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MARRIOTT RESIDENCE INN LIMITED PARTNERSHIP
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[MARRIOTT RESIDENCE INN LIMITED PARTNERSHIP LETTERHEAD]
December 3, 2001
Dear Marriott Residence Inn Limited Partner:
We are pleased to announce that on November 28, 2001 Marriott
Residence Inn Limited Partnership (the "Partnership") entered into a definitive
merger agreement with Apple Hospitality Two, Inc. ("Apple") pursuant to which
Apple will acquire all of the outstanding partnership interests in the
Partnership. In the merger, each unit of limited partnership of the Partnership
("Units") will be converted into $636.43 in cash. The aggregate purchase price
for all of the outstanding Units and the general partner interest of the
Partnership is $41,950,000. Merrill Lynch & Co., the Partnership's financial
advisor, has delivered to the General Partner its opinion as to the fairness,
from a financial point of view, of the merger consideration to be paid to the
Limited Partners.
In addition, immediately prior to the closing of the merger, the
Partnership intends to distribute to the Limited Partners certain Partnership
cash. The actual amount of the distribution to be made will vary depending upon
a number of factors, particularly the performance of the Partnership's hotels
prior to the closing of the merger. If the merger had closed at the end of the
third quarter of 2001, the amount of the distribution would have been
approximately $100 per Unit.
Pursuant to the merger agreement, the surviving partnership in the
merger will assume approximately $94 million of the Partnership's indebtedness.
Apple will also deposit into escrow $35 million of the purchase price, $3
million of which will be held as an earnest money deposit and $32 million of
which will be held as evidence of Apple's financial ability to consummate the
merger.
Further pursuant to the merger agreement, the Partnership will
establish a subsidiary prior to the closing of the merger to satisfy certain
post-closing obligations of the Partnership and to hold certain contingent
assets of the Partnership. The Partnership will contribute $1.5 million of
Partnership cash and assign certain contingent assets to this new entity, which
will be managed without profit by the General Partner. Prior to the closing of
the merger, the Partnership will distribute to each Limited Partner their pro
rata ownership interest in the new entity. As soon as the new entity has
satisfied the obligations for which it is created, which is expected to occur
within two years after the completion of the merger, it will be liquidated and
its assets distributed to the Limited Partners.
Consummation of the merger, which is expected to occur during the
first quarter of 2002, is subject to certain conditions, including approval of
the merger by the Limited Partners,
consent of the Partnership's lenders, consent of the manager of the
Partnership's hotels and other customary conditions.
In connection with the merger, the Partnership will file a consent
solicitation statement and other relevant documents with the U.S. Securities and
Exchange Commission (the "SEC"). The Partnership will mail a copy of the consent
solicitation statement to each Limited Partner who is listed on the records of
the Partnership on the record date, which will be a date that is immediately
prior to the mailing date. Limited Partners are urged to read the consent
solicitation statement carefully when it becomes available, together with all
other relevant documents filed by the Partnership with the SEC. Such documents
will contain important information with respect to the merger. You will also be
able to obtain the consent solicitation statement and all other relevant
documents filed by the Partnership with the SEC free of charge at the web site
maintained by the SEC at www.sec.gov. In addition, you can obtain documents
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filed by the Partnership with the SEC free of charge by requesting them in
writing from the Partnership at: Marriott Residence Inn Limited Partnership,
10400 Fernwood Road, Bethesda, MD 20817, Attention Investor Relations, or by
telephone at 301-380-2070.
Limited Partners are urged to read the consent solicitation statement
carefully and in its entirety before making any voting decision.
We anticipate that the consent solicitation statement will be mailed
to the Limited Partners during the first quarter of 2002. It will be important
for the General Partner to have on record the address and telephone number at
which to reach you during that time period. Please contact the General Partner
with any necessary updates to this information as soon as possible. Changes may
be mailed to the address above, faxed to 301-380-5370 or sent via email to
lpinfo@hostmarriott.com.
The Partnership, the General Partner and the executive officers and
managers of the General Partner may be deemed to be participants in the
solicitation of consents from the Limited Partners in connection with the
merger. Information about the General Partner and the executive officers and
managers of the General Partner and their ownership of interests in the
Partnership is set forth in the Partnership's annual reports on Form 10-K filed
with the SEC. Limited Partners may obtain additional information regarding the
interests of such participants by reading the consent solicitation statement
regarding the merger when it becomes available.
If you have any questions with respect to these matters, please call
the Partnership's Investor Relations Group at 301-380-2070.
Very truly yours,
RIBM ONE LLC
General Partner
/s/ Robert E. Parsons, Jr.
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Robert E. Parsons, Jr.
President and Manager