Nation Energy (NEGY) 10-K 2015 FY Annual report

PROMISSORY NOTE

US$50,000.00

July 18, 2014

FORVALUE RECEIVED, the undersigned,Nation Energy Inc.(the “Borrower”), promises to pay to the order ofJohn Hislop (the “Lender”) the principal sum ofFiftyThousand Dollars($50,000.00) in lawful currency ofthe United States (the “Principal Sum”), together with interest thereon as hereinprovided.

The Principal Sum or such amount as shall remain outstanding from time to time shall bear interest, thereon, calculated quarterly, not in advance, at arate offifteen (15%) percent per annumupon demand by the Lender, both before and after each of maturity, default and judgment commencing effectiveJuly 18, 2014.  In the event of any partial repayments made on the Principal Sum, such payments shallbe applied firstly towards accrued interest and then towards the Principal Sum.

The Principal Sum andall accruedand unpaid interest at the rate aforesaid willbecome due andpayable onJuly 18, 2016 (the “Term”).  Extension of time of payment ofall or any part of the amount owinghereunder at any time or times and failure of the Lender to enforce any of their rights or remedies hereunder shall not release the Borrower from its obligations hereunder or constitute a waiver of the rights of the Lender to enforce any rights and remedies therein.

On default in payment of any sum due hereunder for the Principal Sum or interest or after 15 days’ notice of Default to the Borrower, the unpaid balance of the Principal Sum and all accrued interest thereon shall at the option of the Lender forthwith become due and payable.

This Promissory Note shall be governed by the laws of the Province of British Columbia.

The undersigned will have the privilege of prepaying in whole or in part the Principal Sum and accrued interest.

Presentment, protest, notice of protest and notice of dishonour are hereby waived.

NATION ENERGY INC.

"/s/John R. Hislop"

"/s/John R. Hislop"

JOHN R. HISLOP

JOHN R. HISLOP, President