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                                                                    Exhibit 10.7


                                                                  EXECTUION COPY

                     AGREEMENT REGARDING ISSUANCE OF SHARES

September 15, 2005

Atari, Inc.
417 Fifth Avenue
New York, NY 10016
U.S.A.

Ladies and Gentlemen:

     This is to set forth the agreement between Atari, Inc. ("Atari"), a
Delaware corporation, and Infogrames Entertainment S.A. ("IESA"), a French
societe anonyme, regarding the issuance by Atari of shares of common stock, par
value $0.01 per share, of Atari ("Common Stock") in satisfaction of obligations
of Atari to IESA and/or its subsidiaries, which agreement is as follows:

1.   At the closing described below, Atari will issue to IESA 4,881,533 shares
     (the "Shares") of Common Stock, to be applied at the rate of $1.30 per
     Share as follows:

     (a)  3,626,154 Shares will be applied in full satisfaction of a total of
          $4,714,000 due from Atari to subsidiaries of IESA for work performed
          and to be performed relating to the development of the Test Drive
          Unlimited and Stuntman 2 games, as reflected on the attached schedule.

     (b)  1,255,379 Shares will be applied to reduce month end net balances due
          from Atari and its subsidiaries (the "Atari Companies") to IESA and
          its direct or indirect wholly-owned subsidiaries (the "IESA
          Companies"), as provided in Section 2.

2.   (a)  If at the end of September 2005 or any subsequent calendar month
          through and including March 2006, the amount due from the Atari
          Companies to the IESA Companies exceeds the amount due from the IESA
          Companies to the Atari Companies, the $1.30 per share issue price of
          the Shares described in Section 1(b) will be applied in satisfaction
          of the net amount due from the Atari Companies to the IESA Companies
          until the entire issue price has been applied.

     (b)  If at March 31, 2006, after applying the issue price of the Shares
          described in Section 1(b) as provided in Section 2(a) in satisfaction
          of net amounts, if any, due from the Atari Companies to the IESA
          Companies at the end of each month from September 2005 to and
          including March 31, 2006, any portion of that issue price has not been
          applied in satisfaction of net amounts due from the Atari Companies to
          the IESA companies, not later than April 10, 2006, IESA will pay the
          unapplied balance of that issue price to Atari in cash.

3.   The closing of the issuance of the Shares to IESA (the "Closing") will take
     place on September 15, 2005, at Atari's offices, 417 Fifth Avenue, New
     York, NY 10016, at 10:00 a.m., New York City time. At the Closing:

     (a)  Atari will deliver to IESA the certificates representing the Shares,
          registered in IESA's name. Each certificate shall bear a legend
          stating that the shares it represents were issued in a transaction
          that was not registered under the Securities Act of 1933, as amended,
          and those shares may be sold or otherwise transferred only in a
          transaction that is registered

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          under that Act or is exempt from the registration requirements of that
          Act and any applicable state securities laws.

     (b)  IESA will deliver to Atari a document stating that (i) all obligations
          of Atari set forth on the schedule to this Agreement relating to the
          development of the Test Drive Unlimited and Stuntman 2 games have been
          paid in full and (ii) acknowledging that the issue price of the Shares
          described in Section 1(b) will be applied in satisfaction of net month
          end balances due from the Atari Companies to the IESA Companies, or
          paid, as provided in Section 2.

4.   IESA hereby acknowledges and agrees that all of the services rendered and
     expenses incurred by the subsidiaries of IESA in connection with Test Drive
     Unlimited and Stuntman 2 and all of the results and proceeds thereof
     (sometimes severally and collectively called "Elements" herein), were and
     shall continue to be performed in accordance with, and are subject to the
     terms of, Atari's standard developer agreement, including (a) with respect
     to Atari's ownership from inception and in perpetuity of all intellectual
     property rights or interests resulting from or arising in connection with
     such services such that, among other things, Atari is and shall be the sole
     and exclusive owner of all right, title and interest, including without
     limitation all copyrights, trademarks, and patent rights (and all
     extensions and renewals thereof throughout the world), in and to all such
     Elements, including all so-called engines, designs, game play, narrative,
     characters, textures, and processes created, adapted, commissioned or used
     by such subsidiaries in performing the Test Drive Unlimited and Stuntman 2
     development work at any time, it being expressly acknowledged by IESA that
     all such work has been commissioned by Atari and rendered by the IESA
     subsidiaries on a "work-for-hire" basis from inception (and, to the extent
     that it is ever legally determined that such work or any Elements were not
     rendered or created on a work-for-hire basis, IESA hereby irrevocably
     grants to Atari a gratis, perpetual, exclusive, world-wide license with
     respect to any such Elements), and (b) standard warranties and
     representations from the IESA subsidiaries in favor or Atari that all
     Elements are delivered to Atari on an unencumbered, liability-free, fully
     paid-up basis such that Atari's exploitation thereof and of the games shall
     never (i) violate the laws or requirements of any jurisdiction, union or
     other entity, (ii) infringe the rights of any person or entity or (iii)
     require Atari to pay any sums or other consideration to any person or
     entity in respect of the Elements (other than those licensors identified on
     Exhibit 4 attached hereto and such other ordinary course license payments
     which Atari may hereafter agree in writing to accept).

5.   Atari represents and warrants to IESA as follows:

     (a)  Atari is a corporation duly incorporated and in good standing under
          the laws of the State of Delaware.

     (b)  Atari has all corporate power that is necessary to enable it to enter
          into this Agreement and to carry out the transactions contemplated by
          it. All corporate actions necessary to authorize Atari to enter into
          this Agreement and carry out the transactions contemplated by it have
          been taken. This Agreement has been duly executed by Atari and is a
          valid and binding agreement of Atari, enforceable against Atari in
          accordance with its terms.

     (c)  When the Shares are issued at the Closing as contemplated by this
          Agreement, the Shares will be duly authorized and issued, fully paid
          and non-assessable shares of Common Stock, and IESA will own the
          Shares free and clear of any liens, encumbrances or claims of other
          persons, other than liens or encumbrances imposed by reason of acts of
          IESA and restrictions imposed by U.S. Federal and state securities
          laws.


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6.   IESA represents and warrants to Atari as follows:

     (a)  IESA is a societe anonyme duly formed and currently existing under the
          laws of the Republic of France.

     (b)  IESA has all corporate power that is necessary to enable it to enter
          into this Agreement and to carry out the transactions contemplated by
          it. All actions necessary to authorize IESA to enter into this
          Agreement and carry out the transactions contemplated by it have been
          taken. This Agreement has been duly executed by IESA and is a valid
          and binding agreement of IESA, enforceable against IESA in accordance
          with its terms.

     (c)  IESA is aware that the Shares will be issued to it in a transaction
          that will not be registered under the U.S. Securities Act of 1933, as
          amended, and that IESA may sell or transfer the Shares only in a
          transaction that is registered under that Act or is exempt from the
          registration requirements of that Act and any applicable U.S. state
          securities laws.

     (d)  IESA will be acquiring the Shares at the Closing for investment, and
          not with a current view to the sale or distribution of the Shares.

7.   This Agreement will be governed by the laws of the State of New York in the
     United States of America, without regard to principles of conflicts of laws
     that would apply the laws of any other jurisdiction. IESA and Atari each
     (i) agrees that any action or proceeding relating to this Agreement may be
     brought in, but only in, a state or Federal court sitting in the Borough of
     Manhattan in the State of New York, (ii) consents to the personal
     jurisdiction of any such court in any such action or proceeding, (iii)
     agrees not to seek to change the venue of any such action or proceeding
     brought in any such court, whether on the basis of convenience of the
     parties or for any other reason, and (iv) agrees that process in any such
     action or proceeding may be served by registered mail or in any other
     manner permitted by the rules of the court in which the action or
     proceeding is brought.

8.   Any notice or other communication under this Agreement must be in writing,
     and will be deemed given when it is delivered in person or sent by email or
     facsimile communication, or on the tenth day after the day on which it is
     sent by mail, to the other of them at its principal office.

9.   This Agreement and the documents to be delivered in accordance with this
     Agreement contain the entire agreement between Atari and IESA relating to
     the transactions that are the subject of this Agreement and those other
     documents, all prior negotiations, understandings and agreements between
     Atari and IESA with regard to those transactions are superseded by this
     Agreement and those other documents, and there are no representations,
     warranties, understandings or agreements concerning the transactions that
     are the subject of this Agreement or those other documents other than those
     expressly set forth in this Agreement or those other documents.

10.  This Agreement may be amended by, but only by, a document in writing signed
     by both Atari and IESA.

11.  This Agreement may be executed in two or more counterparts, some of which
     may contain the signatures of fewer than all the parties or may contain
     facsimile copies of pages signed by some of the parties. Each of those
     counterparts will be deemed to be an original copy of this Agreement, but
     all of them together will constitute one and the same agreement.


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     Please execute a copy of this document which, when it is executed by Atari,
will constitute a legally binding agreement between IESA and Atari.

Very truly yours,

INFOGRAMES ENTERTAINMENT S.A.
(for itself and each of its wholly-owned subsidiaries)


By:    /s/ Thomas Schmider
    ---------------------------------
Title:     DGD
       ------------------------------


Agreed to:

ATARI, INC.
(for itself and each of its wholly-owned subsidiaries)


By:    /s/ Diane P. Baker
    ---------------------------------
Title:    EVP & CFO
       ------------------------------


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