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DAVENPORT MANAGEMENT CORPORATION
52 DAVENPORT RIDGE ROAD
STAMFORD, CT 06903
January 14, 1998
TO: UNITHOLDERS OF PRIME MOTOR INNS LIMITED PARTNERSHIP
RE: FUTURE OF THE PARTNERSHIP/PROPOSALS FOR NEW MANAGEMENT
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Dear Unitholder:
This is to remind you that a very important meeting of Unitholders will be
held on January 29, 1998, in Secaucus, New Jersey, to vote on our proposals to
replace the Partnership's general partner with new management. You should have
already received in the mail a Proxy Statement from us which describes our
proposals, together with a GOLD proxy card and return envelope.
We strongly urge you to vote FOR each of our proposals. Your vote is
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extremely important. Please complete, sign, date and return promptly the
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enclosed GOLD Proxy Card, no matter how many units you own. If you did not
receive the Proxy Statement, or if you otherwise require any additional
information or assistance, please contact Regan & Associates, 15 Park Row, New
York, NY 10038, tel. number (800) 737-3426.
The Proxy Statement, which you should read carefully, describes the need to
replace the general partner of the Partnership and to develop a business
strategy which would enhance the long-term value of your units. The troubled
history of the Partnership and its operating difficulties and poor financial
condition are described in detail in the publicly available reports which the
Partnership has filed with the Securities and Exchange Commission. Unitholder
value has diminished as evidenced by the dramatic increase through recent years
in the negative net worth of the Partnership. Moreover, the present general
partner let the Partnership's financial condition deteriorate to the point where
the units were delisted by the New York Stock Exchange in June 1997, and Holiday
Inns, Inc., the franchisor for the Partnership's Inns, has threatened not to
renew the franchise agreements for a majority of the Inns because the Inns no
longer meet required standards and because the Partnership cannot afford to make
necessary improvements to the Inns.
It is clear to us that the Partnership's last-minute efforts to address its
problems have been inadequate in the face of the magnitude of the Partnership's
long-standing problems. In November 1997, the Partnership announced that it had
reached an agreement to sell the assets of the Partnership to Servico, Inc.
Under the circumstances, we believe that the proposed transaction with Servico
amounts to a "fire" sale of the Partnership's assets. This ill-conceived
maneuver by the general partner, which will yield at most $2.00 per unit to
Unitholders, reinforces the merit of our proposal to replace the general partner
with new management.
When you evaluate the Servico transaction and compare it to the prospect of
fresh management with a real strategy for enhancing Unitholder value, you will
understand the importance of our effort to replace the general partner. Make
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your voice heard. Vote FOR the proposals in our Proxy Statement by completing
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and returning the enclosed GOLD Proxy Card AS SOON AS POSSIBLE.
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Sincerely yours,
DAVENPORT MANAGEMENT CORPORATION
