EXHIBIT 10.13


                     AMENDMENT NO. 1 TO SUBLICENSE AGREEMENT

     THIS AMENDMENT NO.1 TO SUBLICENSE AGREEMENT, (the "Amendment"), is made as
     of the 5th day of March, 2004, by and between COATES INTERNATIONAL, LTD., A
     Delaware corporation, having its principal offices located at 2100 Highway
     #34 & Ridgewood Road, Wall Township, New Jersey 07719-9738 ( SUBLICENSOR")
     and COATES MOTORCYCLE COMPANY, LTD., having its principal offices located
     at Central Avenue, Building 3 Farmingdale, New Jersey 07727 ( the "
     SUBLICENSEE").

                                   BACKGROUND
             WHEREAS, SUBLICENSOR owns the exclusive license (the "Exclusive
     License") to make, use and sell combustion engines utilizing the CSRV Valve
     System as well as the rights to franchise and sublicense certain Patent
     Rights* and Technical Information* relating to Licensed Products* utilizing
     the CSRV Valve System* throughout the countries, their territories and
     possessions, of North America, Central America and South America (the
     "Territory");

               WHEREAS, pursuant to its rights under the Exclusive License,
     SUBLICENSOR and SUBLICENSEE entered into a certain Sublicense Agreement,
     dated April 30, 2003 (the "Sublicense Agreement") pursuant to the general
     terms of which SUBLICENSOR granted SUBLICENSEE an exclusive sublicense to
     make, use and sell motorcycles utilizing the CSRV Valve System in all of
     the countries and their territories and possessions comprising North
     America, Central America and South America (the "Territory"), for a period
     equal to the duration of the patents, including the periods covering any
     continuations and reissuances thereof as well as any additional patents
     that may be issued relating to the CSRV Valve System as well as a certain
     "anti-dilution" right in order that the SUBLICENSOR have the right at all
     times to maintain a fifty percent plus ownership and control position over
     the SUBLICENSEE;

               WHEREAS, SUBLICENSEE is engaged in the preparation of an initial
     public offering of its securities and has determined that it would be in
     the best interests of its present and future shareholders to amend the
     Sublicense Agreement to terminate the "anti-dilution" rights granted by the
     SUBLICENSEE to the SUBLICENSOR in the original Sublicense Agreement as well
     as to clarify SUBLICENSEE'S rights to further sublicense and franchise its
     sublicense rights;

               WHEREAS, SUBLICENSOR currently owns 2,558,000 shares of the
     common stock of SUBLICENSEE and notwithstanding any dilution resulting from
     the contemplated initial public offering of SUBLICENSEE's common shares,
     SUBLICENSOR acknowledges that it will be a direct beneficiary and obtain
     material benefits as a result of SUBLICENSEE's public offering, which may
     include but not be limited to enhanced opportunities to earn royalties from
     licensed products sold by a well-capitalized SUBLICENSEE as well as
     increased marketing awareness and brand recognition for its technology and
     licensed products which could result from the motorcycle sales, anticipated
     in part from the funds derived by SUBLICENSEE'S contemplated initial public
     offering;

               WHEREAS, SUBLICENSOR and SUBLICENSEE desire and intend to set
     forth in this Amendment the express modifications to the Sublicense
     Agreement that shall govern their business relationship.

               NOW, THEREFORE, in consideration of the premises and covenants,
     and other good and valuable consideration, and the mutual promises of the
     performance of the undertakings set forth herein, it is agreed by and among
     the SUBLICENSOR and SUBLICENSEE as follows:

See notes to financial statements                                            23

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     I. AMENDMENT OF SUBLICENSE AGREEMENT.

          Subject to the terms and conditions set forth herein, SUBLICENSOR and
     SUBLICENSEE agree to amend the Sublicense Agreement in the following
     manner:

                  1. ARTICLE 1.14, SOLD UNIT, shall be amended by deleting
      Article 1.14 in its entirety and substituting the following new Article
      1.14 in lieu thereof:

                  1.14.(A) Manufactured Unit shall mean a Licensed Product that
                  has completed the manufacturing process by a permitted
                  sublicensee or franchisee of SUBLICENSEE under the terms of
                  this Agreement and as a result, is included in the
                  determination of royalty payments due and owing to SUBLICENSOR
                  pursuant to the terms of this Agreement.

                           (B) Sold Unit shall mean a Licensed Product that has
                  been sold by SUBLICENSEE under the terms of this Agreement and
                  the sales price from such sale has been received or collected
                  by the SUBLICENSEE and as a result, is included in the
                  DETERMINATION OF ROYALTY PAYMENTS DUE AND OWING TO SUBLICENSOR
                  pursuant to the terms of this Agreement.

                  2. ARTICLE 2.1, LICENSES GRANTED TO LICENSEE, shall be amended
      by deleting Article 2.1 in its entirety and substituting the following new
      Article 2.1 in lieu thereof:

                  2.1 SUBLICENSES GRANTED TO SUBLICENSEE
                  Subject to the terms and conditions set forth herein, for a
                  sublicense period equal to the duration of the Patents
                  commencing upon the Payment Date, as defined in Section 5.1
                  (the "Sublicense Period"), unless terminated pursuant to
                  Article VIII, SUBLICENSOR hereby grants to SUBLICENSEE:

                  (a) Engines. An exclusive sublicense, with the right to grant
                  further sublicenses and franchises to make, use or sell to
                  others, throughout the Territory within the Field of Use under
                  the Patent Rights and Technical Information subject to the
                  payment of royalties as provided herein, to make or retrofit
                  motorcycle engines that incorporate the CSRV Valve System in
                  accordance with the Technical Specifications, and to sell,
                  lease or otherwise dispose of such motorcycle engines; and

                  (b) CSRV Valve Seals.Within the limitations set forth in
                  subsections 2.1(a), a non-exclusive sublicense to use CSRV
                  Valve Seals solely in the manufacture of CSRV Valve Systems
                  for incorporation into motorcycle engines throughout the
                  Territory within the Field of Use under the Patent Rights and
                  Technical Information subject to the payment of royalties as
                  provided herein.

                  3. ARTICLE 5.1, Licensing Fee, 5.2, Royalties, 5.3, and 5.7
      Books and Records, shall be amended by deleting Articles 5.1, 5.2, 5.3 and
      5.7 in their entirety and substituting the following new Articles 5.1,
      5.2, 5.3 and 5.7 in lieu thereof:

                  5.1 - Sublicensing Fee and Undertakings.

                  In consideration of the rights granted under the Sublicense
                  Agreement, SUBLICENSEE paid to SUBLICENSOR a Sublicensing Fee
                  of 2,550,000 shares of SUBLICENSEE'S common stock and granted
                  to SUBLICENSOR an antidilution right to maintain a 50%+


See notes to financial statements                                            24

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                  ownership position in SUBLICENSEE'S securities. SUBLICENSOR
                  and SUBLICENSEE hereby agree to terminate the antidilution
                  rights granted to SUBLICENSOR in the Sublicense Agreement,
                  effective immediately. As consideration for the expansion of
                  its sublicense rights granted to it by SUBLICENSOR in this
                  Amendment, SUBLICENSEE and SUBLICENSOR agree as follows:

                  (a) SUBLICENSEE hereby agrees to issue to SUBLICENSOR an
                  additional 1,000,000 shares of its common stock as partial
                  consideration for the expanded sublicense rights granted to it
                  in this Amendment;

                  (b) SUBLICENSEE further agrees to utilize its best efforts to
                  register 1,000,000 shares of its common stock transferred and
                  paid to SUBLICENSOR and to include such shares in the Form
                  SB-2 registration statement SUBLICENSEE has filed with the
                  U.S. Securities and Exchange Commission and which is currently
                  under review;

                  (c) SUBLICENSEE acknowledges that it is the intent of
                  SUBLICENSOR to distribute the subject 1,000,000 shares to its
                  shareholders of record as a stock dividend following their
                  registration under the Securities Act of 1933, provided, that
                  the subject registration statement, including the subject
                  1,000,000 shares, is declared effective by the Securities and
                  Exchange Commission and its intended distribution to
                  SUBLICENSOR'S shareholders is in compliance with applicable
                  state securities laws;

                  (d) In the event the SUBLICENSEE'S registration statement,
                  including the 1,000,000 common shares, is not declared
                  effective by the Securities and Exchange Commission on or
                  before June 1, 2004, SUBLICENSEE'S obligations to continue its
                  efforts to register said shares under the Securities Act of
                  1933 shall terminate, unless such obligation is extended by
                  mutual agreement of SUBLICENSOR and SUBLICENSEE; (e)
                  SUBLICENSEE agrees to take all necessary corporate action in
                  order to register the 1,000,000 shares of its common stock
                  under the Securities Act of 1933 on behalf of SUBLICENSOR in
                  order to permit the lawful distribution of these shares to the
                  shareholders of SUBLICENSOR;

                  (f) SUBLICENSOR shall utilize its best efforts to cooperate
                  and assist SUBLICENSEE in the preparation of any documents
                  necessary in order to facilitate the registration and
                  distribution of the subject 1,000,000 common shares pursuant
                  to the Securities Act of 1933 and applicable state securities
                  laws.

                  SUBLICENSOR acknowledges its receipt of the Sublicensing Fee
                  payment of 2,550,000 shares of SUBLICENSEE'S common stock
                  pursuant to the Sublicense Agreement, and the additional
                  1,000,000 shares pursuant to this Amendment; SUBLICENSOR
                  further agrees that such stock issuances to it represents the
                  only payment and consideration that constitutes the
                  Sublicensing Fee due and payable under the Sublicense
                  Agreement and this Amendment. Accordingly, SUBLICENSOR further
                  acknowledges that its equity ownership position in the
                  SUBLICENSEE'S common stock shall be subject to further
                  dilution for proper corporate purposes and that the common
                  shares issuable to SUBLICENSOR under the Sublicense Agreement


See notes to financial statements                                            23

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                  and this Amendment do not bear any pre- emptive or similar
                  rights.

                  5.2 - Royalties.

                  (a) In further consideration for the grant of the Sublicense
                  described in Article II of the Sublicense Agreement,
                  SUBLICENSEE and its further sublicensees and franchisees shall
                  pay SUBICENSOR royalties as follows: in the case of the
                  SUBLICENSEE, it shall pay a royalty to SUBLICENSOR for each
                  Sold Unit in the amount of $25.00 per each 1,000 cc. within
                  the Territory, and; in the case of a sublicensee or franchisee
                  of SUBLICENSEE, it shall pay a royalty to SUBLICENSOR for each
                  Manufactured Unit that has completed the manufacturing process
                  in the Territory in the amount of $25.00 per each 1,000 cc.
                  and shall accrue when a Licensed Product becomes a
                  Manufactured Unit produced by a further sublicensee or
                  franchisee of the SUBLICENSEE. The royalties provided for in
                  this Section 5.2 shall be payable with respect to each Sold
                  Unit by SUBLICENSEE sold within the Territory and with respect
                  to each Manufactured Unit produced by a further sublicensee or
                  franchisee of the SUBLICENSEE within the Territory.

                  (b) Except as otherwise specified, the royalty payments
                  required by Section 5.2 shall accrue, in the case of the
                  SUBLICENSEE when a Licensed Product becomes a Sold Unit and,
                  in the case of a further sublicensee or franchisee of
                  SUBLICENSEE, shall accrue when a Licensed Product becomes a
                  Manufactured Unit.

                  5.3 - SUBLICENSEE or a further sublicensee or franchisee of
                  SUBLICENSEE, as the case may be, shall pay the royalties
                  accruing during each Payment Computation Period (consisting of
                  each day during each calendar month for each calendar year,
                  including the first and the last day of each calendar month),
                  ten (10) days after the end of such Payment Computation Period
                  and such payment shall be accompanied by a royalty report
                  stating the following:

                  (a) in the case of the SUBLICENSEE, the number of Sold Units
                  of each Licensed Product type sold during such Payment
                  Computation Period, and in the case of a further SUBLICENSEE
                  or franchisee of the SUBLICENSEE, the number of Manufactured
                  Units of each Licensed Product type manufactured during such
                  Payment Computation Period; and

                  (b) the amount of the royalty payment due for each such
                  Licensed Product during each such Payment Computation Period,
                  broken down to reflect the derivation of such amount.

                  5.7 - BOOKS AND RECORDS.

                  Until five (5) years after the termination of the Sublicense
                  Period, SUBLICENSEE shall keep full and accurate books and
                  records setting forth the sales records and the amount of
                  compensation payable with respect to the Sold Units of each
                  Licensed Product. In the case of a further sublicensee or
                  franchisee of SUBLICENSEE, SUBLICENSEE shall cause each such
                  further sublicensee and franchisee to keep full and accurate
                  books and records setting forth the manufacturing records and
                  the amount of compensation payable with respect to the
                  Manufactured Units of each Licensed Product. SUBLICENSEE and
                  its further sublicensees and franchisees shall permit an
                  independent certified public accountant selected by
                  SUBLICENSOR to examine such books and records, upon reasonable
                  notice during working hours, at any time, but not later than
                  two (2) years following the payment in question, for the

See notes to financial statements                                            26

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                  purpose of verifying the reports, accounting and payments
                  required by this Sublicense Agreement.

     II. RATIFICATION AND CONFIRMATION OF BALANCE OF TERMS AND PROVISIONS OF
         SUBLICENSE AGREEMENT

         SUBLICENSOR and SUBLICENSEE hereby ratify and confirm all of the terms
     and provisions of the Sublicense Agreement not expressly modified by this
     Amendment and incorporate by reference all of such terms and provisions
     into this Amendment as if set forth herein in their entirety.

          IN WITNESS WHEREOF, the SUBLICENSOR and SUBLICENSEE have executed this
     Amendment as of the day, month and year first above written.

                                  SUBLICENSOR:

                                  COATES INTERNATIONAL, LTD.


                                  By: /s/ George J. Coates
                                     ----------------------
                                     George J. Coates, President


                                  SUBLICENSEE:

                                  COATES MOTORCYCLE COMPANY, LTD.

                                  By: /s/ Gregory G. Coates
                                      ------------------------
                                      Gregory G. Coates, President







AMENDMENT NO. 1 to Sublicense and License Agr 04-05-04 no sigs


See notes to financial statements                                            27