Press Release: AFM Hospitality Corporation
February 14, 2002
TORONTO -- AFM Hospitality Corporation (TSE:AFM) is pleased to announce the completion of several transactions
with key parties and senior executives who have made further financial commitments to the long-term success of
AFM.
First, on February 7th, 2002, Mr. Stephen Phillips, Vice-chair and CEO, AFM Hospitality Corporation, exercised
his previously granted options under AFM's employee stock option plan and purchased 250,000 common shares of AFM
for an aggregate subscription price of $550,000.00 (CDN). The proceeds of the transaction will used by AFM for
working capital requirements.
Second, on February 11, 2002, AFM received final regulatory approval for a transaction whereby Rushlake Hotels
(USA), Inc. accepted 66,667 common shares of AFM in lieu of fees earned during year 2000 pursuant to a management
agreement. Rushlake already controls more than 10 per cent of AFM voting securities through its wholly owned subsidiary
Hospitality First Securities Inc. This transaction had already been approved by shareholders at AFM's last annual
meeting of June 6, 2001.
Third, on February 11, 2002, AFM also received regulatory approval for the completion of the first two phases of
the share purchase arrangement that was approved by disinterested shareholders at AFM's special meeting of December
19, 2001. The first phase was announced on December 31, 2001 subject to such regulatory approval. Pursuant to the
second phase, two shareholder/directors, Lawrence P. Horwitz, Chairman, AFM and Andre Tatibouet, Director, AFM,
purchased 20,000 and 26,120 common shares respectively at a per share price of $4.75, which was above the market
value of $4.00 on the signing date. Mr. Stephen Phillips purchased 31,578 common shares at such price, together
with 31,578 warrants exercisable within 5 years at an exercise price of $4.75 per common share. Four other senior
officers, Mr. Warren Adamson President, AFM; Mr. Alan Raffan, CFO, AFM; Mr. Glen Blake, COO, AFM and Mr. Tom Matthews
(president of a wholly-owned subsidiary), each purchased 15,000 common shares at $4.75 per share and 15,000 similar
warrants. As part of the share purchase arrangement, AFM also extended financial assistance to such parties by
way of loans in the aggregate of amount $654,065.50. Management anticipates the final phase of the share purchase
arrangement will occur on or before March 1, 2002, subject to regulatory approval. Further details of the share
purchase arrangement may be obtained from the Information Circular prepared by management for the Special Shareholders
Meeting of December 19, 2001.
"The completion of these transactions continues to demonstrate that key players and senior management are
personally committed to the future success of AFM and are willing to contribute financially to help AFM reach its
potential. Not only does AFM have an excellent management team and board of directors to guide it, but individuals
who are critical to future success have personally committed to making it happen. Such personal contributions will
greatly assist AFM pursuing its future growth strategies for the benefit of all shareholders," stated Mr.
Horwitz, the Chairman of the Board.
Mr. Phillips added, "Management is pleased to demonstrate its commitment to AFM and is appreciative of the
shareholders who were supportive of management's initiatives to find innovative financial solutions."
About AFM Hospitality Corporation
Through its subsidiaries, AFM Hospitality Corporation, which also owns HFS Purchasing Services Canada, AFM Asset
Management Inc., Northwest Lodging International (USA) Inc. and Northwest Lodging International (Canada) Inc.,
is the exclusive Canadian Master Franchiser for ASTON(R), Best Inns(R), Hawthorn(R) Suites, Howard Johnson(R),
Knights Inn(R), Park Plaza, Park Inn, Ramada(R), Villager(R) Lodge and La Quinta(R) Inns. AFM Hospitality Corporation
operates or has open and/or executed franchise and management agreements with more than 170 hotels in North America,
representing an inventory of nearly 19,000 hotel rooms. The company's primary focus is to increase the number of
hotels franchised by the respective brands, franchise new brands, build the portfolio of hotel management agreements,
and acquire other franchise businesses related to the hospitality industry, while making available property management
services. AFM Hospitality Corporation is a publicly traded company listed on the Toronto Stock Exchange (TSE:AFM).
AFM Hospitality Corporation system-wide sales for branded hotels in its franchise portfolio and properties operated
by the company exceed CDN$300 million per year. AFM Hospitality Corporation may be reached at www.afmcorp.com
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Contact:
Contact: Stephen Phillips
Company: AFM Hospitality Corporation
Title: Vice-Chairman, CEO
Voice: 416-202-6763
Email: sphillips@afmcorp.com
Contact: Lawrence P. Horwitz
Company: AFM Hospitality Corporation
Title: Chairman of the Board
Voice: 206-443-2570
Email: lhorwitz@afmcorp.com