from time to time with third parties
pursuant to which Licensor shall sell Proprietary Binder Material for less than
$**** per unit of Proprietary Binder Material (assuming 2% Proprietary Binder
Material by weight) to produce one (1) ton of synthetic fuel product (such lower
price, the "Reduced Cost of Manufacture"), then the parties hereto agree that
the price which Licensee shall pay for Proprietary Binder Material delivered by
Licensor to Licensee pursuant to this Agreement shall be automatically reduced
to such Reduced Cost of Manufacture. If during the term of this Agreement,
Licensor's direct and actual costs (including, but not limited to, material,
labor and transportation costs) incurred in connection with the manufacture and
sale of the Proprietary Binder Material delivered by Licensor to Licensee
pursuant to this Agreement shall exceed $**** per unit of Proprietary Binder
Material (assuming 2% Proprietary Binder Material by weight) to produce one (1)
ton of synthetic fuel product (such price, the "Increased Cost of Manufacture"),
then the parties hereto agree that the price which Licensee shall pay for
Proprietary Binder Material delivered by Licensor to Licensee pursuant to this
Agreement shall be automatically increased to an amount equal to such Increased
Cost of Manufacture, unless or until the price has been or is subsequently
reduced pursuant to the immediately preceding sentence.

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

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

         (2) Proprietary Binder Material purchased by Licensee from Licensor
hereunder shall not contain any Hazardous Substances and its sale, delivery and
use to produce solid synthetic fuel at the Facility, in each case, as
contemplated by this Agreement shall comply with all applicable laws and
governmental regulations (including, but not limited to, environmental laws and
regulations).

         (3) Licensor represents and warrants to Licensee that the Proprietary
Binder Material when applied to Coal Feedstock produces a "significant chemical
change" for purposes of Section 29 of the Code.

                                       8
<PAGE>

         (4) Licensor agrees that it shall not substitute other monomers or
polymers for the Dow carboxylated styrene/butadiene latex formulation currently
being used by Licensor to produce Proprietary Binder Material without the prior
written consent of Licensee and without first providing Licensee with a written
report of a third party fuels expert reasonably acceptable to Licensor and
Licensee to the effect that (in such third party's professional judgment) the
monomers or polymers so to be substituted will achieve the results set forth in
Section 4.3(c).

         (5) Licensor agrees that all Proprietary Binder Material delivered to
Licensee shall be in accordance with the specifications set forth in Exhibit A
attached hereto.

         (6) At Licensee's request, Licensor shall replace, or refund the
purchase price of, all non-conforming Proprietary Binding Material. In addition,
Licensor shall (i) pay all of Licensee's costs and expenses incurred to return,
remove or dispose of non-conforming Proprietary Binder Material and (ii)
indemnify, defend and hold harmless Licensee and its partners, directors,
officers, members, agents, representatives, subsidiaries and affiliates from and
against any and all claims, demands or suits (by any party, including any
governmental entity), losses, liabilities, damages, obligations, penalties,
payments, costs and expenses (including the costs and expenses of enforcing this
indemnification and defending any and all actions, suits, proceedings, demands
and assessments, which shall include reasonable attorneys' fees and court costs)
resulting from, relating to, arising out of, or incurred in connection with any
products liability claim resulting from, relating to, arising out of, or
incurred in connection with the delivery to and use by Licensee of Proprietary
Binder Material delivered by Licensor; provided, however, that in no event shall
Licensor's liability under this Section 4.3(f)(ii) exceed the greater of (i) the
proceeds received from insurance provided for in Section 4.8 and (ii) the
proceeds received under the Dow Agreement and/or any of its other vendor or
binder manufacturing agreements which Licensor may enter into from time to time.

         (7) Licensor agrees that there will be available at the Facility from
time to time as reasonably requested by Licensee sufficient quantities of the
Proprietary Binder Material to supply the requirements of Licensee for the
production of up to 83,334 tons of Product per calendar month from the date
hereof until at least December 31, 2007.

                                       9
<PAGE>

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

         4.5 Delivery and Acceptance. All Proprietary Binder Material purchased
hereunder shall be delivered F.O.B. the Facility. Licensor shall arrange for any
necessary transportation of the Proprietary Binder Material to the Facility and
shall deliver or cause to be delivered to Licensee a material safety data sheet
in respect of each delivery of Proprietary Binder Material to Licensee. Licensee
shall bear the expense of unloading Proprietary Binder Material from the trucks.
Licensee shall have a reasonable opportunity to sample Proprietary Binder
Material delivered to it hereunder to confirm that such Proprietary Binder
Material conforms to the terms and requirements hereof (including, but not
limited to, the specifications set forth in Exhibit A attached hereto), and
Licensee shall not be deemed or required to accept any such Proprietary Binder
Material prior to the completion of such sampling. From time to time as
requested by Licensee, Licensor shall certify in writing to Licensee that the
representations and warranties in Section 4.3 are true and complete with respect
to the Proprietary Binder Material delivered to Licensee pursuant to this
Agreement.

                                       10
<PAGE>

         4.6 Grant of License. Licensor hereby grants to Licensee a nonexclusive
license for the term of this Agreement (or such shorter period as provided in
the proviso hereto) to use the technology used to manufacture the Proprietary
Binder Material, and the copy of the Formula delivered in escrow pursuant to
Section 4.7, to manufacture the Proprietary Binder Material in sufficient
quantities to operate the Facility to full capacity, and such technology shall
be deemed "Coal Briquetting Technology" for the purposes of this Agreement;
provided, however, that Licensee shall not be permitted to use, and Licensee
agrees that it shall not use, such license unless and until Licensor has given
notice to Licensee of its inability to deliver the Proprietary Binder Material
to Licensee (which Licensor shall give to Licensee not less than ninety (90)
days before its ability to deliver the Proprietary Binder Material to Licensee
will be interrupted or terminated for any reason, including Licensor's
insolvency, bankruptcy or liquidation) or, in the absence of such notice, the
actual failure by Licensor to deliver the Proprietary Binder Material to
Licensee for at least ten (10) days after Licensee gives written notice of
non-delivery to Licensor. Upon the occurrence of the events described in the
immediately proceeding proviso, Licensor agrees to coordinate and arrange for,
and does hereby authorize and permit, Licensee, its sublicensees or assignees,
to purchase the Proprietary Binder Material directly from Licensor's binder
manufacturing or vendor sources. The license granted to Licensee under this
Section shall cease (subject to reinstatement upon the reoccurrence of the
events contemplated above) and sales of Proprietary Binder Material under the
terms of this Agreement shall be reinstated, in each case, on a date not less
than ninety (90) days after Licensor gives notice to Licensee, together with
evidence reasonably satisfactory to Licensee, that Licensor is able to deliver
the Proprietary Binder Material to Licensee in accordance with this Agreement.
No additional fee or royalty shall be payable to Licensor in connection with the
license granted pursuant to this Section and Licensor shall be responsible for
any additional out-of-pocket costs incurred by Licensee in connection with the
production of Proprietary Binder Material pursuant to this Section.

         4.7 Escrow of Binder Material Formula.

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

         4.8 Required Insurance.

                                       11
<PAGE>

         (1) Types. Licensor shall obtain and maintain, at its own cost, from
reputable insurers at all times during the term of this Agreement, general third
party liability insurance, including product liability coverage, with a
$10,000,000 coverage limit, which may be comprised of a $1,000,000 per
occurrence primary policy and a $10,000,000 umbrella policy.

         (2) "Occurrence" Basis Coverage. To the extent available on
commercially reasonable terms at commercially reasonable rates the liability
coverage required in this Section 4.8 shall be written on an "occurrence" basis.

         (3) Named Insured. Licensor shall cause Licensee to be named as an
additional insured on all the insurance policies required under this Section
4.8.

         (4) Subrogation Waiver. Licensor shall cause all the insurance policies
required under this Section 4.8 to contain a waiver of subrogation by the
insurer in favor of Licensee.

         (5) Notice of Cancellation/Coverage Reduction. Licensor shall insure
that each insurance policy required under this Section 4.8 shall contain a
"notice of cancellation/coverage reduction" provision requiring the insurer to
give at least thirty (30) days prior written notice to Licensee of the
cancellation of and/or material change to (including, but not limited to, a
reduction in coverage under such insurance policy) its insurance policy.

         (6) Default. If Licensor fails duly to perform it obligations to effect
and maintain any of the insurance required pursuant to this Section 4.8,
Licensee may, but shall not be obligated to, upon written notice to Licensor, in
the name of and on behalf of Licensor effect and maintain such insurance, and
all costs and expenses thereby incurred by Licensee shall be paid by Licensor
within ten (10) days of written demand.

         (7) Certificates of Insurance. Licensor shall cause its insurers under
each insurance policy required under this Section 4.8 to provide Licensee with
certificates of insurance evidencing the insurance policies and endorsements
required by this Section 4.8. Failure of Licensee to receive such certificates
shall not relieve Licensor of its obligation to obtain and maintain insurance in
accordance with this Section 4.8. Failure to obtain insurance pursuant to this
Section 4.8 shall in no way relieve or limit Licensor's obligations and
liabilities under this Agreement.

                                       12
<PAGE>

         Section 5. Records; Inspection; Confidentiality.

         5.1 Records. Each party hereto shall keep accurate records containing
all data reasonably required for the computation and verification of the amounts
to be paid by the respective parties under this Agreement (including, but not
limited to, any Reduced Cost of Manufacture or Increased Cost of Manufacture),
and shall permit each other party or an independent accounting firm designated
by such other party to inspect and/or audit such records during normal business
hours upon reasonable advance notice. All costs and expenses incurred by a party
in connection with such inspection shall be borne by it.

         5.2 Confidentiality. Each party agrees to hold confidential from all
third parties all information contained in records examined by or on behalf of
it pursuant to this Section 5; provided, however, that information shall not be
subject to the terms of this Section 5 which (i) is or becomes generally
available to the public other than as a result of an unauthorized disclosure by
the parties or their respective agents, employees, directors or representatives,
(ii) was available to the party receiving disclosure on a non-confidential basis
prior to its receiving disclosure hereunder, (iii) lawfully becomes available to
the party receiving disclosure on a non-confidential basis from a third party
source (provided that such source is not known by the party receiving disclosure
or its agents, employees, directors or representatives to be prohibited from
transmitting the information), (iv) a party is compelled by legal process by any
court or other authority to disclose, or (v) is developed by the party
independently of (or which does not depend on the use of) disclosure hereunder.
In the case of (iv) above, the compelled party shall give the other party prompt
written notice of such legal process in order that an appropriate protective
order can be sought and each party agrees not to oppose the other party's
efforts to prevent the public disclosure of such information. At the termination
of this Agreement, each party receiving copies of such information (including,
without limitation, any reports or memoranda) shall use commercially reasonable
efforts to return all such copies, except to the extent such information is
necessary for accounting, tax, regulatory or other similar purposes. Nothing in
this Agreement shall prohibit Licensee from disclosing such information to
affiliates or to others as may be reasonably necessary for Licensee to exploit
Licensee's rights under the Transaction Documents and/or this Agreement,
provided that the recipient of any such information executes a confidentiality
agreement restricting further disclosure of such information.

                                       13
<PAGE>

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

         Section 7. General Representations, Warranties and Covenants.

         7.1 Authority. Each party represents and warrants to the other party
that (a) the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby (i) have been duly
authorized on its behalf by all requisite action, corporate or otherwise, (ii)
does not and will not result in any violation of, conflict with or default under
the terms of any of its organizational documents (nor, to its knowledge, does
there exist any condition which upon the passage of time or the giving of notice
would cause such violation, conflict or default), and (iii) does not and will
not result in any violation of, conflict with or default under any collective
bargaining agreement, permit, lease, venture, indenture, mortgage, agreement,
contract, judgment, order or other obligation or restriction to which it or its
assets may be bound or encumbered (nor, to its knowledge, does there exist any
condition which upon the passage of time or the giving of notice would cause
such violation, conflict or default), (b) it has the full right, power and
authority to enter into this Agreement and to carry out the terms of this
Agreement, (c) it has duly executed and delivered this Agreement, and (d) this
Agreement is its valid and binding obligation, enforceable in accordance with
its 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).

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

         7.3 Intellectual Property Matters.

                                       14
<PAGE>

         (1) Licensor represents and warrants to Licensee that (i) it owns, free
and clear of all liens and encumbrances, patents related to the Coal Briquetting
Technology (including, but not limited to, United States Patent Numbers
5,599,361, 5,487,764 and 5,453,103) and has developed and exclusively owns the
Coal Briquetting Technology, including, but not limited to, printed and not
printed technical data, know-how, trade secrets, copyrights, and other
intellectual property rights and all other scientific or technical information
in whatever form relating to, embodied in or used in the process to produce
synthetic coal fuel briquettes from waste coal dust, coal fines, run of mine
coal and other similar coal feedstock, and, the right to freely make, use, sell
and exploit the Coal Briquetting Technology and Proprietary Binder Material used
in manufacturing synthetic coal fuel briquettes from waste coal dust, coal
fines, run of mine coal and other similar coal feedstocks, (ii) it has the sole
and complete right and power to grant to Licensee the licenses granted herein,
and (iii) the sale or use of the rights, Proprietary Binder Material and Coal
Briquetting Technology and/or licenses granted herein as contemplated by this
Agreement do not and will not infringe any third-party's intellectual property
rights.

         (2) Except as otherwise expressly provided in this Agreement, Licensor
agrees that it will not take any action or fail to take any action during the
term of this Agreement that would negate this Agreement or cause a loss to
Licensee of the licenses granted hereunder.

         (3) If during the term of this Agreement a third party has infringed
any intellectual property rights associated with the Coal Briquetting Technology
or otherwise misappropriated any Coal Briquetting Technology, Licensor shall, at
Licensor's expense, institute and conduct legal actions against such third party
or enter into such agreements or accord in settlement as are deemed appropriate
by Licensor, in which case Licensor shall be entitled to any sums recovered in
connection therewith from third parties. If Licensor does not take any action,
Licensee shall have the right, but not the obligation, to take action as a
plaintiff in the prosecution of any infringement or misappropriation action
affecting the Facility, and Licensee shall be entitled to any sums recovered in
connection therewith from third parties. If Licensee and Licensor have jointly
conducted an infringement or misappropriation action, after each party has been
reimbursed for costs and expenses incurred by it in prosecuting the action, any
sums recovered in connection therewith from third parties shall be distributed
to Licensee and Licensor based on the proportionate amount of damages suffered
by Licensee and Licensor. Licensee shall always have the right to be represented
at its expense by counsel of its own selection in any action. In no event shall
Licensor enter into any agreement or settlement inconsistent with the terms of
this Agreement.

                                       15
<PAGE>

         7.4 Indemnification. Each party agrees to indemnify, defend and hold
harmless the other party and its partners, directors, officers, members, agents,
representatives, subsidiaries and affiliates from and against any and all
claims, demands or suits (by any party, including any governmental entity),
losses, liabilities, damages, obligations, penalties (including, but not limited
to, for violation of environmental laws), payments, costs (including, but not
limited to, costs of remediation) and expenses (including, but not limited to,
the costs and expenses of enforcing this indemnification and defending any and
all actions, suits, proceedings, demands and assessments, which shall include
reasonable attorneys' fees and court costs) resulting from, relating to, arising
out of, or incurred in connection with its breach of any of the representations,
warranties and/or covenants contained in this Agreement.

         Section 8. Term. The term of this Agreement will begin on the date of
this Agreement and will expire, unless terminated earlier pursuant to Section 9,
on the later of: (a) December 31, 2007, (b) the end of the term of Section 29 of
the Code, or (c) the last to expire of the U.S. patents referred to under the
definition of Coal Briquetting Technology above or any other U.S. patents in
existence at the date of this Agreement that disclose and claim Covol's
proprietary Coal Briquetting Technology. Any extension of this Agreement must be
in writing and signed by both parties.

         Section 9. Events of Default; Remedies.

         9.1 Events of Default. The following shall constitute an event of
default ("Event of Default") under this Agreement:

         (1) Licensor shall have breached any of its obligations pursuant to
Section 4.8, which breach cannot be or has not been cured within thirty (30)
days after the giving of written notice thereof by the non-defaulting party;

         (2) a party shall have breached in any material respect any of its
representations, warranties, covenants or other agreements contained in this
Agreement (other than as provided in Section 9.1(a)), which breach cannot be or
has not been cured within sixty (60) days after the giving of written notice
thereof by the non-defaulting party;

                                       16
<PAGE>

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

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

         9.2 Remedies.

         (1) Upon the occurrence of an Event of Default, the non-defaulting
party may, in addition to exercising any of its remedies at law or equity or any
of its other remedies provided for in this Agreement, terminate this Agreement
upon written notice thereof to the defaulting party.

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

                                       17
<PAGE>

         (3) If either party terminates this Agreement pursuant to this Section
9.2, Licensee shall promptly return and cause all agents of Licensee to promptly
return to Licensor all Confidential Information (except to the extent such
Confidential Information is necessary for accounting, tax, regulatory or other
similar purposes) and all Coal Briquetting Technology then in Licensee's
possession, and Licensee shall not thereafter use for its own commercial benefit
or disclose to any third person any Confidential Information or Coal Briquetting
Technology before the end of the term of Section 29 of the Code. Notwithstanding
the foregoing, Confidential Information shall not be subject to the terms of
this Section 9.2(c) which (i) is or becomes generally available to the public
other than as a result of an unauthorized disclosure by Licensee or its
respective members, agents, employees, directors or representatives, (ii) was
available to Licensee on a non-confidential basis prior to its receiving
disclosure hereunder, (iii) lawfully becomes available to Licensee on a
non-confidential basis from a third party source (provided that such source is
not known by Licensee or its members, agents, employees, directors or
representatives to be prohibited from transmitting the information), (iv)
Licensee is compelled by legal process by any court or other authority to
disclose or (v) is developed by Licensee independently of (or which does not
depend on the use of) Confidential Information received from Licensor; provided,
however, that in the case of (iv) above, Licensee shall give Licensor prompt
written notice of such legal process in order that an appropriate protective
order can be sought and Licensee agrees not to oppose Licensor's efforts to
prevent the disclosure of Confidential Information.

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

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

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

                  To Licensor:         Brent M. Cook, President
                                       Covol Technologies, Inc.
                                       3280 North Frontage Road
                                       Lehi, UT  84043-9534
                                       Fax:  (801) 768-4483

                  To Licensee:         Premier Elkhorn Coal Company
                                       c/o TECO Coal Corporation
                                       200 Allison Boulevard
                                       Corbin, Kentucky 40701
                                       Fax:  (606) 523-4180
                                       Attn:  President

                                       18
<PAGE>

                  With a copy to:      TECO Energy, Inc.
                                       702 N. Franklin Street
                                       Tampa, Florida 33602
                                       Fax:  (813) 228-4811
                                       Attn:  General Counsel

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

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

         Section 15. Relocation of the Facility. Licensee shall have the right
to relocate the Facility to Pike County, Kentucky or Lecher County, Kentucky or
any other site with respect to which Licensor has not as of the date of this
Agreement conveyed a conflicting exclusive territorial license to a third party,
provided that any such relocation shall not affect the terms of this Agreement
which shall remain in full force and effect.

         Section 16. License Status in Bankruptcy. (a) This Agreement shall
constitute an executory contract under Section 365 of the United States
Bankruptcy Code, 11 U.S.C. ss. ss. 101 et seq. (the "Bankruptcy Code"). All
rights and licenses granted pursuant to this Agreement are, and shall be deemed
to be, licenses of and right to "intellectual property" as that term is defined
in Section 101(35A), and as used in Section 365, of the Bankruptcy Code. The
parties agree that (i) Licensor is a "licensor" under Section 365(n) of the
Bankruptcy Code and (ii) Licensee, as licensee under this Agreement, shall
possess and may fully exercise all of its rights, remedies and elections
afforded by and under the Bankruptcy Code.

                                       19
<PAGE>

         (b) The parties further agree that, in the event of the commencement of
a case by or against Licensor under the Bankruptcy Code, Licensee shall be
entitled to all applicable rights under Section 365 of the Bankruptcy Code.
Without limiting the foregoing, the parties hereby agree that Licensee has (i)
the right to complete duplicate/ or complete access to, as appropriate) any such
intellectual property referred to in subsection (a) above and any and all
embodiments of such intellectual property upon the written request of Licensee
and (ii) the right (unless and until the Agreement is rejected), upon written
request of Licensee, (A) to compel Licensor to perform the Agreement or to
provide to Licensee such intellectual property (including any and all
embodiments thereof) and (B) to compel Licensor not to interfere with Licensee's
rights as provided in this Agreement/or any supplemental agreement) to such
intellectual property (including any and all embodiments thereof), including any
right to obtain such intellectual property/or any embodiment thereof) from
another entity (including without limitation, the escrow referred to in Section
4.7).

         Section 17. Governing Law; Consent to Jurisdiction; Waiver of Jury
Trial.

         THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK (WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS
OF LAW EXCEPT SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW OR ANY
SUCCESSOR PROVISION THERETO).

                                       20
<PAGE>

         (1) Licensor, in respect of itself and its properties, (i) agrees to be
subject to (and hereby irrevocably submits to) the nonexclusive jurisdiction of
any Federal court located in the Commonwealth of Kentucky or any Kentucky state
court in the event of any dispute arising out of or relating to this Agreement
or the transactions contemplated hereby, (ii) agrees that it shall not attempt
to deny or defeat such jurisdiction by motion or other request for leave from
any such court and 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
action in any such court and any claim that any such action brought in any such
court has been brought in an inconvenient forum, (iii) agrees that it shall not
bring any action arising out of or relating to this Agreement or any
transactions contemplated hereby in any court other than a Federal or state
court sitting in the Commonwealth of Kentucky and (iv) irrevocably agrees that
all disputes arising our of or relating to this Agreement and the transactions
contemplated hereby may be determined in any Federal or state court sitting in
the Commonwealth of Kentucky.

         (2) Licensee, in respect of itself and its properties, (i) agrees to be
subject to (and hereby irrevocably submits to) the nonexclusive jurisdiction of
any Federal court located in the State of Utah or any Utah state court in the
event of any dispute arising out of or relating to this Agreement or the
transactions contemplated hereby, (ii) agrees that it shall not attempt to deny
or defeat such jurisdiction by motion or other request for leave from any such
court and 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
action in any such court and any claim that any such action brought in any such
court has been brought in an inconvenient forum, (iii) agrees that it shall not
bring any action arising out of or relating to this Agreement or any
transactions contemplated hereby in any court other than a Federal or state
court sitting in the State of Utah and (iv) irrevocably agrees that all disputes
arising our of or relating to this Agreement and the transactions contemplated
hereby may be determined in any Federal or state court sitting in the State of
Utah.

         (3) Either party may make service on the other Party by 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 12, provided that
nothing in this Section 17, shall affect the right of any party to serve legal
process in any other manner permitted by law or in equity.

         (4) EACH OF THE PARTIES IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF, OR IN CONNECTION WITH,
THIS AGREEMENT OR THE TRANSACTION DOCUMENTS OR ANY MATTER ARISING HEREUNDER OR
THEREUNDER.

                                       21
<PAGE>

         Section 18. Assignment. This Agreement may not be assigned, in whole or
in part, by any party without the prior written consent of the other party,
which consent shall not be unreasonably withheld, except that each party shall
have the right to assign their respective rights and obligations under this
Agreement without the prior consent of the other party to (i) any affiliate or
any entity which is controlled by such party and of which such party owns,
directly or indirectly, at least fifty percent (50%) of each class of its
outstanding securities, provided that no such assignment shall release such
party from their respective obligations hereunder or (ii) in the case of
Licensee, to any transferee or purchaser of the Facility.

         Section 19. Further Assurances. Each party agrees, at the request of
the other party, at any time and from time to time, to execute and deliver all
such further documents, and to take and to forbear from all such action, as may
be reasonably necessary or appropriate in order to more effectively carry out
the provisions of this Agreement.

         Section 20. Interpretation. Unless the context requires otherwise:

         (1) When a reference is made in this Agreement to an article or
section, such reference shall be to an article or section of this Agreement.

         (2) Whenever the words "include", "includes" or "including" are used in
this Agreement they shall be deemed to be followed by the words "without
limitation."

         (3) The words "hereof", "herein" and "herewith" and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement
as a whole and not to any particular provision of this Agreement, and section
and exhibit references are to the sections and exhibits of this Agreement.

         (4) The meaning assigned to each term defined herein shall be equally
applicable to both the singular and the plural forms of such term, and words
denoting any gender shall include all genders. Where a word or phrase is defined
herein, each of its other grammatical forms shall have a corresponding meaning.

         (5) A reference to any party to this Agreement or any other agreement
or document shall include such party's successors and permitted assigns.

         (6) A reference to any legislation or to any provision of any
legislation shall include any amendment to, and any modification or re-enactment
thereof, any legislative provision substituted therefor and all regulations and
statutory instruments issued thereunder or pursuant thereto.

         (7) All references to contracts, agreements, leases or other
understandings or arrangements shall refer to oral as well as written matters.

                                       22
<PAGE>

         (8) 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.

         (9) The parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement.

                    [SIGNATURES APPEAR ON THE FOLLOWING PAGE]

                                       23
<PAGE>

         IN WITNESS WHEREOF, each party has caused the License and Binder
Purchase Agreement to be executed by the duly authorized representative of the
parties on the date and year first above written.

COVOL TECHNOLOGIES, INC.                     PREMIER ELKHORN COAL COMPANY

By: /s/ Brent M. Cook                        By: /s/ J.J. Shackleford
   -------------------                          ----------------------
Name: Brent M. Cook                          Name: J.J. Shackleford
Title:   President                           Title: President


                                       24