Exhibit 10.23
[Puget Sound Energy Letterhead]
September 21, 1999
Cabot Oil & Gas Corporation
Attention: Scott Schroeder
1200 Enclave Parkway
Houston, Texas 77077
Re: 6% Convertible Redeemable Preferred Stock
Dear Scott:
Puget Sound Energy, Inc. ("PSE") wishes to confirm its binding agreement
with Cabot Oil & Gas Corporation ("Cabot") with respect to the repurchase by
Cabot of the 1,134,000 shares of its 6% Convertible Redeemable Preferred Stock,
stated value $50 per share ("Preferred Stock"), held by PSE on the terms set
forth below.
1. BASIC TRANSACTION
Cabot will repurchase, and PSE will sell, the Preferred Stock for an
aggregate price of $51,600,000, together with accrued and unpaid dividends to
the date of Closing (as defined below), payable by wire transfer of immediately
available funds on the date of Closing. Cabot will determine the date on which
the repurchase shall occur, which shall be on or before November 1, 1999 or as
soon thereafter as is, in Cabot's judgement, practicable, but in no event after
November 1, 2000 (the "Closing") nor prior to the satisfactory receipt of the
conditions described in section 2.1) and 2.b) of the Gas Purchase Agreement
Letter of Intent between PSE and Cabot Oil & Gas Marketing Corporation dated
September __, 1999. In this connection, PSE understands that Cabot expects to
conduct an offering of Class A Common Stock, par value $.10 per share ("Common
Stock"), of Cabot to fund the repurchase.
At the mutual election of Cabot and PSE, Cabot may, in lieu of repurchasing
the Preferred Stock for cash, repurchase the Preferred Stock for a number of
shares of Common Stock to be mutually agreed on by PSE and Cabot. In such event,
PSE will arrange for the sale of the Common Stock at or as soon as practicable
after the Closing.
2. PUBLICITY
The parties will consult with each other and will mutually agree upon any
press releases or public announcements pertaining to the agreement or the
repurchase contemplated hereby prior to the Closing, and will not issue any such
press releases or make any such public announcements prior to such consultation,
except as may be required by applicable law or by obligations pursuant to any
listing agreement with any national securities exchange, in which case the party
proposing to issue such press release or make such public announcement shall use
its best efforts to consult in good faith with the other party before issuing
any such press releases or making any such public announcements.
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Mr. Scott Schroeder
Page 2
September 21, 1999
3. COSTS
Each party shall be responsible for and bear all its own costs and expenses
(including any broker's or finder's fees) incurred in connection with the
repurchase transaction and any sale of Common Stock, including expenses of its
representatives and brokers. PSE shall pay all brokerage or underwriting
commissions or discounts in connection with any sale of Common Stock by PSE, and
in the event the repurchase is for cash, PSE will pay Cabot $137,500 in cash at
Closing in lieu of the brokerage costs avoided by PSE.
If Cabot is in agreement with the foregoing, please execute both originals
of this Letter of Intent and return one of them to the undersigned.
Very truly yours,
PUGET SOUND ENERGY, INC.
By: /s/ DONALD E. GAINES
--------------------------------
Donald E. Gaines
Treasurer
Acknowledged and agreed:
CABOT OIL & GAS CORPORATION
By: /s/ RAY SEEGMILLER
---------------------------------
Ray R. Seegmiller
Chairman and
Chief Executive Officer
Date: September 21, 1999
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