**Exhibit 10.6**

 

**FIRST AMENDMENT TO**

**MUTUAL RELEASE AND SETTLEMENT AGREEMENT**

 

This First Amendment to Mutual Release and Settlement Agreement (“Amendment”)dated and effective September 14, 2005, is made by and betweenNathaniel Energy Corporation, a Delaware corporation (“Nathaniel”), and Merrick &Company, a Colorado corporation (“Merrick”). The parties to this Agreement are collectively referred to herein as the“Parties.” Capitalized terms used but not otherwise defined herein shall havethe meanings assigned to them in the Release Agreement (defined below) aftergiving effect to this Amendment.

 

**RECITALS**

 

A.    On or about August 3, 2005, the Partiesexecuted that certain Mutual Release and Settlement Agreement (“ReleaseAgreement”), pursuant to which Nathaniel and Merrick settled and resolved alldisputes, issues, and claims between them through the effective date of theRelease Agreement, including but not limited to all claims arising from orrelating to the Contract, Services, Deliverables, Project, Invoices, $126,153.30Note, $199,626.96 Note, $461,135.35 Note, and $325,780.26 Note, as well as allclaims, known or unknown, that could have been asserted by Nathaniel or Merrickagainst the other in any judicial, administrative, or like action orproceeding.

 

B.    On the terms set forth in this Amendment,Nathaniel and Merrick hereby desire and intend to amend the Release Agreement.

 

NOW THEREFORE, for and in consideration ofthe foregoing recitals, the mutual promises and covenants herein, and for othergood and valuable consideration, the receipt and sufficiency of which arehereby acknowledged, the Parties hereby agree as follows:

 

1.     **Payment toMerrick**.  Upon execution ofthis Agreement, Nathaniel shall pay Merrick the sum of Four Hundred ThirtyThousand and No/100ths Dollars ($430,000.00).  Merrick hereby acknowledges receipt of suchsum, and further acknowledges that the Promissory Note dated July 15, 2005,in the face amount of $728,637.00, with Nathaniel as maker and Merrick as payee,attached to the Release Agreement as **Exhibit “A”**(“Discharged Note”), is hereby completely released, cancelled, discharged, andotherwise satisfied and, accordingly, Merrick shall clearly and indelibly markthe Discharged Note “Canceled” and “Paid In Full” and deliver the same toNathaniel (at the time signatures on this Agreement are exchanged).

 

2.     **Deliverables**.  Upon execution of this Agreement, Merrickshall deliver to Nathaniel, at no charge to Nathaniel, the Deliverables.  Nathaniel hereby acknowledges receipt of theDeliverables and that all of Merrick’s duties and obligations in connectionwith the Deliverables are hereby completely released, satisfied, anddischarged, Merrick being under no duty or obligation to perform any additionalservices or work whatsoever in connection therewith.

 

3.     **Payment ToMerrick From Funds Received By Nathaniel On Project.**  On the terms set forth herein, Nathanielhereby promises to pay Merrick the total sum of up to Seventy Thousand andNo/100ths Dollars ($70,000.00).  This sumshall be paid by Nathaniel to Merrick exclusively as follows:  twenty percent (20%) of each and everypayment Nathaniel receives

 

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from its customer on theProject (in Cologna-Veneta, Italy) until the total sum is paid in full.  Said payments shall be payable to Merrick at P.O. Box22026, Denver, Colorado 80222, or such other place as it may designate inwriting.  Such payments shall be madewithin ten (10) business days after receipt of a Project payment, andshall continue until the entire indebtedness is fully paid.  Nathaniel shall report monthly in writing toMerrick regarding the status of potential Project payments.  Notwithstanding any other term or provisionin this Agreement, it is conclusively understood and agreed that the solesource of Nathaniel’s payment obligations hereunder shall be payments receivedby Nathaniel from the Project (in Cologna-Veneta, Italy).  Accordingly, if Nathaniel receives no paymentsfrom its customer on the Project, Nathaniel shall have no obligation to payMerrick hereunder.

 

4.     **Release**.  The releases granted by the Parties inSections 10 and 11 of the Release Agreement shall apply with equal forcethrough the effective date of this Amendment, and are hereby ratified andconfirmed.

 

5.     **Miscellaneous**.

 

(a)   The Release Agreement, asamended by this Amendment, is hereby ratified and confirmed and shall continueto be in full force and effect in accordance with its terms as amended by thisAmendment including, without limitation, its provisions that specificperformance constitutes a party’s sole remedy for breach of this Amendment.

 

(b)   This Amendment may be executedin any number of counterparts, all of which together shall constitute one andthe same instrument and any party may execute this Amendment by signing anysuch counterpart.

 

(c)   The captions and section headingsappearing in this Amendment are included solely for convenience of referenceand are not intended to affect the interpretation of any provision of thisAmendment.

 

IN WITNESS WHEREOF, the Parties have caused this Amendment to be dulyexecuted as of the day and year first above written.

 

 
| **Nathaniel Energy Corporation**                |
|-------------------------------------------------|
| ** **                                      |
|                                            |
| /s/ George A. Cretecos, CEO                     |   |
| By: George Cretecos, Chief Executive  Officer   |
|                                            |
|                                            |
| **Merrick & Company**                  |
|                                            |
|                                            |
| /s/ David A. Sprenkle                           |   |
| By: David A. Sprenkle, Chief Financial  Officer |
|                                                 |  |  |

 

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