30.08.2006
Chartwell Technology and Parlay Entertainment Agree To Merger
CALGARY , Canada — August 30, 2006 — Chartwell Technology Inc. (TSX – CWH)
("Chartwell") a leading provider of gaming software systems to the online and remote gaming industry and Parlay Entertainment Inc. (TSXV – PEI) ("Parlay") the world's leading provider of Internet bingo solutions are pleased to announce their intention to enter into a business combination as agreed to in a binding Letter of Intent (LOI) executed today.
The LOI calls for Chartwell, and/or a wholly owned subsidiary of Chartwell, to acquire all of the issued and outstanding common shares of Parlay by way of a plan of arrangement or similar business combination, subject to obtaining all necessary regulatory and court approvals and the approval of the Parlay shareholders and subject to the completion of due diligence by both parties. Under the proposed business combination, Chartwell will issue 0.75 common shares of Chartwell for each issued and outstanding common share of Parlay. Assuming completion of the transaction, Chartwell will issue up to approximately 11.2 million common shares in exchange for all of the issued and outstanding Parlay common shares and post closing, will have approximately 29.9 million issued and outstanding common shares. Outstanding options and warrants to purchase Parlay common shares will either be exercised, cashed out or converted into options or warrants to purchase Chartwell shares.
The definitive agreement to be entered into by Chartwell and Parlay will be subject to a number of conditions, including court approvals, stock exchange approvals and the approval of the shareholders of Parlay at a meeting expected to be held in October, 2006. If all necessary approvals are obtained and all other conditions to the completion of the transaction are satisfied or waived, the business combination is expected to be completed by October 31, 2006. Certain major shareholders who are also directors of Parlay, holding approximately 22% of the issued Parlay common shares, have agreed to enter into agreements with Chartwell confirming their support for the proposed business combination. Chartwell and Parlay have each agreed, under certain circumstances, to pay a termination fee of $500,000 (Cdn) to the other party if the business combination is not completed.
The merger will combine two significant international software providers in the Internet gaming arena with a compatible customer base, complementary product offerings and identical business models, to better compete on the global stage.
On completion of the business combination, the Chartwell board of directors will consist of two founders of each of Chartwell and Parlay and three independent directors. An Office of the CEO will be established with the President and CEO of each of Chartwell and Parlay acting as Co-CEO of Chartwell. A Merger Committee with representatives of both companies will be established to plan for, and manage, the technical, financial and operational aspects of the business combination. The senior executive teams of both Chartwell and Parlay will be combined in Chartwell following the merger.
In commenting on the proposed merger, Darold H. Parken, President and CEO of Chartwell said: "Chartwell and Parlay are a perfect fit. In an ever expanding remote gaming industry, Chartwell and Parlay share a unique and highly successful business model and enjoy great reputations. Our combined entity will be a much stronger and effective competitor and our customers will benefit from the merger of our best-of-breed gaming applications and our talented group of people. We are very excited about joining forces and working with the people at Parlay to build the world's most comprehensive and flexible gaming software system, while maintaining our independence from the operation of any gaming business."
Also commenting on the proposed merger, Scott White, President and CEO of Parlay added: "Consolidating two growing businesses like Parlay and Chartwell is the first step in our joint creation of a global technology powerhouse. Leveraging our respective excellence and leadership in technology, our common employment cultures, our existing and prospective customer bases and our depth in human resources, we are confident in our ability to develop, license and support a world-class suite of e-gaming products. It is our intention to create a new company which will generate excellent value for our stakeholders, and as our industry moves into the mainstream over the coming years, the fact that we will not compete with our customers will be our most important value proposition."
About Chartwell
Chartwell Technology Inc. specializes in the development of leading-edge gaming applications and entertainment content for the Internet and wireless platforms and other remote access devices. Chartwell's Java and Flash based software products and games are designed for deployment in gaming, entertainment, advertising and promotional applications. Chartwell does not participate in the online gaming business of its clients nor does Chartwell operate its own gaming sites. Chartwell's team of highly trained professionals is committed to delivering the highest quality software and maintaining its leading edge through continuous development and unparalleled customer support.
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