EXHIBIT 10.2

 

THIRD AMENDED AND RESTATED GUARANTY

 

FOR GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH ARE
ACKNOWLEDGED, each of Great American Group, Inc., a Delaware corporation (“GAG
Inc.”), and Great American Group, LLC, a California limited liability company
(“Great American”), as of July 15, 2013 (the “Effective Date”), jointly and
severally unconditionally guaranties to Wells Fargo Bank, National Association,
successor by merger to Wells Fargo Retail Finance, LLC, (together with any of
its successors-in-interest, the “Lender”), with an address at One Boston Place,
18th Floor, Boston, Massachusetts 02108, in its capacity as Lender under the
Credit Agreement (as defined below), in accordance with the terms and conditions
hereof, the payment of the Guaranteed Amount (as defined below).

 

1. DEFINITIONS. All initially capitalized terms used here shall have the same
meaning as set forth in the Credit Agreement, unless otherwise defined herein.
As used herein, the following terms have the following meanings:

 

“Borrower” means each of Great American Group WF, LLC, a California limited
liability company (“Original Borrower”), and any other Person who may be joined
from time to time as a borrower under the Credit Agreement, as hereinafter
defined. “Borrowers” refers to each Borrower collectively.

 

“Costs of Collection” means, all reasonable and documented attorneys’ fees and
reasonable and documented out-of-pocket expenses incurred by the Lender’s
attorneys, and all reasonable and documented costs and expenses incurred by the
Lender (including, without limitation, reasonable and documented costs and
expenses associated with travel), which fees, costs and expenses arise out of
enforcement against Guarantor of this Guaranty.

 

“Credit Agreement” means that certain Second Amended & Restated Credit Agreement
of even date herewith by and among Original Borrower, any other affiliate of
Original Borrower that becomes a party thereto from time to time, and the
Lender, as such agreement may be amended, supplemented, modified or restated
from and after the date hereof.

 

“Guaranteed Amount” means as of any date of determination thereof (i) the
aggregate amount of all Liabilities outstanding as of such date plus, (ii)
interest which may accrue on such Liabilities from and after the date demand for
payment is made or deemed to be made hereunder at the rate applicable under the
Credit Agreement following the occurrence and during the continuance of an Event
of Default, and (iii) any Costs of Collection.

 

“Guarantor” means, individually and collectively, GAG Inc. and Great American,
and their respective successors and assigns, subject to the terms and conditions
of this Guaranty.

 

“Guaranty” means this Third Amended and Restated Guaranty, as hereafter amended
or amended and restated, supplemented, or replaced.

 

“ICA” means any intercreditor agreement between the Lender and Burdale Financial
Limited which may be entered into after the Effective Date.

 

“Key Date” means the earliest to occur of any of the following events:

 

 

 

 

(a) Guarantor, any Borrower, any Affiliate thereof, or any of their employees,
Authorized Persons, agents, or principals engages in, or causes or induces any
other Person to engage in, any fraud or bad faith in connection with, or any
intentional or grossly negligent breach of, the terms of the Credit Agreement,
any other Loan Document, any Liquidator Joint Venture Agreement, or any
Liquidation Sales Agreement, or any of the transactions contemplated in any of
the foregoing;

 

(b) (i) Guarantor (or any member of senior management of Guarantor) consents to,
votes in favor of, fails to contest, acquiesces or otherwise causes any Borrower
or, with respect to GAG Inc., Great American, to become the subject of any
Insolvency Proceeding constituting an Event of Default described at Sections
9.1(g) or (h) of the Credit Agreement; (ii) Guarantor becomes the subject of an
Insolvency Proceeding described in either of such Sections; or (iii) an Event of
Default under Section 9.1(p) or (q) of the Credit Agreement occurs;

 

(c) Any Guarantor, any Borrower, or any Person acting on any Borrower’s or
Guarantor’s behalf, diverts, misappropriates or misapplies any funds received by
such Borrower or such Person or otherwise fails to cause the Proceeds to be
applied in a manner consistent with Sections 2.6 and 2.8 of the Credit
Agreement;

 

(d) Except as may be permitted under the ICA, any Guarantor pledges, or causes
any other member of the Great American Group to pledge, any asset or Capital
Stock of any Borrower, or any right of any Borrower under any Liquidation Sales
Agreement or Liquidator Joint Venture Agreement in respect to which any Borrower
has incurred any Obligations, to any Person other than the Lender;

 

(e) In respect to any Liquidation Sale in respect to which any Borrower has
incurred any Obligations, any Borrower voluntarily ceases, or intentionally
fails, to perform its obligation to conduct such Liquidation Sale pursuant to
the applicable Liquidation Sales Agreement prior to the completion of such
Liquidation Sale;

 

(f) Any payment of Expenses made to any Person which is a member of the Great
American Group in connection with any Liquidation Sale in respect to which any
Borrower has incurred any Obligations which includes a mark up for profit above
such Person’s actual out-of-pocket cost therefor; or

 

(g) Any Default or Event of Default occurs with respect to any Borrower other
than the Original Borrower, except, with respect to the Original Borrower, as
otherwise provided in the immediately preceding clauses “a” through “f’.

 

“Liabilities” means all Obligations, whether now existing or hereafter arising,
of any Borrower to the Lender under the Credit Agreement and other Loan
Documents including, but not limited to, any interest arising after the
commencement of any case with respect to any Borrower under any Debtor Relief
Laws against any Borrower as debtor (including the payment of interest and other
amounts, which would accrue and become due but for the commencement of such
case, whether or not such amounts are allowed or allowable in whole or in part
in any such case and including loans, interest, fees, charges and expenses
related thereto and all other Liabilities of the Borrowers to the Lender under
the Credit Agreement or other Loan Documents) due in connection with the Credit
Agreement and the other Loan Documents.

 

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2. GUARANTY. If after the Effective Date Great American and/or any Affiliate or
Subsidiary thereof obtains a Parent Working Capital Facility, each Guarantor
absolutely and unconditionally, jointly and severally, as a primary guarantor
and not merely as a surety guarantees, agrees to be liable for, the due and
punctual payment and performance (whether at the stated maturity, by required
prepayment, by acceleration or otherwise) by each of the Borrowers of the
Guaranteed Amount (the “PWCF Guaranty Obligation”).  However, at all times
during which such Parent Working Capital Facility is not in place, either
because it has not yet been obtained or because it has expired or is terminated
for any reason, each Guarantor absolutely and unconditionally, jointly and
severally, as a primary guarantor and not merely as a surety guarantees, agrees
to be liable for, the due and punctual payment and performance (whether at the
stated maturity, by required prepayment, by acceleration or otherwise) by each
of the Borrowers of the Guaranteed Amount on or after the occurrence of the Key
Date (the “Non-PWCF Guaranty Obligation”).  Notwithstanding anything to the
contrary set forth in Section 2, and for the sake of clarity, if, after Great
American and/or any Affiliate or Subsidiary thereof obtains a Parent Working
Capital Facility, such Parent Working Capital Facility expires or is terminated
for any reason, (A) any then-existing PWCF Guaranty Obligations will remain in
effect and shall not become Non-PWCF Guaranty Obligations as a result of such
Expiration or termination of the Parent Working Capital Facility, but (B) any
new obligations which arise under the Guaranty after such expiration or
termination will be Non-PWCF Guaranty Obligations.  Each Guarantor further
agrees that the Obligations and other Liabilities may be extended or reviewed,
in whole or in part, without notice to or further assent from it, and that it
will remain bound upon this Guaranty notwithstanding any extension or renewal of
any such obligations or other Liabilities.  This is a guaranty of payment and
not of collection.

 

3. OBLIGATIONS NOT AFFECTED. The obligations of any Guarantor shall not be
affected by: any fraudulent, illegal, or improper act by any Borrower, any
Guarantor or any other Person liable or obligated to the Lender for or on the
Liabilities; any release, discharge, or invalidation, by operation of law or
otherwise, of the Liabilities; or the legal incapacity of any Borrower, the
Guarantor, or any other Person liable or obligated to the Lender for or on
account of the Liabilities. Interest and Lender Expenses included in the
Liabilities shall continue to accrue and shall continue to be deemed Liabilities
guarantied hereby notwithstanding any stay to the enforcement thereof against
any Borrower, or any other guarantor of the Liabilities, or the disallowance of
any claim therefor against any Borrower.

 

4. INCORPORATION OF ALL DISCUSSIONS. This Guarantee and the Credit Agreement
incorporate all discussions and negotiations between the Guarantors and the
Lender, concerning the guaranty provided by the Guarantors hereby. No such
discussions or negotiations shall limit, modify, or otherwise affect the
provisions hereof. No provision hereof may be altered, amended, waived cancelled
or modified, except by a written instrument executed, and acknowledged by a duly
authorized officer of the Lender and the Guarantors.

 

5. GENERAL WAIVERS. The Guarantors waive: presentment, demand, notice, and
protest with respect to the Liabilities and this Guaranty (except as provided
herein); any delay on the part of the Lender; any claim which a Guarantor may
have or to which a Guarantor may become entitled to the extent that such claim
might otherwise cause any transfer to the Lender by or on behalf of any Borrower
to be avoided as having been, or in the nature of, a preference (or any
corresponding provision of any other Debtor Relief Law); and notice of
acceptance of this Guaranty.

 

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6. WAIVER OF SURETYSHIP, The Guarantors hereby expressly waive all suretyship
defenses, including, without limitation: (i) surrender, release, exchange,
substitution, dealing with or taking any additional Collateral, and (ii) any
impairment of Collateral, including but not limited to failure to perfect a
security interest in the Collateral.

 

7. WAIVER OF SUBROGATION. The Guarantors shall not undertake any of the
following unless and until the Obligations have been indefeasibly repaid in full
in cash and the Revolving Credit Termination Date has occurred:

 

· Exercise of any right against any Borrower, by way of subrogation,
reimbursement, indemnity, contribution, or the like; and

 

· The claiming of any set-off or counterclaim against any Borrower in respect of
any liability of a Guarantor to any Borrower.

 

8. SUBORDINATION. The payment of any amounts due with respect to any
indebtedness of any Borrower now or hereafter owed to the Guarantor is hereby
subordinated to the prior payment in full of the Liabilities. Any amounts which
are collected, enforced and received by the undersigned in violation of this
Section 8 shall be held by the Guarantors as trustee for the Lender and shall be
paid over to the Lender on account of the Liabilities without affecting in any
manner the liability of the Guarantors under this Guaranty.

 

9. LENDER’S BOOKS AND RECORDS. The books and records of the Lender showing the
account between the Lender and the Borrowers shall be admissible in any action
or proceeding and constitute prima facie evidence and proof of the items
contained therein.

 

10. CHANGES IN LIABILITIES. The Guarantors assent to any indulgence or waiver
which the Lender might grant or give any Borrower and/or any other Person liable
or obligated to the Lender for or on the Liabilities. The Guarantors authorize
the Lender, subject to the terms and conditions of the Loan Documents, to alter,
amend, cancel, waive, or modify any term or condition of the Liabilities and of
the obligations of any other Person liable or obligated to the Lender for or on
the Liabilities, without notice to, or consent from, the Guarantors. No
compromise, settlement, or release by the Lender of the Liabilities or of the
obligations of any such other Person (whether or not jointly liable with the
Guarantors) and no release of any Collateral securing the Liabilities or
securing the obligations of any such other Person shall affect the obligations
of the Guarantors hereunder. No action by the Lender which has been assented to
herein shall affect the obligations of the Guarantors to the Lender.

 

11. COSTS OF ENFORCEMENT. The Guarantors will pay on demand, without limitation,
all reasonable and documented Costs of Collection.

 

12. BINDING EFFECT. This instrument shall inure to the benefit of the Lender,
its successors and assigns; shall be binding upon the respective successors and
assigns of the Guarantors; and shall apply to all Liabilities of any Borrower
and any successor to any such Borrower, including any successor by operation of
law. No Guarantor may assign any of its rights or obligations under this
Guaranty to any other Person without the prior written consent of the Lender in
the Lender’s sole discretion. The Lender may assign its right, title, and
interest in this Guaranty subject to Section 10.3 of the Credit Agreement.

 

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13. LENDER’S RIGHTS AND REMEDIES. The rights, powers, privileges, and
discretions of the Lender hereunder (herein, the “Lender’s Rights and Remedies”)
shall be cumulative and not exclusive of any rights or remedies which it would
otherwise have. No delay or omission by the Lender in exercising or enforcing
any of the Lender’s Rights and Remedies shall operate as, or constitute a waiver
thereof. No waiver by the Lender of any of the Lender’s Rights and Remedies or
of any default or remedies under any other agreement with the Guarantors, or of
any default under any agreement with any Borrower, or any other Person liable or
obligated for or on the Liabilities, shall operate as a waiver of any other of
the Lender’s Rights and Remedies or of any default or remedy hereunder or
thereunder. No exercise of any of the Lender’s Rights and Remedies and no other
agreement or transaction of any nature entered into between the Lender, the
Guarantors, any Borrower and/or any other Person at any time shall preclude any
exercise of the Lender’s Rights and Remedies, without prejudice to the
definition of Key Date. No waiver by the Lender of any of the Lender’s Rights
and Remedies on any one occasion shall be deemed a waiver on any subsequent
occasion, nor shall it be deemed a continuing waiver. All of the Lender’s Rights
and Remedies, and all of the Lender’s rights, remedies, powers, privileges, and
discretions under any other agreement or transaction with any Guarantor, any
Borrower, or any such other Person, shall be cumulative and not alternative or
exclusive, and may be exercised by the Lender at such time or times and in such
order of preference as the Lender in its sole discretion may determine.

 

14. COPIES AND FACSIMILES. This instrument and all documents which have been or
may be hereinafter furnished by the Guarantors to the Lender may be reproduced
by the Lender by any photographic, microfilm, xerographic, digital imaging, or
other process. Any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was made in the
regular course of business). Any facsimile which bears proof of transmission
shall be binding on the party which or on whose behalf such transmission was
initiated and likewise so admissible in evidence as if the original of such
facsimile had been delivered to the party which or on whose behalf such
transmission was received.

 

15. CHOICE OF LAWS. This instrument shall be governed, construed, and
interpreted in accordance with the laws of the Commonwealth of Massachusetts.

 

16. CONSENT TO JURISDICTION.

 

(a) The Guarantors agree that any legal action, proceeding, case, or controversy
brought against or by the undersigned with respect to this Guaranty, may be
brought in the Superior Court of Suffolk County Massachusetts or in the United
States District Court, District of Massachusetts, sitting in Boston,
Massachusetts. By execution and delivery of this Guaranty, the Guarantors
accept, submit, and consent generally and unconditionally, to the jurisdiction
of the aforesaid courts.

 

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(b) The Guarantors WAIVE personal service of any and all process and irrevocably
consents to the service of process out of any of the aforementioned courts in
any such action or proceeding by the mailing of copies thereof by certified
mail, postage prepaid, to the Guarantors at the address listed underneath their
signatures or such other address of the Guarantors of which the Lender then has
been provided with written notice by Guarantors, such service to become
effective five (5) business days after such mailing.

 

(c) The Guarantors WAIVE any objection based on forum non conveniens and any
objection to venue of any action or proceeding instituted hereunder in the
aforementioned courts.

 

(d) Nothing herein shall affect the right of the Lender to bring legal actions
or proceedings in any other competent jurisdiction in the United States or in
any other nation.

 

17. BROAD SCOPE OF GUARANTY. Subject to the limitations set forth herein in
Section 2 of this Guaranty and elsewhere herein, it is the intention of the
Guarantors that the provisions of this Guaranty be liberally construed to the
end that the Lender may be put in as good a position as if the Borrowers had
promptly, punctually, and faithfully performed all Liabilities and that the
Guarantors had promptly, punctually, and faithfully performed hereunder.

 

18. SEVERABILITY. Any determination that any provision herein is invalid,
illegal, or unenforceable in any respect in any instance shall not affect the
validity, legality, or enforceability of such provision in any other instance
and shall not affect the validity, legality, or enforceability of any other
provision contained herein.

 

19. RIGHT OF SET-OFF. Any and all deposits or other sums at any time credited by
or due to the Guarantors from the Lender or from any participant with the Lender
in the Liabilities (a “Participant”), and any cash, securities, instruments or
other property of the Guarantors in the possession of the Lender or any
Participant, may be applied or set off against the obligations of the Guarantors
to the Lender hereunder.

 

20. TERMINATION. The obligations of the Guarantors hereunder shall remain in
full force and effect as to all Liabilities, without regard to any reduction of
the Liabilities (other than on account of payments to the Lender by Guarantors
made pursuant to this Guaranty) until the date on which the Obligations have
been indefeasibly repaid in full in cash and the Revolving Credit Termination
Date has occurred. This Guaranty shall continue to be effective or, if
previously terminated, shall be automatically reinstated, without any further
action, if at any time payment made or value received with respect to a
Liability is rescinded or must otherwise be returned by the Lender upon the
insolvency, bankruptcy or reorganization of the Guarantor, or otherwise, all as
though such payment had not been made or value received.

 

21. MISCELLANEOUS. The Guarantors represent and warrant that, prior to the
execution of this Guaranty, the Guarantor carefully read and reviewed all of the
provisions of this Guaranty and were afforded an opportunity to consult with
counsel independently selected by the Guarantors. The Guarantors further
represent and warrant that the Guarantors have freely and willingly executed
this Guaranty with full appreciation of the legal effect of this Guaranty. The
Guarantors recognize that the titles to the paragraphs within this Guaranty are
for ease of reference; are not part of this Guaranty; and do not alter or affect
substantive provisions hereof.

 

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22. WAIVER OF JURY TRIAL. The Guarantors makes the following waiver knowingly,
voluntarily, and intentionally, and understand that the Lender, in the
establishment and maintenance of its relationship with the Borrowers and the
Guarantor, is relying thereon. THE GUARANTORS HEREBY IRREVOCABLY WAIVE ANY
PRESENT OR FUTURE RIGHT OF THE GUARANTORS TO A TRIAL BY JURY OF ANY CASE OR
CONTROVERSY IN WHICH THE LENDER IS OR BECOMES A PARTY (WHETHER SUCH CASE OR
CONTROVERSY IS INITIATED BY OR AGAINST THE LENDER OR IN WHICH THE LENDER IS
JOINED AS A PARTY LITIGANT), WHICH CASE OR CONTROVERSY ARISES OUT OF, OR IS IN
RESPECT OF THIS GUARANTY , OR THE OTHER LOAN DOCUMENTS

 

23. AUTHORIZATION. Great American is a limited liability company duly organized
and in good standing under the laws of the State of California. The execution,
delivery and performance of this Guaranty is within the limited liability
company powers of Great American. GAG Inc. is a corporation duly organized and
in good standing under the laws of the State of Delaware. The execution,
delivery and performance of this Guaranty is within the corporate powers of GAG
Inc. The execution, delivery and performance of this Guaranty by Guarantors has
been duly authorized and is not in contravention of (i) law or (ii) the terms of
the organizational documentation of any Guarantor, or (iii) any indenture,
agreement or undertaking to which any Guarantor is a party or by which any
Guarantor or its property are bound. This Guaranty constitutes the legal, valid
and binding obligation of each Guarantor enforceable in accordance with its
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium, any Debtor Relief Law or similar laws relating to or limiting
creditors’ rights generally or by equitable principles relating to
enforceability. GAG Inc. is the sole holder of Great American’s Capital Stock
and Great American is the sole holder of the Original Borrower’s Capital Stock,
and in their respective capacities as such, will derive material financial
benefit from the extensions of credit to the Borrowers which may be made under
the Credit Agreement.

 

24. AMENDMENT AND RESTATEMENT. This Guaranty amends and restates in its entirety
that certain Second Amended and Restated Guaranty, dated as of December 8, 2010,
from Great American Group LLC and Great American Group, Inc. to the Lender (the
“Original Guaranty”). By execution of this Guaranty, no obligations of
Guarantors under the Original Guaranty are released or discharged but shall
continue and constitute obligations of the Guarantor under this Guaranty.

 

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  GREAT AMERICAN GROUP, INC.   a Delaware corporation               By: /s/
Philip J. Ahn         Name:   Philip J. Ahn         Title: Chief Financial
Officer               GREAT AMERICAN GROUP, LLC   a California limited liability
company               By: /s/ Philip J. Ahn         Name: Philip J. Ahn        
Title: Chief Financial Officer