Exhibit 10.18

GUARANTY

This Guaranty (“Agreement”) is made and executed this 30th day of June, 2015 by
MAD CATZ, INC., a corporation, duly incorporated and validly existing pursuant
to the laws of Delaware (“Guarantor”), having its principal place of business at
10680 Treena St., Suite 500, San Diego, California 92131, in favor of FAUNUS
GROUP INTERNATIONAL, INC., a Delaware corporation (“FGI”), having its principal
place of business at 80 Broad Street, 22nd Floor, New York, New York 10004.

BACKGROUND

A. FGI intends to establish financing arrangements with, extend credit to and/or
purchase receivables from MAD CATZ EUROPE LTD. (“Client”) pursuant to the terms
and conditions of the certain Master Facilities Agreement dated as of the date
hereof between Client and FGI (as may hereafter be amended, supplemented,
restated or replaced from time to time, the “MFA”).

B. In order to induce FGI to enter into the financing arrangements with and make
loans and extend credit to the Client, Guarantor undertakes and agrees as set
forth below.

1. Obligations Guaranteed.  To induce FGI to enter into the MFA and consider
extending or continuing to extend credit or purchase receivables from time to
time to Client thereunder, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Guarantor, intending to
be legally bound hereby, absolutely and unconditionally guarantees and becomes
surety for the payment and performance when due (at maturity, upon acceleration,
or otherwise) of all of the debts and obligations of Client to FGI of every kind
or nature (including the Secured Obligations), whether joint or several, due or
to become due, absolute or contingent, now existing or hereafter arising, and
whether principal, interest, fees, costs, expenses or otherwise, and arising
under the MFA or otherwise (including without limitation any interest and/or
expenses accruing following the commencement of any insolvency, receivership,
reorganization or bankruptcy case or proceeding relating to Client, whether or
not a claim for post-petition interest and/or expenses is allowed in such case
or proceeding) (collectively, the “Obligations”). Guarantor shall also pay or
reimburse FGI on demand for all costs and expenses, including without limitation
attorneys’ fees, incurred by FGI at any time to enforce, protect, preserve, or
defend FGI’s rights hereunder and with respect to any property securing this
Agreement. All payments hereunder shall be made in lawful money of the United
States, in immediately available funds. Unless otherwise defined herein, all
capitalized terms shall have the respective meanings given to such terms in the
MFA or the Debenture.

2. Representations and Warranties.  Guarantor represents and warrants that:

(a) Guarantor’s execution and performance of this Agreement shall not
(i) violate or result in a default or breach (immediately or with the passage of
time) under any material contract, agreement or instrument to which Guarantor is
a party, or by which Guarantor or any asset of Guarantor is bound, (ii) violate
or result in a default or breach under any order,

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decree, award, injunction, judgment, law, regulation or rule applicable to
Guarantor, (iii) cause or result in the imposition or creation of any lien or
other encumbrance upon any property or asset of Guarantor, or (iv) violate or
result in a breach of the certificate of incorporation or bylaws of Guarantor.

(b) Guarantor has the full power and authority to enter into and perform under
this Agreement, which has been authorized by all necessary corporate action on
behalf of Guarantor.

(c) No consent, license or approval of, or filing or registration with, any
governmental authority is necessary for the execution and performance hereof by
Guarantor.

(d) This Agreement constitutes the valid and binding obligation of Guarantor
enforceable in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
enforcement of creditors’ rights.

(e) This Agreement promotes and furthers the business and interests of Guarantor
and the creation of the obligations hereunder will result in direct financial
benefit to Guarantor.

3. Guarantor Acknowledgements.

(a) Guarantor hereby waives notice of (i) acceptance of this Agreement, (ii) the
existence or incurring from time to time of any Obligations guaranteed
hereunder, (iii) nonpayment, the existence of any Event of Default, the making
of demand, or the taking of any action by FGI, under the MFA, and (iv) default
and demand hereunder.

(b) Guarantor acknowledges that Guarantor (i) has examined or had the
opportunity to examine the MFA and related agreements and (ii) waives any
defense which may exist resulting from Guarantor’s failure to receive or examine
at any time the MFA or any amendments, supplements, restatements or replacements
therefor.

(c) Guarantor acknowledges that it shall not do anything to impede or interfere
in any manner with the normal collection and payment of the Approved Receivables
assigned and sold to FGI.

(d) Guarantor acknowledges that in entering into this Agreement Guarantor is not
relying upon any statement, representation, warranty or opinion of any kind from
FGI as to the present or future financial condition, performance, assets,
liabilities or prospects of Client or as to any other matter.

4. FGI Actions.  Guarantor hereby consents and agrees that FGI may at any time
or from time to time in FGI’s discretion (a) extend or change the time of
payment and/or change the manner, place or terms of payment of any or all
Obligations, (b) amend, supplement, restate or replace the MFA or any related
agreements, (c) renew or extend any financing now or hereafter reflected by the
MFA or the maturity thereof or increase (without limit of any kind and whether
related or unrelated) or decrease loans and extensions of credit to Client,
(d) modify the terms

 

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and conditions under which loans, extensions of credit or purchases of
receivables may be made to Client, (e) settle, compromise or grant releases for
liabilities of Client, and/or any other Person or Persons liable with Guarantor
for, any Obligations, (f) exchange, compromise, release or surrender, or
subordinate or release any lien on, any property (including any collections
therefrom or proceeds thereof) of Client or any other Person or Persons now or
hereafter securing any of the Obligations, and (g) apply any and all payments
and proceeds of any property of any Person securing any or all of the
Obligations received by FGI at any time against the Obligations in any order as
FGI may determine; all of the foregoing in such manner and upon such terms as
FGI may see fit, and without notice to or further consent from Guarantor, who
hereby agrees to be and shall remain bound upon this Agreement notwithstanding
any such action on FGI’s part.

5. Scope of Guaranty.  The Agreement is an agreement of suretyship and a
guaranty of payment and not of collection. The liability of Guarantor hereunder
is absolute, primary, unlimited and unconditional and shall not be reduced,
impaired or affected in any way by reason of (a) any failure to obtain, retain
or preserve, or the lack of prior enforcement of, any rights against any Person
or Persons liable for the Obligations (including Client and Guarantor) or in any
property, (b) the invalidity, unenforceability or voidability of any Obligations
or any liens or rights in any property pledged by any Person or Persons, (c) any
delay in making demand upon Client or any delay in enforcing, or any failure to
enforce, any rights against Client or any other Person or Persons liable for any
or all of the Obligations or in any property pledged by any Person or Persons,
even if such rights are thereby lost, (d) any failure, neglect or omission on
FGI’s part to obtain, perfect or continue any lien upon, protect, exercise
rights against, or realize on, any property of Client, Guarantor or any other
party securing the Obligations, (e) the existence or nonexistence of any
defenses which may be available to the Client with respect to the Obligations,
(f) the granting of any waiver or forbearance at any time and for any period
with respect to any performance by Client or any Event(s) of Default under the
MFA, (g) the commencement of any bankruptcy, reorganization, liquidation,
dissolution or receivership proceeding or case filed by or against Client or any
Guarantor or (h) any other fact, event, condition or omission which may give
rise to a suretyship defense. Guarantor promises and undertakes to make all
payments hereunder free and clear of any deduction, offset, defense, claim or
counterclaim of any kind.

6. Reinstatement.  If any or all payments or proceeds of property securing any
or all of the Obligations made from time to time to FGI with respect to any
obligation hereby guaranteed are at any time recovered from, or repaid by, FGI
in whole or in part in any bankruptcy, reorganization, receivership, insolvency
or similar case or proceeding instituted by or against Client, this Agreement
shall continue to be fully applicable to (or, as the case may be, reinstated to
be applicable to) such obligation to the same extent as if the recovered or
repaid payment(s) or proceeds had never been originally paid to FGI.

7. Cumulative Remedies.  All rights and remedies hereunder and under the MFA,
and related agreements, are cumulative and not alternative, and FGI may proceed
in any order from time to time against Client, Guarantor and/or any other Person
or Persons liable for any or all of the Obligations and their respective assets.
FGI shall not have any obligation to proceed at any time or in any manner
against, or exhaust any or all of FGI’s rights against, Client or any

 

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other Person or Persons liable for any or all of the Obligations prior to
proceeding against Guarantor hereunder.

8. Security Interest.  As additional security for the Obligations, Guarantor
hereby grants to FGI a security interest in all of Guarantor’s right, title and
interest in and to the following assets, wherever located and whether now or
hereafter owned or acquired: (a) all Accounts, (b) Chattel Paper, (c) Commercial
Tort Claims, (d) Deposit Accounts, (e) Documents, (f) Equipment, (g) General
Intangibles, (h) Goods (including but not limited to all files, correspondence,
computer programs, tapes, disks and related data processing software which
contain informa-tion identifying or pertaining to any of the Collateral or any
Account Debtor or showing the amounts thereof or payments thereon or otherwise
necessary or helpful in the realization thereon or the collection thereof),
(i) Inventory, (j) Investments, (k) Investment Property, (l) Letters of Credit
and Letter of Credit rights, (m) all Supporting Obligations and (n) all cash and
non-cash proceed of the foregoing (including insurance proceeds). Upon the
occurrence of an Event of Default under MFA or any breach or default by
Guarantor under this Agreement (each an “Event of Default”), FGI shall have all
the rights of a secured party under applicable law, and more specifically under
the Uniform Commercial Code (in effect in the State of New York) and shall have
all the rights and remedies set forth in the MFA. In addition and without
limitation, FGI may, without notice to or demand upon the Guarantor and take
possession of the Collateral, and for that purpose FGI may enter upon any
premises on which the Collateral may be situated and remove the same therefrom;
require Guarantor to assemble all or any part of the Collateral at such location
or locations within the jurisdiction(s) of Guarantor’s principal office(s) or at
such other locations as FGI may reasonably designate. Unless the Collateral is
perishable or threatens to decline speedily in value or is of a type customarily
sold on a recognized market, the FGI shall give to Guarantor at least ten
(10) days prior written notice of the time and place of any public sale of
Collateral or of the time after, which any private sale or any other intended
disposition is to be made. The Guarantor hereby acknowledges that ten (10) days
prior written notice of such sale or sales shall be reasonable notice. In
addition, Guarantor waives any and all rights that it may have to a judicial
hearing in advance of the enforcement of any of FGI’s rights hereunder,
including, without limitation, its right following an Event of Default to take
immediate possession of the Collateral and to exercise its rights with respect
thereto. In addition, FGI shall have and may exercise any or all other rights
and remedies it may have available at law, in equity, or otherwise. All of FGI’s
rights and remedies, whether evidenced by this Agreement, the MFA or any other
writing, shall be cumulative and may be exercised singularly or concurrently.
Election by FGI to pursue any remedy shall not exclude pursuit of any other
remedy, and an election to make expenditures or to take action to perform an
obligation of Guarantor under this Agreement, after Guarantor’s failure to
perform, shall not affect FGI’s right to declare a default and to exercise its
remedies.

9. Subrogation.  Any and all rights of any nature of Guarantor to subrogation,
reimbursement or indemnity and any right of Guarantor to recourse to any assets
or property of, or payment from, Client or any other Person or Persons liable
for any or all of the Obligations as a result of any payments made or to be made
hereunder for any reason shall be unconditionally subordinated to all of FGI’s
rights under the MFA and Guarantor shall not at any time exercise any of such
rights unless and until all of the Obligations have been unconditionally paid in
full. Any payments received by Guarantor in violation of this Section 9 shall be
held in trust for and

 

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immediately remitted to FGI.

10. FGI Records.  FGI’s books and records of any and all of the Obligations,
absent manifest error, shall be prima facie evidence against Guarantor of the
indebtedness owing or to become owing to FGI hereunder.

11. Continuing Surety.  This Agreement shall constitute a continuing surety
obligation with respect to all Obligations from time to time incurred or arising
and shall continue in effect until all Obligations are indefeasibly paid and
satisfied and the liability of Guarantor under this Agreement may not be revoked
or terminated.

12. Setoff.  Guarantor agrees that FGI shall have a right of setoff against any
and all property of Guarantor now or at any time in FGI’s possession, including
without limitation deposit accounts, and the proceeds thereof, as security for
the obligations of Guarantor hereunder.

13. Acceleration.  If an Event of Default occurs and is continuing under the
MFA, then all of Guarantor’s liabilities of every kind or nature to FGI
hereunder shall, at FGI’s option, become immediately due and payable and FGI may
at any time and from time to time, at FGI’s option (regardless of whether the
liability of Client or any other Person or Persons liable for any or all of the
Obligations has matured or may then be enforced), take any and/or all actions
and enforce all rights and remedies available hereunder or under applicable law
to collect Guarantor’s liabilities hereunder.

14. Enforcement Timing.  Failure or delay in exercising any right or remedy
against Guarantor hereunder shall not be deemed a waiver thereof or preclude the
exercise of any other right or remedy hereunder. No waiver of any breach of any
provision of this Agreement shall be construed as a waiver of any subsequent
breach or of any other provision.

15. Successors and Assigns.  This Agreement shall (a) be legally binding upon
Guarantor, and Guarantor’s successors and assigns, provided that Guarantor’s
obligations hereunder may not be delegated or assigned without FGI’s prior
written consent and (b) benefit any and all of FGI’s successors and assigns. FGI
may assign its rights under this Agreement without notice to or consent from
Guarantor.

16. Entire Agreement.  This Agreement and the MFA embody the whole agreement and
understanding of the parties hereto relative to the subject matter hereof. No
modification or waiver of any provision hereof shall be enforceable unless
approved by FGI in writing.

17. Governing Law, Submission to Jurisdiction and Jury Trial.  THIS AGREEMENT,
AND ALL MATTERS ARISING HEREUNDER OR RELATING HERETO, SHALL IN ALL RESPECTS BE
INTERPRETED, CONSTRUED AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW
YORK. GUARANTOR IRREVOCABLY KNOWINGLY AND VOLUNTARILY (I) SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSES OF
ANY LITIGATION OR

 

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PROCEEDING HEREUNDER OR CONCERNING THE TERMS HEREOF AND (II) WAIVES THE RIGHT TO
A JURY TRIAL WITH RESPECT TO ANY LITIGATION, CLAIMS OR PROCEEDING HEREUNDER OR
CONCERNING THE TERMS HEREOF OR OTHERWISE IN CONNECTION WITH GUARANTOR’S DEALINGS
WITH FGI.

18. Notices.

(a) In any action or proceeding brought by FGI to enforce the terms hereof,
Guarantor consents that service of process may be made upon Guarantor in any
legal proceeding relating to this Agreement by any means allowed under state or
federal law.

(b) Any and all notices which may be given to Guarantor by FGI hereunder shall
be sent to Guarantor at the address of Guarantor set forth in the Preamble
hereto (or such other address at which Guarantor is then located) and may be
delivered (i) in person, (ii) by registered or certified mail, return receipt
requested, (iii) by nationally recognized overnight courier and (iv) by
facsimile transmission and such notice shall be deemed delivered in the case of
(i) above, on the date of delivery; in the case of (ii) above, three (3) days
after deposit in the U.S. Mail; in the case of (iii) above, one (1) day after
delivery to the courier and in the case of (iv) above on the date sent, if proof
of receipt is received.

19. Maximum Liability.  To the extent that applicable law otherwise would render
the obligations of Guarantor hereunder invalid or unenforceable, Guarantor shall
nevertheless remain liable hereunder; provided however that Guarantor’s
obligations shall be limited to the maximum amount which does not result in such
invalidity or unenforceability. Notwithstanding the foregoing, Guarantor’s
obligations hereunder shall be presumptively valid and enforceable to their
fullest extent in accordance with the terms of this Agreement, as if this
Section 19 were not a part of this Agreement.

20. Severability.  The invalidity or unenforceability of any provision hereof
shall not affect the remaining provisions which shall remain in full force and
effect.

[SIGNATURES APPEAR ON FOLLOWING PAGE]

 

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THIS GUARANTY is dated the date and year first above written.

 

MAD CATZ, INC.

By:

 

/s/ Darren Richardson

Name:

 

Darren Richardson

Title:

 

President & CEO

[Signature page to Guaranty]