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EXHIBIT 10.20
PROMISSORY NOTE
$65,000,000 August 31, 1995
CMS NOMECO Oil & Gas Co., formerly known as NOMECO Oil & Gas Co., a
corporation duly organized and existing in good standing under the laws of the
State of Michigan (the "Borrower"), for value received, hereby promises to pay
to the order of CMS Enterprises Company, a Michigan corporation (the "Lender"),
the principal sum of Sixty Five Million Dollars ($65,000,000) or, if less, the
aggregate unpaid principal amount of all loans made by the Lender to the
Borrower and endorsed by the Lender on Schedule A hereto (the "Schedule") on
November 1, 1999.
The Borrower promises to pay interest on the unpaid principal balance
of each loan hereunder from and including the date of such loan to the maturity
date of such loan (as shown on the Schedule) at a rate per annum equal to the
average cost of debt of CMS Energy Corporation (on an unconsolidated basis) for
the most recent quarter (the "Borrowing Rate"), payable quarterly in arrears
and on such maturity date. Any principal not paid when due shall bear interest
from maturity until paid in full, payable upon demand, at a rate per annum
equal to 120% of the Borrowing Rate. Interest shall be calculated on the basis
of a year of 360 days and actual days elapsed.
All payments hereunder shall be made in lawful money of the United
States and in immediately available funds. Any extension of time for the
payment of the principal of this note resulting from the due date falling on a
Saturday, Sunday or legal holiday shall be included in computation of interest.
If (i) any sum payable on any liability of the Borrower to the Lender
hereunder shall not be paid when due and such default shall continue for 30
consecutive days; or (ii) the Borrower shall default on any obligation for
repayment of borrowed money and the holder of such borrowed money shall
accelerate the due date thereof, the Lender may, at its option, declare the
principal and interest on this note immediately due and payable, without
protest, presentment, notice or demand, all of which the Borrower hereby
waives. Notwithstanding the above, the Lender may terminate the unused portion
of this facility in whole or in part by giving the Borrower thirty days advance
written notice thereof.
The Borrower agrees to pay on demand all expenses, including reasonable
attorneys' fees, the Lender may incur in connection with the enforcement of
this note.
The indebtedness evidenced by this note (including the obligations
described in the preceding paragraph) and any renewals or extension hereof,
shall at all times be wholly subordinate and junior in right of payment to any
and all present and future indebtedness, obligations and liabilities of the
Borrower pursuant to the Amended and Restated Credit
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Agreement dated as of November 1, 1993 among the Borrower, the banks now or
hereafter parties thereto and NBD Bank, N.A., as agent, as such Amended and
Restated Credit Agreement is amended, modified, restated or refinanced from
time to time and all renewals or increases therein and further including
without limitation all reimbursement obligations pursuant to any letters of
credit issued pursuant thereto and all obligations pursuant to any promissory
notes issued pursuant thereto, all amounts accruing after the filing of any
petition in bankruptcy or similar loss, whether or not such amount is an
allowable claim, all guarantees, all guarantees for any of the foregoing and
all rights and remedies of the holders of any of the foregoing (herein called
"Superior Indebtedness"), in the manner and with the force and effect hereafter
set forth:
(1) In the event of any liquidation, dissolution, or winding up of the
Borrower, or of any execution receivership, insolvency, bankruptcy,
liquidation, reorganization or other similar proceeding
relative to the Borrower or its property, all Superior Indebtedness
shall first be paid in full in cash or cash equivalents before any
payment is made upon the indebtedness evidenced by this note; and in
any such event any payment or distribution of any kind or character,
whether in cash, property or securities (other than in securities,
including equity securities, or other evidences of indebtedness, the
payment of which is subordinated to the payment of all Superior
Indebtedness which may at the time be outstanding in the same manner as
the subordinated notes are subordinated to the Superior Indebtedness,
but only to the extent that the court awarding or permitting the
distribution of such securities states that in doing so it is giving
effect to the subordination of this note to the Superior Indebtedness
set forth herein) which shall be made upon or in respect of this note
shall be paid over the holders of such Superior Indebtedness, pro rata,
for application in payment thereof unless and until such Superior
Indebtedness shall have been paid or satisfied in full;
(2) In the event that this note is declared or becomes due and payable
because of the occurrence of any event of default hereunder or
otherwise than at the option of the Borrower, under circumstances when
the foregoing clause (1) shall not be applicable, the Lender shall be
entitled to payments only after there shall first have been paid in
full in cash or cash equivalents all Superior Indebtedness outstanding
at the time this note so becomes due and payable because of any such
event, or payment shall have been provided for in a manner satisfactory
to the holders of such Superior Indebtedness; and
(3) During the continuance of any default with respect to any Superior
Indebtedness permitting the holders thereof to accelerate the
maturity of such Superior Indebtedness, no payment of principal,
premium or interest or other amount shall be made on this note, if
either (i) notice of such default in writing or by telegram has been
given to the Borrower by the holders of a majority in aggregate
principal amount of the outstanding Superior Indebtedness in default,
provided that judicial proceedings shall be commenced with respect to
such default (x) within one hundred twenty (120) days thereafter in the
case such default relates to the non-payment of principal, interest or
premium on such Superior Indebtedness or (y) within 90 days after the
giving of such notice in the case
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of any other event or condition causing such default, or (ii)
judicial proceedings shall be pending in respect of such default. The
holders of Superior Indebtedness shall not be entitled to give notice
pursuant to this clause (3) more than once with respect to any default
which was specified in such a notice and which has continued without
interruption since the date such notice was given, nor shall such
holders be entitled to give a separate notice with respect to any
default not so specified which (to the knowledge of any holder giving
such notice) was existing on the date notice shall have been given
pursuant to this clause (3) and which has continued without
interruption from the date such notice was given. Upon receipt of any
notice from such holders of Superior Indebtedness pursuant to this
clause (3), the Borrower shall forthwith send a copy thereof to the
Lender.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets or securities of the Borrower of any kind or character,
whether in cash, property or securities, shall be received by any trustee,
agent or paying agent or the holders of this note (or, if the borrower of any
subsidiary or affiliate of the Borrower is acting as paying agent, money,
assets or securities shall be segregated or held in trust) on account of
principal of, premium on, interest on or other amounts with respect to this
note contrary to the terms hereof, such payment or distribution shall be
received, segregated from other funds, and held in trust by such trustee,
agent, paying agent or holder for the benefit of, and shall immediately be paid
over to, the holders of Superior Indebtedness or their representative, ratably
according to the respective amounts of Superior Indebtedness held or
represented by each.
The Lender undertakes and agrees for the benefit of each holder of
Superior Indebtedness to execute, verify, deliver and file any proofs of claim
which any holder of Superior Indebtedness may at any time require in order to
prove and realize upon any rights or claims pertaining to this note and to
effectuate the full benefit of the subordination contained herein; and upon
failure of the Lender so to do, any such holder of Superior Indebtedness shall
be deemed to be irrevocably appointed the agent and attorney-in-fact of the
Lender to execute, verify, deliver and file any such proofs of claim.
No right of any holder of any Superior Indebtedness to enforce
subordination as herein provided shall at any time or in any way be affected or
impaired by any failure to act on the part of the Borrower or the holders of
Superior Indebtedness, or by any noncompliance by the Borrower with any of the
terms, provisions and covenants of this note or the agreement under which they
are issued, regardless of any knowledge thereof that any holder of Superior
Indebtedness may have or be otherwise charged with.
The Borrower agrees, for the benefit of the holders of Superior
Indebtedness, that in the event that this note is declared due and payable
before its expressed maturity because of the occurrence of a default hereunder,
(i) the Borrower will give prompt notice in writing of such happening to the
holders of Superior Indebtedness and (ii) all Superior Indebtedness shall
forthwith become immediately due and payable upon demand. regardless of the
expressed maturity thereof.
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The Borrower may make optional prepayments on this note at any time,
provided that no event of default under the Superior Indebtedness and no event
which may become such an event of default with notice or lapse of time, or
both, has occurred and is continuing at the time of such payment or would be
caused by such payment, in which case the Borrower not make, and the holder of
this note shall not accept, any such optional prepayment.
The foregoing provisions are solely for the purpose of defining the
relative rights of the holders of Superior Indebtedness on the one hand, and
the Lender on the other hand, and nothing herein shall impair, as between the
Borrower and the Lender, the obligation of the Borrower which is unconditional
and absolute, to pay the principal, premium, if any, and interest on this note
in accordance with its terms, nor shall anything herein prevent the Lender from
exercising all remedies otherwise permitted by applicable law or hereunder upon
default hereunder, subject to the rights of the holders of Superior
Indebtedness as herein provided for.
This note is subject to further terms and conditions specified in
Subordination Agreement executed among the Lender and the current holders of
the Superior Indebtedness.
This note shall be governed by, and interpreted and construed in
accordance with, the laws of the State of Michigan.
CMS NOMECO OIL & GAS CO.
BY: /s/ Paul E. Geiger
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Paul E. Geiger
ITS: Vice President, Secretary and Treasurer
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Schedule A
to $65,000,000 CMS NOMECO Oil & Gas Co.
Promissory Note dated August 31, 1995
ADVANCES AND PAYMENTS OF PRINCIPAL
Amount of
Principal Unpaid
Amount of Paid or Principal Interest Notation
Date Advance Prepaid Balance Maturity Date Rate Made By
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August 31, 1995 $61,340,000 $61,340,000 November 1, 1999