**Exhibit 10.2**

 

PROMISSORY NOTE

 
| $3,354,210.00 |   | New Windsor, New  York   |
|---------------|--------|--------------------------|
|          |   | September 29,  2005 |

 

 

Nathaniel EnergyCorporation, a Delaware corporation with its principal place of business at 8001 South InterPort Blvd., Suite 260,Englewood, CO 80112 (the “Payor”), for value received, herebyunconditionally promises to pay to the order of **RICHARD C. STRAIN**, an individual residing at 15 Loockerman Avenue, Poughkeepsie, NewYork 12601****(the “Payee”),on the earlier of (i) the date of commencement of any bankruptcy, insolvencyor similar proceedings in respect of the Payor and (ii) a demand thereforeby the Payee, in lawful money of the United States of America, the principalsum of THREE MILLION THREE HUNDRED FIFTY-FOUR THOUSAND TWO HUNDRED TEN and00/100 ($3,354,210.00) DOLLARS, together with interest thereon as hereinafterprovided; provided that no demand for payment shall be made by the Payeepursuant to paragraph (ii) hereinabove prior to December 31, 2005.

 

SECTION 1.  Interest.  Interest shall accrue and be payablequarterly on the outstanding principal amount of this Promissory Note at theprime rate as published in the Wall Street Journal on the date hereof plus one andone-half percent (1.5%).  Interest shallbe computed based upon a 365 day year.

 

SECTION 2.  Priority.  This Promissory Note shall not besubordinated or junior in right of payment or distribution to any otherindebtedness, liabilities or obligation of any kind or nature whatsoever andshall be senior or paripassu in right of payment and distributionto any and all such other indebtedness, liabilities and obligations of thePayor.

 

SECTION 3.  Security.  The obligations under this Note are securedby the Pledge Agreement between Payor and Payee of even date herewith and by theSecurity Agreement between Payor and Payee of even date herewith.

 

SECTION 4.  Miscellaneous.  (a)  The Payor hereby waivespresentment, demand, protest and notice of any kind whatsoever in connectionwith this Promissory Note.  Thenonexercise by the holder of any of its rights hereunder in any particularinstance shall not constitute a waiver thereof in that or any subsequentinstance.

 

(b)           The Payor may prepay all or part ofthe principal hereof at any time without penalty.

 

(c)           **This Promissory Note shallbe construed in accordance with and governed by the law of the State of NewYork**.

 

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(d)           All borrowings evidenced by thisPromissory Note and all payments and prepayments of the principal hereof andinterest hereon shall be recorded by such holder in its internal records, provided,however, that the failure of the holder hereof to make such a notationor any error in such a notation shall not affect the obligation of the Payorunder this Promissory Note.  All paymentsand prepayments payments received by the Payee shall be applied first toaccrued interest and, thereafter, to principal.

 

(e)           This Promissory Note is thatPromissory Note referred to in that certain Stock Purchase Agreement dated September 29,2005, between Payor and Payee.

 

IN WITNESS WHEREOF, theundersigned has caused this Promissory Note to be duly executed as of the dayand year first above written.

 

 
|   | NATHANIEL ENERGY  CORPORATION |
|--------|-------------------------------|
|   |                          |
|   | /s/ George A. Cretecos        |
|   | By:                           | George A. Cretecos |
|   | Title:                        | Chief Executive Officer |
|        |                               |  |  |

 

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