Made today July 16th, 2004, in Cologna Veneta between the following companies:


- ECOIDEA  S.R.L.,  an Italian  Corporation,  with  principal  office in Cologna
Veneta (VR), via S. Michele n. 41, Capital Stock of 10,400.00  Euros, Tax ID and
Verona Chamber of Commerce Business Registration Number 02903190235, through its
duly authorized Sole Director and legal representative,  Ing. Gerardo Menegazzi,
invested with the necessary powers, hereinafter referred to as "ECOIDEA".


And


- ELECTRONIC  SOLAR S.R.L.,  an Italian  Corporation,  with principal  office in
Cappelletta di Noale (VE),  via Giovanna  D'Arco 36, Capital Stock of 103,480.00
Euros,  Tax ID and Treviso  Chamber of  Commerce  Business  Registration  Number
00633600267,   through  its  duly  authorized  legal   representative   Giovanni
Antonello, invested with the necessary powers, hereinafter referred to as "ES".


And


- EUROPEAN WASTE SOLUTION INC., a Delaware (U.S.A.) Corporation,  with principal
office in Dover,  DE (USA),  through its duly  authorized  legal  representative
Gianfranco Licursi, invested with the necessary powers,  hereinafter referred to
as "EWS".


And


- L&R ENERGY COMPANY LLC, a New York (USA) Corporation, with principal office in
Denver,  CO (USA),  through its duly  authorized  legal  representative  Richard
Franks, invested with the necessary powers, hereinafter referred to as "L&R".


And


- NATHANIEL ENERGY CORP., a Delaware (USA) Corporation, with principal office in
Englewood,  CO (USA),  Capital Stock of 30,000,000.00 U.S. Dollars,  through its
duly authorized legal representative Gorge Cretecos, invested with the necessary
powers, hereinafter referred to as "NATHANIEL".

Hereinafter referred to collectively as the "PARTIES"


<PAGE>

RECITALS:

A.   On January 15th, 2003 ECOIDEA and ES signed an agreement, which is attached
     hereto as Sub.  1, for the  design,  supply,  installation  (at the ECOIDEA
     establishment  in Cologna Veneta,  via S. Michele 41) start-up,  operation,
     management,  ordinary and  extraordinary  maintenance of a  waste-to-energy
     plant (hereinafter  referred to as the "PLANT") producing  electrical power
     for the production of electrical  energy and steam,  through the combustion
     of fuels  derived  from waste  (RDF)  using  technologies  provided  by the
     Nathaniel  gasification  system  (hereinafter  referred to as "GASIFICATION
     SYSTEM")  consisting of two Modified Model 1800 gasifiers  manufactured  by
     NATHANIEL  (hereinafter  referred  to  as  "GASIFIERS"),  boiler,  computer
     management system, and engineering designs.

B.   The  consideration  due to ES for the  design,  supply,  installation,  and
     start-up of the PLANT,  as established by the  above-referenced  Agreement,
     was to be 11,000,000 U.S.  dollars ("USD") in addition to VAT as determined
     by law, plus  6,100,000.00  Euros in addition to VAT, as determined by law,
     of which 1,800,000.00 Euros have already been paid by ECOIDEA.

C.   To  guarantee  payment of the entire  above-indicated  amount,  ECOIDEA has
     provided ES irrevocable and divisible letters of credit,  issued by a major
     bank, which expired on June 30, 2004.

D.   On July 1st,  2003 ES and EWS signed an Agreement  whereby EWS is committed
     to providing the design, supply,  installation,  and start-up of the PLANT,
     which is the subject of the  Agreement  signed  between  ECOIDEA and ES, as
     well as the  directions,  user guides,  spare-parts  lists with costs,  and
     quantities  of materials  required for planned  ordinary and  extraordinary
     maintenance;  all of which for the consideration of USD 11,000,000.00  plus
     VAT as determined by law.

E.   To  guarantee  payment of the  above-indicated  amount,  ES provided EWS an
     irrevocable and divisible  letter of credit for the same amount it received
     from ECOIDEA upon execution of the Agreement it signed with ECOIDEA.

F.   On July 10th  2003,  EWS  signed an  Agreement  with L&R for the supply and
     start-up  of  the  GASIFICATION  SYSTEM  to be  used  in the  PLANT,  for a
     consideration of USD 6,275,000.00 guaranteed by L&R with a letter of credit
     for the same amount it received  from EWS upon  execution of the  Agreement
     detailed above.

G.   In signing an Addendum  Agreement on July 13,  2004,  EWS and L&R agreed to
     increase the above-stated amount from 6,275,000.00 USD to 6,925,000.00 USD.


<PAGE>

H.   On October 28, 2003, L&R signed an Agreement with NATHANIEL for the design,
     supply,  and  start-up  of the  GASIFIERS  to be used  in the  GASIFICATION
     SYSTEM, for a consideration of 2,100,000.00 USD in addition to any expenses
     incurred by NATHANIEL  personnel  for start-up at the ECOIDEA  plant;  this
     consideration  was  guaranteed by a letter of credit,  in the above amount,
     given  to  NATHANIEL  by  L&R  who  had  received  it in  execution  of the
     above-mentioned   Agreement.   The  termination  notice  of  the  Agreement
     mentioned in this  paragraph has been revoked and said  Agreement is hereby
     modified on this day.


I.   The PLANT works are almost complete,  with start-up and acceptance  testing
     to follow.

J.   NATHANIEL  notified L&R on July 2, 2004 of its  intention to terminate  its
     October  28, 2003  Agreement  with L&R due to the  expiration  of the above
     mentioned  letters  of credit  and other  deficiencies  on the part of L&R,
     among  which  changes  made  by  L&R  to  the  GASIFIERS  without  previous
     authorization from NATHANIEL and without regard for safety. As indicated in
     paragraph H above,  this  termination  has been revoked and a new Agreement
     hereby signed on this day.

K.   On July 15, 2004, also in view of the PARTIES having expressed their desire
     to sign this  Agreement,  NATHANIEL  revoked  its notice to  terminate  the
     October 28,  2003  Agreement  with L&R and agreed with L&R to reaffirm  the
     validity of said Agreement and continue with its execution.

L.   With  this  Agreement  (hereinafter  referred  to as the  "AGREEMENT")  the
     PARTIES  intend to undertake  actions and behaviors to ensure a start-up of
     the PLANT by, and no later than, the July 31, 2004 deadline, as required by
     the Veneto Regional Council with its deliberation No. 2926 dated October 3,
     2003,  without  prejudice  to any  party's  right to  undertake  any action
     whatsoever to safeguard its rights and interests.

Now, therefore, the PARTIES hereto agree as follows:


                                    Article I
                            Recitals and Attachments


The Recitals and  Attachments of this AGREEMENT are deemed to form a substantial
and integral part thereof.  The PARTIES  mutually  agree that this AGREEMENT was
negotiated at length and agreed to in every  detail,  including the Recitals and
Attachments thereto.

<PAGE>

                                   Article II
                          AGREEMENT Nature and Effects

The  stipulations  of this  AGREEMENT  integrate and modify,  within each of the
PARTIES'  respective sphere of responsibility,  the provisions of the Agreements
mentioned  in  recitals  A., D., F.,  G., and H. that  remain in effect  without
change except as explicitly integrated, modified or eliminated herein.

The PARTIES  hereto  explicitly  state that this AGREEMENT is not to be deemed a
settlement of the issues  contained  herein and agree to exclude any  settlement
effect from the AGREEMENT itself,  without prejudice to any notice served by any
of the PARTIES who reserve the  broadest  right to undertake  appropriate  legal
action to safeguard their respective rights and interests.


                                   Article III
                                Common Objective

The PARTIES  hereto have  agreed to sign this  AGREEMENT  in order to pursue the
common objective of completing and starting up the plant,  each party within its
own sphere of  responsibility,  within the deadline of July 31, 2004 as required
by the Veneto Regional  Council through its  deliberation No. 2926 dated October
3, 2003.

                                   Article IV
                                     Subject

4.01 Assignment of ES Credit to EWS
-----------------------------------

ES hereby  assigns to EWS a portion of its credit due from  ECOIDEA as agreed-to
compensation  for the  Agreement  under  Recital A. This portion  amounts to USD
6,925,000.00  (six million nine hundred  twenty five  thousand)  and carries the
same terms and conditions as said Agreement under Recital A. Said amount will be
collectible  upon  a  positive  PLANT  acceptance  test,  as  stipulated  in the
aforementioned Agreement.

The assignment  detailed in the preceding  sub-paragraph  is in compliance  with
Art.  1198 of the Italian  Civil  Code,  in  fulfillment  of ES'  obligation  to
compensate  EWS in the amount of USD  6,925,000.00  (six  million  nine  hundred
twenty five  thousand) as part of the  compensation  stipulated in the Agreement
under Recital D.

With  reference  to  the  assigned  credit,   ES  undertakes  to  send  EWS  any
documentation that pertains to the credit and is required for its collection, as
well as any  correspondence  or payment  that it may receive with respect to the
assigned credit.

By affixing its signature hereto,  ECOIDEA hereby confirms its acceptance of the
assignment as detailed above.

<PAGE>

4.02 Assignment of EWS Credit to L&R
------------------------------------

EWS hereby assigns to L&R its credit due from ECOIDEA, acquired as per the above
Paragraph  4.01,  in the amount of USD  6,925,000.00  (six  million nine hundred
twenty five  thousand) at the same terms and  conditions as the Agreement  under
Recital A. Said  amount will be  collectible  upon a positive  PLANT  acceptance
test, as stipulated in the aforementioned Agreement.

The  assignment  detailed in the preceding  sub-paragraph  is made in compliance
with Art. 1198 of the Italian Civil Code, in fulfillment  of EWS'  obligation to
compensate  L&R in the amount of USD  6,925,000.00  (six  million  nine  hundred
twenty five thousand) which is due to L&R as part of the compensation stipulated
in the Agreement under Recital F., as modified by the additional Agreement under
Recital G.

With  reference  to  the  assigned  credit,  EWS  undertakes  to  send  L&R  any
documentation that pertains to the credit and is required for its collection, as
well as any  correspondence  or payment  that it may receive with respect to the
assigned  credit.  By affixing  their  signature  hereto,  ECOIDEA and ES hereby
confirm their  acceptance of the assignment as detailed above,  each for its own
part.

4.03 Assignment of L&R Credit to NATHANIEL
------------------------------------------

L&R hereby assigns to NATHANIEL a portion of its credit due from ECOIDEA that it
acquired  by  virtue  of the  preceding  Paragraph  4.02,  in the  amount of USD
3,000,000.00  (three  million) at the same terms and conditions as the Agreement
under  Recital  A.  Said  amount  will  be  collectible  upon a  positive  PLANT
acceptance test, as stipulated in the aforementioned Agreement.

The  assignment  detailed in the preceding  sub-paragraph  is made in compliance
with Art. 1198 of the Italian Civil Code, in fulfillment of L&R's  obligation to
compensate  NATHANIEL in the amount of USD 3,000,000.00 (three million) which is
the  agreed-upon  compensation  stipulated in the Agreement under Recital H, and
consisting  in the cost of the  GASIFIER,  in  addition  to certain  other costs
(these "other costs" are analogous to the term "Additional Charges" contained in
the Agreement under Recital H).

With  reference to the assigned  credit,  L&R  undertakes to send  NATHANIEL any
documentation that pertains to the credit and is required for its collection, as
well as any  correspondence  or payment  that it may receive with respect to the
assigned credit. By affixing their signature hereto, ECOIDEA, ES, and EWS hereby
confirm their  acceptance of the assignment as detailed above,  each for its own
part.

<PAGE>



                                    Article V
                              Statement By Ecoidea

To prove that it has  sufficient  funds  available to satisfy the claims against
it, as assigned under the above Article IV,  ECOIDEA  hereby submits  attachment
Sub 2 to this  AGREEMENT  consisting  in the letter  dated July 6, 2004 from MPS
BANCAVERDE spa bank which states that: "RE: Funding N. 1004516. With this notice
we  confirm  that the  "Ecoidea  S.r.l."  company  has in place with this Bank a
financing operation for the purpose of constructing a building and installing an
RDF  combustion  plant for the production of electrical  energy and steam.  Said
financing  will  be  disbursed   through  staged  payments  based  on  milestone
completion  (some  payments  have  already  been made) with payment of the final
balance upon the  positive  outcome of  acceptance  testing.  Sincerely,  signed
GENERAL MANAGEMENT"


                                   Article VI
                              Additional Agreement

In addition to the stipulations contained in this AGREEMENT,  the Parties hereto
agree to take on the obligations under Attachment #3, each for its own part.


                                   Article VII
                                  Governing Law


This AGREEMENT shall be governed by Italian law.



<PAGE>


                                  Article VIII
                                    Disputes

Any  dispute  that  should  arise   concerning   the  validity,   effectiveness,
interpretation,  execution, failure to perform, or termination of this AGREEMENT
will be the exclusive jurisdiction of Italian Courts.


                                   Article IX
                                Text of Agreement

This AGREEMENT, which has been prepared in five original copies, one for each of
the PARTIES,  is composed of 7 (seven) pages, 9 articles,  including the present
one,  and of 3 (three)  attachments,  identified  by  numbers 1 through  3. Each
original copy of this  AGREEMENT  contains the Italian  language  version of the
text and its English  language  translation.  The PARTIES  hereto agree that the
Italian  language  version of this Agreement shall govern and control in case of
any differences or disagreement.


Attachments:

#1 Agreement Between Ecoidea And E.S.
#2 Letter from MPS BANCAVERDE S.p.a.
#3 Additional Agreement Between the Parties


ECOIDEA S.R.L.                [/s/ Signature illegible]
                              [Printed Name: Augusto Pizzolo: Representative]

ELECTRONIC SOLAR S.R.L.       [/s/ Signature illegible]
                              [Printed Name: Massimo Caratti: Representative]

EUROPEAN WASTE
SOLUTION INC.                 [/s/ Signature illegible]

L&R ENERGY COMPANY LLC        [/s/ Signature illegible]

NATHANIEL ENERGY CORP         [/s/ Signature illegible]
                              [Printed Name: Dennis Pungitore: Nathaniel VP OPS]


<PAGE>


            AGREEMENT PERTAINING TO THE DEFINITION OF PLANT START-UP


This document was prepared  with the intent of clarifying  among the parties the
expression  "completing and starting up the plant" contained in Article 3 of the
Agreement  made  on  July  16,  2004  (the  "Agreement")  between  ECOIDEA  SRL,
ELECTRONIC SOLAR SRL, EUROPEAN WASTE SOLUTIONS INC., L&R ENERGY COMPANY LLC, and
NATHANIEL ENERGY CORPORATION.

The following meaning should be given to the expression "completing and starting
up the plant" contained in Article 3 of the Agreement:

Initial Start-Up Phase
----------------------

(a) A (1) gasifier must be placed in service with natural gas by July 29, 2004.

(b) By the  same  date - July  29,  2004 - the  Plant  must  produce  at least 1
Kilowatt of electricity.

(c) After fulfilling the obligations under the preceding paragraphs (a) and (b),
and without  prejudice  to the  obligation  to comply  with the Veneto  Regional
Council deliberation # 2926 dated October 3, 2003, the Plant must be immediately
shut down and work resumed in order to proceed with testing.


Dated: July 16, 2004

Ecoidea S.r.l.                                     Electronic Solar S.r.l.
By: [/s/ Signature Illegible]                      By: [/s/ Signature Illegible]
Name: Augusto Pizzolo                              Name: Massimo Caratti
Title: Representative                              Title: Representative

European Waste Solutions, Inc.                     L&R Energy Company, LLC
By: [/s/ Signature Illegible]                      By: [/s/ Signature Illegible]
Name: G. Licursi                                   Name: Richard L. Franks
Title: Managing Director                           Title: Manager

Nathaniel Energy Corporation
By: [/s/ Signature Illegible]
Name: Dennis W. Pungitore
Title: VP OPS


<PAGE>


                                  ATTACHMENT #2

MPS BANCAVERDE
BANK FOR NATURE
First ISO 14001 Certified AND EMS Registered Italian Bank


                                        To:   Spett. ECOIDEA S.r.l.
                                              Via San Michele 41
                                              37044 Cologna Veneta (VR)



Florence July 6, 2004


RE: Funding N. 1004516


          With this notice we confirm that the "Ecoidea  S.r.l."  company has in
place with this Bank a financing  operation  for the purpose of  constructing  a
building and installing an RDF combustion plant for the production of electrical
energy and steam. Said financing will be disbursed through staged payments based
on milestone  completion  (some payments have already been made) with payment of
the final balance upon the positive outcome of acceptance testing.

          Sincerely,


                                                     GENERAL MANAGEMENT
                                                     [/s/ Signature Illegible]












MPS BANCAVERDE SPA General Management: Piazza D'Azeglio, 22 - 50121 Florence
                     - Capital Stock 50,000,000 Euros paid
               in full - Business Registration # and VAT Tax ID # 00658040480
    Bank Code # 10004.0 Group Code #1030.6 - C.P. 1478 - Phone: 055 23 311 -
                     Fax 055 240 826 - Toll Free # 800 267
          241 - www.bancaverde.it - e-mail: contactcenter@bancaverde.it

 Adheres to the Code of Ethics of the Financial and Banking sector - Adheres to
               the Safety Deposit Interbank Fund - Adheres to UNEP
                                    MPS GROUP


<PAGE>


                                  ATTACHMENT 3

 ADDITIONAL AGREEMENT BETWEEN NATHANIEL - L&R - EWS - ECOIDEA - ELECTRONIC SOLAR

1 - Nathaniel is committed to an initial  start-up of the plant by July 31, 2004
and to completing  the plant by September 30, 2004 and  guarantees the following
performance: 57,600,000 BTU/hour, capable of producing 19,240 Kg/h of steam.

2 - Upon  successful  completion  of testing,  Ecoidea is  committed to paying $
3,000,000 to  Nathaniel,  through the  assignment of credit as per the Agreement
signed today, to which this document is an attachment.

3 -  Nathaniel  will  bear  all  costs  for its own  personnel  and any  missing
equipment up to the time of acceptance testing, besides the costs it has already
incurred.

4 - Ecoidea  will bear all the extra costs  incurred to  complete  the  GASIFIER
(labor and materials)

5 - Upon successful  completion of acceptance  testing,  Ecoidea is committed to
paying  $3,925,000 to L&R, through the assignment of credit as per the Agreement
signed today, to which this document is an attachment.

6 - EWS will not be able to claim any additional costs from L&R.

7 - L&R will not be able to claim any additional costs from Nathaniel.

8  -  EWS,   Electronic  Solar,  and  Ecoidea  defer  the  final  definition  of
responsibilities  pertaining to all additional costs until acceptance testing of
the PLANT has been completed. In any case, no further claims will be made of L&R
and Nathaniel for these additional costs.

Dated: July 16, 2004

Ecoidea S.r.l.                                      Electronic Solar S.r.l.
By: [/s/ Signature Illegible]                       By:[/s/ Signature Illegible]
Name: Augusto Pizzolo                               Name: Massimo Caratti
Title: Representative                               Title: Representative

European Waste Solutions, Inc.                      L&R Energy Company, LLC
By: [/s/ Signature Illegible]                       By:[/s/ Signature Illegible]
Name: G. Licursi                                    Name: Richard L. Franks
Title: Managing Director                            Title: Manager

Nathaniel Energy Corporation
By: [/s/ Signature Illegible]
Name: Dennis W. Pungitore
Title: VP OPS