Document:

Exhibit 10.19

                              EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated October 23, 2006

By and Between:

      COATES INTERNATIONAL, LTD., a Delaware corporation (the "Company" or the
      "Employer"),

      AND

      GREGORY COATES , an individual having an address at 1811 Murray Drive,
      Wall Township, New Jersey 07719 ("Executive")

WHEREAS, the Company desires to hire the Executive and employ him in the
position of a President Technology Division ; and

WHEREAS, Executive has agreed to serve as the President Technology Division of
the Company and pursuant to the terms and conditions set forth herein.

NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the premises
and the mutual covenants, agreements, representations and warranties contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Executive and the Company hereby agree as
follows:

                                    ARTICLE 1

                                   EMPLOYMENT

1.1 Employer hereby hires the Executive as a President Technology Division of
the Company and Executive hereby affirms and accepts such position and
employment by Employer for the Term (as defined in Article 3 below), upon the
terms and conditions set forth herein.

1.2 The Employer shall utilize its best efforts to cause its Board of Directors
to appoint the Executive as a member of the Employer's Board of Directors
throughout the Term.

                                    ARTICLE 2

                                     DUTIES

During the Term, Executive shall serve Employer faithfully, diligently and to
the best of his ability, under the direction and supervision of the Board of
Directors of Employer ("Board of Directors") and the Company's Chief Executive
Officer and shall use his best efforts to promote the interests and goodwill of
Employer and any affiliates, successors, assigns, parent corporations,
subsidiaries, and/or future purchasers of Employer. Executive shall render such
services during the Term at Employer's principal place of business or at such
other place of business as may be determined by the Board of Directors, as
Employer may from time to time reasonably require of him, and shall devote all
of his business time to the performance thereof. Executive shall have those
duties and powers as generally pertain to each of the offices of which he holds,
as the case may be, subject to the control of the Board of Directors. Employer
and Executive also agree that Executive shall serve as a member of the
Employer's Board of Directors during the Term.

<PAGE>

                                    ARTICLE 3

                                      TERM

3.1 The term of this Agreement (the "Term") shall commence on the date hereof
(the "Effective Date"), and continue thereafter for a term of five (5) years, as
may be extended or earlier terminated pursuant to the terms and conditions of
this Agreement. The Term is renewable upon the agreement of the parties hereto.

                                    ARTICLE 4

                           GOVERNANCE AND COMPENSATION

4.1 Governance. During the Term, Executive agrees to vote all shares of the
Company's Common Stock owned by him or as to which he had voting power to elect
to the Company's Board of directors at least two directors who qualify as
"independent directors" under the rules of the Securities Exchange Commission
and Nasdaq.

4.2 Salary and Equity Compensation

      (a) In consideration of Executive's services to Employer, Employer shall
pay to Executive an annual salary (the "Salary") of Two Hundred Thousand Dollars
($200,000.00), payable in equal installments at the end of each regular payroll
accounting period as established by Employer, or in such other installments upon
which the parties hereto shall mutually agree, and in accordance with Employer's
usual payroll procedures, but no less frequently than monthly. Notwithstanding
the above, payment of the Salary will be deferred until the earlier to occur of:
(I) the closing by the Company of an equity investment of at least $10,000,000;
or (II) December 31, 2006.

      (b) In addition to the Salary, Employer shall issue to Executive a Stock
Option to purchase 3,000,000 shares of the Employer's common stock, at an
exercise price equal to Employer's common stock fair market value as of the date
of issuance, as determined by the independent members of the Board (the "Stock
Option"). The Stock Option shall vest (i.e., become exercisable) in three equal
installments, as follows: One third of the Stock Options shall vest on the
Effective Date; an additional third of the Stock Option shall vest on each of
the first and second anniversaries of the Effective Date. Executive must be
continuously a full-time employee of the Company through the time he exercises
part or all of the Stock Option, except, however, in the event this Agreement is
terminated by the Executive for a Good Reason, as defined in Article 10.1 and
10.2 below, or by the Employer without Cause, as defined in Article 10.3 below,
in which cases the Stock Option shall immediately and fully vest upon such
termination provided further that the events surrounding any such termination
have not been the subject of any claim, proceeding or lawsuit by either the
Executive or the Company in which further case the Stock Option shall only vest
upon final adjudication, determining that such termination was a valid
termination by the Executive for Good Reason or by the Employer without Cause
pursuant to the applicable above referenced articles of this Agreement. The
Stock Option shall be deemed a non-qualified stock option (i.e., not an ISO).
The Stock Option will be issued out of the Employer's stock incentive plan, and
subject to such incentive plan.

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      (c) Executive hereby acknowledges that the Stock Option and the shares
issuable upon the exercise thereof shall be "restricted securities" as such term
is defined under Rule 144, unless and until an effective registration covering
these shares takes place, promulgated under the Securities Act of 1933, as
amended (the "1933 Act"); that the Executive hereby represents that he shall
accept such compensation and has no present intent to distribute or transfer
such securities; that such securities shall bear the appropriate restrictive
legend providing that they may not be transferred except pursuant to the
registration requirements of the 1933 Act or pursuant to exemptions therefrom,
and; the Executive further acknowledges that he may be required to hold such
securities for an indeterminable amount of time.

      (d) The Company undertakes, that it shall file a Form S-8, that will cover
the shares issuable upon exercise of the Stock Option, within a reasonable time
after a registration statement covering the securities issued in connection with
the Investment becomes effective.

      (e) Executive shall not be entitled to any other compensation from the
Company unless they have been unanimously approved by the independent directors
of the Board.

4.3 Benefits

Upon the earlier to occur of: (I) the closing by the Company of an equity
investment of at least $10,000,000; or (II) December 31, 2006, and thereafter
during the Term, Executive shall be entitled to participate in all medical and
other executive benefit plans, including vacation, sick leave, retirement
accounts and other executive benefits provided by Employer to any of the other
senior officers of Employer on terms and conditions no less favorable than those
offered to such senior officers. Such participation shall be subject to the
terms of the applicable plan documents and Employer's generally applicable
policies. In addition, upon the earlier to occur of: (I) the closing by the
Company of an equity investment of at least $10,000,000; or (II) December 31,
2006, Employer shall pay the premiums for : (A) Executive's disability
insurance; and (B) life insurance in the amount of $2,000,000, but only to the
extent that the cost thereof is determined to be reasonable by the independent
directors of the Board. The beneficiary of the life insurance policy shall be
Executive's spouse, and if he has no spouse as directed by Executive. Executive
also agrees to cooperate with the Company in obtaining for the benefit of the
Company "key man" life insurance on Executive's life in the amount of at least
$2,000,000. The amount of such insurance shall be approved by the independent
directors of the Board.

4.4 Expense Reimbursement

Employer shall reimburse Executive for reasonable and necessary expenses
incurred by him on behalf of Employer in the performance of his duties hereunder
during the Term, including any and all travel and entertainment expenses related
to the Employer's business in accordance with Employer's then customary
policies, provided that such expenses are adequately documented.

4.5 Bonus

In addition to the compensation payable under Section 4.2, Executive shall be
entitled to receive during the Term an annual bonus, the amount of which shall
be determined by the unanimous vote of the independent members of the Board of
Directors ("Bonus"). Each year's Bonus shall be paid to the Executive within 110
days of the Employer's calendar year end.

4.6 Other Compensation

Employer shall provide Executive with a leased automobile for his exclusive use
throughout the Term, including costs for gasoline, maintenance and comprehensive
insurance including an "umbrella" policy.

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                                    ARTICLE 5

                                OTHER EMPLOYMENT

During the Term, Executive shall devote all of his business and professional
time and effort attention, knowledge, and skill to the management, supervision
and direction of Employer's business and affairs as Executive's highest
professional priority. Employer shall be entitled to all benefits, profits or
other remuneration arising from or incidental to all work, services and advice
performed or provided by Executive. Nothing in this Agreement shall preclude
Executive from:

      (a)   serving as a director or member of a committee of any organization
            or corporation involving no conflict of interest with the interests
            of Employer, provided that Executive must obtain the prior written
            approval of the independent members of the Board;

      (b)   serving as a consultant in his area of expertise (in areas other
            than in connection with the business of Employer), to government,
            industrial, and academic panels provided that only de minimis time
            shall be devoted thereto and Executive must obtain the prior written
            approval of the independent members of the Board of Employer and
            where it does not conflict with the interests of Employer, provided
            that such written consent shall not be unreasonably withheld,
            delayed or conditioned; and

      (c)   managing his personal investments or engaging in any other
            non-competing business; provided that such activities do not
            materially interfere with the regular performance of his duties and
            responsibilities under this Agreement.

                                    ARTICLE 6

                       CONFIDENTIAL INFORMATION/INVENTIONS

Confidential Information

6.1 Executive shall not, in any manner, for any reasons, either directly or
indirectly, divulge or communicate to any person, firm or corporation, any
confidential information concerning any matters not generally known in the
internal combustion engine industry (the "Engine Industry") or otherwise made
public by Employer which affects or relates to Employer's business, finances,
marketing and/or operations, research, development, inventions, products,
designs, plans, procedures, or other data (collectively, "Confidential
Information") except in the ordinary course of business or as required by
applicable law. Without regard to whether any item of Confidential Information
is deemed or considered confidential, material, or important, the parties hereto
stipulate that as between them, to the extent such item is not generally known
in the Engine Industry, such item is important, material, and confidential and
affects the successful conduct of Employer's business and goodwill, and that any
breach of the terms of this Section 6.1 shall be a material and incurable breach
of this Agreement. Confidential Information shall not include: information in
the public domain other than because of a breach of this Agreement.

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Documents

6.2 Executive further agrees that all documents and materials furnished to
Executive by Employer and relating to Employer's business or prospective
business are and shall remain the exclusive property of Employer. Executive
shall deliver all such documents and materials, and all copies thereof and
extracts therefrom, to Employer upon demand therefor and in any event upon
expiration or earlier termination of this Agreement.

Inventions and Intellectual Property

6.3 Inventions and Intellectual Property. The Company's rights in patents,
ideas, inventions, and other intellectual property rights, including with
respect to the CSRV engine, shall be as set forth in the License Agreement
executed by the parties of even date herewith (the "License Agreement"). The
Company shall have no rights to any intellectual property developed by Employee
that (i) do not relate to and are not useful in the conduct of the Company's
business; and (ii) were not developed with the use of any Company facilities.

Disclosure

6.4 During the Term, Executive will promptly disclose to the Board of Directors
full information concerning any interest, direct or indirect, of Executive (as
owner, shareholder, partner, lender or other investor, director, officer,
executive, consultant or otherwise) or any member of his immediate family in any
business that is reasonably known to Executive to purchase or otherwise obtain
services or products from, or to sell or otherwise provide services or products
to, Employer or any of their suppliers or customers.

                                    ARTICLE 7

                             COVENANT NOT TO COMPETE

7.1 No Competitive Activities. Except as expressly permitted in Article 5 above,
during the Term, Executive shall not engage in any activities that are
competitive with the actual or prospective business of the Company including
without limitation: (a) engaging directly or indirectly in any business
substantially similar to any business or activity engaged in (or proposed to be
engaged in) by Employer, including and not limited to business that relates to
internal combustion engines; (b) engaging directly or indirectly in any business
or activity competitive with any business or activity engaged in (or proposed to
be engaged in) by Employer; (c) soliciting or taking away any executive,
employee, agent, representative, contractor, supplier, vendor, customer,
franchisee, lender or investor of Employer, or attempting to so solicit or take
away; (d) interfering with any contractual or other relationship between
Employer and any executive, employee, agent, representative, contractor,
supplier, vendor, customer, franchisee, lender or investor; or (e) using, for
the benefit of any person or entity other than Employer any Confidential
Information of Employer.

7.2 Results of Termination. In the event that the employment of Executive is
terminated for Cause, or if Executive terminates his employment with Company
without Good Reason prior to the Threshold Date (as defined in the License
Agreement), then the foregoing covenant prohibiting competitive activities shall
survive the termination of this Agreement and shall extend, and shall remain
enforceable against Executive, for the period of two (2) years following the
date of termination of employment. In addition, during the two-year period
following such termination, neither Executive nor Employer shall make or permit
the making of any negative statement of any kind concerning Employer or their
affiliates, or their directors, officers or agents or Executive.

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                                    ARTICLE 8

                                    SURVIVAL

Except as otherwise provided, Executive agrees that the provisions of Articles
6, 7, 8 and 9 shall survive expiration or earlier termination of this Agreement
for any reasons whether voluntary or involuntary, with or without Cause, and
shall remain in full force and effect thereafter.

                                    ARTICLE 9

                                INJUNCTIVE RELIEF

Executive acknowledges and agrees that the covenants and obligations of
Executive set forth in Articles 6 and 7 with respect to non-competition,
non-solicitation, confidentiality and Employer's property relate to special,
unique and extraordinary matters and that a violation of any of the terms of
such covenants and obligations will cause Employer irreparable injury for which
adequate remedies are not available at law. Therefore, Executive agrees that if
Executive breaches this Agreement than Employer shall be entitled to apply for
an injunction, restraining order or such other equitable relief as a court of
competent jurisdiction as limited by Section 13.3 may deem necessary or
appropriate to restrain Executive from committing any violation of the covenants
and obligations referred to in this Article 9. Executive shall have the right to
appeal from such injunction or order and to seek reconsideration, These
injunctive remedies are cumulative and in addition to any other rights and
remedies Employer may have at law or in equity.

                                   ARTICLE 10

                                   TERMINATION

Termination by Executive

10.1 Executive shall be entitled to terminate this Agreement, for any, or no
reason, upon providing a 60 days' written notice, only upon the earlier to occur
of: (i) the fifth (5th) anniversary of this Agreement; or (ii) the Threshold
Date.

Executive may terminate this Agreement for Good Reason at any time upon 30 days'
written notice to Employer, provided the Good Reason has not been cured within
such period of time.

Good Reason

10.2 In this Agreement, "Good Reason" means, without Executive's prior written
consent, the occurrence of any of the following events, unless Employer shall
have fully cured all grounds for such termination within thirty (30) days after
Executive gives notice thereof:

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      (i)   any reduction in his then-current Salary or benefits, other than in
            connection a percentage pay cut that is applicable to all senior
            executives and which is the same percentage for all such persons or
            in connection with a general reduction in benefits;

      (ii)  any material failure to timely grant, or timely honor, the Stock
            Option set forth in Article 4.2;

      (iii) failure to pay or provide required expenses;

      (iv)  Any diminution in authority or responsibility to a non-executive
            position;

            The written notice given for Good Reason by Executive to Employer
            shall specify in reasonable detail the cause for termination, and
            such termination notice shall not be effective until thirty (30)
            days after Employer's receipt of such notice, during which time
            Employer shall have the right to respond to Executive's notice and
            cure the breach or other event giving rise to the termination.

Termination by Employer

10.3 Employer may terminate its employment of Executive under this Agreement
only with Cause and only by written notice to Executive. For purposes of this
Agreement, the term Cause for termination by Employer shall be (a) a conviction
of or plea of guilty or nolo contendere by Executive to a felony, or any crime
involving fraud, securities laws violations, embezzlement or moral turpitude;
(b) the refusal by Executive to perform his material duties and obligations
hereunder or to follow the proper instructions of the Board of Directors after a
written warning with respect thereto; (c) Executive's willful or intentional
misconduct in the performance of his duties and obligations; or (d) conduct that
is known or that should have been known by Executive to be detrimental to the
best interests of the Company, as determined by the independent members of the
Board; (e) if Executive or any member of his family makes any personal profit
arising out of or in connection with a transaction to which Employer is a party
or with which it is associated without making disclosure to and obtaining the
prior written consent of the independent members of the Board; or (f) the entry
by the Securities and Exchange Commission or a self-regulatory organization of a
consent decree relating to a securities law violation by Executive. The written
notice given hereunder by Employer to Executive shall specify that it is with
Cause shall specify in reasonable detail the cause for termination. For purposes
of this Agreement, "family" shall mean "immediate family" as defined in the
rules of the Securities and Exchange Commission. In the case of a termination
for the causes described in (a), (d) and (e) above, such termination shall be
effective upon receipt of the written notice. In the case of the causes
described in (b) and (c) above, such termination notice shall not be effective
until thirty (30) days after Executive's receipt of such notice, during which
time Executive shall have the right to respond to Employer's notice and cure (if
curable) the breach or other event giving rise to the termination.

Severance

10.4 Upon a termination of this Agreement with Good Reason by Executive,
Employer shall pay to Executive all accrued and unpaid compensation and expense
reimbursement, as of the date of such termination and the "Severance Payment."
The Severance Payment shall be payable in a lump sum, subject to Employer's
statutory and customary withholdings. The Severance Payment shall be paid by
Employer within thirty (30) business days of the expiration of any applicable
cure period. The "Severance Payment" shall equal the total amount of the Salary
payable to Executive under Section 4.2 of this Agreement for a period of one
year, or if the Threshold Date has been achieved, two years .

Termination Upon Death

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10.5 If Executive dies during the Term, this Agreement shall terminate, except
that Executive's legal representatives shall be entitled to receive any earned
but unpaid compensation or expense reimbursement due hereunder through the date
of death.

Termination Upon Disability

10.6 If, during the Term, Executive suffers and continues to suffer from a
"Disability" (as defined below), then Employer may terminate this Agreement by
delivering to Executive ten (10) calendar days' prior written notice of
termination based on such Disability, setting forth with specificity the nature
of such Disability and the determination of Disability by Employer. For purposes
hereof, "Disability" means "permanent and total disability" as defined in
Section 22(e)(3) of the Internal Revenue Code. Upon any such termination for
Disability, Executive shall be entitled to receive any earned but unpaid
compensation or expense reimbursement due hereunder through the date of
termination and the Severance Payment.

                                   ARTICLE 11

                  PERSONNEL POLICIES, CONDITIONS, AND BENEFITS

      During the Term, Executive shall be entitled to vacation during each year
of the Term at the rate of four (4) weeks per year. Within 30 days after the end
of each year of the Term, Employer shall elect to (a) carry over and allow
Executive the right to use any accrued and unused vacation of Executive, or (ii)
pay Executive for such vacation in a lump sum in accordance with its standard
payroll practices.

                                   ARTICLE 12

                           BENEFICIARIES OF AGREEMENT

This Agreement shall inure to the benefit of the parties hereto, their
respective heirs, successors and permitted assigns.

                                   ARTICLE 13

                               GENERAL PROVISIONS

No Waiver

13.1 No failure by either party to declare a default based on any breach by the
other party of any provisions of this Agreement, nor failure of such party to
act quickly with regard thereto, shall be considered to be a waiver of any such
breach , or of any future breach.

Modification

13.2 No waiver or modification of this Agreement or of any covenant, condition,
or limitation herein contained shall be valid unless in writing and duly
executed by the parties to be charged therewith.

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Submission to Jurisdiction; Consent to Service of Process.

13.3 Submission to Jurisdiction; Consent to Service of Process. This Agreement
shall be governed in all respects, by the laws of the State of New York,
including validity, interpretation and effect, without regard to principles of
conflicts of law. The parties hereto irrevocably and unconditionally consent to
submit to the exclusive jurisdiction of the state and federal courts in the
State of New Jersey for any lawsuits, actions or other proceedings arising out
of or related to this Agreement and agree not to commence any lawsuit, action or
other proceeding except in such courts. The parties hereto further agree that
service of process, summons, notice or document by mail to their addresses set
forth above shall be effective service of process for any lawsuit, action or
other proceeding brought against them in any such court. The parties hereto
irrevocably and unconditionally waive any objection to the laying of venue of
any lawsuit, action or other proceeding arising out of or related to this
Agreement in such courts, and hereby further irrevocably and unconditionally
waive and agree not to plead or claim in any such court that any such lawsuit,
action or proceeding brought in any such court has been brought in an
inconvenient forum.

Entire Agreement

13.4 This Agreement embodies the whole agreement between the parties hereto
regarding the subject matter hereof and there are no inducements, promises,
terms, conditions, or obligations made or entered into by Employer or Executive
other than contained herein and except for the License Agreement.

Severability

13.5 In the event a court of competent jurisdiction determines that a term or
provision contained in this Agreement is overly broad in scope, time,
geographical location or otherwise, the parties hereto authorize such Court to
modify and reduce any such term or provision deemed overly broad in scope, time,
geographic location or otherwise so that it complies with then applicable law.

Headings

13.6 The headings contained herein are for the convenience of reference and are
not to be used in interpreting this Agreement.

Independent Legal Advice

13.7 Employer and Executive each acknowledge that he or it has obtained legal
advice concerning this Agreement.

No Assignment

13.8 No party may pledge or encumber its respective interests in this Agreement
nor assign any of its rights or duties under this Agreement without the prior
written consent of the other party.

      IN WITNESS WHEREOF the parties have executed this Agreement as of the day
and year first above written.

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                                        ----------------------------------------
COATES INTERNATIONAL, LTD.              Gregory Coates

By: __________________________

Name: _______________________

Title: ________________________

                                       10Exhibit 10.20

                                LICENSE AGREEMENT

      This License Agreement (the "Agreement") is made as of October 23, 2006
between George J. Coates and Gregory Coates, as licensors (separately and
together, "Licensors") and Coates International, Ltd., a Delaware corporation
("Licensee"). This Agreement shall become effective as of the Effective Date, as
defined herein.

                                    Recitals:

      1. Licensors and Licensee are parties to a license agreement, dated
      December 22, 1997 (Exhibit A), and George J. Coates and Licensee are
      parties to a license agreement, dated November 10, 2005 (Exhibit B)
      (together, the "Prior License Agreements").

      2. Licensee intends to sell additional shares of its common stock to
      certain purchasers. As a precondition thereof the placement agent is
      requiring that the Prior License Agreements be amended and restated, and
      employment agreements, in the form of Exhibit C and Exhibit D be signed
      with George J. Coates and Gregory Coates, respectively (the "Employment
      Agreements"), and Licensors acknowledge that they will benefit therefrom.

      NOW THEREFORE, for this and other valuable consideration, the receipt of
which is hereby acknowledged, and intending to be legally bound, the parties
agree as follows:

1. DEFINITIONS:

      "Additional Licensed Intellectual Property Rights" means Intellectual
      Property Rights (not including the Licensed Intellectual Property Rights)
      and any related inventions that (i) do not relate to the CSRV and (ii)
      that are invented or developed by one of both Licensors or as to which a
      Licensor acquires the right to license or sublicense during the period of
      time that the applicable Licensor is employed by, or a consultant to, the
      Licensee and a period of five years thereafter.

      "Cause" - with respect to each Licensor shall have the meaning ascribed to
      such term is such Licensor's Employment Agreement.

      "Commitment Period" - with respect to each Licensor shall have the meaning
      ascribed to such term in such Licensor's Employment Agreement.

      "CSRV" means the spherical rotary valve system developed by Licensors as
      it may be improved or modified from time to time.

      "CSRV Engine" shall mean an internal combustion engine which incorporates
      the CSRV.

      "Effective Date" means the closing by the Company of an equity investment
      of at least $10,000,000 (the "Investment") provided that such investment
      occurs on or before December 31, 2006.

<PAGE>

      "Field of Use" shall mean the development, manufacturing, sale and/or
      distribution of CSRV Engines.

      "Good Reason" - with respect to each Licensor shall have the meaning
      ascribed to such term is such Licensor's Employment Agreement.

      "Intellectual Property Rights" means patent rights, copyright rights
      (including, but not limited to, moral rights), Know-how, license rights,
      and any other intellectual property rights (other than trademarks)
      recognized by the law of any applicable jurisdiction.

      "Know-How" means trade secrets (including trade secrets as defined in the
      United States Uniform Trade Secrets Act and under corresponding foreign
      statutory law and common law), concepts, knowledge, technical information,
      and data including, but not limited to, algorithms, engineering,
      scientific and practical information and formulae, equipment designs,
      information or materials and commercial sources thereof, technical
      information recorded in reports, on drawings, in specifications and in
      other writings, irrespective of the form of expression or media upon or in
      which it is recorded, or transmitted.

      "Letter Agreement" shall mean a certain letter agreement dated July 7,
      2006 by and between Licensee and WWE, a copy of which is attached hereto
      as Exhibit E.

      "Licensed Intellectual Property Rights" shall mean (a) the patents and
      patent applications listed on Appendix 1.1 hereto, (b) any patents that
      shall issue on any of the patent applications listed on Appendix 1.1, (c)
      any patents derived from continuation, continuation-in-part, divisional,
      reissue or reexamination applications based on the patents and patent
      applications referred to in clauses (a) or (b) above to the extent related
      to the same subject matter, (d) foreign counterparts to any of the
      foregoing, and (e) any other patents or patent applications, in each case
      owned by one or both Licensors or as to which a Licensor has the right to
      license or sublicense that relate to the CSRV, Licensed Intellectual
      Property Rights shall include any Intellectual Property Rights relating to
      the CSRV invented or developed by one of both Licensors or as to which a
      Licensor acquires the right to license or sublicense during the period of
      time that the applicable Licensor is employed by, or a consultant to, the
      Licensee and a period of five years thereafter.

      "Territory" shall mean the countries comprising North America, Central
      America and South America and their respective territories and possessions
      provided, that until the Threshold Date, "Territory" shall mean worldwide.
      After the Threshold Date "Territory" shall include all countries outside
      of North America, Central America and South America in which Licensee has
      sold products under this Agreement through the Threshold Date aggregating
      at least $5 million, but any licenses hereunder with respect to such
      countries shall be non-exclusive.

      "Threshold Date" shall mean the end of any four consecutive fiscal
      quarters in which Licensee recognizes aggregate consolidated revenue
      determined in accordance with U.S. generally accepted accounting
      principles consistently applied of $200 million.

      "WWE" shall mean Well to Wire Energy Inc., a Canada-based corporation.

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<PAGE>

2. GRANT

      2.1 Licensors hereby grant to Licensee a sole and exclusive, fully paid-up
      and royalty-free, perpetual and irrevocable (subject to the termination of
      this Agreement) license in the Territory, with the right to sublicense,
      under the Licensed Intellectual Property Rights, solely in the Field of
      Use, to develop, make, have made, use, sell, offer to sell, lease and
      import products and to develop and perform processes that use any of the
      Licensed Intellectual Property Rights.

      2.2 Licensors hereby grant to Licensee a fully paid-up and royalty-free,
      perpetual and irrevocable (subject to the termination of this Agreement)
      license in the Territory, with the right to sublicense, under the
      Additional Licensed Intellectual Property Rights, solely in the Field of
      Use, to develop, make, have made, use, sell, offer to sell, lease and
      import products and to develop and perform processes that use any of the
      Additional Licensed Intellectual Property Rights. The license described in
      this Section 2.2 shall be exclusive through the earlier of the Threshold
      Date or December 31, 2009, and non-exclusive thereafter.

      2.3 Licensors hereby grant to Licensee during the term of this Agreement
      an exclusive license to use and display the trademarks owned by Licensors
      that are listed on Appendix 2.3 (the "Marks") as necessary or appropriate
      to conduct its business in the Field of Use within the Territory; provided
      that Licensors may require Licensee to cease or suspend use of particular
      Mark(s) for good cause (for example, because of Licensor's business
      decision to modify or abandon a Mark). Each use or display of Marks by
      Licensee will be in conformance with any trademark usage guidelines that
      Licensors may communicate to Licensee from time to time, will be subject
      to Licensor's prior written pproval, and will be accompanied by the
      appropriate service mark symbol (either "tm" or "sm") and a legend
      specifying that such Marks are trademarks or service marks of Licensors.
      Licensee will provide Licensors with a copy of any materials it has
      created or uses bearing any of Licensors' Marks. If Licensee's use of any
      Marks, or if any material bearing such Marks, is deficient in quality, as
      reasonably determined by Licensors, Licensee will promptly remedy such
      deficiencies upon receipt of written notice of such deficiencies from
      Licensors. Nothing herein will grant to Licensee any right, title or
      interest in the Marks. All goodwill resulting from Licensee's use of the
      Marks will inure solely to Licensors. Licensee will not, at any time
      during or after the term of this Agreement, register, attempt to register,
      claim any interest in, contest the use of, or otherwise adversely affect
      the validity of any of the Marks (including, without limitation any act or
      assistance to any act, which may infringe or lead to the infringement of
      any such Marks).

      2.4 In the event that the employment of a Licensor by Licensee is
      terminated by Licensor for Cause or if a Licensor terminates his own
      employment with Licensee without Good Reason prior to the Threshold Date,
      then the term Territory shall be permanently defined as worldwide,
      provided, however, that the license granted under Section 2.1 above shall
      be exclusive within North, South and Central America and non-exclusive
      elsewhere.

                                       3
<PAGE>

      2.5 The Licensors confirm that WWE is entitled to a right of first refusal
      from the Licensee to market the Coates electrical generation systems
      worldwide, and agree that, in the event WWE exercises such right anywhere
      outside of the Territory, Licensors, as applicable, hereby grant Licensee
      any additional Intellectual Property Rights, for the sole purpose of
      sublicensing them to WWE, necessary for WWE to market the Coates
      electrical generation systems anywhere it has acquired such marketing
      rights from Licensee.

3. NEGATIVE COVENANTS:

      Each of the Licensors undertakes and covenants as follows:

      (a) that until the Threshold Date, he shall not sell, assign, grant any
      license, lien or pledge any of the Licensed Intellectual Property Rights
      either within or outside the Territory other than to Licensee.

      (b) in the event that his employment with Licensee is terminated by
      Licensee for Cause, or in the event he terminates his employment with
      Licensee without Good Reason, in each case prior to the Threshold Date,
      then such Licensor shall not sell, assign, grant any license, lien or
      pledge any of the Licensed Intellectual Property Rights or the Licensed
      Additional Intellectual Property Rights owned by him or under his control
      for a period of five (5) years.

      (c) That until the earlier of the Threshold Date or December 31, 2009, he
      will not sell, assign, grant any license, lien or pledge any of the
      Additional Licensed Intellectual Property Rights, and thereafter that he
      will not grant any licenses to the Additional Licensed Intellectual
      Property Rights that are inconsistent with the rights of Licensee under
      this Agreement

      (d) he shall not sell, assign, grant any license, lien or pledge with
      respect to the Intellectual Property Rights or the Additional Intellectual
      Property Rights that are inconsistent with the rights of the Licensee
      under this Agreement or that would preclude the grant of any rights to
      which the Licensee may be entitled under this Agreement. In the event that
      any of the provisions of this Section 3 are inconsistent with the
      provisions of Section 2, then the provision most favorable to the Licensee
      shall control.

4. TERM:

                                       4
<PAGE>

      The term of this Agreement shall commence as of the Effective Date and
      shall remain in effect perpetually, unless terminated in accordance with
      the provisions of this Agreement.

5. PATENT PROTECTION AND INFRINGEMENT:

      5.1 Licensee, during the term of this Agreement, is responsible for the
      filing and the prosecution of all Patent Rights in North, Central and
      South America at Licensee's expense. If Licensee determines that it is
      uneconomic to file and/or prosecute any such Patent Rights in a particular
      country, Licensee shall notify Licensors thereof and Licensors shall have
      the right to prosecute the same subject to the terms of this Agreement.

      5.2 Each party shall notify the other of any instances of infringement of
      the Licensed Intellectual Property Rights of the Additional Licensed
      Intellectual Property Rights. Licensee shall have the right, but not the
      obligation, to bring suit at its own expense to restrain any infringement
      or to recover damages. If Licensee fails to challenge an instance of
      alleged infringement after notice to the Licensee's Board of Directors and
      the concurrence of a majority of the independent members of the Board of
      Directors, then Licensors shall have the right but not the obligation to
      take such action in their own name and at their own expense.

      5.3 Each party shall cooperate as is reasonably necessary in any such
      action brought by the other party. The party bringing the action shall
      have the sole right to control prosecution. Damages shall be retained by
      the party bringing the action. In any event, no settlement, consent,
      judgment or other voluntary final disposition of the suit may be entered
      into without the consent of Licensor, which shall not be unreasonably
      withheld.

      5.4 Licensee will bear all costs and expenses incurred in connection with
      the defense of any infringement claims against it or as a result of any
      settlement made or judgment rendered on the basis of such claims. Licensor
      will have the right, but not the obligation, to retain counsel and
      participate in the defense at its expense in connection with any such
      claim. 5.5 Subject to Section 2.5 above, Licensors shall have no
      responsibility with respect to Licensee's own trademarks and trade name,
      and Licensee in respect to the use thereof will defend, indemnify and hold
      harmless Licensor against any and all third party claims.

6. INDEMNIFICATION:

      Licensee shall release, indemnify and hold harmless Licensors against any
      and all losses, expenses, claims, actions, lawsuits and judgments thereon
      (including attorney's fees, and expenses through the appellate levels)
      ("Losses") which may be brought against Licensors as a result of or
      arising out of (i) any negligent or intentional act or omission of
      Licensee, its agents, or employees, or arising out of the use, production,
      manufacture, sale, lease, consumption or advertisement by Licensee or any
      third party of any of the Intellectual Property Rights licensed under this
      Agreement, or (ii) third party claims of infringement which may be
      asserted against Licensor or the aforementioned persons because of the
      manufacture, use, sale or lease, consumption or advertisement of products
      using the Intellectual Property Rights licensed under this Agreement.
      Licensee shall have the right, at its expense, to control the defense
      against any such claim or action. Notwithstanding the foregoing, Licensee
      shall not have any obligation under this subparagraph with respect to any
      Losses that are directly related to any breach by a Licensor of this
      Agreement.

                                       5
<PAGE>

7. WARRANTIES:

      LICENSORS MAKE NO WARRANTIES, EXPRESS OR IMPLIED, AND HEREBY DISCLAIM ALL
      SUCH WARRANTIES, AS TO ANY MATTER WHATSOEVER, INCLUDING, WITHOUT
      LIMITATION, THE CONDITION OF ANY INVENTION(S) OR PRODUCT, WHETHER TANGIBLE
      OR INTANGIBLE, LICENSED UNDER THIS AGREEMENT; OR THE MERCHANTABILITY, OR
      FITNESS FOR A PARTICULAR PURPOSE OF THE INVENTION OR PRODUCT; OR THAT THE
      USE OF THE LICENSED PRODUCT WILL NOT INFRINGE ANY PATENT, COPYRIGHTS,
      TRADEMARKS, OR OTHER RIGHTS. LICENSORS SHALL NOT BE LIABLE FOR ANY DIRECT,
      CONSEQUENTIAL, OR OTHER DAMAGES SUFFERED BY ANY LICENSEE OR ANY THIRD
      PARTIES RESULTING FROM THE USE, PRODUCTION, MANUFACTURE, SALE, LEASE,
      CONSUMPTION, OR ADVERTISEMENT OF THE PRODUCT.

      Notwithstanding the foregoing, Licensors represent and warrant to Licensee
      that they have no actual knowledge of invalidity of any of the
      Intellectual Property Rights licensed to Licensee under this Agreement.
      Licensors further represent and warrant that they have the full power and
      authority, without any conflict with the rights of others, to grant the
      licenses to Licensee contained in this Agreement. Licensors will promptly
      bring to the attention of the Licensee any Licensed Intellectual Property
      Rights or Additional Licensed Intellectual Property Rights not theretofore
      disclosed to Licensee.

8. MARKING AND STANDARDS:

      Licensee agrees to mark Products (or their containers or labels) made,
      sold, or otherwise disposed of by it under the license granted in this
      Agreement with a proper patent notice as specified under the patent laws
      of the United States and with a notice of the existence of this license
      and a proper patent notice as specified under the patent laws of (1) the
      United States; and, (11) to the extent applicable, the country, other than
      the United States, where the Products are made, sold or otherwise disposed
      of by Licensee.

9. ASSIGNMENT:

      9.1 Licensee may assign its rights and obligations under this Agreement in
      connection with the sale of its business, by merger, sale of outstanding
      stock or sale or transfer of all or substantially all assets relating to
      the Patent Rights and the Products. Licensee may not otherwise assign this
      Agreement without the prior written consent of Licensor, which consent
      shall not be unreasonably withheld or delayed.

      9.2 This Agreement shall extend to and be binding upon the successors and
      legal representatives and permitted assigns of Licensor and Licensee.

                                       6
<PAGE>

10. TERMINATION:

      10.1 Licensors, together, and Licensee shall have the right to terminate
      this Agreement if the other party commits a material breach of an
      obligation under this Agreement and continues in default for more than
      sixty (60) days after receiving written notice of such default.

      10.2 If any provision of this Agreement is declared invalid by a court of
      last resort, or by any court, the decision of which an appeal is not taken
      within the time provided by law, then and in such an event, this Agreement
      will be deemed to have been terminated only as to the portion thereof
      which relates to the provision invalidated by that judicial decision, but
      this Agreement, in all other respects, will remain in force.

      10.3 This Agreement shall terminate automatically if Licensee ceases
      business operations, if Licensee files for bankruptcy or if an involuntary
      petition in bankruptcy is filed against Licensee and is not dismissed
      within 60 days.

      10.4 Upon termination, Licensee shall have the right to dispose of CSRV
      Products then in their possession and to complete existing contracts for
      such CSRV products.

      10.5 Any sublicenses granted by Licensee under this Agreement shall remain
      in effect after the termination of this Agreement, and shall be assigned
      without consideration to Licensor in the event this license terminates.

11. GOVERNING LAW:

      This Agreement shall be governed in all respects, by the laws of the State
of New Jersey, including validity, interpretation and effect, without regard to
principles of conflicts of law. The parties hereto irrevocably and
unconditionally consent to submit to the exclusive jurisdiction of the state and
federal courts in the State of New Jersey for any lawsuits, actions or other
proceedings arising out of or related to this Agreement and agree not to
commence any lawsuit, action or other proceeding except in such courts. The
parties hereto further agree that service of process, summons, notice or
document by mail to their addresses set forth above shall be effective service
of process for any lawsuit, action or other proceeding brought against them in
any such court. The parties hereto irrevocably and unconditionally waive any
objection to the laying of venue of any lawsuit, action or other proceeding
arising out of or related to this Agreement in such courts, and hereby further
irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such lawsuit, action or proceeding brought in any such court
has been brought in an inconvenient forum.

12. SURVIVAL:

      12.1 The provisions of Sections 5, 6 and 7 shall survive the termination
      or expiration of this Agreement and shall remain in full force and effect.

      12.2 The provisions of this Agreement which do not survive termination or
      expiration hereof (as the case may be) shall, nonetheless, be controlling
      on, and shall be used in construing and interpreting, the rights and
      obligations of the parties hereto with regard to any dispute, controversy
      or claim which may arise under, out of, in connection with, or relating to
      this Agreement.

                                       7
<PAGE>

13. AMENDMENT:

      No amendment or modification of the terms of this Agreement shall be
binding on either party unless reduced to writing and signed by an authorized
officer of the party to be bound.

14. WAIVER:

      No failure or delay on the part of a party in exercising any right
hereunder will operate as a waiver of, or impair, any such right. No single or
partial exercise of any such right will preclude any other or further exercise
thereof or the exercise of any other right. No waiver of any such right will be
deemed a waiver of any other right hereunder.

15. ENTIRE AGREEMENT:

      This Agreement constitutes the entire agreement between the parties hereto
respecting the subject matter hereof, and supercedes and terminates all prior
agreements respecting the subject matter hereof, whether written or oral,
including, and not limited to, the Prior License Agreements.

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized to be effective
as of the Effective Date.

COATES INTERNATIONAL LTD.

By: __________________________          _______________________
        Name:                           George J. Coates
        Title:

                                        -----------------------
                                        Gregory Coates

Coates Trust, a trust formed under the laws of the Commonwealth of the Bahamas,
having an address at Katherina Court 101, East Hill Place, Market Street, North,
Nassau, the Bahamas (the "Coates Trust"), agrees that to the extent any of the
Licensed Intellectual Property Rights or Additional Intellectual Property Rights
licensed to Licensee hereunder are owned or under the control of the Coates
Trust, the Coates Trust hereby makes the license grants contained herein as if
if were the Licensors and will perform all of the covenants of the Licensors
hereunder to the extent necessary to afford to Licensee the full benefits of
this Agreement.

COATES TRUST

By:
    ------------------------------------
        Name:
        Title:

                                       8
<PAGE>

List of  Exhibits and Appendixes:

Exhibit A:  License agreement, dated December 22, 1997

Exhibit B:  License agreement, dated November 10, 2005

Exhibit C:  Employment Agreement by and between George J. Coates and Licensee

Exhibit D:  Employment Agreement by and between Gregory Coates and Licensee

Exhibit E:  the Letter Agreement with WWE

Appendix 1.1:  Patents and patent applications

Appendix 2.3:  List of trademarks

                                       9

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