ASSIGNMENT AND AMENDMENT AGREEMENT
THIS ASSIGNMENT AND AMENDMENT dated as of February 4, 2000 (this
"Agreement"), made by and between Covol Technologies, Inc., a Delaware
corporation ("Covol"), Utah Synfuel #1 Ltd., a Delaware limited partnership
("Utah Synfuel"), AJG Financial Services, Inc., a Delaware corporation ("AJG"),
and Coaltech No. 1 L.P., a Delaware limited partnership ("Coaltech").
RECITALS
WHEREAS, Covol and AJG are parties to that certain Debenture dated
January 9, 1999 (the "Debenture") in the principal amount of $4,367,351.28; and
WHEREAS, as of the date hereof, the total amount owing from Covol to
AJG under the Debenture is $4,927,318.23 (the "Debenture Balance"); and
WHEREAS, Covol, Utah Synfuel, and Coaltech are parties to that certain
Non- Negotiable Nonrecourse Promissory Note dated March 7, 1997 (the "Note") in
the principal amount of $3,500,000, and that certain Security Agreement of even
date therewith (the "Security Agreement") relating to the note; and
WHEREAS, as of the date hereof, the total amount owing from Coaltech to
Covol under the Note is $2,965,361.82 (the "Note Balance"); and
WHEREAS, Covol and AJG desire and are willing to amend the terms of the
Debenture; and
WHEREAS, the parties hereto desire to effect the assignment and
transfer by Covol and Utah Synfuel to AJG of all the right, title and interest
of Covol and Utah Synfuel in, under and with respect to the Note.
NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and for other valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
do hereby agree as follows:
SECTION 1. Assignment.
(a) Effective as of the date hereof, Covol and Utah Synfuel hereby (i)
irrevocably sell, assign, transfer and convey to AJG all of their right, title
and interest in and to the Note; (ii) release any and all liens, encumbrances,
and security interests of whatsoever nature against the Collateral (as defined
in the Note); (iii) agree that the Security Agreement is
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terminated effective as of the date hereof; and (iv) agree to execute, deliver,
and file such documents of release of lien, including UCC filings, as AJG shall
reasonably direct.
(b) Covol and Utah Synfuel hereby covenant and agree to pay over to
AJG, if and when received following the date hereof, any amounts (including any
sums payable as interest in respect thereof) paid to or for the benefit of Covol
or Utah Synfuel that, under subsection (a) hereof, belong to AJG.
SECTION 2. Amendment.
(a) As of the date hereof, Covol and AJG amend the Debenture as
follows: (i) the Debenture Balance is reduced by the amount of the Note Balance,
to a remaining balance of $1,939,232.04 due from Covol to AJG under the
Debenture; and (ii) the due date of the Debenture for the remaining balance plus
interest is extended from January 10, 2000 to October 31, 2000; and all other
terms and provisions of the Debenture (including terms of the letter agreement
dated 26 February 1998 by and between Covol and AJG) shall remain in full force
and effect.
(b) The amount due and payable on October 31, 2000 is the remaining
balance due under the Debenture of $1,961,956.41 plus interest of $86,756.09 for
a total of $2,048,712.40.
SECTION 3. Governing Law. This Agreement shall be construed and
enforced in accordance with and governed by the law of the State of Utah without
giving effect to the principles thereof relating to conflicts of law.
SECTION 4. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered on the date first above written.
COVOL TECHNOLOGIES, INC.
/s/ Brent M. Cook
---------------------------
Name: Brent M. Cook
Title: President
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AJG FINANCIAL SERVICES, INC.
/s/ John C. Rosengren
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Name: John C. Rosengren
Title: Vice President and
General Counsel
UTAH SYNFUEL #1 LTD.
By Covol Technologies, Inc.,
general partner
/s/ Brent M. Cook
Name: Brent M. Cook
Title: President
COALTECH NO. 1, L.P.
By: US Coal LLC, general partner
/s/ David S. O'Neill
--------------------
Name: David S. O'Neill
Title: Manager of the General
Partner
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