SCHEDULE 14A INFORMATION
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MARRIOTT RESIDENCE INN II LIMITED PARTNERSHIP
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April 30, 2002
Dear Marriott Residence Inn II Limited Partner:
We are pleased to announce that on April 30, 2002, Marriott Residence Inn
II 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 $415 in cash. The aggregate purchase price for all of the
outstanding Units and the one percent general partner interest of the
Partnership is $29,250,000. Merrill Lynch & Co., the Partnership's financial
advisor, has delivered to the General Partner its opinion that the merger
consideration to be paid to the Limited Partners is fair from a financial point
of view.
Pursuant to the merger agreement, Apple will deposit into escrow $3 million
of the purchase price, $1 million of which will be held as an earnest money
deposit. Upon consummation of the merger, the purchaser will assume
approximately $131 million of the Partnership's indebtedness and the
Partnership's obligation to fund the $9.7 million capital expenditure plan for
the current fiscal year.
Prior to the closing of the merger, the Partnership will establish a
Liquidating Trust to satisfy certain post-closing obligations of the Partnership
and to hold certain contingent assets of the Partnership. The Partnership will
contribute $300,000 of Partnership cash ($4.28 per Unit) and assign certain
contingent assets to this trust, which will be managed without profit by the
General Partner. The Partnership will distribute to each Limited Partner their
pro rata ownership interest in the Liquidating Trust. Approximately two years
after the completion of the merger, the Trust will be liquidated and its
remaining assets distributed to the Limited Partners.
Because the terms of the Merger Agreement provide that substantially all of
the Partnership cash remain in the Partnership at closing, less any cash used to
fund (a) closing costs of the merger and (b) the contribution to the Liquidating
Trust, we do not believe that there will be any further distributions to the
Limited Partners of Partnership cash. If any unrestricted Partnership cash
remains in the Partnership immediately prior to the closing of the merger, we
believe the amount will be minimal. However, if the amount of unrestricted
Partnership cash
remaining would equal $5.00 or more per Unit, we will make a distribution of
that amount to Limited Partners immediately prior to the consummation of the
merger. If the amount per Unit is less than $5.00, the cash will be contributed
to the assets of the Liquidating Trust. As noted above, once the Liquidating
Trust has satisfied the obligations for which it was created, the Trust will be
liquidated and all of its remaining assets will be distributed to the Limited
Partners.
Consummation of the merger is expected to occur during the third quarter of
2002. However, it 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 which are
available free of charge at the web site maintained by the SEC at www.sec.gov.
In addition, you can obtain documents filed by the Partnership with the SEC free
of charge by requesting them in writing from the Partnership at: Marriott
Residence Inn II Limited Partnership, 10400 Fernwood Road, Bethesda, Maryland
20817, Attention: Investor Relations, or by telephone at 301-380-2070.
We anticipate that the consent solicitation statement will be mailed to the
Limited Partners during the second 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 e-mail to
lpinfo@hostmarriott.com.
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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 report 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.
Additionally, as you are aware, in April of each year, the General Partner
provides the Limited Partners with an estimate of the taxable income to be
allocated to each Unit for that year. Due to the impending merger, which will
have a material impact upon the actual tax liability for the portion of 2002 you
own your Units, the General Partner is not in a position to estimate the taxes
per Unit at this time. However, the consent solicitation statement will contain
a discussion of the tax consequences of the merger itself.
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 TWO LLC
General Partner
/s/ Robert E. Parsons, Jr.
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Robert E. Parsons, Jr.
President and Manager