July 7, 1997

Alabama Synfuel #1, Ltd.
c/o Covol Technologies, Inc.
3280 North Frontage Road
Lehi, Utah  84043

Covol Technologies, Inc.
3280 North Frontage Road
Lehi, Utah  84043

         RE:      Letter Amendment

Gentlemen:

         Reference is made to the Alabama Project Purchase  Agreement,  dated as
of March 20,  1997 (the  "Project  Purchase  Agreement'),  by and among  Alabama
Synfuel #1, Ltd. and Covol  Technologies,  Inc. as sellers,  and  Birmingham Syn
Fuel,  LLC, as buyer.  Capitalized  terms used but not otherwise  defined herein
shall have the meanings ascribed thereto in the Project Purchase Agreement.

1.       Project  Purchase  Agreement.   The  parties  to  the  Project Purchase
Agreement hereby amend the Project Purchase Agreement by:

a.       deleting the language "; provided,  further, Buyer shall not assume any
         liability  or  obligation  incurred  by Covol under the  Operation  and
         Maintenance Agreement" in Section 3.3 thereof;

b.       deleting Sections 5.3(f) and 8.2(c) and Exhibit D in their entirety;

c.       deleting  the fourth  paragraph  of Exhibit A-1 thereto in its entirety
         and deleting  the number "*" in the third  paragraph of Exhibit A-1 and
         inserting the number "*" in place thereof;

d.       deleting the language ", and all obligations of the Debtor to repay all
         principal  and accrued and unpaid  interest not repaid prior to January
         1, 2008 on amounts  advanced as 'Deficit Loans' as described in Section
         5.10 of the  Operation  and  Maintenance  Agreement"  in  Section  2 of
         Exhibit A-2 thereto;

e.       deleting the language ", except for transfers by Covol  pursuant to and
         in  accordance  with its duties  under the  Operation  and  Maintenance
         Agreement" in Section 4(a)(1) of Exhibit A-2 thereto;

* Confidential  material has been omitted from this Exhibit and filed separately
with the Commission.

<PAGE>

f.       deleting the last  sentence of Section 4(f)  of Exhibit A-2  thereto in
         its entirety;

g.       deleting Section 4(g) of Exhibit A-2 thereto in its entirety;

h.       deleting  the  language  "(a) the failure of the Secured  Party (or any
         affiliate  thereof)  to perform  its  obligations  with  respect to the
         application of funds under the Operation and Maintenance Agreement,  or
         (b)" in Sections 9(a) and (b) Exhibit A-2 thereto;

i.       deleting  the language  "If  Assignee is not the  "Operator"  under the
         Operation and  Maintenance  Agreement,"  in the first  sentence and the
         entirety of the last  sentence,  respectively,  of Section 5 of Exhibit
         A-3 thereto;

j.       deleting  the  definition  "Operation  and  Maintenance  Agreement"  in
         Section 1 of Exhibit E thereto;

k.       deleting the  numbers "*" and "*" in  Section 3.2 of Exhibit  E thereto
         and  inserting in their place the numbers "*" and "*," respectively;

l.       deleting  the language "; provided,  however,  that  the  amount of all
         payments of Royalties due and payable but for the  application  of this
         paragraph  shall accrue and bear  interest at a rate per annum equal to
         the rate of  interest  publicly  announced  by  Morgan  Guaranty  Trust
         Company  of New York in New York City  from time to time as its  "prime
         rate"  and be  payable  from  net  operating  cash  flow  of  Licensee;
         provided, further, that all Royalties and interest accrued with respect
         thereto   shall  be  due  and  payable  on  January  1,  2008,  or  the
         corresponding date under Section 29 of the 1986 Code in the event of an
         extension of tax credits  available  under Section 29 of the 1986 Code"
         in the second paragraph of Section 3.2 of Exhibit E thereto;

m.       deleting  the  language  ";  provided,  however,  that the price  which
         Licensee shall pay for the proprietary binder material for any calendar
         year during the term of this  Agreement  shall not  increase  above the
         price paid for the  proprietary  binder material during the immediately
         preceding  year if the imposition of the price increase would require a
         "Deficit  Loan"  under the  Operation  and  Maintenance  Agreement"  in
         Section 4.1.2 of Exhibit 2 thereto;

n.       deleting  the  language  ";  provided,   however,   that  out-of-pocket
         operating   costs  incurred  in  connection   with  the  production  of
         proprietary  binder  material  by  Licensee  shall be  included  in the
         calculation of "Costs" under the Operation and  Maintenance  Agreement"
         in the last sentence of Section 4.2 of Exhibit E thereto;

o.       deleting the last sentence of Section 8 of Exhibit E thereto;

p.       amending and restating  Section 9 of Exhibit E thereto  in its entirety
         to read as follows:

*  Confidential   material   omitted  Exhibit  and  filed  separately  with  the
Commission.

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<PAGE>

                           Payments  hereunder  shall be subordinate in right of
                  payment to amounts due under the Promissory  Note. In addition
                  to any rights of the Licensee under the Transaction  Documents
                  and applicable  law, any amounts owing to Licensee from either
                  Licensor or Vendor under any of the Transaction  Documents may
                  be offset and applied  toward the payment of any  amounts,  or
                  any part thereof,  owing to the Licensor or Vendor, whether or
                  not such amounts shall be due and payable.

q.       deleting  the  language  "January 1, 2008" in Section 1(b) of Exhibit G
         thereto, and inserting in its place "January 1, 2010."

2. Capital Contributions.  Upon consummation of the transaction  contemplated by
the  Project  Purchase  Agreement,  each of  Birmingham  Syn  Fuel I,  Inc.  and
Birmingham  Syn Fuel II, Inc.  hereby  agrees to make capital  contributions  to
Birmingham  Syn Fuel LLC in an amount  sufficient to pay amounts due and payable
under (i) the  Non-Negotiable  Promissory  Note attached as Exhibit A-1 thereto,
and (ii) Section 3.2 of the License and Binder  Purchase  Agreement  attached as
Exhibit E thereto.

         This letter agreement may be executed in one or more counterparts,  all
of which shall be considered one and the same letter agreement.

                                           Very truly yours,

                                           BIRMINGHAM SYN FUEL I, INC.

                                           By: /s/ Reynold Roeder
                                              ---------------------
                                           Name:  Reynold Roeder
                                           Title:  Vice President


                                           BIRMINGHAM SYN FUEL II, INC.

                                           By:  /s/ Reynold Roeder
                                              ---------------------
                                           Name:  Reynold Roeder
                                           Title:   Vice President


                                           BIRMINGHAM SYN FUEL, LLC

                                           By:  /s/ Reynold Roeder
                                              ----------------------
                                           Name: Reynold Roeder
                                           Title:   Vice President

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<PAGE>

                                           PACIFICORP FINANCIAL SERVICES, INC.

                                           By:  /s/ Reynold Roeder
                                              ----------------------
                                           Name:  Reynold Roeder
                                           Title:   Vice President


ACCEPTED AND AGREED TO
AS OF THE DATE FIRST SET
FORTH ABOVE:

Alabama Synfuel #1, Ltd.

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


Covol Technologies, Inc.

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

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