The escrow agreement was established to provide a more secure mechanism forthe Company to collect payments due under both the prior Canadian licensingand research and development agreements and the initial monies due underthe new $50 million US License. The Escrow Agreement provides that the USLicense shall be held until WWE remits payment of the initial monies duethereunder (the "Release Payment"). While the US License is held in escrowthere shall not be any grant of license to WWE. The initial monies dueunder the US License consist of a down payment of $1 million from WWE tothe Company and an additional $8.5 million in payment of the balance of allof the monies due to the Company in connection with the license for theterritory of Canada, including the Canadian license agreement and theresearch and development agreement (the "Canadian Agreements"). WWE isexpected to make non-refundable periodic payments to the Company inunspecified amounts as partial payments of the Release Payment until suchRelease Payment has been paid in full. Upon full satisfaction of theRelease Payment, the US License agreement would be released from escrow.

WWE is a privately held company and to date has previously madenonrefundable payments to us totaling $1,500,000 and has made an additionalpayment of $375,000 in April 2008. Therefore the total nonrefundablepayments made by WWE to the Company to date is $1,875,000.

Under the Escrow Agreement, WWE is required to remit the full amount of theRelease Payment by June 30, 2008 (the "Payment Period"). Should WWE beunable to make the Release Payment within the Payment Period, the Canadianlicense agreement shall automatically become non-exclusive. However,provided that WWE shall have paid at least $500,000 on account of theRelease Payment, the Payment Period shall be extended until September 30,2008 (the "Extended Release Period"). Should WWE be able to make the entireRelease Payment within the Extended Release Period, the exclusivity of theCanadian license agreement would be reinstated.

The failure of WWE to make the entire Release Payment within the ReleasePeriod or within the Extended Release Period should it be extended, shallconstitute a breach of the Escrow Agreement, the Canadian license agreementand the US License. In such event, the Company would be entitled to (i)retain any and all monies received from WWE and (ii) immediately, cancelthe Escrow Agreement, the Canadian license agreement and the US License.

The US License would, if WWE is able to satisfy the Escrow Agreementrelease provisions, grant to WWE the right to use, sell and lease LicensedProducts, as defined, as the power source for the generation of electricalenergy for the oil and gas industry and from landfills.

WWE is required to procure all internal combustion engines incorporatingthe CSRV Valve System from the Company or its designee. The license grantedto WWE is exclusive within the Territory, provided that WWE satisfies theminimum annual purchase commitment of 120 internal combustion enginesincorporating the CSRV System, the Coates Engines and all component parts.The agreement also grants WWE a right of first refusal in the event thatthe Company negotiates an offer with another third party for a worldwidelicense to use the Licensed Product.

After payment of the Release Payment required under the Escrow Agreement,the remaining unpaid balance of the US License of $49,000,000 is payable inquarterly installments commencing 180 days from the closing date of theEscrow Agreement. The amount of the quarterly installment payments shall beequal to 5% of WWE's net profits over the next five years; however, in anyevent, the entire balance of the licensing fee must be paid in full on orbefore February 12, 2012.

Acceleration of the balance of the licensing fee payments shall be requiredin the event that WWE completes a stock offering or private placementoffering. The entire $49,000,000 unpaid balance of the licensing fee shallbecome due and payable if WWE raises $100 million or more from suchoffering. If WWE raises $25 million or less from any such offering, thenWWE must pay the Company 20% of the amount raised towards the licensingfee.

Pricing of the Licensed Products shall be set forth in a separate agreementto be executed between the parties. The Company is solely responsible forprotecting the Patent Rights, as defined, in connection with the LicensedProducts at its own cost and expense. The term of the agreement shallexpire upon the expiration of the last to expire of the patents comprisingthe Patent Rights.

Coates International, Ltd. is continuing talks with other companies thatare interested in licensing its patented CSRV Technology for numerous otherapplications.

The Company is now in the planning stages of the production of its CSRVproducts.

About Coates International, Ltd.: Coates has recently completed finalrefinements to a patented spherical rotary valve CSRV Industrial InternalCombustion Engine developed over a period of more than 6 years and otherCSRV applications over 10 years. The underlying CSRV technology wasinvented by George J. Coates and his son Gregory. The CSRV system isadaptable to combustion engines of many types. This technology is currentlyadapted to a number of practical applications including industrialgenerators powered by engines incorporating the CSRV technology anddesigned to run on flare-off gas from oil wells, landfill gas and rawnatural gas. The company is actively engaged in planning for production androllout of these engines.

This press release contains forward-looking statements that are madepursuant to the safe harbor provisions of the Private Securities LitigationReform Act of 1995. By their nature, forward-looking statements andforecasts involve risks and uncertainties because they relate to events anddepend on circumstances that will occur in the near future. There are anumber of factors that could cause actual results and developments todiffer materially from forecasted results. These risks and uncertaintiesinclude market conditions, regulatory approvals, and other risks inherentin our operations. For a discussion of these risks and uncertainties,please see our filings with the Securities and Exchange Commission. Ourpublic filings with the SEC may be viewed and printed on the websitemaintained by the SEC at http://www.sec.gov.