Document:

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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
       ------------------------------

                                       4<PAGE>
                                                                    Exhibit 10.8

             GT INTERACTIVE UK SETTLEMENT OF INDEBTEDNESS AGREEMENT

     AGREEMENT, dated as of September 15, 2005, between Atari UK (f/k/a
Infogrames UK) ("AUK"), and Infogrames Entertainment SA and all of its
subsidiaries (collectively, "IE") (AUK and IE are referred to herein separately,
and collectively as "IESA"), on one hand, both having an address of 1, place
Verrazzano 69252 Lyon, Cedex 09 France and Atari, Inc. ("COMPANY"), on the
other, having an address of 417 Fifth Avenue, New York, NY 10016 (the
"AGREEMENT").

     WHEREAS, in December 1999, IESA acquired a controlling interest in Company
and its wholly-owned subsidiaries. Following this acquisition, AUK, a
wholly-owned subsidiary of IESA, had paid certain expenses on behalf of GT
Interactive UK ("GTUK"), a subsidiary of Company, the operations of which were
discontinued in or about March 2000. The expense payments include amounts for
various legal functions, settlements, account fees and taxes, trade payables and
accrued liabilities;

     WHEREAS, AUK has asserted, or could assert, that Company is indebted to AUK
for payments, liabilities and obligations based on any and all matters or
circumstances arising or occurring at any time prior to or as of the date hereof
(the "GTUK INDEBTEDNESS"); and

     WHEREAS, by this Agreement, IESA and Company hereby intend to resolve all
matters of, concerning or related to the GTUK Indebtedness.

     NOW, THEREFORE, in consideration of the foregoing, the Fee and of the
mutual promises set forth herein, it is hereby agreed as follows:

     1. In full satisfaction of the GTUK Indebtedness, promptly upon the full
execution hereof, Company shall pay AUK (or its designee) 1,263,518 shares of
Company's common stock totaling in value 892,525 British pounds, each share
priced at $1.30 (the "FEE") in full and final settlement and payment of the GTUK
Indebtedness.

     2. IESA acknowledges, agrees and understands that the entire consideration
for the releases and waivers given in this Agreement is that consideration set
forth in paragraph 1 above; that said consideration is being given solely for
the purpose of settling amounts due arising out of expense reimbursements or
other amounts due and owing to AUK from Company. Any and all tax refunds or
credits associated with GTUK (including the payment of the GTUK Indebtedness)
shall be solely the property of, and inure solely to the benefit of, Company.

     3. (a) IESA does hereby relieve, release and forever discharge Company and
its predecessors, successors, representatives, employees, officers, directors
(including, without limitation, former employees, officers and directors),
shareholders, agents, employees, administrators, assigns and all affiliated,
parent and subsidiary corporations, and each of them, of and from any and all
claims, debts, liabilities, demands, obligations, promises, acts, agreements,
costs, expenses (including, but not limited to, attorneys' fees), damages,
actions and causes of action of whatsoever kind or nature, whether now known or
unknown, based on, arising out of, or in

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connection with anything whatsoever done, omitted or suffered to be done at any
time relating to, arising from, or in connection with all claims relating to,
the GTUK Indebtedness, any other expense reimbursement made by IESA in
connection with GTUK and any other amounts due to IESA in connection with GTUK.
IESA hereby expressly, knowingly, and intentionally waives all rights and
protections afforded in connection with the matters hereby released by the terms
and provisions of California Civil Code section 1542 and by any and all similar
laws of and for any other state of the United States and all foreign
governments. California Civil Code section 1542 states that:

     A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
     KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
     WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
     DEBTOR.

In connection with such waiver, IESA hereby acknowledges that it hereafter may
discover claims, obligations, rights, causes of action, claims for relief,
liabilities, and facts, or any of them, in addition to or different from those
that it now knows or believes to be in existence, accrued, or true with respect
to the matters hereby released. Nevertheless, it is the intention of each party,
through this release and with the independent advice of counsel or the
opportunity to receive such advice, to fully, finally, and forever to settle and
release all such claims, obligations, rights, causes of action, claims for
relief, liabilities, and damages that heretofore have existed, now exist, or
hereafter may exist in connection with the matters hereby released, including
those that could have been filed.

          (b) Each of the parties hereto represents, warrants, and agrees as
     follows:

               (i) Each party has received independent legal advice from its
          attorneys, with respect to the advisability of making the settlement
          of indebtedness provided for herein, and with respect to the
          advisability of executing this Agreement;

               (ii) No party (nor any officer, agent, employee, representative,
          or attorney of or for any party), has made any statement or
          representation to any other party regarding any fact relied upon by
          the other party in entering into this Agreement, and each party does
          not rely upon any statement, representation or promise of any other
          party (or of any officer, agent, employee representative or alternate
          for the other party), in executing this Agreement except as expressly
          stated herein;

               (iii) Each party has made such investigation of the facts and the
          law pertaining to this Agreement and of all the matters pertaining
          hereto as it deems necessary; and

               (iv) Each of the persons executing this Agreement is empowered to
          do so.

          (c) Each party hereto represents and warrants to the other party that
     it is the sole and lawful owner of all right, title and interest in and to
     every matter and thing released

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     herein, and that it has not heretofore assigned or transferred, or
     purported to assign or transfer, to any person or entity any claims or
     other matters released herein.

     4. This Agreement shall inure to the benefit of, and be binding upon, the
respective assigns, subsidiaries and successors-in-interests to and of each
party hereto.

     5. This Agreement sets forth the entire understanding between IESA and
Company with respect to the subject matter hereof, and no amendment to or
modification, waiver, termination or discharge of this agreement or any
provision thereof shall be binding upon IESA or Company unless confirmed by a
written instrument specifically referring to this Agreement which is signed by
an authorized signatory of each party. No waiver of any provision of or default
under this Agreement shall affect IESA's or Company's right, as the case may be,
thereafter to enforce such provision or to exercise any right or remedy in the
event of any other default, whether or not similar.

     6. THIS AGREEMENT IS ENTERED INTO IN THE STATE OF NEW YORK AND SHALL BE
CONSTRUED ONLY IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO CONTRACTS ENTERED INTO AND TO BE FULLY PERFORMED THEREIN (WITHOUT GIVING
EFFECT TO ANY CONFLICTS OF LAW PRINCIPLES UNDER NEW YORK LAW), AND THE COURTS OF
THE STATE OF NEW YORK LOCATED IN NEW YORK COUNTY (MANHATTAN) ARE HEREBY GRANTED
EXCLUSIVE JURISDICTION WITH RESPECT TO ANY SUITS ARISING OUT OF OR WITH RESPECT
TO THIS AGREEMENT.

     7. This Agreement shall not be construed against either party as the
drafter, it being agreed that this Agreement has been drafted jointly by the
parties and may be executed in one or more counterparts, including by facsimile,
each of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.

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     IN WITNESS WHEREOF, the parties have executed this Agreement the date and
year first above written.

                                        Atari, Inc.

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

ACCEPTED AND AGREED TO:
Infogrames Entertainment SA

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

Atari UK

By: /s/ Thomas Schmider
    ---------------------------------
Name: Thomas Schmider
      -------------------------------
Title: Director
       ------------------------------

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