Chartwell to Acquire Parlay

31 August 2006

Internet gaming software provider Chartwell Technology Inc. and Internet bingo software provider Parlay Entertainment Inc. on Wednesday publicized their intentions to merge, which was made official through the signing of a binding letter of intent.

According to the LOI, Chartwell will acquire all of the issued and outstanding common shares of Parlay, issuing 0.75 common shares of Chartwell for each issued and outstanding share of Parlay. Assuming the transaction is completed, Chartwell will issue roughly 11.2 million common shares in exchange for the entirety of Parlay's issued and outstanding common shares, and it will have an estimated 29.9 million issued and outstanding common shares at closing.

Pending court approvals, stock exchange approvals and Parlay shareholders' approval, the merger is scheduled to be completed by Oct. 31, 2006. Certain major Parlay shareholders (who hold 22 percent of the issued Parlay common shares) have already confirmed their support for the merger.

Additionally, Chartwell and Parlay have each agreed to pay a termination fee of CA$500,000 to the other party if the merger is not completed.

The executive landscape will change upon the merger's completion. Chartwell's board of directors will be comprised of two founders from each company as well as three independent directors. Chartwell and Parlay will also nominate co-CEOs, and senior executive teams of both companies will be combined as part of Chartwell after the merger.