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EXHIBIT 10.22
PROMISSORY NOTE
$6,500,000.00 July 17, 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 Energy Corporation, a Michigan corporation (the "Lender"),
the principal sum of Six Million Five Hundred Thousand Dollars ($6,500,000.00)
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 (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, and pursuant to the
Borrower's Senior Serial Notes in the aggregate principal amount of $50,000,000
issued pursuant to the Note Agreements dated as of March 1, 1990 of the
Borrower regarding the $25,000,000 9.30% Senior Serial Notes, Series A due
March 1, 1997 and the $25,000,000 9.45% Senior Serial Notes, Series B due March
1, 2000, as such Amended and Restated Credit Agreement, Note Agreements and
Senior Serial Notes are 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,
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provided that judicial proceedings shall be commended 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 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 go
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 of 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
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forthwith become immediately due and payable upon demand, regardless of the
expressed maturity thereof.
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 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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