Infogrames Entertainment S.A. Announces Unwinding of Nexgen Financing

Business Wire, Oct 29, 2004

NEW YORK -- Infogrames Entertainment S.A. ("IESA"), the majority shareholder of Atari, Inc. (Nasdaq: ATAR), today announced it has redeemed $26.1 million out of the $28.2 million Nexgen financing raised through its wholly-owned subsidiary California US Holdings, Inc. ("CUSH").

On June 17, 2004, CUSH received $28.2 million from Nexgen Capital Limited and, in exchange, transferred 10.6 million Atari shares, with a one-year maturity date (the "Transaction").

The amount due by CUSH to Nexgen now amounts to $2.1 million. This reduction reflects the offset of the credit cushion, margin calls payments made by IESA as well as the sale of shares by Nexgen. It has also been agreed that all obligations of CUSH and Nexgen relating to reset payments and credit cushion payments shall lapse. The underlying number of shares of Atari, Inc. held by Nexgen is now reduced to 3.9 million.

The CUSH payment obligations to Nexgen have been almost completely extinguished. Therefore, the Transaction has been amended to terminate earlier and no later than February 15, 2005. Upon termination of the Transaction, IESA will hold approximately 60% of the share capital of Atari, Inc.