Exhibit 99.3
HFS INCORPORATED
0 Xxxxxx Xxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
December 13, 1996
General Motors Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Treasurer
Gentlemen:
Reference is made to the Stock Purchase Agreement
(the "Agreement"), dated as of August 28, 1996, by and
between HFS Incorporated ("HFS") and General Motors
Corporation ("GM"). Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to them
in the Agreement.
HFS hereby extends the Directed Sale Date to the
close of business on January 31, 1997; provided, that GM
shall not sell any of the 1,067,398 shares of HFS common
stock held by it as of the date hereof (the "Remaining
Shares") prior to the close of business on the tenth
business day prior to the Directed Sale Date unless directed
to do so by HFS. Any Remaining Shares not sold as of the
close of business on the Directed Sale Date shall be valued
at the closing price of HFS common stock on the New York
Stock Exchange on the Directed Sale Date.
HFS agrees to pay to GM interest on the value of
each of the Remaining Shares at a rate of LIBOR plus 100
basis points. With respect to a Remaining Share, interest
shall be calculated from and including November 17, 1996 to
but not including the date of sale of such Remaining Share.
HFS shall deliver to XX xxxx in the amount equal to the
aggregate interest owed on the Remaining Shares at the time
HFS is, or would be, required to pay the Post-Closing
Adjustment, if any. For purposes of calculating interest
pursuant to this paragraph: (i) each of the Remaining
Shares shall be valued at $74.063; and (ii) LIBOR shall mean
the one month London Interbank Offered Rate as published in
the Wall Street Journal.
In addition, HFS shall deliver to GM not later
than five business days after the date hereof, one or more
letters of credit in the amount of $30 million (the "Letter
of Credit") in order to secure payment by HFS to GM of the
Post-Closing Adjustment. The Letter of Credit shall be in
form and substance, and issued by one or more banking
institutions, satisfactory to GM. GM shall be entitled to
draw down on the Letter of Credit on the third business day
after the day HFS was required to deliver to GM the Post-
Closing Adjustment, if any, and failed to do so; provided
that GM delivers to HFS advance notice of its intent to draw
down on the Letter of Credit and GM has otherwise complied
with the terms hereof. The Letter of Credit shall expire on
February 14, 1997.
If on any day between the date hereof and January
20, 1997, GM delivers written notice to HFS that an estimate
of the Post-Closing Adjustment (the "Estimated Post-Closing
Adjustment") equals or exceeds $25 million on each of three
consecutive trading days during the period between the date
hereof and January 17, 1997, had the Remaining Shares not
yet sold been sold at the closing prices of a share HFS
common stock on the New York Stock Exchange on each of such
three days, then HFS shall, within five business days of
receipt of such notice, deliver to GM one or more additional
letters of credit in such amounts that such letters of
credit, together with the Letter of Credit, shall equal an
amount which is at least 120% of the highest Estimated Post-
Closing Adjustment of such three trading days. Such
additional letters of credit shall be in form and substance,
and issued by one or more banking institutions, satisfactory
to GM. Any additional letters of credit issued shall be
subject to the same terms and conditions as the Letter of
Credit. No subsequent notice delivered by GM shall include
a trading day which is within five trading days of trading
day used in a prior notice.
Please confirm that the foregoing is acceptable to
GM by signing the enclosed copy of this letter in the space
provided below and returning the same to me at your earliest
convenience.
Very truly yours,
HFS INCORPORATED
By: /s/ Xxxxx X. Xxxxxxx
------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice
President and
General Counsel
Agreed to and Accepted
as of the date first above
written:
GENERAL MOTORS CORPORATION
By: /s/ X. Xxxxxx Xxxxx
-----------------------
Name: X. Xxxxxx Xxxxx
Title: Assistant Treasurer
cc: General Counsel
General Motors Corporation
0000 Xxxx Xxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
(000) 000-0000
