Document:

EXHIBIT 10.31

 

SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE
AGREEMENT (the “Agreement”), dated as of February 12, 2016, by and between Coates International, Ltd., a
Delaware corporation, with headquarters located at Highway 34 & Ridgewood Road, Wall Township, NJ 07719, (the “Company”),
and APG CAPITAL HOLDINGS, LLC, a New York limited liability company, with its address at 300 Cadman Plaza West, 12th
Floor, Brooklyn, NY 11201 (the “Buyer”).

 

WHEREAS:

 

A.    The Company and the
Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the rules
and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities
Act of 1933, as amended (the “1933 Act”);

 

B.    Buyer desires
to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement a 10% convertible
note of the Company, in the form attached hereto as Exhibit A in the aggregate principal amount of $33,000.00 (together with any
note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance with the terms thereof,
the “Note”), convertible into shares of common stock, of the Company (the “Common Stock”), upon the terms
and subject to the limitations and conditions set forth in such Note.

 

C.    The Buyer wishes
to purchase, upon the terms and conditions stated in this Agreement, such principal amount of Note as is set forth immediately
below its name on the signature pages hereto; and

 

NOW THEREFORE, the
Company and the Buyer severally (and not jointly) hereby agree as follows:

 

1.    Purchase and Sale
of Note.

 

a.    Purchase of Note.
On the Closing Date (as defined below), the Company shall issue and sell to the Buyer and the Buyer agrees to purchase from the
Company such principal amount of Note as is set forth immediately below the Buyer’s name on the signature pages hereto.

 

     

     

    

 

b.    Form of Payment.
On the Closing Date (as defined below), (i) the Buyer shall pay the purchase price for the Note to be issued and sold to it at
the Closing (as defined below) (the “Purchase Price”) by wire transfer of immediately available funds to the Company,
in accordance with the Company’s written wiring instructions, against delivery of the Note in the principal amount equal
to the Purchase Price as is set forth immediately below the Buyer’s name on the signature pages hereto, and (ii) the
Company shall deliver such duly executed Note on behalf of the Company, to the Buyer, against delivery of such Purchase Price.

 

c.    Closing Date.
The date and time of the first issuance and sale of the Note pursuant to this Agreement (the “Closing Date”) shall
be on or about February 12, 2016, or such other mutually agreed upon time. The closing of the transactions contemplated by this
Agreement (the “Closing”) shall occur on the Closing Date at such location as may be agreed to by the parties.

 

2.    Buyer’s Representations
and Warranties. The Buyer represents and warrants to the Company that:

 

a.    Investment Purpose.
As of the date hereof, the Buyer is purchasing the Note and the shares of Common Stock issuable upon conversion of or otherwise
pursuant to the Note, such shares of Common Stock being collectively referred to herein as the “Conversion Shares”
and, collectively with the Note, the “Securities”) for its own account and not with a present view towards the public
sale or distribution thereof, except pursuant to sales registered or exempted from registration under the 1933 Act; provided,
however, that by making the representations herein, the Buyer does not agree to hold any of the Securities for any minimum
or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration
statement or an exemption under the 1933 Act.

 

b.    Accredited Investor
Status. The Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D (an “Accredited
Investor”). Any of Buyer’s transferees, assignees, or purchasers must be “accredited investors” in order
to qualify as prospective transferees, permitted assignees in the case of Buyer’s or Holder’s transfer, assignment
or sale of the Note.

 

c.    Reliance on Exemptions.
The Buyer understands that the Securities are being offered and sold to it in reliance upon specific exemptions from the registration
requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of,
and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Buyer
set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire the Securities.

 

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d.    Information.
The Buyer and its advisors, if any, have been, and for so long as the Note remain outstanding will continue to be, furnished with
all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of
the Securities which have been requested by the Buyer or its advisors. The Buyer and its advisors, if any, have been, and for so
long as the Note remain outstanding will continue to be, afforded the opportunity to ask questions of the Company. Notwithstanding
the foregoing, the Company has not disclosed to the Buyer any material nonpublic information and will not disclose such information
unless such information is disclosed to the public prior to or promptly following such disclosure to the Buyer. Neither such inquiries
nor any other due diligence investigation conducted by Buyer or any of its advisors or representatives shall modify, amend or affect
Buyer’s right to rely on the Company’s representations and warranties contained in Section 3 below. The Buyer understands
that its investment in the Securities involves a significant degree of risk. The Buyer is not aware of any facts that may constitute
a breach of any of the Company's representations and warranties made herein.

 

e.    Governmental Review.
The Buyer understands that no United States federal or state agency or any other government or governmental agency has passed upon
or made any recommendation or endorsement of the Securities.

 

f.    Transfer or Re-sale.
The Buyer understands that (i) the sale or re-sale of the Securities has not been and is not being registered under the 1933 Act
or any applicable state securities laws, and the Securities may not be transferred unless (a) the Securities are sold pursuant
to an effective registration statement under the 1933 Act, (b) in the case of subparagraphs (c), (d) and (e) below, the Buyer
shall have delivered to the Company, at the cost of the Buyer, an opinion of counsel that shall be in form, substance and scope
customary for opinions of counsel in comparable transactions to the effect that the Securities to be sold or transferred may be
sold, or transferred pursuant to an exemption from such registration, including the removal of any restrictive legend which opinion
shall be accepted by the Company, (c) the Securities are sold or transferred to an “affiliate” (as defined in
Rule 144 promulgated under the 1933 Act (or a successor rule) (“Rule 144”) of the Buyer who agrees to sell or otherwise
transfer the Securities only in accordance with this Section 2(f) and who is an Accredited Investor, (d) the Securities are
sold pursuant to Rule 144, or (e) the Securities are sold pursuant to Regulation S under the 1933 Act (or a successor rule)
(“Regulation S”); (ii) any sale of such Securities made in reliance on Rule 144 may be made only in accordance with
the terms of said Rule and further, if said Rule is not applicable, any re-sale of such Securities under circumstances in which
the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933
Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and
(iii) neither the Company nor any other person is under any obligation to register such Securities under the 1933 Act or any state
securities laws or to comply with the terms and conditions of any exemption thereunder (in each case). Notwithstanding the foregoing
or anything else contained herein to the contrary, the Securities may be pledged as collateral in connection with a bona
fide margin account or other lending arrangement.

 

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g.    Legends. The
Buyer understands that the Note and, until such time as the Conversion Shares have been registered under the 1933 Act will be sold
pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then
be immediately sold, the Conversion Shares may bear a restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of the certificates for such Securities):

 

“NEITHER THE ISSUANCE AND SALE
OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE
FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING
THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT
SECURED BY THE SECURITIES.”

 

The legend set forth above
shall be removed and the Company shall issue a certificate without such legend to the holder of any Security upon which it is stamped,
if, unless otherwise required by applicable state securities laws, (a) such Security is registered for sale under an effective
registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or Regulation S without any restriction
as to the number of securities as of a particular date that can then be immediately sold, and (b) such holder provides the Company
with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect
that a public sale or transfer of such Security may be made without registration under the 1933 Act, and that legend removal is
appropriate, which opinion shall be accepted by the Company so that the sale or transfer is effected. The Buyer agrees to sell
all Securities, including those represented by a certificate(s) from which the legend has been removed, in compliance with applicable
prospectus delivery requirements, if any. In the event that the Company does not accept the opinion of counsel provided by the
Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation S,
within 2 business days, it will be considered an Event of Default under the Note.

 

h.    Authorization;
Enforcement. This Agreement has been duly and validly authorized. This Agreement has been duly executed and delivered on behalf
of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in accordance with its terms.

 

i.    Residency.
The Buyer is a resident of the jurisdiction set forth immediately below the Buyer’s name on the signature pages hereto.

 

j. No Short Sales. Buyer/Holder, its
successors and assigns, agree that so long as the Note remains outstanding, the Buyer/Holder shall not enter into or effect “short
sales” of the Common Stock or hedging transaction which establishes a short position with respect to the Common Stock of
the Company. The Company acknowledges and agrees that upon delivery of a Conversion Notice by the Buyer/Holder, the Buyer/Holder
immediately owns the shares of Common Stock described in the Conversion Notice and any sale of those shares issuable under such
Conversion Notice would not be considered short sales.

 

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3.    Representations
and Warranties of the Company. The Company represents and warrants to the Buyer that:

 

a.    Organization and
Qualification. The Company and each of its subsidiaries, if any, is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is incorporated, with full power and authority (corporate and other) to
own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted.

 

b.    Authorization;
Enforcement. (i) The Company has all requisite corporate power and authority to enter into and perform this Agreement, the
Note and to consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance with the terms
hereof and thereof, (ii) the execution and delivery of this Agreement, the Note by the Company and the consummation by it of the
transactions contemplated hereby and thereby (including without limitation, the issuance of the Note and the issuance and reservation
for issuance of the Conversion Shares issuable upon conversion or exercise thereof) have been duly authorized by the Company’s
Board of Directors and no further consent or authorization of the Company, its Board of Directors, or its shareholders is required,
(iii) this Agreement has been duly executed and delivered by the Company by its authorized representative, and such authorized
representative is the true and official representative with authority to sign this Agreement and the other documents executed in
connection herewith and bind the Company accordingly, and (iv) this Agreement constitutes, and upon execution and delivery by the
Company of the Note, each of such instruments will constitute, a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms.

 

c.    Issuance of Shares.
The Conversion Shares are duly authorized and reserved for issuance and, upon conversion of the Note in accordance with its respective
terms, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances with respect
to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Company and will
not impose personal liability upon the holder thereof.

 

d.    Acknowledgment
of Dilution. The Company understands and acknowledges the potentially dilutive effect to the Common Stock upon the issuance
of the Conversion Shares upon conversion of the Note. The Company further acknowledges that its obligation to issue Conversion
Shares upon conversion of the Note in accordance with this Agreement, the Note is absolute and unconditional regardless of the
dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.

 

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e.    No Conflicts.
The execution, delivery and performance of this Agreement, the Note by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby (including, without limitation, the issuance and reservation for issuance of the Conversion Shares)
will not (i) conflict with or result in a violation of any provision of the Certificate of Incorporation or By-laws, or (ii) violate
or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of
time or both could become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation
of, any agreement, indenture, patent, patent license or instrument to which the Company or any of its subsidiaries is a party,
or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities
laws and regulations and regulations of any self-regulatory organizations to which the Company or its securities are subject) applicable
to the Company or any of its subsidiaries or by which any property or asset of the Company or any of its subsidiaries is bound
or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would
not, individually or in the aggregate, have a material adverse effect). All consents, authorizations, orders, filings and registrations
which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date
hereof. The Company is not in violation of the listing requirements of the OTC marketplace (the “OTC MARKETPLACE”)
and does not reasonably anticipate that the Common Stock will be delisted by the OTC MARKETPLACE in the foreseeable future, nor
are the Company’s securities “chilled” by DTC. The Company and its subsidiaries are unaware of any facts or circumstances
which might give rise to any of the foregoing.

 

f.    Absence of Litigation.
Except as disclosed in the Company’s Periodic Report filings with the SEC, there is no action, suit, claim, proceeding, inquiry
or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the
knowledge of the Company or any of its subsidiaries, threatened against or affecting the Company or any of its subsidiaries, or
their officers or directors in their capacity as such, that could have a material adverse effect. Schedule 3(f) contains a complete
list and summary description of any pending or, to the knowledge of the Company, threatened proceeding against or affecting the
Company or any of its subsidiaries, without regard to whether it would have a material adverse effect. The Company and its subsidiaries
are unaware of any facts or circumstances which might give rise to any of the foregoing.

 

g.    Acknowledgment
Regarding Buyer’ Purchase of Securities. The Company acknowledges and agrees that the Buyer is acting solely in the capacity
of arm’s length purchasers with respect to this Agreement and the transactions contemplated hereby. The Company further acknowledges
that the Buyer is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this
Agreement and the transactions contemplated hereby and any statement made by the Buyer or any of its respective representatives
or agents in connection with this Agreement and the transactions contemplated hereby is not advice or a recommendation and is merely
incidental to the Buyer’ purchase of the Securities. The Company further represents to the Buyer that the Company’s
decision to enter into this Agreement has been based solely on the independent evaluation of the Company and its representatives.

 

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h.    No Integrated
Offering. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly
made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration
under the 1933 Act of the issuance of the Securities to the Buyer.

 

i.    Title to Property.
The Company and its subsidiaries have good and marketable title in fee simple to all real property and good and marketable title
to all personal property owned by them which is material to the business of the Company and its subsidiaries, in each case free
and clear of all liens, encumbrances and defects except such as are disclosed in the Company’s quarterly report on Form 10-Q
filed with the Securities and Exchange Commission on November 12, 2015 or such as would not have a material adverse effect. Any
real property and facilities held under lease by the Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as would not have a material adverse effect.

 

j.    Bad Actor.
No officer or director of the Company would be disqualified under Rule 506(d) of the Securities Act as amended on the basis of
being a "bad actor" as that term is established in the September 19, 2013 Small Entity Compliance Guide published
by the Securities and Exchange Commission.

 

k.    Breach of Representations
and Warranties by the Company. If the Company breaches any of the representations or warranties set forth in this Section 3,
and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an Event of default
under the Note.

 

4.    COVENANTS.

 

a.    Expenses.
At the Closing, the Company shall reimburse Buyer for no more than $2,000 of expenses incurred by them in connection with the negotiation,
preparation, execution, delivery and performance of this Agreement and the other agreements to be executed in connection herewith
(“Documents”), including, without limitation, reasonable attorneys’ and consultants’ fees and expenses,
transfer agent fees, fees for stock quotation services, fees relating to any amendments or modifications of the Documents or any
consents or waivers of provisions in the Documents, fees for the preparation of opinions of counsel, escrow fees, and costs of
restructuring the transactions contemplated by the Documents. When possible, the Company must pay these fees directly, otherwise
the Company must make immediate payment for reimbursement to the Buyer for all fees and expenses immediately upon written notice
by the Buyer or the submission of an invoice by the Buyer. The Company shall also be responsible for all transfer agent fees relating
to the issuance of the shares issuable upon conversion of the Note.

 

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b.    Listing. The
Company shall promptly secure the listing of the Conversion Shares upon each national securities exchange or automated quotation
system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and, so long as the
Buyer owns any of the Note Securities, shall maintain, so long as any other shares of Common Stock shall be so listed, such listing
of all Conversion Shares from time to time issuable upon conversion of the Note. The Company will obtain and, so long as the Buyer
owns any of the Securities, maintain the listing and trading of its Common Stock on the OTC MARKETPLACE or any equivalent replacement
market, the Nasdaq stock market (“Nasdaq”), the New York Stock Exchange (“NYSE”), or the American Stock
Exchange (“AMEX”) and will comply in all respects with the Company’s reporting, filing and other obligations
under the bylaws or rules of the Financial Industry Regulatory Authority (“FINRA”) and such exchanges, as applicable.
The Company shall promptly provide to the Buyer copies of any notices it receives from the OTC MARKETPLACE and any other markets
on which the Common Stock is then listed regarding the continued eligibility of the Common Stock for listing on such markets.

 

c.    Corporate Existence.
So long as the Buyer beneficially owns the Note, the Company shall maintain its corporate existence and shall not sell all or substantially
all of the Company’s assets, except in the event of a merger or consolidation or sale of all or substantially all of the
Company’s assets, where the surviving or successor entity in such transaction (i) assumes the Company’s obligations
hereunder and under the agreements and instruments entered into in connection herewith and (ii) is a publicly traded corporation
whose Common Stock is listed for trading on the OTC MARKETPLACE, Nasdaq, NYSE or AMEX.

 

d.    No Integration.
The Company shall not make any offers or sales of any security (other than the Securities) under circumstances that would require
registration of the Securities being offered or sold hereunder under the 1933 Act or cause the offering of the Securities to be
integrated with any other offering of securities by the Company for the purpose of any stockholder approval provision applicable
to the Company or its securities.

 

e.    Breach of Covenants.
If the Company breaches any of the covenants set forth in this Section 4, and in addition to any other remedies available to the
Buyer pursuant to this Agreement, it will be considered an event of default under the Note.

 

5.    Governing
Law; Miscellaneous.

 

a.    Governing Law.
This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to principles
of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Agreement
shall be brought only in the state courts of New York or in the federal courts located in the state and county of New York. The
parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and
shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Company and
Buyer waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees
and costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid
or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may
prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement.
Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding
in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail
or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

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b.    Counterparts;
Signatures by Facsimile. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original
but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party. This Agreement, once executed by a party, may be delivered to the other party hereto by
facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.

 

c.    Headings.
The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of,
this Agreement.

 

d.    Severability.
In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then
such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform
with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect
the validity or enforceability of any other provision hereof.

 

e.    Entire Agreement;
Amendments. This Agreement and the instruments referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the
Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement
may be waived or amended other than by an instrument in writing signed by the majority in interest of the Buyer.

 

f.    Notices. All
notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and,
unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, (iv) via electronic
mail or (v) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such
party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given
hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business
hours where such notice is to be received) or delivery via electronic mail, or the first business day following such delivery (if
delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business
day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt
of such mailing, whichever shall first occur. The addresses for such communications shall be:

 

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g.    

 

If to the Company,
to:

Coates International,
Ltd.

Highway 34 & Ridgewood Road,

Wall Township, NJ 07719

Attn: Barry C.
Kaye, CFO

 

If to the Buyer:

APG CAPITAL HOLDINGS, LLC

300 Cadman Plaza
West, 12th Floor

Brooklyn, NY
11201

Attn: Finance

 

Each party shall provide
notice to the other party of any change in address.

 

h.    Successors and
Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. Neither
the Company nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the prior written consent
of the other. Notwithstanding the foregoing, the Buyer may assign its rights hereunder to any “qualified person”, any
“permitted assigns”, or “prospective transferee” that acquires or purchases Note Securities in a private
transaction from the Buyer or to any of its “affiliates,” as that term is defined under the 1934 Act, with the prior
written consent of the Company, which consent shall not be unreasonably withheld, and with Buyer’s Opinion of Counsel. A
qualified person is an “accredited investor” transferee, assignee, or purchaser of the Note who succeeds to the Holder’s
right, title and interest to all or a portion of the Note accompanied with an Opinion of Counsel as provided for in Section 2(f).

 

i.    Third Party Beneficiaries.
This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other person.

 

j.    Survival.
The representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall survive the
closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of the Buyer. The Company agrees to
indemnify and hold harmless the Buyer and all their officers, directors, employees and agents for loss or damage arising as a result
of or related to any breach or alleged breach by the Company of any of its representations, warranties and covenants set forth
in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they are incurred.

 

k.    Further Assurances.
Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry
out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

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l.    No Strict Construction.
The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and
no rules of strict construction will be applied against any party.

 

m.    Remedies. The Company acknowledges
that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer by vitiating the intent and purpose of
the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations
under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions
of this Agreement, that the Buyer shall be entitled, in addition to all other available remedies at law or in equity, and in addition
to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Agreement
and to enforce specifically the terms and provisions hereof, without the necessity of showing economic loss and without any bond
or other security being required.

 

IN WITNESS WHEREOF, the undersigned
Buyer and the Company have caused this Agreement to be duly executed as of the date first above written.

 

Coates
International, Ltd.

 

	By:	/s/
    Barry C. Kaye	 
	Name:	Barry
    C. Kaye	 
	Title:	CFO	 

 

APG
CAPITAL HOLDINGS, LLC.

 

	By:	/s/
    Nochum Greenberg	 
	Name:	Nochum
    Greenberg	 
	Title:	Manager	 

 

AGGREGATE SUBSCRIPTION AMOUNT:

 

	Aggregate Principal Amount of Note:	$33,000.00

 

Aggregate Purchase Price:    

 

Note: $33,000.00, less $2,000.00 in legal fees

 

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EXHIBIT A

144 NOTE - $33,000Exhibit
4.2

 

MEDIFIRST
SOLUTIONS

 

CONVERTIBLE
DEBENTURE

 

THE
SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS
AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SUCH LAWS. THE SECURITIES ARE SUBJECT
TO RESTRICTIONS OF TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SUCH LAWS PURSUANT
TO REGISTRATION OR AN EXEMPTION THEREFROM. THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF
THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE OFFERING MATERIALS. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

 

	AMOUNT: 	$100,000
	 	 
	DEBENTURE NUMBER:    	001
	 	 
	ISSUANCE DATE: 	June 12, 2015
	 	 
	MATURITY DATE:	December 12 2015

 

FOR
VALUE RECEIVED, MEDIFIRST SOLUTIONS, INC.., a Nevada corporation (Company”), hereby promises to pay MARK W. BALDWIN
(Holder”) on December 12, 2015, ( “Maturity Date”), the principal amount of ONE HUNDRED THOUSAND
Dollars ($100,000) U.S.,

 

Article
1. Interest.     The Company shall pay interest on the unpaid principal amount of the Debenture (“Debenture”)
at the time of each conversion until the principal amount hereof is paid in full or has been converted. The Debenture shall pay
five percent (5% APR) cumulative interest, in cash or in shares of common stock, par value $.0001 per share, of the Company (“Common
Stock”), at the Holder’s option, at the current conversion price, at the time of each conversion. The closing shall
be deemed to have occurred on the date the funds (less escrow fees and attorney fees) are received by the Company ( “Closing
Date”). If the interest is to be paid in cash, the Company shall make such payment within five (5) business days of the
date of conversion. If the interest is to be paid in Common Stock, said Common Stock shall be delivered to the Holder, or per
Holder’s instructions, within five (5) business days of the date of conversion. The Debenture is subject to automatic conversion
on the Maturity Date at which time this Debenture shall be automatically converted based upon the formula set forth in Section
3.2 herein.

 

Article
2. Method of Payment.     The Debenture must be surrendered to the Company in order for the Holder to receive payment
of the principal amount hereof. The Company shall have the option of paying the interest on the Debenture in United States dollars
or in Common Stock upon conversion pursuant to Article 1 hereof. The Company may draw a check for the payment of interest to the
order of the Holder of the Debenture and mail it to the Holder’s address as set forth in Section 6 herein.

 

     

     

    

 

Article
3. Conversion

 

Section
3.1. Conversion Privilege

 

(a)
The Holder shall have the right to convert it into shares of Common Stock at any time One Hundred Eighty (180) days following
the Closing Date. The number of shares of Common Stock issuable upon the conversion of the Debenture is determined pursuant to
Section 3.2 and rounding the result to the nearest whole share.

 

Section
3.2. Conversion Procedure.

 

(a)
Debenture Upon receipt by the Company or its designated attorney of a facsimile or original of Holder’s
signed Notice of Conversion (See Exhibit A attached hereto) preceded by, together with or followed by receipt of the original
Debenture to be converted in whole or in part in the manner set forth in 3.2(b) below, the Company shall instruct its transfer
agent to issue one or more certificates representing that number of shares of Common Stock into which the Debenture is convertible.
Conversion calculations pursuant shall be rounded up to the nearest whole share, and no fractional shares shall be issuable by
the Company upon conversion of the Debenture. All shares issuable upon a conversion of the Debenture, including fractions thereof,
shall be aggregated for purposes of determining whether such conversion would result in the issuance of a fractional share.(b)
Conversion Rate. Holder is entitled to convert the face amount of the Debenture, at a 50% discount to the average of the
previous three (3) trading days closing price, on any date prior to the Conversion Date, each being referred to as the “Conversion
Price”, as quoted by OTC Markets Group Inc.

 

(b)
Legend. The Holder acknowledges that each certificate representing the Debenture and the Common Stock shall
be stamped or otherwise imprinted with a legend substantially in the following form:

 

THE
SECURITIES EVIDENCED BY THIS CERTIFICATE MAY NOT BE OFFERED OR SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED
OF EXCEPT (i) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“1933 Act”),
(ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES),
OR (iii) IF AN EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT IS AVAILABLE.

 

(c)
Conversion Limitaitons. Notwithstanding anything to the contrary contained herein, the number of shares of Common Stock
that may be acquired by the Holder upon conversion of the Debenture shall be limited to the extent necessary to ensure that, following
such conversion (or other issuance), the total number of shares of Common Stock then beneficially owned by Holder and his affiliates
and any other persons whose beneficial ownership of Common Stock would be aggregated with the Subscriber's for purposes of Section
13(d) of the Securities Exchange Act of 1934, as amended (“1934”), does not exceed 4.999% of the total number
of issued and outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable upon such conversion).
For such purposes, beneficial ownership shall be determined in accordance with Section 13(d) of the 1934 Act and the rules and
regulations promulgated thereunder. The foregoing conversion limitation is enforceable, unconditional and non-waivable.

 

Section
3.3. Taxes on Conversion. The Company shall pay any documentary, stamp or similar issue or transfer tax due
on the issue of shares of Common Stock upon the conversion of the Debenture. However, the Holder shall pay any such tax which
is due because the shares are issued in a name other than its name.

 

Section
3.4. Company to Reserve Stock. The Company shall reserve the number of shares of Common Stock required pursuant
to and upon the terms set forth in the Subscription Agreement to permit the conversion of the Debenture.
All shares of Common Stock which may be issued upon the conversion hereof shall upon issuance be validly issued, fully
paid and non- assessable and free from all taxes, liens and charges with respect to the issuance thereof.

 

Section
3.5. Restrictions on Sale. The Debenture has not been registered under the Securities Act of 1933, as amended,
(the “1933 Act”) and is being issued under Section 4(a)(2) of the 1933 Act and Rule 506 of Regulation D promulgated
thereunder. The Debenture and the Common Stock issuable upon the conversion thereof may only be sold pursuant to registration
under or an exemption from the 1933 Act.

 

    	 	2	 

     

    

 

Article
4. Mergers     The Company shall not consolidate or merge into, or transfer all or substantially all of its assets to,
any person, unless such person assumes in writing the obligations of the Company under the Debenture and immediately after such
transaction no Event of Default exists. Any reference herein to the Company shall refer to such surviving or transferee corporation
and the obligations of the Company shall terminate upon such written assumption.

 

Article
5. Defaults and Remedies

 

Section
5.1. Events of Default. An “Event of Default” occurs if (a) the Company does not make the payment
of the principal of the Debenture by conversion into Common Stock within ten (10) business days of the Maturity Date, upon redemption
or otherwise, (b) the Company does not make a payment, other than a payment of principal, for a period of five (5) business days
thereafter, (c) any of the Company’s representations or warranties contained in the Subscription Agreement or the Debenture
were false when made or the Company fails to comply with any of its other agreements in the Subscription Agreement or the Debenture
and such failure continues for the period and after the notice specified below, (d) the Company pursuant to or within the meaning
of any Bankruptcy Law (as hereinafter defined): (i) commences a voluntary case; (ii) consents to the entry of an order for relief
against it in an involuntary case; (iii) consents to the appointment of a Custodian (as hereinafter defined) of it or for all
or substantially all of its property or (iv) makes a general assignment for the benefit of its creditors or (v) a court of competent
jurisdiction enters an order or decree under any Bankruptcy Law that: (A) is for relief against the Company in an involuntary
case; (B) appoints a Custodian of the Company or for all or substantially all of its property or (C) orders the liquidation of
the Company, and the order or decree remains un-stayed and in effect for sixty (60) calendar days, (e) the Company’s Common
Stock is suspended or no longer listed on any recognized exchange including electronic over-the-counter bulletin board for in
excess of five (5) consecutive trading days. As used in this Section 6.1, the term “Bankruptcy Law” means Title 11
of the United States Code or any similar federal or state law for the relief of debtors. The term “Custodian” means
any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law. A default under clause (c) above is
not an Event of Default until the holders of at least 25% of the aggregate principal amount of the Debentures outstanding notify
the Company of such default and the Company does not cure it within thirty (30) business days after the receipt of such notice,
unless the Company commences to cure such default within such period, which must specify the default, demand that it be remedied
and state that it is a “Notice of Default”.

 

Section
5.2. Acceleration. If an Event of Default occurs and is continuing, the Holder , by notice to the Company, may
declare the remaining principal amount of the Debenture, together with all accrued interest and any liquidated damages, to be
due and payable. Upon such declaration, the remaining principal amount shall be due and payable immediately.

 

Section     5.3
Liquidation Value. The liquidation value of the Debenture shall be equal to 100% of the outstanding balance remaining
on the Debenture plus accrued but unpaid interest and liquidated damages.

 

Article
6. Notice.     Any notices, consents, waivers or other communications required or permitted to be given under
the terms of the Debenture must be in writing and will be deemed to have been delivered (i) upon receipt, when delivered personally;
(ii) upon receipt, when sent by facsimile (provided a confirmation of transmission is mechanically or electronically generated
and kept on file by the sending party); or (iii) one (1) day after deposit with a nationally recognized overnight delivery service,
in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications
shall be:

 

If
to the Company:

 

Medifirst
Solutions, Inc.

4400
Hwy 9 South, Suite 1000, Freehold NJ 07728

Attention:
Bruce Schoengood

Email:
bruce@medifirstsolutions.com

 

    	 	3	 

     

    

 

If
to the Holder:

 

Mark
W. Baldwin

3821
Beaver Ridge Circle

Cedar
Falls, IA 50613-9440

Email:
__________________

 

Each
party shall provide five (5) business days prior notice to the other party of any change in address, email address

 

Article
7. No Assignment.     The Debenture is non-negotiable and shall not be assigned or hypothecated in whole
or in part by the Holder.

 

Article
8. Governing Law     The validity, terms, performance and enforcement of the Debenture shall be governed and construed
by the provisions hereof and in accordance with the laws of the State of New Jersey applicable to agreements that are negotiated,
executed, delivered and performed solely in the State of New Jersey.

 

Article
9. Miscellaneous 

 

(a)
Forum Selection and Consent to Jurisdiction. Any litigation arising out of, under, or in connection with, the
Debenture or any course of conduct, course of dealing, statements (whether oral or written) or actions of the Company or Holder
shall be brought and maintained exclusively in the courts of the State of New Jersey in the Courts of Monmouth County. The Company
hereby expressly and irrevocably submits to the jurisdiction of the state and federal courts of the State of New Jersey for the
purpose of any such litigation as set forth above and irrevocably agrees to be bound by any final judgment rendered thereby in
connection with such litigation. The Company further irrevocably consents to the service of process by registered mail, postage
prepaid, or by personal service within or without the State of New Jersey. The Company hereby expressly and irrevocably waives,
to the fullest extent permitted by law, any objection which it may have or hereafter may have to the laying of venue of any such
litigation brought in any such court referred to above and any claim that any such litigation has been brought in any inconvenient
forum. To the extent that the Company has or hereafter may acquire any immunity from jurisdiction of any court or from any legal
process (whether through service or notice, attachment prior to judgment, attachment in aid of execution or otherwise) with respect
to itself or its property, the Company hereby irrevocably waives such immunity in respect of its obligations under the Debenture.

 

(b)
Waiver of Jury Trial. The Holder and the Company hereby knowingly, voluntarily and intentionally waive any rights they
may have to a trial by jury in respect of any litigation based hereon, or arising out of, under, or in connection with, the Debenture,
or any course of conduct, course of dealing, statements (whether oral or written) or actions of the Holder or the Company. The
Company acknowledges and agrees that it has received full and sufficient consideration for this provision and that this provision
is a material inducement for the Holder purchasing the Debenture.

 

(c)
Governing Law. The terms of the Debenture shall be governed by and construed and enforced in accordance with
the laws of the State of New Jersey without regard to the conflicts of laws principles.

 

(d)
Amendments and Waivers; Remedies. No failure or delay on the part of either the Company or Holder in exercising any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies
provided for herein are cumulative and are not exclusive of any remedies that may be available at law, in equity or otherwise.
Any amendment, supplement or modification of or to any provision of the Debenture, any waiver of any provision of the Debenture,
and any consent to any departure from the terms of any provision of the Debenture, shall be effective (i) only if it is made or
given in writing and signed by the Company and the Holder and (ii) only in the specific instance and for the specific purpose
for which made or given.

 

    	 	4	 

     

    

 

(e)
Entire Agreement. The Debenture contains the complete understanding and agreement of the Company and the Holder and
supersedes all prior representations, warranties, agreements, arrangements, understandings, and negotiations. THE DEBENTURE REPRESENTS
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY ALLEGED PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

IN
WITNESS WHEREOF, the Company has duly executed the Debenture as of the date first written above.

 

MEDIFIRST
SOLUTIONS, INC.

 

	By	 	 
	Name: 	Bruce Schoengood 	 
	 	 	 
	Title:  	President and Chief Executive Officer	 
	 	 	 
	Date : 	June 12,  2015	 

 

    	 	5	 

     

    

 

EXHIBIT
A 

 

NOTICE
OF CONVERSION

 

(To
be Executed by the Registered Holder in order to Convert the Debenture.)

 

The
undersigned (“Holder”) hereby irrevocably elects, as of ________ to convert ______of Debentureinto Common Stock of
MEDIFIRST SOLUTIONS,INC.. (“Company”) according to the conditions set forth in the Debenture dated June 12,2015d issued
by the Company.

 

This
conversion is being made for an immediate sale.

 

Date
of Conversion ______________________________________

Applicable Conversion Price_______________________________

Number of Shares Issuable upon this conversion_____________________

Name (Print) ____ __________________________________________________ Address__________________________________________________
_______________ ______________________________________ Phone_________________ Fax__________________________

 	By	 	 
	 	 

Mark
W Baldwin

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