We received the following press release.--RL

A LETTER TO THE INDUSTRY FROM DONALD REENTS, PRESIDENT OF CHESSEX DISTRIBUTION, AND DANIEL HIRSCH, PRESIDENT OF THE ARMORY:

We are very pleased to announce that Chessex Distribution and The Armory have agreed to merge. This will result in the formation of a new company, Alliance Distribution.

The opportunities presented by this merger are tremendous for everyone we do business with. The economies created will allow us to upgrade systems, fully integrate the warehouses, and better train our staff. For retailers this will mean better fill rates, fewer packing and invoicing errors, better sales assistance, and enhanced on-line capabilities. For manufacturers it will mean better information sharing, fewer instances of in-print items being 3temporarily out of stock, better product marketing, and reduced order processing costs.

We are also merging our two manufacturing companies into a new company which we expect will retain the name of Chessex Manufacturing. Chessex is well known for having innovative, high quality dice, Battlemats, and Magic Wand paints. The Armory has a strong reputation for its full line of hobby tools as well as Armory paints and primers. Both companies also provide a wide array of quality gaming supplies and accessories. We are looking forward to providing you with one stop shopping for all of your favorite gaming accessories.

The merger should be completed by late July. Until then we will continue to operate as separate companies. Upon finalization Dan Hirsch will become president of Alliance and Don Reents will become president of Chessex Manufacturing. During the integration period our biggest priority will be to make sure our retail clients experience a smooth flow of business. Also, there will be some operational changes within the companies so we hope you will all stay in touch with your account representatives to keep current on any news. For those of you who will be attending the Chessex Midwest Open House, we will be hosting an open Q & A session on Saturday which we hope you will attend. For those of you not able to make it, we know you may have issues and concerns. Although we may not be able to answer specific account related questions for a few months, we certainly invite you to call us at any time to discuss your situation. Also, we hope to address most of the issues in our weekly updates (each will have a special section dedicated specifically to merger related news).

We are confident that this is a strong move for the industry and we'll be happy to discuss it with anyone who has any questions. Also we have instructed our sales people to list any ideas for making our business better for retailers and manufacturers. We look forward to those ideas and your comments.

Yours Truly,

Daniel Hirsch
Donald Reents

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