Sega and Atari Announce Agreements, Investments and Resolutions

TOKYO -- Sega Electronics, Ltd., and Atari Corporation have announced an
affiliation that includes several agreements designed to serve as the
basis of future working agreements between the two video-game
manufacturers.

Under the terms of the agreements, Sega will receive worldwide,
non-exclusive rights, with certain exceptions, to Atari's extensive
lbirary of patents, a number of which extend beyond the turn of the
century. The agreement covers Sega, its subsidiars, its licensees, and its
customers for more than 70 U.S. patents and applications, for a fully
prepaid royalty to Atari covering the remaining seven years of certain
patents, amortized at about $7 million per year. Atari will thereafter
receive a total of $40 million, less Atari's contingent attorney fees and
costs.

Sega will also purchase approximately 4.7 million shares of Atari common
stock for a total price of $40 million. Both companies will enter into
software license agreements for a specified number of games that will be
made available on each company's present and future platforms.

In addition, Atari has agreed to dismiss its legal proceedings against
Sega, and each company will release its claims against each other.

The agreements are subject to approval by the U.S. Department of Justice
and the Federal Trade Commission, and to certain other conditions.

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