[LETTERHEAD] COVOL TECHNOLOGIES, INC.
August 22, 1996

Byrleen Hansen
45 South 1300 East
Pleasant Grove, UT 84062

         RE: TERMS FOR PURCHASE OF OFFICE BUILDING

Dear Byrleen:

Following are the modified terms of purchase for the 401 North Carbonville Road,
Price,  Utah, office building.  The insurance and title companies are gearing up
to close around  September  1, 1996.  This is a follow up to our  discussion  on
Wednesday  on the terms of the purchase of the office  building in Price.  As we
discussed,  we will  arrange  with a title  company  for the  closing.  Relevant
provisions from the Lease Agreement regarding default, insurance,  utilities and
notices, will continue to apply to the purchase.

The terms outlined in the Lease Agreement,  and in our  discussions,  will be as
follows:

Purchase Price:                                      $150,000
Credit for rental payments                            (48,800)

Balance:                                              101,200
Cash to be paid:                                        1,200
Loan to be carried by the owner:                      100,000

Terms: 120 months at 9% per annum.
Monthly payment:                                        1,266.76

Timing:                    first payment will be due October 1  for the month of
                           September.

Annuity arrangement:       Prepayment will not be permitted. If for  any  reason
                           we sell the building  before 10 years, we will escrow
                           sufficient  money  to  guarantee  that  you  continue
                           receiving the same payments for the remainder of  the
                           10  years,  without  adverse  tax consequences.

Late payment penalty:      $10 for each day after  the first of the  month  that
                           you actually receive our payment.

Encumbrances:              Covol will not use the building as collateral for any
                           loan.
[LETTERHEAD]3280 NO. FRONTAGE ROAD, LEHI, UT 84043 801-768-4481 FAX:801-768-4483

Taxes:                     Covol  pays  taxes  for  1996.  Future  taxes will be
                           escrowed.

Insurance:                 The replacement policy will be in effect by September
                           1, 1996. Insurance agent will be instructed to notify
                           you if  the  coverage lapses during  the term of this
                           agreement.

Title insurance:           You  will  pay  half  the  cost  of  obtaining  title
                           insurance, up to $320 (half of $640).

Default:                   If Covol defaults on she purchase or Lease Agreement,
                           and you take back the  building, Covol must return it
                           in its original condition, minus ordinary wear.

Again,  Byrleen,  if there are any questions  with the above,  call me so we can
clear them up before closing.

Sincerely,


/s/Asael T. Sorensen
Asael T. Sorensen
General Counsel