Exhibit 10.2


 


PROMISSORY NOTE


 


	
  $3,354,210.00

  	
   

  	
  New Windsor, New
  York

  
	
   

  	
   

  	
  September 29,
  2005

  



 


 


Nathaniel Energy
Corporation, a Delaware corporation with its principal place of business at 8001 South InterPort Blvd., Suite 260,
Englewood, CO 80112 (the “Payor”), for value received, hereby
unconditionally promises to pay to the order of RICHARD C. STRAIN, an individual residing at 15 Loockerman Avenue, Poughkeepsie, New
York 12601 (the “Payee”),
on the earlier of (i) the date of commencement of any bankruptcy, insolvency
or similar proceedings in respect of the Payor and (ii) a demand therefore
by the Payee, in lawful money of the United States of America, the principal
sum of THREE MILLION THREE HUNDRED FIFTY-FOUR THOUSAND TWO HUNDRED TEN and
00/100 ($3,354,210.00) DOLLARS, together with interest thereon as hereinafter
provided; provided that no demand for payment shall be made by the Payee
pursuant to paragraph (ii) hereinabove prior to December 31, 2005.


 


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


 


SECTION 2.  Priority.  This Promissory Note shall not be
subordinated or junior in right of payment or distribution to any other
indebtedness, liabilities or obligation of any kind or nature whatsoever and
shall be senior or pari  passu in right of payment and distribution
to any and all such other indebtedness, liabilities and obligations of the
Payor.


 


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


 


SECTION 4.  Miscellaneous.  (a)  The Payor hereby waives
presentment, demand, protest and notice of any kind whatsoever in connection
with this Promissory Note.  The
nonexercise by the holder of any of its rights hereunder in any particular
instance shall not constitute a waiver thereof in that or any subsequent
instance.


 


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


 


(c)           This Promissory Note shall
be construed in accordance with and governed by the law of the State of New
York.


 





















 


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


 


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


 


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


 


 


	
   

  	
  NATHANIEL ENERGY
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  /s/ George A. Cretecos

  
	
   

  	
  By:

  	
  George A. Cretecos

  
	
   

  	
  Title:

  	
  Chief Executive Officer