DEMAND PROMISSORY NOTE
ISSUED TO: CARAVEL MANAGEMENT INC.
Suite 1100 - 609 West Hastings Vancouver, British
Columbia V6B 4W4
ISSUED BY: NATION ENERGY INC.
Suite 725 - 1736 E. Charleston Blvd. Las Vegas,
United States of America
March 31, 2006 (the "Effective Date")
PROMISE TO PAY
For value received, the Borrower hereby promises to pay to or to the order of the Lender at its place of business
noted above, the principal amount of NINE HUNDRED EIGHTY THOUSAND NINE HUNDRED AND
FIVE DOLLARS AND SIX CENTS ($980,905.06) in lawful money of Canada (the "Loan") in the manner
hereinafter provided together with interest and other monies which may from time to time be owing hereunder or
The amount of principal that has been advanced and is outstanding from time to time, shall bear interest at a rate
of 15% per annum calculated and compounded monthly from the Effective Date.
Subject to the provisions hereof, the Borrower will pay the outstanding principal balance of the Loan together
with all interest which has accrued thereon at the rate set out above, calculated as aforesaid and then remains
unpaid, ON DEMAND, and without demand the Borrower will pay interest at the rate and calculated as
provided herein on the last day of March, June, September and December of each and every year commencing
June 30, 2006.
Interest at the rates provided by this Promissory Note is calculated not in advance and payable after as well as
before maturity both before and after default and both before and after judgment.
ARREARS OF INTEREST
Arrears of interest bear interest at the rate from time to time chargeable on principal compounded monthly,
calculated and paid at the same times and in the same manner as interest on principal.
6. MAXIMUM INTEREST RATE
The Borrower agrees that, notwithstanding a