Document:

EX-10.4

 Exhibit 10.4 

Execution Version 

EXECUTIVE EMPLOYMENT AGREEMENT 

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this
“Agreement”) is made and entered into effective as of August 26, 2014 (the “Effective Date”), by and between Eclipse Resources Corporation, a Delaware corporation (the “Company”), and
Thomas S. Liberatore (“Executive”). 
 WHEREAS, the Company desires to employ
Executive as its Executive Vice President and Chief Operating Officer, and Executive desires to accept such employment, on the terms and subject to the conditions set forth herein; 

NOW, THEREFORE, in consideration of the mutual premises, covenants and agreements herein
contained, intending to be legally bound, the parties agree as follows: 
 1. Employment. From and after the Effective Date,
the Company will employ Executive as its Executive Vice President and Chief Operating Officer, and Executive will report to the Company’s Chief Executive Officer. Executive will perform all services and acts necessary to fulfill the duties and
responsibilities of his position and agrees to devote substantially all of his business time, attention and energies to the performance of the duties assigned hereunder, and to perform such duties diligently, faithfully and to the best of his
abilities. Executive agrees to refrain from any activity that does, will or could reasonably be deemed to conflict with the best interests of the Company, unless such activity is approved in advance by the Company’s Chief Executive Officer.

 2. Term. The Company agrees to employ Executive, and Executive agrees to be employed by the Company, for a period (the
“Initial Term”) commencing on the Effective Date and ending on the third anniversary of such date, unless earlier terminated in accordance with Section 4. If neither party gives the other at least ninety (90) days written
notice that it intends for this Agreement to terminate at the end of the Initial Term, then this Agreement will continue for successive one-year terms (each a “Renewal Term”), unless earlier terminated in accordance with
Section 4, until either party gives the other party at least ninety (90) days written notice that it intends for this Agreement to terminate at the end of any such Renewal Term. The Initial Term and any Renewal Terms will constitute the
“Term”. If either Executive or the Company gives timely notice of termination pursuant to this Section 2, then Executive’s employment shall end on the last day of the Term. A termination of Executive’s employment by
reason of a timely notice of termination pursuant to this Section 2 shall not be considered a termination for Cause or without Cause by the Company, or a termination for Good Reason or without Good Reason by Executive. 

3. Compensation and Benefits. 

(a) Base Salary. Executive will receive a base salary (“Base Salary”) at an annual rate of
$292,500, paid in accordance with the normal payroll practices of the Company. The Base Salary shall be reviewed periodically by the Board (or a designated committee thereof) and may be increased in its discretion but not decreased without
Executive’s consent. 

 (b) Bonus. Executive will be eligible for an annual bonus (“Annual
Bonus”) for each calendar year pursuant to an annual cash performance bonus program. Each Annual Bonus shall be payable based on the achievement of reasonable performance targets established by the Board, and for each calendar year
Executive’s target Annual Bonus shall be equal to 100% of Executive’s Base Salary in effect on the last day of the applicable calendar year; provided, that the percentage of Executive’s annual Base Salary that applies for the purposes
of determining Executive’s target Annual Bonus for a given year may be increased above 100% (but not decreased without the Executive’s written consent) by the Board (or a designated committee thereof) in its discretion. Executive’s
Annual Bonus will be paid no later than March 15 of the year following the calendar year to which it relates. 
 (c)
Long-Term Incentive Compensation. Executive may, as determined by the Board (or a designated committee thereof) in its sole discretion, periodically receive grants of stock options or other equity or non-equity related awards pursuant to the
Company’s or an affiliate’s long-term incentive plan(s), subject to the terms and conditions of such plan(s). 

(d) Retirement and Welfare Benefits. During the Term, Executive or Executive’s spouse and dependents, as the case
may be, will be eligible to participate in such pension and similar benefit plans (qualified, non-qualified and supplemental), profit sharing, 401(k), medical and dental, disability, group or executive life, accidental death and travel accident
insurance, and similar benefit plans and programs of the Company, subject to the terms and conditions thereof, as may be in effect and made available from time to time to the Company’s senior executives. 

(e) Perquisites. Executive will be entitled to participate in the Company’s perquisite programs, as such are made
generally available to the Company’s senior executives. 
 (f) Business Expenses. The Company will reimburse
Executive for all ordinary and necessary business expenses incurred by him in connection with his employment upon timely submission by Executive of receipts and other documentation in conformance with the Company’s normal procedures. All
payments for reimbursement under this Section 3(f) will be paid promptly, but in no event later than March 15 of the calendar year following the calendar year in which Executive incurred such expenses. 

(g) Vacation. Executive will be entitled to paid vacation in accordance with the policies and practices of Company as in
effect from time to time with respect to the Company’s senior executives, but in no event will such vacation time be less than four (4) weeks per calendar year. 

4. Termination. This Agreement will continue in effect until the expiration of the Term unless earlier terminated pursuant to this
Section 4. 
 (a) Disability. If Executive incurs a Disability during the Term, the Company may terminate
Executive’s employment effective on the 30th day after Executive’s receipt of written notice of the Company’s intent to terminate Executive’s employment; provided that, within the 30 days after such notice Executive does not
return to perform, with or without reasonable accommodation, the essential functions of his position. 

  
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 (b) Cause. The Company may terminate the Executive’s employment at
any time during the Term for Cause or without Cause. For purposes of this Agreement, a termination “without Cause” means Executive’s termination of employment during the Term at the Company’s sole discretion for any reason other
than a termination for Cause or as a result of Executive’s death or Disability. 
 (c) Good Reason. The
Executive’s employment may be terminated during the Term by Executive for Good Reason or without Good Reason; provided, however, that the Executive may not terminate his employment for Good Reason unless (i) the Executive has given the
Company written notice of his belief that Good Reason exists within 30 days of the initial existence of the condition(s) giving rise to Good Reason, which notice will specify the facts and circumstances giving rise to Good Reason, (ii) the
Company has not remedied such facts and circumstances giving rise to Good Reason within the 30-day period following the receipt of such notice, and (iii) the Executive separates from service on or before the 60th day after the end of such
30-day cure period by delivering the Notice of Termination. 
 (d) Notice of Termination. Any termination by the
Company for Cause or without Cause or because of the Executive’s Disability, or by the Executive for Good Reason or without Good Reason, must be communicated by Notice of Termination to the other party. 

5. Obligations of the Company Upon Termination. 

(a) For Cause; Without Good Reason; Expiration of Term. If the Company terminates Executive’s employment for Cause,
Executive terminates his employment without Good Reason, or the Term expires by reason of timely notice given by either party pursuant to Section 2, the Company will have no further obligations to the Executive or his legal representatives,
except that Executive (or his legal representatives as the case may be) will be entitled to any (i) unpaid but earned Base Salary accrued up to the Termination Date or expiration of the Term, (ii) benefits or compensation as provided under
the terms of any employee benefit and compensation agreements or plans applicable to Executive, (iii) unreimbursed business expenses required to be reimbursed to Executive, (iv) if the Term expires by reason of timely notice given by
either party pursuant to Section 2, unpaid, but earned and accrued annual incentive for any completed calendar year as of the date on which the Term expires, and (v) rights to indemnification Executive may have under the Company’s
Articles of Incorporation, Bylaws, or separate indemnification agreement, as applicable (together, the “Accrued Obligations”). 

  
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 (b) Death or Disability. If Executive’s employment is terminated by
reason of the Executive’s death or Disability, the Company will have no further obligations to the Executive or Executive’s legal representatives, except that Executive (or his legal representatives as the case may be) will be entitled to
the Accrued Obligations and the following additional payments from the Company: 
 (i) Severance Payment. The Company
will pay Executive (or his legal representatives as the case may be) an amount equal to one (1) times Executive’s Base Salary as of the Termination Date, which amount will be paid in a lump sum payment on the date that is 60 days after the
Termination Date; and 
 (ii) Post-Employment Health Coverage. During the portion, if any, of the 18-month period
following the Termination Date that Executive, Executive’s spouse or Executive’s eligible dependents elect to continue coverage under the Company’s group health plans under the Consolidated Omnibus Budget Reconciliation Act of 1985
(“COBRA”), the Company will promptly reimburse Executive or Executive’s spouse or eligible dependents, as applicable, on a monthly basis for the amount paid to effect and continue such coverage (“COBRA Reimbursement
Amounts”); provided, however, that in the event Executive’s employment is terminated by reason of Executive’s Disability, payment of the COBRA Reimbursement Amounts will cease immediately upon the date that Executive begins
providing services to a subsequent employer. Nothing contained herein is intended to limit or otherwise restrict any rights to continued group health plan coverage pursuant to COBRA following the period described in the preceding sentence. 

(c) Termination Without Cause or for Good Reason. If Executive’s employment is terminated by the Company
without Cause or by Executive for Good Reason the Company will have no further obligations to Executive or Executive’s legal representatives, except that Executive will be entitled to the Accrued Obligations and the following: 

(i) Severance Payment. The Company will pay Executive an amount equal to two (2) times the sum of
(A) Executive’s Base Salary as of the Termination Date, and (B) the amount equal to the average of the Annual Bonuses paid to Executive for the three immediately preceding completed calendar years, or if Executive has not been
employed for three complete calendar years, then the average of the Annual Bonuses paid to Executive for the calendar years employed with the Company (the “Average Bonus”), which amount will be paid in a lump sum payment on the date
that is 60 days after the Termination Date. 
 (ii) Post-Employment Health Coverage. During the portion, if any, of
the 18-month period following the Termination Date that Executive elects to continue coverage for Executive, Executive’s spouse or Executive’s eligible dependents under the Company’s group health plans under COBRA, the Company will
promptly reimburse Executive on a monthly basis for the COBRA Reimbursement Amounts; provided, however, that payment of the COBRA Reimbursement Amounts by the Company to Executive will cease immediately upon the date that Executive begins providing
services to a subsequent employer. Nothing contained herein is intended to limit or otherwise restrict any rights to continued group health plan coverage pursuant to COBRA following the period described in the preceding sentence. 

  
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 (iii) Pro Rata Annual Bonus. The Company will pay Executive an amount
equal to the Annual Bonus for the calendar year in which occurs the Termination Date, as determined in good faith by the Board in accordance with the performance criteria established for such Annual Bonus and based on the Company’s actual
performance for such calendar year, which amount will be prorated through and including the Termination Date (based on the ratio of the number of days Executive was employed by the Company during such year to the number of days in such year). This
amount will be payable in a lump sum on or before the date on which annual bonuses for the calendar year are paid to executives who have continued employment with the Company (but in no event earlier than 60 days after the Termination Date or later
than the March 15 next following such calendar year); provided, however, that if this Section 5(c)(iii) applies with respect to an Annual Bonus that is intended to constitute performance-based compensation within the meaning and for
purposes of section 162(m) of the Code, then this Section 5(c)(iii) will apply with respect to such Annual Bonus only to the extent the applicable performance criteria have been satisfied as certified in writing by a committee of the Board as
required under section 162(m) of the Code. 
 (iv) Equity Awards. 

(A) If Executive’s employment is terminated by the Company without Cause or by Executive for Good Reason, all unvested
awards granted to Executive under any of the Company’s equity compensations plans that would have vested during the 36-month period following the Termination Date but for Executive’s termination of employment will immediately vest and be
exercisable (if applicable), and all performance goals or other vesting criteria with respect to such awards will be deemed achieved at the target levels set forth in the applicable award agreement; provided, that, any such awards that are intended
to qualify as “performance-based compensation” under section 162(m) of the Code will only become vested subject to the attainment of the performance measures for the applicable performance period as provided under the terms of the
applicable award agreement. 
 (B) If Executive’s employment is terminated by the Company without Cause or by Executive
for Good Reason during a Change of Control Period, all unvested awards granted to Executive under any of the Company’s equity compensations plans that do not vest immediately upon the Termination Date pursuant to Section 5(c)(iv)(A) above
will vest and be exercisable (if applicable) on the later of the date of the Change of Control or the Termination Date and all performance goals or other vesting criteria with respect to such awards will be deemed achieved at the target levels set
forth in the applicable award agreement on the later of the date of the Change of Control or the Termination Date. 
 (d)
Release and Compliance with this Agreement. With the exception of the Accrued Obligations, the obligation of the Company to pay any portion of the amounts 

  
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due pursuant to Section 5(c) of this Agreement is expressly conditioned on Executive’s (i) execution and non-revocation of a release substantially in the form attached as
Exhibit A, which such release may be may be revised to reflect changes in applicable law, (the “Release”) no later than fifty (50) days following the Termination Date or such shorter period as may be set out in the Release
(such period, the “Release Consideration Period”) and (ii) Executive’s compliance with the requirements of Sections 6 and 7. 

6. Confidential Information. 

(a) Executive acknowledges that the Company has trade, business and financial secrets and other confidential and proprietary
information (collectively, the “Confidential Information”) which will be provided to Executive during the Executive’s employment by the Company. Confidential information includes, but is not limited to, the Company’s or
any of its affiliates’ businesses, trade secrets, products, or services (including without limitation, all such information relating to corporate opportunities, strategies, business plans, product specifications, compositions, manufacturing and
distribution methods and processes, research, financial and sales data, pricing terms, evaluations, opinions, interpretations, acquisition prospects, the identity of customers or their requirements, the identity of key contacts within the
customers’ organizations or within the organization of acquisition prospects, or production, marketing, and merchandising techniques, prospective names and marks), and all writings or materials of any type embodying any of such information,
ideas, concepts, improvements, discoveries, inventions, and other similar forms of expression. Notwithstanding the foregoing, Confidential Information does not include any information that is generally known in the oil and gas industry, was known by
Executive prior to his employment with the Company or has been published in a form generally available to the public before the date Executive proposes to disclose or use such information, provided, that, such publishing of the Confidential
Information does not result from Executive directly or indirectly breaching Executive’s obligations under this Section 6(a) or any other similar provision by which Executive is bound, or from any third-party breaching a provision similar
to that found under this Section 6(a). For the purposes of the previous sentence, Confidential Information will not be deemed to have been published or otherwise disclosed merely because individual portions of the information have been
separately published, but only if all material features comprising such information have been published in combination. 

(b) Executive acknowledges that the Confidential Information has been developed or acquired by the Company through the
expenditure of substantial time, effort and money and provides the Company with an advantage over competitors who do not know or use such Confidential Information. Executive acknowledges that all such Confidential Information is the sole and
exclusive property of the Company. 
 (c) During, and all times following, Executive’s employment by the Company,
Executive will hold in confidence and not directly or indirectly disclose or use or copy or make lists of any Confidential Information except: (i) to the extent authorized in writing by the Company’s Chief Executive Officer;
(ii) where such information is, at the time of disclosure by Executive, generally available to the public other than as a result of any direct or indirect act or omission of Executive in breach of this Agreement; or (iii)

  
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where Executive is compelled by legal process, other than to an employee of the Company or a person to whom disclosure is reasonably necessary or appropriate in connection with the performance by
Executive of his duties as an employee of the Company. Executive agrees to use reasonable efforts to give the Company notice of any and all attempts to compel disclosure of any Confidential Information, in such a manner so as to provide the Company
with written notice at least five (5) days before disclosure or within one (1) business day after Executive is informed that such disclosure is being or will be compelled, whichever is earlier. Such written notice must include a
description of the information to be disclosed, the court, government agency, or other forum through which the disclosure is sought, and the date by which the information is to be disclosed, and must contain a copy of the subpoena, order or other
process used to compel disclosure. 
 (d) Executive will take all necessary precautions to prevent disclosure of Confidential
Information to any unauthorized individual or entity. Executive further agrees not to use, whether directly or indirectly, any Confidential Information for the benefit of any person, business, corporation, partnership, or any other entity other than
the Company and its affiliates, and to immediately return to the Company all Confidential Information and all copies thereof, in whatever tangible form or medium, including electronic, at the end of his employment with the Company for any reason or
at the request of the Company at any time. 
 7. Competition. Executive acknowledges that the Company has provided, and the
Company agrees to continue to provide Executive, with access to its confidential, proprietary, or trade secret information, including confidential information of third parties such as customers, suppliers, and business affiliates; specialized
training and knowledge regarding the Company’s methodologies and business strategies; or support in the development of goodwill such as introductions and customer relationship information. The foregoing is not contingent on continued
employment, but upon Executive’s use of the access, specialized training, or goodwill support provided by Company for the exclusive benefit of the Company and upon Executive’s full compliance with the restrictions on Executive’s
conduct provided for in this Agreement. Ancillary to the rights provided to Executive as set forth in this Agreement, the Company’s provision of confidential, proprietary, or trade secret information, specialized training, or goodwill
support to Executive, and Executive’s agreements regarding the use of same, in order to protect the value of any equity-based compensation, training, goodwill support or the confidential information described above, the Company and Executive
agree to the following provisions against unfair competition, which Executive acknowledges represent a fair balance of the Company’s rights to protect its business and Executive’s right to pursue employment: 

(a) Executive will not, at any time during the Restriction Period, directly or indirectly engage in, have any equity interest
in, interview for a potential employment or consulting relationship with or manage or operate any person, firm, corporation, partnership or business (whether as director, officer, employee, agent, representative, partner, security holder, consultant
or otherwise) that engages in any business which competes with any portion of the Business (as defined below) of the Company in the State of Ohio or any other state of the United States in which the Company conducts Business as of the Termination
Date or expiration of the Term, as applicable; provided, however, in the event the Company terminates Executive’s employment without Cause, 

  
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Executive’s employment terminates upon expiration of the Term by reason of the Company giving timely notice to Executive pursuant to Section 2, or Executive resigns for Good Reason, the
post-termination restrictions set forth in this Section 7(a) will be limited as follows: (a) without the prior written consent of the Company, which consent may be withheld in the discretion of the Company, Executive will not, at
any time during the Restriction Period, directly or indirectly engage in, have any equity interest in, interview for a potential employment or consulting relationship with or manage or operate any person, firm, corporation, partnership or business
(whether as director, officer, employee, agent, representative, partner, security holder, consultant or otherwise) that engages in any business which competes in any material respect with any material portion of the Business (as defined below) of
the Company within six (6) miles of (i) any oil or natural gas assets of the Company or (ii) any potential oil or natural gas assets where the Company has taken material steps to lease or purchase real property with respect to such
potential assets within the six (6) month period immediately prior to the Termination Date or expiration of the Term, as applicable. Nothing herein prohibits Executive from being a passive owner of not more than 2.5% of the outstanding
equity interest in any entity that is publicly traded, so long as Executive has no active participation in the business of such entity. 

(b) Executive will not, at any time during the Restriction Period, directly or indirectly, either for Executive or for any
other person or entity, (i) solicit any employee of the Company to terminate his or her employment with the Company, (ii) employ any such individual during his or her employment with the Company and for a period of three months after such
individual terminates his or her employment with the Company or (iii) solicit or service any person who was a customer, supplier, licensee, licensor or other business relation of the Company in order to induce or attempt to induce such person
to cease doing business with, or reduce the amount of business conducted with, the Company, or in any way interfere with the relationship between any such customer, supplier, licensee, licensor or other business relation of the Company. 

(c) In the event the terms of this Section 7 are determined by any court of competent jurisdiction to be
unenforceable by reason of its extending for too great a period of time or over too great a geographical area or by reason of its being too extensive in any other respect, it will be interpreted to, and may be modified by a court of competent
jurisdiction to, extend only over the maximum period of time for which it may be enforceable, over the maximum geographical area as to which it may be enforceable, or to the maximum extent in all other respects as to which it may be enforceable, all
as determined by such court in such action. 
 (d) As used in this Section 7, (i) the term
“Company” includes the Company and its affiliates; (ii) the term “Business” means the business of the Company and includes the acquisition, exploration, exploitation and development of, oil and natural gas
assets, and the acquisition of leases and other real property in connection therewith, as such business may be expanded or altered by the Company during the Term; and (iii) the term “Restriction Period” means the period
beginning on the Effective Date and ending on the date twelve (12) months following the Termination Date or expiration of the Term, except that if the Termination Date or expiration of the Term occurs within one year following a Change of
Control, Restriction Period means the period beginning on the Effective Date and ending on the date six (6) months following the Termination Date or expiration of the Term. 

  
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 (e) Executive agrees, during the Term and following the Termination Date or
expiration of the Term, to refrain from disparaging the Company and its affiliates, including any of its services, technologies or practices, or any of its directors, officers, agents, representatives or stockholders, either orally or in
writing. Nothing in this Section 7(e) precludes Executive from making truthful statements that are reasonably necessary to comply with applicable law, regulation or legal process. 

(f) The Company agrees, during the Term and following the Termination Date or expiration of the Term, to refrain from
disparaging Executive, including any of Executive’s services or practices, either orally or in writing. Nothing in this Section 7(f) precludes the Company from making truthful statements that are reasonably necessary to comply with
applicable law, regulation or legal process. 
 (g) In the event Executive engages in conduct in violation of his covenants
in Section 7 the Restriction Period will be extended for a period of time equal to the time in which Executive engaged in competitive activity prohibited by this Agreement. 

8. Injunctive Relief. It is recognized and acknowledged by Executive that a breach of the covenants contained in Sections 6 and 7 will
cause irreparable damage to Company and its goodwill, the exact amount of which will be difficult or impossible to ascertain, and that the remedies at law for any such breach will be inadequate. Accordingly, Executive agrees that in the event of a
breach of any of the covenants contained in Sections 6 and 7, in addition to any other remedy which may be available at law or in equity, the Company will be entitled to specific performance and injunctive relief without the need to post bond. 

9. Assignment and Successors. The Company may assign its rights and obligations under this Agreement to any successor to all or
substantially all of the business or the assets of the Company (by merger or otherwise), and may assign or encumber this Agreement and its rights hereunder as security for indebtedness of the Company and its affiliates. This Agreement is binding
upon and inure to the benefit of the Company, Executive and their respective successors, assigns, personnel and legal representatives, executors, administrators, heirs, distributees, devisees, and legatees, as applicable. None of Executive’s
rights or obligations may be assigned or transferred by Executive, other than Executive’s rights to payments hereunder, which may be transferred only by will or operation of law. 

10. Section 409A. The amounts payable pursuant to this Agreement are intended to be exempt from section 409A of the Code, and
related U.S. treasury regulations or official pronouncements (“Section 409A”) and will be construed in a manner that is compliant with such exemption; provided, however, if and to the extent that any compensation payable under this
Agreement is determined to be subject to Section 409A, this Agreement will be construed in a manner that will comply with Section 409A, and provided further, however, that no person connected with this Agreement in any capacity, including
but not limited to the Company and its affiliates, and their respective directors, officers, agents and employees, makes any representation, commitment or guarantee that any tax treatment, including but not limited to, federal, state and local
income, estate and gift tax treatment, will be applicable with respect to 

  
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any amounts payable or benefits provided under this Agreement. Notwithstanding any provision to the contrary in this Agreement, if Executive is deemed on his Termination Date or expiration of the
Term to be a “specified employee” within the meaning of Section 409A, then any payments and benefits under this Agreement that are subject to Section 409A and paid by reason of a termination of employment will be made or provided
on the later of (a) the payment date set forth in this Agreement or (b) the date that is the earliest of (i) the expiration of the six-month period measured from the Termination Date or expiration of the Term, or (ii) the date of
Executive’s death (the “Delay Period”). Payments and benefits subject to the Delay Period will be paid or provided to Executive without interest for such delay. The terms “termination of employment” and “separate
from service” as used throughout this Agreement refer to a “separation from service” within the meaning of Section 409A. 

11. Maximum Payments by the Company. Notwithstanding anything to the contrary in this Agreement, if Executive is a “disqualified
individual” (as defined in section 280G(c) of the Code), and the payments and benefits provided for in this Agreement, together with any other payments and benefits which Executive has the right to receive from the Company or any of its
affiliates, would constitute a “parachute payment” (as defined in section 280G(b)(2) of the Code), then the payments and benefits provided for in this Agreement will be either (a) reduced (but not below zero) so that the present value
of such total amounts and benefits received by Executive from the Company and its affiliates will be one dollar ($1.00) less than three times Executive’s “base amount” (as defined in section 280G(b)(3) of the Code) and so that no
portion of such amounts and benefits received by Executive will be subject to the excise tax imposed by section 4999 of the Code, or (b) paid in full, whichever produces the better net after-tax position to Executive (taking into account any
applicable excise tax under section 4999 of the Code and any other applicable taxes). The reduction of payments and benefits hereunder, if applicable, will be made by reducing, first, payments or benefits to be paid in cash hereunder in the order in
which such payment or benefit would be paid or provided (beginning with such payment or benefit that would be made last in time and continuing, to the extent necessary, through to such payment or benefit that would be made first in time) and, then,
reducing any benefit to be provided in-kind hereunder in a similar order. The determination as to whether any such reduction in the amount of the payments and benefits provided hereunder is necessary will be made by the Company in good faith. If a
reduced payment or benefit is made or provided, and through error or otherwise, that payment or benefit, when aggregated with other payments and benefits from the Company (or its affiliates) used in determining if a “parachute payment”
exists, exceeds one dollar ($1.00) less than three times Executive’s base amount, then Executive will immediately repay such excess to the Company upon notification that an overpayment has been made. Nothing in this Section 11 requires the
Company to be responsible for, or have any liability or obligation with respect to, Executive’s excise tax liabilities under section 4999 of the Code. 

12. Clawback. Notwithstanding any other provision of this Agreement to the contrary, Executive acknowledges and agrees that any amounts
payable under this Agreement shall be subject to clawback, cancellation, recoupment, rescission, payback or other action in accordance with the terms of any policy (the “Policy”) (whether in existence as of the Effective Date or
later adopted) established by the Company providing for clawback, cancellation, recoupment, rescission, payback or other action of amounts paid to Executive. Executive agrees and consents to the Company’s application, implementation and
enforcement of (a) the Policy and (b) any provision of applicable law relating to the clawback, cancellation, recoupment, 

  
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rescission or payback of Executive’s compensation, and expressly agrees that the Company may take such actions as are necessary to effectuate the Policy or applicable law without further
consent or action being required by Executive. To the extent that the terms of this Agreement and the Policy conflict, then the terms of the Policy shall prevail. 

13. Miscellaneous. 

(a) Notices. For purposes of this Agreement, notices and all other communications provided for herein will be in writing
and deemed to have been duly given (i) when received if delivered personally or by courier, or (ii) on the date receipt is acknowledged if delivered by certified mail, postage prepaid, return receipt requested, as follows: 

 

			
	If to Executive, addressed to:	 	 Thomas S. Liberatore
 230 Brothers Court

Port Matilda, PA 16870, or the last known
residential address reflected in the Company’s records

		
	If to the Company, addressed to:	 	 Eclipse Resources Corporation
2121 Old Gatesburg Road, Suite 110

State College, Pennsylvania 16803
Attention: General Counsel

 or to such other address as either party may furnish to the other in writing, except that notices or changes of
address are effective only upon receipt. 
 (b) Applicable Law. This Agreement is entered into under, and governed for
all purposes by, the laws of the Commonwealth of Pennsylvania, without regard to conflicts of laws principles thereof. 
 (c)
No Waiver. No failure by either party hereto at any time to give notice of any breach by the other party of, or to require compliance with, any condition or provision of this Agreement will be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time. 
 (d) Severability. If a court of competent
jurisdiction determines that any provision of this Agreement is invalid or unenforceable, then the invalidity or unenforceability of that provision will not affect the validity or enforceability of any other provision of this Agreement, and all
other provisions remain in full force and effect. 
 (e) Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original, but all of which together will constitute one and the same Agreement. 

(f) Withholding of Taxes and Other Employee Deductions. The Company or its affiliates may withhold from any benefits and
payments made pursuant to this Agreement all federal, state, city, and other taxes and withholdings as may be required pursuant to any law or governmental regulation or ruling and all other customary deductions made with respect to the
Company’s employees generally. 

  
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 (g) Headings. The section headings have been inserted for purposes of
convenience and may not be used for interpretive purposes. 
 (h) Gender and Plurals. Wherever the context so
requires, the masculine gender includes the feminine or neuter, and the singular number includes the plural and conversely. 

(i) Third Party Beneficiaries. Each affiliate of the Company will be a third party beneficiary of, and may directly
enforce, Executive’s obligations under Sections 6, 7 and 8. 
 (j) Survival. Termination of this Agreement will
not affect any right or obligation of any party which is accrued or vested prior to such termination. Without limiting the scope of the preceding sentence, the provisions of Sections 6, 7, 8 and 12, and those provisions necessary to interpret and
apply them will survive any termination of this Agreement. 
 (k) Entire Agreement. Except as provided in any signed
written agreement contemporaneously or hereafter executed by the Company and Executive, this Agreement (i) constitutes the entire agreement of the parties with regard to the subject matter hereof, (ii) supersedes all prior agreements,
arrangements, and understandings, written or oral, relating to the subject matter hereof, and (iii) contains all the covenants, promises, representations, warranties, and agreements between the parties with respect to employment of Executive by
the Company. Without limiting the scope of the preceding sentence, all understandings and agreements preceding the date of execution of this Agreement and relating to the subject matter hereof (including but not limited to any employment agreements,
confidentiality agreements, noncompete agreements, or other agreements) are hereby null and void and of no further force and effect. 

(l) Modification; Waiver. Any modification to or waiver of this Agreement will be effective only if it is in writing and
signed by the parties to this Agreement. 
 (m) Actions by the Board. Any and all determinations or other actions
required of the Board hereunder that relate specifically to Executive’s employment or the terms and conditions of such employment will be made by the members of the Board, other than Executive if Executive is a member of the Board, and
Executive will not have any right to vote or decide upon any such matter. 
 (n) Forum and Venue. With respect to any
claims, legal proceeding or litigation arising in connection with this Agreement, the parties hereto hereby consent to the exclusive jurisdiction, forum, and venue of the state and federal courts, as applicable, located in Centre County,
Pennsylvania. 
 14. Certain Definitions. In addition to the terms defined in the body of this Agreement, for purposes of this
Agreement the following capitalized words have the meanings indicated below: 
 (a) “Board” means the Board
of Directors of the Company. 

  
 - 12 - 

 (b) “Cause” means the occurrence of any of the following events,
as reasonably determined by the Board: (i) Executive’s willful or continued failure to perform his material duties for the Company; (ii) Executive’s conviction of a felony, or his guilty plea to or entry of a nolo contendere plea
to a felony charge; (iii) the willful or grossly negligent engagement by Executive in conduct that is materially injurious to the Company, financially or otherwise; or (iv) Executive’s breach of any material term of this Agreement or
the Company’s material written policies and material procedures, as in effect from time to time; provided, that, with respect to (i), (iii) or (iv) above, such termination for Cause will only be effective upon a majority
vote of the members of the Board after notice to Executive and a period of not less than thirty (30) calendar days during which time Executive will have an opportunity to appear before the Board to demonstrate that he has cured the conduct
giving rise to Cause. 
 (c) “Change of Control” means the occurrence of any of the following events: 

(i) Any one person, or more than one person acting as a group (within the meaning of section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934), acquires ownership of the Company’s common stock that, together with stock held by such person or group, constitutes more than 40 percent of the total fair market value or total voting power of the
Company’s common stock. However, if any one person or more than one person acting as a group is considered to own more than 40 percent of the total fair market value or total voting power of the Company’s common stock, the acquisition
of additional common stock by the same person or persons will not be a Change of Control. An increase in the percentage of common stock owned by any one person, or persons acting as a group, as a result of a transaction in which the Company acquires
its stock in exchange for property will be treated as an acquisition of common stock for purposes of this Section 14(c). This section applies only when there is a transfer of common stock (or issuance of common stock) and common stock in
the Company remains outstanding after the transaction. 
 (ii) A majority of the members of the Board are replaced during any
12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election. 

(iii) A change in the ownership of a substantial portion of the Company’s assets, which will occur on the date that any
one person, or more than one person acting as a group (within the meaning of section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934) acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition
by such person or group of persons) assets from the Company that have a total gross fair market value equal to or more than 40 percent of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or
acquisitions; provided, however, that a sale of a substantial portion of the Company’s assets in the ordinary course of business and investment of the proceeds into similar assets 

  
 - 13 - 

 
for use in the business of the Company will not constitute a change in the ownership of a substantial portion of the Company’s assets for purposes of this provision. For this purpose, gross
fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. 

(d) “Change of Control Period” means the period beginning six (6) months before the date of a Change of
Control and ending on the one-year anniversary of such Change of Control. 
 (e) “Code” means the Internal
Revenue Code of 1986, as amended. 
 (f) “Disability” means Executive’s inability to engage in any
substantial gainful activity necessary to perform his duties hereunder by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted, or can be expected to last, for a continuous
period of not less than twelve (12) months. Executive agrees to submit to such medical examinations as may be necessary to determine whether a Disability exists, pursuant to such reasonable requests made by the Company from time to time. Any
determination as to the existence of a Disability will be made by a physician selected by the Company. 
 (g) “Good
Reason” means any of the following, but only if occurring without the Executive’s consent: (i) a material diminution in Executive’s Base Salary; (ii) a material diminution in Executive’s authority, duties, or
responsibilities; (iii) the relocation of Executive’s principal office to an area more than 50 miles from its location immediately prior to such relocation; or (iv) the material failure of the Company to comply with any material
provision of this Agreement. Such termination by Executive will not preclude the Company from terminating the Executive’s employment prior to the Termination Date established by Executive’s Notice of Termination. 

(h) “Notice of Termination” means a written notice which (i) indicates the specific termination provision
in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under that provision, and (iii) if the
Termination Date is other than the date the notice is given, specifies the Termination Date (which must not be more than 30 days or, in the case of a termination by Executive for Good Reason, 60 days after the date on which the Notice of Termination
is given). The failure by the Company or Executive to set forth in the Notice of Termination the facts or circumstances giving rise to Cause or Good Reason, as applicable, will not waive any right of the Company or Executive under this Agreement or
preclude the Company or Executive from asserting such fact or circumstance in enforcing the Company’s or Executive’s rights under this Agreement. 

(i) “Termination Date” means: (i) if Executive’s employment is terminated by death, the date of
death; (ii) if Executive’s employment is terminated pursuant to Section 4(a) due to a Disability, thirty (30) days after the Notice of Termination is given; (iii) if Executive’s employment is terminated by the Company
without Cause or by Executive for Good Reason pursuant to Section 4(b) or 4(c), on the effective date of 

  
 - 14 - 

 
termination specified in the Notice of Termination; (iv) if Executive voluntarily terminates his employment with the Company without Good Reason, the date of Executive’s termination of
employment; or (v) if Executive’s employment is terminated by the Company for Cause pursuant to Section 4(b), the date on which the Notice of Termination is given. 

[Signatures begin on next page.] 

  
 - 15 - 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the
Effective Date. 
  

			
	ECLIPSE RESOURCES CORPORATION
		
	By:	 	 /s/ Benjamin W. Hulburt

	Name:	 	Benjamin W. Hulburt
	Title:	 	President and Chief Executive Officer
	
	EXECUTIVE
		
	By:	 	 /s/ Thomas S. Liberatore

	Name:	 	Thomas S. Liberatore

 EXHIBIT A 

RELEASE 
 1. In
consideration of the payments and benefits to be made under the Employment Agreement, dated as of August 26, 2014 (the “Employment Agreement”), by and between Thomas S. Liberatore (“Executive”) and Eclipse
Resources Corporation (the “Company”) (each of Executive and the Company, a “Party” and together, the “Parties”), the sufficiency of which Executive acknowledges, Executive, with the intention
of binding himself and his heirs, executors, administrators and assigns, does hereby release, remise, acquit and forever discharge the Company and each of its subsidiaries and affiliates (the “Company Affiliated Group”), their
present and former officers, directors, executives, stockholders, agents, attorneys, employees and employee benefit plans (and the fiduciaries thereof), and the successors, predecessors and assigns of each of the foregoing (collectively, the
“Company Released Parties”), of and from any and all claims, actions, causes of action, complaints, charges, demands, rights, damages, debts, sums of money, accounts, financial obligations, suits, expenses, attorneys’ fees and
liabilities of whatever kind or nature in law, equity or otherwise, whether accrued, absolute, contingent, unliquidated or otherwise and whether now known or unknown, suspected or unsuspected, which Executive, individually or as a member of a class,
now has, owns or holds, or has at any time heretofore had, owned or held, arising on or prior to the date hereof, against any Company Released Party that arises out of, or relates to, the Employment Agreement, Executive’s employment with the
Company or any of its subsidiaries and affiliates, or any termination of such employment, including claims (i) for severance or vacation or paid time off benefits, unpaid wages, salary or incentive payments, (ii) for breach of contract,
wrongful discharge, impairment of economic opportunity, defamation, intentional infliction of emotional harm or other tort, (iii) for any violation of applicable state and local labor and employment laws (including, without limitation, all laws
concerning unlawful and unfair labor and employment practices) and (iv) for employment discrimination under any applicable federal, state or local statute, provision, order or regulation, and including, without limitation, any claim under Title
VII of the Civil Rights Act of 1964 (“Title VII”), the Civil Rights Act of 1988, the Fair Labor Standards Act, the Americans with Disabilities Act (“ADA”), the Family and Medical Leave Act, the Executive Retirement
Income Security Act of 1974, as amended (“ERISA”), the Age Discrimination in Employment Act (“ADEA”), the Equal Pay Act, the Uniformed Services Employment and Reemployment Rights Act and any similar or analogous
state statute. Notwithstanding the foregoing, this Release will not apply and expressly excludes: (a) vested benefits under any plan maintained by the Company that provides for deferred compensation, equity compensation or pension or retirement
benefits; (b) health benefits under any policy or plan currently maintained by the Company that provides for health insurance continuation or conversion rights including, but not limited to, rights and benefits to continue health care coverage
under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended or similar state law; (c) any claim that cannot by law be waived or released by private agreement; (d) claims arising after the date of the Release; (e) to
the extent not paid as of the date of this Release, payments and benefits to be made under the Employment Agreement; (f) claims under any directors and officers insurance policies; and (g) rights to indemnification Executive may have under
the by-laws or certificate of incorporation of the Company and its Affiliates, any applicable indemnification agreements with the Company and its Affiliates or applicable law. 

2. Executive acknowledges and agrees that the release of claims set forth in this Release is not to be construed in any way as an admission of
any liability whatsoever by any Company Released Party, any such liability being expressly denied. 

  
 Exhibit A – Page 1

 3. The release of claims set forth in this Release applies to any relief no matter how called,
including, without limitation, (i) wages, (ii) back pay or front pay, (iii) compensatory damages, liquidated damages, punitive damages, damages for pain or suffering, (iv) costs, (v) attorneys’ fees and expenses, and
(vi) any right to receive any compensation or benefit from any complaint, claim, or charge with any local, state or federal court, agency or board, or in any proceeding of any kind which may be brought against the Company as a result of such a
complaint, claim or charge. 
 4. Executive specifically acknowledges that his acceptance of the terms of the release of claims set forth in
this Release is, among other things, a specific waiver of his rights, claims and causes of action under Title VII, ADEA, ADA and any state or local law or regulation in respect of discrimination of any kind; provided, however, that
nothing herein will be deemed, nor does anything contained herein purport, to be a waiver of any right or claim or cause of action which by law Executive is not permitted to waive. 

5. As to rights, claims and causes of action arising under the ADEA, Executive acknowledges that he has been given a period of twenty-one
(21) days1 to consider whether to execute this Release. If Executive accepts the terms hereof and executes this Release, he may thereafter, for a period of seven (7) days following (and
not including) the date of execution, revoke this Release as it relates to the release of claims arising under the ADEA. If no such revocation occurs, this Release will become irrevocable in its entirety, and binding and enforceable against
Executive, on the day next following the day on which the foregoing seven-day period has elapsed. If such a revocation occurs, Executive will irrevocably forfeit any right to payment of the severance benefits described in Section 5 of the
Employment Agreement. 
 6. Other than as to rights, claims and causes of action arising under the ADEA, the release of claims set forth in
this Release will be immediately effective upon execution by Executive. 
 7. Executive acknowledges and agrees that he has not, with
respect to any transaction or state of facts existing prior to the date hereof, filed any complaints, charges or lawsuits against any Company Released Party with any governmental agency, court or tribunal. 

8. Executive acknowledges that he is hereby advised to seek, and has had the opportunity to seek, the advice and assistance of an attorney
with regard to the release of claims set forth in this Release, and has been given a sufficient period within which to consider the release of claims set forth in this Release. 

9. Executive acknowledges that the release of claims set forth in this Release relates only to claims that exist as of the date of this
Release. 
  

	1 	Consideration period must be forty-five (45) days if release relates to an exit incentive or other employment termination program offered to a group or class of employees. 

  
 Exhibit A – Page 2

 10. Executive acknowledges that the severance benefits described in Section 5 of the
Employment Agreement he will receive in connection with the release of claims set forth in this Release and his obligations under this Release are in addition to anything of value to which Executive is entitled from the Company. 

11. Each provision hereof is severable from this Release, and if one or more provisions hereof are declared invalid, the remaining provisions
will nevertheless remain in full force and effect. If any provision of this Release is so broad, in scope, or duration or otherwise, as to be unenforceable, such provision will be interpreted to be only so broad as is enforceable. 

12. This Release constitutes the complete agreement of the Parties in respect of the subject matter hereof and will supersede all prior
agreements between the Parties in respect of the subject matter hereof except to the extent set forth herein. 
 13. The failure to enforce
at any time any of the provisions of this Release or to require at any time performance by another party of any of the provisions hereof will in no way be construed to be a waiver of such provisions or to affect the validity of this Release, or any
part hereof, or the right of any party thereafter to enforce each and every such provision in accordance with the terms of this Release. 

14. This Release may be executed in several counterparts, each of which will be deemed to be an original, but all of which together will
constitute one and the same instrument. Signatures delivered by facsimile will be deemed effective for all purposes. 
 15. This Release
will be binding upon any and all successors and assigns of Executive and the Company. 
 16. Except for issues or matters as to which
federal law is applicable, this Release will be governed by and construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania without resort to any principle of conflict of laws that would require application of the laws of
any other jurisdiction. 
 [Signature Page Follows] 

  
 Exhibit A – Page 3

 IN WITNESS WHEREOF, this Release has been signed as of
            , 20    . 
  

			
	By:	 	  

		 	Thomas S. Liberatore

  
 Exhibit A – Page 4Exhibit
10.24 

 

EQUITY PURCHASE AGREEMENT

  

BY AND BETWEEN

  

COATES INTERNATIONAL, LTD.

  

AND

  

SOUTHRIDGE PARTNERS II, LP 

  

Dated

  

July 2, 2014

 

    	 

    	 

    

 

THIS
EQUITY PURCHASE AGREEMENT entered into as of the 2nd day of July, 2014 (this "AGREEMENT"), by and between
SOUTHRIDGE PARTNERS II, LP, a Delaware limited partnership ("INVESTOR"), and COATES INTERNATIONAL, LTD.,
a Delaware corporation (the "COMPANY").

 

WHEREAS, the parties desire
that, upon the terms and subject to the conditions contained herein, the Company shall issue and sell to Investor, from time to
time as provided herein, and Investor shall purchase up to Ten Million Dollars ($10,000,000) of the Company’s Common Stock
(as defined below); and

 

NOW,
THEREFORE, the parties hereto agree as follows:

 

ARTICLE
I

CERTAIN
DEFINITIONS

 

Section
1.1   DEFINED TERMS as used in this Agreement, the following terms shall have the following meanings specified or indicated
(such meanings to be equally applicable to both the singular and plural forms of the terms defined)

 

"AGREEMENT"
shall have the meaning specified in the preamble hereof.

 

"BY-LAWS"
shall have the meaning specified in Section 4.7.

 

"CLAIM
NOTICE" shall have the meaning specified in Section 9.3(a).

 

“CLEARING
DATE” shall be the date in which the Estimated Put Shares (as defined in Section 2.2(a)) have been deposited into the Investor’s
brokerage account..

 

"CLOSING"
shall mean one of the closings of a purchase and sale of shares of Common Stock pursuant to Section 2.3.

 

"CLOSING
CERTIFICATE" shall mean the closing certificate of the Company in the form of Exhibit B hereto.

 

"CLOSING
PRICE" shall mean the VWAP price for the Company’s common stock on the Principal Market on a Trading Day as reported
by OTCIQ services (“OTCIQ”)..

 

"COMMITMENT
PERIOD" shall mean the period commencing on the Effective Date, and ending on the earlier of (i) the date on which Investor
shall have purchased Put Shares pursuant to this Agreement for an aggregate Purchase Price of the Maximum Commitment Amount, or
(ii) the date occurring thirty six (36) months from the date of commencement of the Commitment Period.

 

    	1

    	 

    

   

"COMMON
STOCK" shall mean the Company's common stock, $0.0001 par value per share, and any shares of any other class of common stock
whether now or hereafter authorized, having the right to participate in the distribution of dividends (as and when declared) and
assets (upon liquidation of the Company).

 

"COMMON
STOCK EQUIVALENTS" shall mean any securities that are convertible into or exchangeable for Common Stock or any options or
other rights to subscribe for or purchase Common Stock or any such convertible or exchangeable securities.

 

"COMPANY"
shall have the meaning specified in the preamble to this Agreement.

 

"DAMAGES"
shall mean any loss, claim, damage, liability, cost and expense (including, without limitation, reasonable attorneys' fees and
disbursements and costs and expenses of expert witnesses and investigation).

 

"DISPUTE
PERIOD" shall have the meaning specified in Section 9.3(a).

 

"DOLLAR
VOLUME" shall mean the product of (a) the Closing Price multiplied by (b) the trading volume on the Principal Market on a
Trading Day.

 

"DTC"
shall have the meaning specified in Section 2.3.

 

"DWAC"
shall have the meaning specified in Section 2.3.

 

"EFFECTIVE
DATE" shall mean the date that the Registration Statement is declared effective by the SEC.

 

“ESTIMATED
PUT SHARES” shall have the meaning specified in Section 2.2(a)

 

"EXCHANGE
ACT" shall mean the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder.

 

"FAST"
shall have the meaning specified in Section 2.3.

 

"FINRA"
shall mean the Financial Industry Regulatory Authority, Inc.

 

“FLOOR
PRICE” shall have the meaning specified in Section 2.2(c).

 

"INDEMNIFIED
PARTY" shall have the meaning specified in Section 9.3(a).

 

"INDEMNIFYING
PARTY" shall have the meaning specified in Section 9.3(a).

 

"INDEMNITY
NOTICE" shall have the meaning specified in Section 9.3(b).

 

    	2

    	 

    

 

"INVESTMENT
AMOUNT" shall mean the dollar amount to be invested by Investor to purchase Put Shares with respect to any Put as notified
by the Company to Investor in accordance with Section 2.2.

 

"INVESTOR"
shall have the meaning specified in the preamble to this Agreement.

 

"LEGEND"
shall have the meaning specified in Section 8.1.

 

"MARKET
PRICE" shall mean the lowest Closing Price on the Principal Market for any Trading Day during the Valuation Period, as reported
by OTCIQ..

 

"MATERIAL
ADVERSE EFFECT" shall mean any effect on the business, operations, properties, or financial condition of the Company that
is material and adverse to the Company and/or any condition, circumstance, or situation that would prohibit or otherwise materially
interfere with the ability of the Company to enter into and perform its obligations under any of this Agreement.

 

"MAXIMUM
COMMITMENT AMOUNT" shall mean Ten Million Dollars ($10,000,000).

  

"PERSON"
shall mean an individual, a corporation, a partnership, an association, a trust or other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.

 

"PRINCIPAL
MARKET" shall mean any of the national exchanges (i.e. NYSE, NYSE AMEX, Nasdaq), OTCQX, OTCQB, the OTC Bulletin Board, or
other principal exchange which is at the time the principal trading exchange or market for the Common Stock.

 

"PURCHASE
PRICE" shall mean 94% of the Market Price on such date on which the Purchase Price is calculated in accordance with the terms
and conditions of this Agreement.

 

"PUT"
shall mean the right of the Company to require the Investor to purchase shares of Common Stock, subject to the terms and conditions
of this Agreement.

 

"PUT
DATE" shall mean any Trading Day during the Commitment Period that a Put Notice is deemed delivered pursuant to Section 2.2(b).

 

"PUT
NOTICE" shall mean a written notice, substantially in the form of Exhibit A hereto, to Investor setting forth the Investment
Amount with respect to which the Company intends to require Investor to purchase shares of Common Stock pursuant to the terms
of this Agreement.

 

    	3

    	 

    

 

"PUT
SHARES" shall mean all shares of Common Stock issued or issuable pursuant to a Put that has been exercised or may be exercised
in accordance with the terms and conditions of this Agreement.

 

"REGISTERED
SECURITIES" shall mean the (a) Put Shares, and (b) any securities issued or issuable with respect to any of the foregoing
by way of exchange, stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization or otherwise. As to any particular Registered Securities, once issued such securities shall cease to be
Registrable Securities when (i) a Registration Statement has been declared effective by the SEC and such Registrable Securities
have been disposed of pursuant to a Registration Statement, (ii) such Registrable Securities have been sold under circumstances
under which all of the applicable conditions of Rule 144 are met, (iii) such time as such Registrable Securities have been otherwise
transferred to holders who may trade such shares without restriction under the Securities Act or (iv) in the opinion of counsel
to the Company, which counsel shall be reasonably acceptable to Investor, such Registrable Securities may be sold without registration
under the Securities Act or the need for an exemption from any such registration requirements and without any time, volume or
manner limitations pursuant to Rule 144(b)(i) (or any similar provision then in effect) under the Securities Act.

 

"REGISTRATION
STATEMENT" shall mean the Company’s effective registration statement on file with the SEC, and any follow up registration
statement or amendment thereto.

 

"REGULATION
D" shall mean Regulation D promulgated under the Securities Act.

 

"RULE
144" shall mean Rule 144 under the Securities Act or any similar provision then in force under the Securities Act.

 

"SEC"
shall mean the Securities and Exchange Commission.

 

"SECURITIES
ACT" shall have the meaning specified in the recitals of this Agreement.

 

"SEC
DOCUMENTS" shall mean, as of a particular date, all reports and other documents filed by the Company pursuant to Section
13(a) or 15(d) of the Exchange Act since the end of the Company's then most recently completed and reported fiscal year as of
the time in question (provided that if the date in question is within ninety days of the beginning of the Company's fiscal year,
the term shall include all documents filed since the beginning of the preceding fiscal year).

 

“SHORT
SALES” shall mean all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall
not be deemed to include the location and/or reservation of borrowable shares of Common Stock).

 

    	4

    	 

    

 

"SUBSCRIPTION
DATE" shall mean the date on which this Agreement is executed and delivered by the Company and Investor.

 

"THIRD
PARTY CLAIM" shall have the meaning specified in Section 9.3(a).

 

“TRADING
DAY” shall mean a day on which the Principal Market shall be open for business.

 

“TRANSACTION
DOCUMENTS” shall mean this Agreement and the Registration Rights Agreement.

 

"TRANSFER
AGENT" shall mean the transfer agent for the Common Stock (and to any substitute or replacement transfer agent for the Common
Stock upon the Company's appointment of any such substitute or replacement transfer agent).

 

"UNDERWRITER"
shall mean any underwriter participating in any disposition of the Registered Securities on behalf of Investor pursuant to the
Registration Statement.

 

"VALUATION
EVENT" shall mean an event in which the Company at any time during a Valuation Period takes any of the following actions:

 

(a)  subdivides or combines the Common Stock;

 

(b)  pays
a dividend in shares of Common Stock or makes any other distribution of shares of Common Stock, except for dividends paid with
respect to any series of preferred stock authorized by the Company, whether existing now or in the future;

 

(c)  issues any options or other rights to subscribe for or purchase shares of Common Stock other than pursuant to this Agreement,
and other than options or stock grants issued or issuable to directors, officers and employees pursuant to a stock option program,
whereby the price per share for which shares of Common Stock may at any time thereafter be issuable pursuant to such options or
other rights shall be less than the Closing Price in effect immediately prior to such issuance;

 

(d)  issues
any securities convertible into or exchangeable for shares of Common Stock and the consideration per share for which shares of
Common Stock may at any time thereafter be issuable pursuant to the terms of such convertible or exchangeable securities shall
be less than the Closing Price in effect immediately prior to such issuance, provided however, that the issuance and/or conversion
of convertible notes convertible into restricted shares of common stock at a discount from a defined conversion price shall not
constitute a Valuation Event;

 

    	5

    	 

    

 

(e)  issues shares of Common Stock otherwise than as provided in the foregoing subsections (a) through (d), at a price per share
less, or for other consideration lower, than the Closing Price in effect immediately prior to such issuance, or without consideration,
provided however, that the issuance and/or conversion of convertible notes convertible into restricted shares of common stock
at a discount from a defined conversion price shall not constitute a Valuation Event; or

 

(f)  makes
a distribution of its assets or evidences of indebtedness to the holders of Common Stock as a dividend in liquidation or by way
of return of capital or other than as a dividend payable out of earnings or surplus legally available for dividends under applicable
law or any distribution to such holders made in respect of the sale of all or substantially all of the Company's assets (other
than under the circumstances provided for in the foregoing subsections (a) through (e).

			

 

"VALUATION
PERIOD" shall mean the period of ten (10) Trading Days immediately following the Clearing Date associated with the applicable
Put Notice during which the Purchase Price of the Common Stock is valued; provided, however, that if a Valuation Event occurs
during any Valuation Period, a new Valuation Period shall begin on the Trading Day immediately after the occurrence of such Valuation
Event and end on the tenth (10th) Trading Day thereafter. Investor shall notify the Company in writing of the occurrence
of the Clearing Date associated with a Put Notice. The Valuation Period shall begin the first Trading Day following such written
notice from Investor.

 

"VWAP"
shall mean the daily volume weighted average price for the Company’s common stock on the Principal Market on a Trading Day
as reported by OTCIQ..

 

ARTICLE
II

PURCHASE
AND SALE OF COMMON STOCK

 

Section
2.1   INVESTMENTS.

 

(a)  PUTS.
Upon the terms and conditions set forth herein (including, without limitation, the provisions of Article VII), on any Put Date
the Company may exercise a Put by the delivery of a Put Notice. The number of Put Shares that Investor shall purchase pursuant
to such Put shall be determined by dividing the Investment Amount specified in the Put Notice by the Purchase Price with respect
to such Put Notice.

 

(b)  PROMISSORY
NOTE; WARRANTS. As a condition for the execution of this Agreement by the Investor, the Company shall issue to the Investor a
promissory note in the principal amount equal to $5,000.00 (the “Note”) on the Subscription Date. In the event that
the Company issues 5,000,000 Put Shares to Investor, then the Company shall issue to Investor a three (3) year warrant to purchase
250,000 shares of common stock at an exercise price of $0.05 (“Warrant”). Such Warrant shall have a cashless exercise
provision. In the event that the Company issues an additional 5,000,000 Put Shares to Investor (i.e. 10,000,000 in aggregate),
then the Company shall issue to Investor an additional Warrant with the exact same terms. Neither the Warrant(s) nor the Note
shall have registration rights.

 

    	6

    	 

    

 

Section
2.2   MECHANICS.

 

(a)  PUT
NOTICE. At any time and from time to time during the Commitment Period, the Company may deliver a Put Notice to Investor, subject
to the conditions set forth in Section 7.2; provided, however, that the Investment Amount identified in the applicable Put Notice,
when taken together with all prior Put Notices, shall not exceed the Maximum Commitment Amount. On the Put Date the Company shall
deliver to Investor’s brokerage account estimated put shares equal to the Investment Amount indicated in the Put Notice
divided by the Closing Price on the Trading Day immediately preceding the Put Date, multiplied by one hundred twenty five percent
(125%) (the “Estimated Put Shares”).

 

(b)  DATE
OF DELIVERY OF PUT NOTICE. A Put Notice shall be deemed delivered on (i) the Trading Day it is received by facsimile or otherwise
by Investor if such notice is received on or prior to 12:00 noon New York time, or (ii) the immediately succeeding Trading Day
if it is received by facsimile or otherwise after 12:00 noon New York time on a Trading Day or at any time on a day which is not
a Trading Day.

 

(c)  FLOOR
PRICE. In the event that, during a Valuation Period, the Closing Price on any Trading Day falls more than twenty five percent
(25%) below the average of the VWAP prices for the ten (10) trading days immediately preceding the date of the Company’s
Put Notice (a “Floor Price”), for each such Trading Day, the parties shall have no right and shall be under no obligation
to purchase one tenth (1/10th) of the Investment Amount specified in the Put Notice, and the Investment Amount shall accordingly
be deemed reduced by such amount.

 

Section
2.3  CLOSINGS. At the end of the Valuation Period the Purchase Price shall be established and the number of Put Shares shall
be determined for a particular Put. If the number of Estimated Put Shares initially delivered to Investor is greater than the
Put Shares purchased by Investor pursuant to such Put, then immediately after the Valuation Period the Investor shall deliver
to Company any excess Estimated Put Shares associated with such Put. If the number of Estimated Put Shares delivered to Investor
is less than the Put Shares purchased by Investor pursuant to a Put, then immediately after the Valuation Period the Company shall
deliver to Investor the difference between the Estimated Put Shares and the Put Shares issuable pursuant to such Put. The Closing
of a Put shall occur upon the first Trading Day following the completion of the Valuation Period, whereby Investor shall deliver
the Investment Amount specified in the Put Notice, less the Par Value Payment, by wire transfer of immediately available funds
to an account designated by the Company. In lieu of delivering physical certificates representing the Common Stock issuable in
accordance with clause (a) of this Section 2.3, and provided that the Transfer Agent then is participating in the Depository Trust
Company ("DTC") Fast Automated Securities Transfer ("FAST") program, upon request of Investor, but subject
to the applicable provisions of Article VIII hereof, the Company shall use its commercially reasonable efforts to cause the Transfer
Agent to electronically transmit, prior to the applicable Closing Date, the applicable Put Shares by crediting the account of
the Investor's prime broker with DTC through its Deposit Withdrawal Agent Commission ("DWAC") system, and provide proof
satisfactory to the Investor of such delivery. In addition, on or prior to such Closing Date, each of the Company and Investor
shall deliver to each other all documents, instruments and writings required to be delivered or reasonably requested by either
of them pursuant to this Agreement in order to implement and effect the transactions contemplated herein.

 

    	7

    	 

    

 

ARTICLE
III

REPRESENTATIONS
AND WARRANTIES OF INVESTOR

 

Investor
represents and warrants to the Company that:

 

Section
3.1  INTENT. Investor is entering into this Agreement for its own account and Investor has no present arrangement (whether or
not legally binding) at any time to sell the Registered Securities to or through any person or entity; provided, however, that
Investor reserves the right to dispose of the Registered Securities at any time in accordance with federal and state securities
laws applicable to such disposition.

 

Section
3.2  NO LEGAL ADVICE FROM THE COMPANY. The Investor acknowledges that it has had the opportunity to review this Agreement and
the transactions contemplated by this Agreement with its own legal counsel and investment and tax advisors. The Investor is relying
solely on such counsel and advisors and not on any statements or representations of the Company or any of its representatives
or agents for legal, tax or investment advice with respect to this investment, the transactions contemplated by this Agreement
or the securities laws of any jurisdiction.

 

Section
3.3  SOPHISTICATED INVESTOR. Investor is a sophisticated investor (as described in Rule 506(b)(2)(ii) of Regulation D) and an
accredited investor (as defined in Rule 501 of Regulation D), and Investor has such experience in business and financial matters
that it is capable of evaluating the merits and risks of an investment in the Registered Securities. Investor acknowledges that
an investment in the Registered Securities is speculative and involves a high degree of risk.

 

Section
3.4  AUTHORITY. (a) Investor has the requisite power and authority to enter into and perform its obligations under this Agreement
and the transactions contemplated hereby in accordance with its terms; (b) the execution and delivery of this Agreement and the
consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action and no
further consent or authorization of Investor or its partners is required; and (c) this Agreement has been duly authorized and
validly executed and delivered by Investor and constitutes a valid and binding obligation of Investor enforceable against it in
accordance with its terms, subject to applicable bankruptcy, insolvency, or similar laws relating to, or affecting generally the
enforcement of, creditors' rights and remedies or by other equitable principles of general application.

 

    	8

    	 

    

 

Section
3.5  NOT AN AFFILIATE. Investor is not an officer, director or "affiliate" (as that term is defined in Rule 405 of
the Securities Act) of the Company.

 

Section 3.6  ORGANIZATION AND STANDING. Investor is a limited partnership duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all requisite power and authority to own, lease and operate its properties
and to carry on its business as now being conducted. Investor is duly qualified and in good standing in every jurisdiction in
which the nature of the business conducted or property owned by it makes such qualification necessary, other than those in
which the failure so to qualify would not have a material adverse effect on Investor.

 

Section 3.7  ABSENCE OF CONFLICTS. The execution and delivery of this Agreement and any other document or instrument contemplated hereby,
and the consummation of the transactions contemplated hereby and thereby, and compliance with the requirements hereof and thereof,
will not (a) violate any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on Investor, (b) violate
any provision of any indenture, instrument or agreement to which Investor is a party or is subject, or by which Investor or any
of its assets is bound, or conflict with or constitute a material default thereunder, (c) result in the creation or imposition
of any lien pursuant to the terms of any such indenture, instrument or agreement, or constitute a breach of any fiduciary duty
owed by Investor to any third party, or (d) require the approval of any third-party (that has not been obtained) pursuant to any
material contract, instrument, agreement, relationship or legal obligation to which Investor is subject or to which any of its
assets, operations or management may be subject.

 

Section
3.8  DISCLOSURE; ACCESS TO INFORMATION. Investor had an opportunity to review copies of the SEC Documents filed on behalf of
the Company and has had access to all publicly available information with respect to the Company.

 

Section
3.9  MANNER OF SALE. At no time was Investor presented with or solicited by or through any leaflet, public promotional
meeting, television advertisement or any other form of general solicitation or advertising.

 

ARTICLE
IV

REPRESENTATIONS
AND WARRANTIES OF THE COMPANY

 

The
Company represents and warrants to Investor that, except as disclosed in the SEC Documents:

 

Section 4.1  ORGANIZATION OF THE COMPANY. The Company is a corporation duly organized and validly existing and in good standing under
the laws of the State of Delaware and has all requisite power and authority to own, lease and operate its properties and to carry
on its business as now being conducted. The Company is duly qualified as a foreign corporation to do business and is in good standing
in every jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary,
other than those in which the failure so to qualify would not have a Material Adverse Effect.

 

    	9

    	 

    

 

Section
4.2  AUTHORITY. (a) The Company has the requisite corporate power and authority to enter into and perform its obligations under
this Agreement and to issue the Put Shares; (b) the execution and delivery of this Agreement by the Company and the consummation
by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action and no further
consent or authorization of the Company or its Board of Directors or stockholders is required; and (c) each of this Agreement
and has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency,
or similar laws relating to, or affecting generally the enforcement of, creditors' rights and remedies or by other equitable principles
of general application.

 

Section
4.3  CAPITALIZATION. As of the date hereof, the authorized capital stock of the Company consists of 1,000,000,000 shares of
Common Stock, $0.0001 par value per share, of which 405,971,843 shares were issued and outstanding as of July 1, 2014, and 100,000,000
million shares of preferred stock, $0.001 par value per share authorized, which included 1,000,000 shares designated as Series
A Preferred Stock, 179,901 of which are issued and outstanding, 1,000,000 shares designated as Series B Convertible Preferred
Stock, no shares of which are issued and outstanding and 98,000,000 share which remain undesignated and unissued.

 

Except
as otherwise disclosed in the SEC Documents or on Schedule 4.3, there are no outstanding securities which are convertible
into shares of Common Stock, whether such conversion is currently exercisable or exercisable only upon some future date or the
occurrence of some event in the future.

 

All
of the outstanding shares of Common Stock of the Company have been duly and validly authorized and issued and are fully paid and
non-assessable.

 

Section 4.4  COMMON STOCK. The Company is in full compliance with all reporting requirements of the Exchange Act, and the Company has
maintained all requirements for the continued listing or quotation of the Common Stock, and such Common Stock is currently listed
or quoted on the Principal Market which is presently the OTCQB.

 

Section
4.5  SEC DOCUMENTS. The Company may make available to Investor true and complete copies of the SEC Documents (including, without
limitation, proxy information and solicitation materials). To the Company’s knowledge, the Company has not provided to Investor
any information that, according to applicable law, rule or regulation, should have been disclosed publicly prior to the date hereof
by the Company, but which has not been so disclosed. As of their respective dates, the SEC Documents complied in all material
respects with the requirements of the Exchange Act, and other federal laws, rules and regulations applicable to such SEC Documents,
and none of the SEC Documents contained any untrue statement of a material fact or omitted to state a material fact required to
be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made,
not misleading. The financial statements of the Company included in the SEC Documents comply as to form and substance in all material
respects with applicable accounting requirements and the published rules and regulations of the SEC or other applicable rules
and regulations with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods involved (except (a) as may be otherwise indicated in such financial
statements or the notes thereto or (b) in the case of unaudited interim statements, to the extent they may not include footnotes
or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as
of the dates thereof and the results of operations and cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments).

 

    	10

    	 

    

 

Section
4.6  VALID ISSUANCES. When issued and paid for as herein provided, the Put Shares shall be duly and validly issued, fully paid,
and non-assessable. The sales of the Put Shares pursuant to this Agreement, and the Company's performance of its obligations hereunder,
shall not (a) result in the creation or imposition of any liens, charges, claims or other encumbrances upon the Put Shares, or
any of the assets of the Company, or (b) entitle the holders of outstanding shares of Common Stock to preemptive or other rights
to subscribe to or acquire the Common Stock or other securities of the Company. The Put Shares shall not subject Investor to personal
liability, in excess of the subscription price by reason of the ownership thereof.

 

Section
4.7  NO CONFLICTS. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company
of the transactions contemplated hereby, including without limitation the issuance of the Put Shares, do not and will not (a)
result in a violation of the Company’s Articles of Incorporation or By-Laws or (b) conflict with, or constitute a material
default (or an event that with notice or lapse of time or both would become a material default) under, or give to others any rights
of termination, amendment, acceleration or cancellation of, any material agreement, indenture, instrument or any "lock-up"
or similar provision of any underwriting or similar agreement to which the Company is a party, or (c) result in a violation of
any federal, state or local law, rule, regulation, order, judgment or decree (including federal and state securities laws and
regulations) applicable to the Company or by which any property or asset of the Company 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) nor is the Company otherwise in violation of, in conflict with or in default under
any of the foregoing. The business of the Company is not being conducted in violation of any law, ordinance or regulation of any
governmental entity, except for possible violations that either singly or in the aggregate do not and will not have a Material
Adverse Effect. The Company is not required under federal, state or local law, rule or regulation to obtain any consent, authorization
or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or
perform any of its obligations under this Agreement or issue and sell the Common Stock in accordance with the terms hereof (other
than any SEC, FINRA or state securities filings that may be required to be made by the Company subsequent to any Closing, any
registration statement that may be filed pursuant hereto); provided that, for purposes of the representation made in this sentence,
the Company is assuming and relying upon the accuracy of the relevant representations and agreements of Investor herein.

 

    	11

    	 

    

 

Section
4.8  NO MATERIAL ADVERSE CHANGE. Since March 31, 2014 no event has occurred that would have a Material Adverse Effect on the
Company.

 

Section
4.9  LITIGATION AND OTHER PROCEEDINGS. Except as disclosed in the Company’s SEC filings, there are no lawsuits or proceedings
pending or to the knowledge of the Company threatened, against the Company, nor has the Company received any written or oral notice
of any such action, suit, proceeding or investigation, which would have a Material Adverse Effect. No judgment, order, writ, injunction
or decree or award has been issued by or, so far as is known by the Company, requested of any court, arbitrator or governmental
agency which would have a Material Adverse Effect.

 

Section
4.10  DILUTION. The number of shares of Common Stock issuable as Put Shares may increase substantially in certain circumstances,
including, but not necessarily limited to, the circumstance wherein the trading price of the Common Stock declines during the
period between the Effective Date and the end of the Commitment Period. The Company’s executive officers and directors have
studied and fully understand the nature of the transactions contemplated by this Agreement and recognize that they have a potential
dilutive effect. The board of directors of the Company has concluded in its good faith business judgment that such issuance is
in the best interests of the Company. The Company specifically acknowledges that, subject to Section 2.2(c), its obligation to
issue the Put Shares is binding upon the Company and enforceable regardless of the dilution such issuance may have on the ownership
interests of other shareholders of the Company.

 

ARTICLE
V

COVENANTS
OF INVESTOR

 

Section 5.1  COMPLIANCE WITH LAW; TRADING IN SECURITIES. Investor's trading activities with respect to shares of the Common Stock will
be in compliance with all applicable state and federal securities laws, rules and regulations and the rules and regulations of
FINRA and the Principal Market on which the Common Stock is listed or quoted.

 

Section 5.2   SHORT SALES AND CONFIDENTIALITY. Neither Investor nor any affiliate of the Investor acting on its behalf or pursuant to
any understanding with it will execute any Short Sales during the period from the date hereof to the end of the Commitment Period.
For the purposes hereof, and in accordance with Regulation SHO, the sale after delivery of a Put Notice of such number of shares
of Common Stock reasonably expected to be purchased under a Put Notice shall not be deemed a Short Sale.

 

    	12

    	 

    

 

Other
than to other Persons party to this Agreement, Investor has maintained the confidentiality of all disclosures made to it in connection
with this transaction (including the existence and terms of this transaction).

 

ARTICLE
VI

COVENANTS
OF THE COMPANY

  

Section
6.1  RESERVATION OF COMMON STOCK. The Company will, from time to time as needed in advance of a Closing Date, reserve and keep
available until the consummation of such Closing, free of preemptive rights sufficient shares of Common Stock for the purpose
of enabling the Company to satisfy its obligation to issue the Put Shares to be issued in connection therewith. The number of
shares so reserved from time to time, as theretofore increased or reduced as hereinafter provided, may be reduced by the number
of shares actually delivered hereunder.

 

Section
6.2  LISTING OF COMMON STOCK. If the Company applies to have the Common Stock traded on any other Principal Market, it shall
include in such application the Put Shares, and shall take such other action as is necessary or desirable in the reasonable opinion
of Investor to cause the Common Stock to be listed on such other Principal Market as promptly as possible. The Company shall use
its commercially reasonable efforts to continue the listing and trading of the Common Stock on the Principal Market (including,
without limitation, maintaining sufficient net tangible assets) and will comply in all respects with the Company's reporting,
filing and other obligations under the bylaws or rules of the FINRA and the Principal Market.

 

Section 6.3  CERTAIN AGREEMENTS. So long as this Agreement remains in effect, the Company covenants and agrees that it will not, without
the prior written consent of the Investor, enter into any other equity line of credit agreement with a third party during the
Commitment Period having terms and conditions substantially comparable to this Agreement. For the avoidance of doubt, nothing
contained in the Transaction Documents shall restrict, or require the Investor's consent for, any agreement providing for the
issuance or distribution of (or the issuance or distribution of) any equity securities pursuant to any agreement or arrangement
that is not commonly understood to be an "equity line of credit."

 

    	13

    	 

    

 

ARTICLE
VII

CONDITIONS
TO DELIVERY OF

PUT
NOTICES AND CONDITIONS TO CLOSING

 

Section
7.1  CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY TO ISSUE AND SELL COMMON STOCK. The obligation hereunder of the Company
to issue and sell the Put Shares to Investor is subject to the satisfaction of each of the conditions set forth below.

  

(a)  ACCURACY
OF INVESTOR'S REPRESENTATIONS AND WARRANTIES. The representations and warranties of Investor shall be true and correct in all
material respects as of the date of this Agreement and as of the date of each such Closing as though made at each such time.

 

(b)  PERFORMANCE
BY INVESTOR. Investor shall have performed, satisfied and complied in all respects with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by Investor at or prior to such Closing.

 

(c)  Principal
Market Regulation. The Company shall not issue any Put Shares, and the Investor shall not have the right to receive any
Put Shares, if the issuance of such shares would exceed the aggregate number of shares of Common Stock which the Company may issue
without breaching the Company’s obligations under the rules or regulations of the Principal Market (the “Exchange
Cap”).

 

Section
7.2  CONDITIONS PRECEDENT TO THE RIGHT OF THE COMPANY TO DELIVER A PUT NOTICE AND THE OBLIGATION OF INVESTOR TO PURCHASE PUT
SHARES. The right of the Company to deliver a Put Notice and the obligation of Investor hereunder to acquire and pay for the Put
Shares is subject to the satisfaction of each of the following conditions:

 

(a)  EFFECTIVE
REGISTRATION STATEMENT. The Registration Statement, and any amendment or supplement thereto, shall remain effective for the sale
by Investor of the Registered Securities subject to such Put Notice, and (i) neither the Company nor Investor shall have received
notice that the SEC has issued or intends to issue a stop order with respect to such Registration Statement or that the SEC otherwise
has suspended or withdrawn the effectiveness of such Registration Statement, either temporarily or permanently, or intends or
has threatened to do so and (ii) no other suspension of the use or withdrawal of the effectiveness of such Registration Statement
or related prospectus shall exist.

 

(b)  ACCURACY
OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES. The representations and warranties of the Company shall be true and correct in
all material respects (except for representations and warranties specifically made as of a particular date), except for any conditions
which have temporarily caused any representations or warranties herein to be incorrect and which have been corrected with no continuing
impairment to the Company or Investor.

 

(c)  PERFORMANCE
BY THE COMPANY. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied with by the Company.

    	14

    	 

    

 

(d)  NO
INJUNCTION. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or adopted by any court or governmental authority of competent jurisdiction that prohibits or directly and materially adversely
affects any of the transactions contemplated by this Agreement, and no proceeding shall have been commenced that may have the
effect of prohibiting or materially adversely affecting any of the transactions contemplated by this Agreement.

 

(e)  ADVERSE
CHANGES. Since the date of filing of the Company's most recent SEC Document, no event that had or is reasonably likely to have
a Material Adverse Effect has occurred.

 

(f)  NO
SUSPENSION OF TRADING IN OR DELISTING OF COMMON STOCK. The trading of the Common Stock shall not have been suspended by the SEC,
the Principal Market or the FINRA and the Common Stock shall have been approved for listing or quotation on and shall not have
been delisted from the Principal Market.

 

(g)  [INTENTIONALLY
OMITTED]

 

(h)  TEN
PERCENT LIMITATION. On each Closing Date, the number of Put Shares then to be purchased by Investor shall not exceed the number
of such shares that, when aggregated with all other shares of Common Stock then owned by Investor beneficially or deemed beneficially
owned by Investor, would result in Investor owning more than 9.99% of all of such Common Stock as would be outstanding on such
Closing Date, as determined in accordance with Section 16 of the Exchange Act and the regulations promulgated thereunder. For
purposes of this Section, in the event that the amount of Common Stock outstanding as determined in accordance with Section 16
of the Exchange Act and the regulations promulgated thereunder is greater on a Closing Date than on the date upon which the Put
Notice associated with such Closing Date is given, the amount of Common Stock outstanding on such Closing Date shall govern for
purposes of determining whether Investor, when aggregating all purchases of Common Stock made pursuant to this Agreement, would
own more than 9.99% of the Common Stock following such Closing Date.

 

(i)  Principal
Market Regulation. The Company shall not issue any Put Shares, and the Investor shall not have the right to receive any Put
Shares, if the issuance of such shares would exceed the Exchange Cap.

 

(j)  NO
KNOWLEDGE. The Company shall have no knowledge of any event more likely than not to have the effect of causing such Registration
Statement to be suspended or otherwise ineffective (which event is more likely than not to occur within the fifteen (15) Trading
Days following the Trading Day on which such Put Notice is deemed delivered).

 

(k)  NO
VIOLATION OF SHAREHOLDER APPROVAL REQUIREMENT. The issuance of shares of Common Stock with respect to the applicable Closing,
if any, shall not violate the shareholder approval requirements of the Principal Market. 

 

    	15

    	 

    

 

(l)  NO
VALUATION EVENT. No Valuation Event shall have occurred since the Put Date.

 

(m)  OTHER.
On the date of delivery of each Put Notice, Investor shall have received a certificate in substantially the form and substance
of Exhibit B hereto, executed by an executive officer of the Company and to the effect that all the conditions to such Closing
shall have been satisfied as at the date of each such certificate.

 

ARTICLE
VIII

LEGENDS

 

Section
8.1  NO STOCK LEGEND OR STOCK TRANSFER RESTRICTIONS. No legend shall be placed on the share certificates representing the Put
Shares.

 

Section
8.2  INVESTOR'S COMPLIANCE. Nothing in this Article VIII shall affect in any way Investor's obligations under any agreement
to comply with all applicable securities laws upon the sale of the Common Stock.

 

ARTICLE
IX

NOTICES;
INDEMNIFICATION

 

Section
9.1  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 (a) personally served, (b) deposited in the mail, registered
or certified, return receipt requested, postage prepaid, (c) delivered by reputable air courier service with charges prepaid,
or (d) transmitted by hand delivery, telegram, facsimile, or email as a PDF, addressed as set forth below or to such other address
as such party shall have specified most recently by written notice given in accordance herewith. Any notice or other communication
required or permitted to be given hereunder shall be deemed effective (i) upon hand delivery or delivery by facsimile, with accurate
confirmation generated by the transmitting facsimile machine, or email as a PDF, 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 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
(ii) on the second business day following the date of mailing by express courier service or on the fifth business day after deposited
in the mail, in each case, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first
occur.

 

    	16

    	 

    

 

The
addresses for such communications shall be:

 

If
to the Company: 

 

Coates
International, Ltd.

2100
Highway 34

Wall
Township, NJ 07719

Attn: 
George J. Coates and Barry C. Kaye

Email:
info@coatesengine.com

bk@coatesengine.com

 

Copy
to (which shall not constitute notice):

 

Szaferman,
Lakind, Blumstein & Blader PC

101
Grovers Mill Road, Suite 200

Lawrenceville,
NJ 08648

Attn:
Gregg Jaclin, Esq.

Email:
Gjaclin@szaferman.com

Tel:
609-275-0400

  

If
to Investor:

 

Southridge
Partners II, LP

90
Grove Street

Ridgefield,
Connecticut 06877

Tel:
203-431-8300

Fax:
203-431-8301

 

Either
party hereto may from time to time change its address or facsimile number for notices under this Section 9.1 by giving at least
ten (10) days' prior written notice of such changed address or facsimile number to the other party hereto.

 

    	17

    	 

    

 

Section
9.2  INDEMNIFICATION. Each party (an “Indemnifying Party”) agrees to indemnify and hold harmless the other party
along with its officers, directors, employees, and authorized agents, and each Person or entity, if any, who controls such party
within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (an “Indemnified Party”)
from and against any Damages, joint or several, and any action in respect thereof to which the Indemnified Party becomes subject
to, resulting from, arising out of or relating to (i) any misrepresentation, breach of warranty or nonfulfillment of or failure
to perform any covenant or agreement on the part of Indemnifying Party contained in this Agreement, (ii) any untrue statement
or alleged untrue statement of a material fact contained in the Registration Statement or any post-effective amendment thereof
or supplement thereto, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading, (iii) any untrue statement or alleged untrue statement of a material fact contained
in any preliminary prospectus or contained in the final prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in the light of the circumstances under which the statements therein were made, not misleading,
(iv) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any
rule or regulation under the Securities Act, the Exchange Act or any state securities law, as such Damages are incurred, except
to the extent such Damages result primarily from Indemnified Party's failure to perform any covenant or agreement contained in
this Agreement or Indemnified Party's negligence, recklessness or bad faith in performing its obligations under this Agreement;
provided, however, that the foregoing indemnity agreement shall not apply to any Damages of an Indemnified Party to the extent,
but only to the extent, arising out of or based upon any untrue statement or alleged untrue statement or omission or alleged omission
made by an Indemnifying Party in reliance upon and in conformity with written information furnished to the Indemnifying Party
by the Indemnified Party expressly for use in the Registration Statement, any post-effective amendment thereof or supplement thereto,
or any preliminary prospectus or final prospectus (as amended or supplemented).

 

Section 9.3  METHOD OF ASSERTING INDEMNIFICATION CLAIMS. All claims for indemnification by any Indemnified Party (as defined below)
under Section 9.2 shall be asserted and resolved as follows:

 

(a)  In
the event any claim or demand in respect of which an Indemnified Party might seek indemnity under Section 9.2 is asserted against
or sought to be collected from such Indemnified Party by a person other than a party hereto or an affiliate thereof (a "THIRD
PARTY CLAIM"), the Indemnified Party shall deliver a written notification, enclosing a copy of all papers served, if any,
and specifying the nature of and basis for such Third Party Claim and for the Indemnified Party's claim for indemnification that
is being asserted under any provision of Section 9.2 against an Indemnifying Party, together with the amount or, if not then reasonably
ascertainable, the estimated amount, determined in good faith, of such Third Party Claim (a "CLAIM NOTICE") with reasonable
promptness to the Indemnifying Party. If the Indemnified Party fails to provide the Claim Notice with reasonable promptness after
the Indemnified Party receives notice of such Third Party Claim, the Indemnifying Party shall not be obligated to indemnify the
Indemnified Party with respect to such Third Party Claim to the extent that the Indemnifying Party's ability to defend has been
prejudiced by such failure of the Indemnified Party. The Indemnifying Party shall notify the Indemnified Party as soon as practicable
within the period ending thirty (30) calendar days following receipt by the Indemnifying Party of either a Claim Notice or an
Indemnity Notice (as defined below) (the "DISPUTE PERIOD") whether the Indemnifying Party disputes its liability or
the amount of its liability to the Indemnified Party under Section 9.2 and whether the Indemnifying Party desires, at its sole
cost and expense, to defend the Indemnified Party against such Third Party Claim.

 

    	18

    	 

    

 

(i)  If
the Indemnifying Party notifies the Indemnified Party within the Dispute Period that the Indemnifying Party desires to defend
the Indemnified Party with respect to the Third Party Claim pursuant to this Section 9.3(a), then the Indemnifying Party shall
have the right to defend, with counsel reasonably satisfactory to the Indemnified Party, at the sole cost and expense of the Indemnifying
Party, such Third Party Claim by all appropriate proceedings, which proceedings shall be vigorously and diligently prosecuted
by the Indemnifying Party to a final conclusion or will be settled at the discretion of the Indemnifying Party (but only with
the consent of the Indemnified Party in the case of any settlement that provides for any relief other than the payment of monetary
damages or that provides for the payment of monetary damages as to which the Indemnified Party shall not be indemnified in full
pursuant to Section 9.2). The Indemnifying Party shall have full control of such defense and proceedings, including any compromise
or settlement thereof; provided, however, that the Indemnified Party may, at the sole cost and expense of the Indemnified Party,
at any time prior to the Indemnifying Party's delivery of the notice referred to in the first sentence of this clause (i), file
any motion, answer or other pleadings or take any other action that the Indemnified Party reasonably believes to be necessary
or appropriate to protect its interests; and provided further, that if requested by the Indemnifying Party, the Indemnified Party
will, at the sole cost and expense of the Indemnifying Party, provide reasonable cooperation to the Indemnifying Party in contesting
any Third Party Claim that the Indemnifying Party elects to contest. The Indemnified Party may participate in, but not control,
any defense or settlement of any Third Party Claim controlled by the Indemnifying Party pursuant to this clause (i), and except
as provided in the preceding sentence, the Indemnified Party shall bear its own costs and expenses with respect to such participation.
Notwithstanding the foregoing, the Indemnified Party may takeover the control of the defense or settlement of a Third Party Claim
at any time if it irrevocably waives its right to indemnity under Section 9.2 with respect to such Third Party Claim.

 

(ii)  If
the Indemnifying Party fails to notify the Indemnified Party within the Dispute Period that the Indemnifying Party desires to
defend the Third Party Claim pursuant to Section 9.3(a), or if the Indemnifying Party gives such notice but fails to prosecute
vigorously and diligently or settle the Third Party Claim, or if the Indemnifying Party fails to give any notice whatsoever within
the Dispute Period, then the Indemnified Party shall have the right to defend, at the sole cost and expense of the Indemnifying
Party, the Third Party Claim by all appropriate proceedings, which proceedings shall be prosecuted by the Indemnified Party in
a reasonable manner and in good faith or will be settled at the discretion of the Indemnified Party(with the consent of the Indemnifying
Party, which consent will not be unreasonably withheld). The Indemnified Party will have full control of such defense and proceedings,
including any compromise or settlement thereof; provided, however, that if requested by the Indemnified Party, the Indemnifying
Party will, at the sole cost and expense of the Indemnifying Party, provide reasonable cooperation to the Indemnified Party and
its counsel in contesting any Third Party Claim which the Indemnified Party is contesting. Notwithstanding the foregoing provisions
of this clause (ii), if the Indemnifying Party has notified the Indemnified Party within the Dispute Period that the Indemnifying
Party disputes its liability or the amount of its liability hereunder to the Indemnified Party with respect to such Third Party
Claim and if such dispute is resolved in favor of the Indemnifying Party in the manner provided in clause (iii) below, the Indemnifying
Party will not be required to bear the costs and expenses of the Indemnified Party's defense pursuant to this clause (ii) or of
the Indemnifying Party's participation therein at the Indemnified Party's request, and the Indemnified Party shall reimburse the
Indemnifying Party in full for all reasonable costs and expenses incurred by the Indemnifying Party in connection with such litigation.
The Indemnifying Party may participate in, but not control, any defense or settlement controlled by the Indemnified Party pursuant
to this clause (ii), and the Indemnifying Party shall bear its own costs and expenses with respect to such participation.

 

    	19

    	 

    

 

(iii)  If
the Indemnifying Party notifies the Indemnified Party that it does not dispute its liability or the amount of its liability to
the Indemnified Party with respect to the Third Party Claim under Section 9.2 or fails to notify the Indemnified Party within
the Dispute Period whether the Indemnifying Party disputes its liability or the amount of its liability to the Indemnified Party
with respect to such Third Party Claim, the amount of Damages specified in the Claim Notice shall be conclusively deemed a liability
of the Indemnifying Party under Section 9.2 and the Indemnifying Party shall pay the amount of such Damages to the Indemnified
Party on demand. If the Indemnifying Party has timely disputed its liability or the amount of its liability with respect to such
claim, the Indemnifying Party and the Indemnified Party shall proceed in good faith to negotiate a resolution of such dispute;
provided, however, that if the dispute is not resolved within thirty (30) days after the Claim Notice, the Indemnifying Party
shall be entitled to institute such legal action as it deems appropriate.

 

(b)  In
the event any Indemnified Party should have a claim under Section 9.2 against the Indemnifying Party that does not involve a Third
Party Claim, the Indemnified Party shall deliver a written notification of a claim for indemnity under Section 9.2 specifying
the nature of and basis for such claim, together with the amount or, if not then reasonably ascertainable, the estimated amount,
determined in good faith, of such claim (an "INDEMNITY NOTICE") with reasonable promptness to the Indemnifying Party.
The failure by any Indemnified Party to give the Indemnity Notice shall not impair such party's rights hereunder except to the
extent that the Indemnifying Party demonstrates that it has been irreparably prejudiced thereby. If the Indemnifying Party notifies
the Indemnified Party that it does not dispute the claim or the amount of the claim described in such Indemnity Notice or fails
to notify the Indemnified Party within the Dispute Period whether the Indemnifying Party disputes the claim or the amount of the
claim described in such Indemnity Notice, the amount of Damages specified in the Indemnity Notice will be conclusively deemed
a liability of the Indemnifying Party under Section 9.2 and the Indemnifying Party shall pay the amount of such Damages to the
Indemnified Party on demand. If the Indemnifying Party has timely disputed its liability or the amount of its liability with respect
to such claim, the Indemnifying Party and the Indemnified Party shall proceed in good faith to negotiate a resolution of such
dispute; provided, however, that if the dispute is not resolved within thirty (30) days after the Claim Notice, the Indemnifying
Party shall be entitled to institute such legal action as it deems appropriate.

 

    	20

    	 

    

 

(c)  The
Indemnifying Party agrees to pay the Indemnified Party, promptly as such expenses are incurred and are due and payable, for any
reasonable legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim.

 

(d)  The
indemnity provisions contained herein shall be in addition to (i) any cause of action or similar rights of the Indemnified Party
against the Indemnifying Party or others, and (ii) any liabilities the Indemnifying Party may be subject to.

 

ARTICLE
X

MISCELLANEOUS

 

Section
10.1  GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and interpreted in accordance with the laws of the State
of New York without regard to the principles of conflicts of law. Each of the Company and Investor hereby submit to the exclusive
jurisdiction of the United States Federal and state courts located in New York with respect to any dispute arising under this
Agreement, the agreements entered into in connection herewith or the transactions contemplated hereby or thereby.

 

Section
10.2  JURY TRIAL WAIVER. The Company and the Investor hereby waive a trial by jury in any action, proceeding or counterclaim
brought by either of the parties hereto against the other in respect of any matter arising out of or in connection with the Transaction
Documents.

 

Section
10.3  ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the Company and Investor and their respective
successors. Neither this Agreement nor any rights of Investor or the Company hereunder may be assigned by either party to any
other person.

 

Section
10.4  THIRD PARTY BENEFICIARIES. This Agreement is intended for the benefit of the Company and Investor and their respective
successors, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

 

Section
10.5  TERMINATION. The Company may terminate this Agreement at any time by written notice to the Investor. Additionally,
this Agreement shall terminate at the end of Commitment Period or as otherwise provided herein; provided, however, that the provisions
of Articles IX, and Sections 10.1 and 10.2 shall survive the termination of this Agreement for a period of twenty four (24) months. 

 

    	21

    	 

    

 

Section
10.6  ENTIRE AGREEMENT, AMENDMENT; NO WAIVER. This Agreement and the instruments referenced herein contain the entire understanding
of the Company and Investor with respect to the matters covered herein and therein and, except as specifically set forth herein
or therein, neither the Company nor Investor 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 party to
be charged with enforcement.

 

Section
10.7  FEES AND EXPENSES. The Company agrees to pay its own expenses in connection with the preparation of this Agreement and
performance of its obligations hereunder. The Company shall pay all stamp or other similar taxes and duties levied in connection
with issuance of the Put Shares pursuant hereto.

 

Section
10.8  COUNTERPARTS. This Agreement may be executed in multiple counterparts, each of which may be executed by less than all
of the parties and shall be deemed to be an original instrument which shall be enforceable against the parties actually executing
such counterparts and all of which together shall constitute one and the same instrument. This Agreement may be delivered to the
other parties hereto by facsimile transmission or email of a copy of this Agreement bearing the signature of the parties so delivering
this Agreement.

 

Section
10.9  SEVERABILITY. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction
to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision; provided
that such severability shall be ineffective if it materially changes the economic benefit of this Agreement to any party.

 

Section
10.10  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.

 

Section
10.11  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.

 

Section
10.12  EQUITABLE RELIEF. The Company recognizes that in the event that it fails to perform, observe, or discharge any or all
of its obligations under this Agreement, any remedy at law may prove to be inadequate relief to Investor. The Company therefore
agrees that Investor shall be entitled to temporary and permanent injunctive relief in any such case without the necessity of
proving actual damages.

 

Section
10.13  TITLE AND SUBTITLES. The titles and subtitles used in this Agreement are used for the convenience of reference and are
not to be considered in construing or interpreting this Agreement.

 

    	22

    	 

    

 

Section
10.14  REPORTING ENTITY FOR THE COMMON STOCK. The reporting entity relied upon for the determination of the Closing Price for
the Common Stock on any given Trading Day for the purposes of this Agreement shall be OTCIQ or any successor thereto. The written
mutual consent of Investor and the Company shall be required to employ any other reporting entity.

 

Section
10.15  PUBLICITY. The Company and Investor shall consult with each other in issuing any press releases or otherwise making public
statements with respect to the transactions contemplated hereby and no party shall issue any such press release or otherwise make
any such public statement without the prior written consent of the other parties, which consent shall not be unreasonably withheld
or delayed, except that no prior consent shall be required if such disclosure is required by law, in which such case the disclosing
party shall provide the other parties with prior notice of such public statement. Notwithstanding the foregoing, the Company shall
not publicly disclose the name of Investor without the prior written consent of such Investor, except to the extent required by
law. Investor acknowledges that this Agreement and all or part of the Transaction Documents may be deemed to be "material
contracts" as that term is defined by Item 601(b)(10) of Regulation S-K, and that the Company may therefore be required to
file such documents as exhibits to reports or registration statements filed under the Securities Act or the Exchange Act. Investor
further agrees that the status of such documents and materials as material contracts shall be determined solely by the Company,
in consultation with its counsel.

 

    	23

    	 

    

  

[SIGNATURE
PAGE]

 

IN
WITNESS WHEREOF, the parties hereto have caused this Equity Purchase Agreement to be executed by the undersigned, thereunto
duly authorized, as of the date first set forth above.

  

	 	SOUTHRIDGE PARTNERS II LP 
	 	 
	 	By:	Southridge Advisors II LLC
	 	 	 
	 	By:	/s/ Stephen Hicks
	 	Name:	Stephen Hicks
	 	Title:	Manager

 

	 	COATES INTERNATIONAL, LTD.
	 	 
	 	By:	/s/ Barry
    C. Kaye
	 	Name:	Barry C. Kaye
	 	Title:	Chief Financial Officer

 

    	 

    	 

    

 

  

Schedule
4.3 – Outstanding Securities

 

 

 

    	 

    	 

    

 

 

EXHIBITS 

 

	EXHIBIT A	Put Notice
	 	 
	EXHIBIT B	Closing Certificate

 

    	 

    	 

    

  

EXHIBIT
A 

 

FORM
OF PUT NOTICE 

 

TO: SOUTHRIDGE
PARTNERS II, LP

  

We
refer to the Equity Purchase Agreement dated July 2, 2014 (the “Agreement”) entered into by COATES INTERNATIONAL,
LTD. (the “Company”) and you. Capitalized terms defined in the Agreement shall, unless otherwise defined, have the
same meaning when used herein.

 

We
hereby:

 

		1.	Give
                                         you notice that we require you to purchase $_________ (the “Investment Amount”)
                                         in Put Shares;

 

		2.	Determine
                                         the Floor Price for this Put, as defined in Section 2.2(c) of the Agreement, to be $___________;
                                         and

 

		3.	Certify
                                         that, as of the date hereof, to the best of our knowledge, the conditions set forth in
                                         Section 7.2 of the Agreement are satisfied.

 

Date: _____________,
20__

 

	 	COATES INTERNATIONAL, LTD.
	 	 
	 	By:	
	 	Name:	Barry C. Kaye
	 	Title:	Chief Financial Officer

 

    	 

    	 

    

 

EXHIBIT
B

 

FORM
OF

 

CERTIFICATE
OF THE CHIEF FINANCIAL OFFICER

 

OF

 

COATES
INTERNATIONAL, LTD.

 

Pursuant
to Section 7.2(m) of that certain Equity Purchase Agreement dated July 2, 2014 (the “Agreement”) by and between the
Company and Southridge Partners II, LP (the “Investor”), the undersigned, in his capacity as the Chief Financial Officer
of COATES INTERNATIONAL, LTD. (the “Company”), and not in his individual capacity, hereby certifies, as of
the date hereof (such date, the “Condition Satisfaction Date”), the following:

 

1.The
representations and warranties of the Company are true and correct in all material respects as of the Condition Satisfaction Date
as though made on the Condition Satisfaction Date (except for representations and warranties specifically made as of a particular
date) with respect to all periods, and as to all events and circumstances occurring or existing to and including the Condition
Satisfaction Date, except for any conditions which have temporarily caused any representations or warranties of the Company set
forth in the Agreement to be incorrect and which have been corrected with no continuing impairment to the Company or Investor;
and

 

2.All
of the Company’s conditions to Closing set forth in Section 7.2 of the Agreement have been satisfied as of the Condition
Satisfaction Date.

 

Capitalized
terms used herein shall have the meanings set forth in the Agreement unless otherwise defined herein.

 

IN
WITNESS WHEREOF, the undersigned has hereunto affixed his hand as of the ___ day of ____________, 20__.

 

	 	By:	 
	 	 	Barry C. Kaye,
	 	 	Chief Financial Officer

 

    	 

    	 

    

 

AMENDMENT
TO EQUITY PURCHASE AGREEMENT DATED JULY 2, 2014 

 

THIS
AMENDMENT is made this August 27, 2014 to that certain Equity Purchase Agreement (“EP Agreement”), dated
July 2, 2014, between COATES INTERNATIONAL, LTD., a Delaware corporation (the “Company”), having an office
located at 2100 Highway 34 and Ridgewood Road, Wall Township, New Jersey 07719 and SOUTHRIDGE PARTNERS II, LP, a Delaware
limited partnership ("Investor").

WHEREAS,
the parties wish to amend certain provisions of the EP Agreement in order to further support the intention of the parties that
Investor’s binding obligation to purchase the securities being registered on Form S-1 to be filed with the Securities and
Exchange Commission is irrevocable.

NOW
THEREFORE THIS AMENDMENT 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,
the parties hereby agree as follows:

FIRST

The
text of Section 2.1(b) shall be deleted and amended to read as follows:

“PROMISSORY
NOTE; RESTRICTED SHARES OF COMMON STOCK.  As a condition for the execution of this Agreement by the Investor, the Company
shall issue to the Investor a promissory note in the principal amount equal to $5,000.00 (the “Note”) on the Subscription
Date.  In the event that the Company issues 5,000,000 Put Shares to Investor (“Milestone 1”), then the Company
shall, at its sole option, either pay $10,000.00 in cash to Investor, or issue to Investor the equivalent of $10,000.00 of unregistered,
restricted shares of its common stock. The number of such shares to be issued shall be calculated based on the closing price of
its common stock at the close of trading on the date that the Put Notice which enabled the Investor to achieve Milestone 1, is
completed. In the event that the Company issues an additional 5,000,000 Put Shares to Investor (i.e. 10,000,000 in aggregate)
(“Milestone 2”), then the Company shall, at its sole option, either pay $10,000.00 in cash to Investor, or issue to
Investor the equivalent of an additional $10,000.00 of unregistered, restricted shares of its common stock. The number of such
shares to be issued shall be calculated based on the closing price of its common stock at the close of trading on the date that
the Put Notice, which enabled the Investor to achieve Milestone 2, is completed.”

SECOND

The
last sentence of Section 10.6 of the EP Agreement which reads as follows shall be deleted:

“No
provision of this Agreement may be waived or amended other than by an instrument in writing signed by the party to be charged
with enforcement.” shall be deleted.

IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to the EP Agreement to be executed as of the date first above
written above by their undersigned, duly authorized representatives.  

	 	SOUTHRIDGE PARTNERS II, LP
	 	 	 
	 	By:	Southridge Advisors II LLC
	 	 	 
	 	By:	/s/ Stephen Hicks
	 	Name:	Stephen Hicks
	 	Title:	Manager
	 	 	 
	 	COATES INTERNATIONAL, LTD.
	 	 	 
	 	By:	/s/ Barry C. Kaye
	 	Name:	Barry C. Kaye
	 	Title:	Chief Financial Officer

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