Exhibit 10.4

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“Agreement”) is entered into this 31st day of July,
2009 between Great American Group, Inc. (“Employer”) and Scott Carpenter
(“Executive”).

RECITAL

Employer desires to employ Executive, and Executive desires to be so employed by
Employer, on the terms and subject to the conditions set forth in this
Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the premises and mutual promises set forth
in this Agreement, Employer and Executive hereby agree as follows:

1. Term of Employment

(a) The term of Executive’s employment under this Agreement (“Term”) shall
commence on the closing date of the acquisition of Great American Group, LLC
(“Great American”) by Employer (“Effective Date”). If the acquisition does not
occur, this Agreement shall not take effect. The term of this Agreement shall
begin on the Effective Date and end on the Termination Date (as defined below).

2. Compensation

(a) Subject to the provisions of this Agreement, in full consideration for all
rights and services provided by Executive under this Agreement, Executive,
during the Term, shall receive the compensation set forth in this Section 2,
plus any compensation Employer subsequently awards to Executive.

(b) Commencing on the Effective Date, Executive shall receive an annual base
salary (“Base Salary”) of Two Hundred Twenty Five Thousand Dollars ($225,000.00)
paid in accordance with Employer’s payroll policies in effect from time to time.
Executive’s Base Salary shall be increased on each anniversary of the Effective
Date by an amount determined by Employer, but in no event will Executive’s Base
Salary be increased by less than 5%.

(c) Executive will be eligible to receive an annual discretionary bonus (“Annual
Bonus”). Executive’s Annual Bonus shall be subject to the terms and conditions
of the Employer’s then-current bonus plan for senior executives.

(d) Executive will receive One Thousand Two Hundred Dollars ($1,200.00) per
month as an automobile allowance, which will be paid to Executive on the
Effective Date and the first day of each month thereafter.

(e) Employer agrees that it shall defend, indemnify, and hold Executive harmless
to the fullest extent permitted by applicable law from and against any and all
liabilities, costs and

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claims, and all expenses actually incurred by Executive in connection therewith
by reason of the fact that Executive is or was employed by Employer, served as a
director of Employer, or otherwise provided services to Employer including,
without limitation, all costs and expenses actually and reasonably incurred by
Executive in defense of litigation arising out of Executive’s employment
hereunder. All amounts payable to Executive or on Executive’s behalf under this
subsection (e) shall be paid to Executive or on Executive’s behalf immediately
on Executive incurring such liability. Employer shall maintain directors and
officers’ insurance on such terms as determined by the Employer, naming
Executive as an additional insured. The Employer shall use commercially
reasonable efforts to ensure that the directors and officers’ insurance shall
provide for a tail period of not less than six years post-employment.

3. Title; Location

Executive shall serve as EXECUTIVE VICE PRESIDENT OF RETAIL SERVICES.
Executive’s principal place of business shall be 21860 Burbank Blvd., Suite 300
South, Woodland Hills, California 91367.

4. Duties

Executive shall report directly to the Chief Executive Officer of the Employer
(the “CEO”) and shall have such duties commensurate with Executive’s position as
may be assigned to Executive from time to time by the CEO. Executive shall
devote all of Executive’s working time to the performance of Executive’s duties
hereunder, shall in all respects conform to and comply to the best of
Executive’s ability with the lawful directions and instructions given to
Executive by CEO. Further, Executive shall not, directly or indirectly, render
services to any other person or organization without the consent of the CEO or
otherwise engage in activities that would interfere with Executive’s faithful
performance of Executive’s duties hereunder; provided, however, that Executive
may serve on civic or charitable boards or engage in charitable activities
without remuneration if doing so is not inconsistent with, or adverse to,
Executive’s employment hereunder.

5. Expenses

To the extent Executive incurs necessary and reasonable travel or other business
expenses in the course of Executive’s employment, Executive shall be reimbursed
for such expenses, upon presentation of written documentation in accordance with
Employer’s policies in effect from time to time.

6. Other Benefits

(a) Executive shall be eligible to participate in all health, welfare,
retirement, pension, life insurance, disability, perquisite and similar plans,
programs and arrangements generally available to executives of Employer from
time to time during the Term on terms and conditions no less favorable than
offered to other senior employees of Employer. Employer shall cause to be paid
all compensation that is payable to Executive according to the terms of that
certain Amendment Agreement and Release dated on or prior to the date hereof
between Executive and Great American Group, LLC (the “Release”).

 

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(b) Executive will be entitled to paid vacation days in accordance with the
normal vacation policies of Employer in effect from time to time; provided,
however, that in no event shall Executive be entitled to less than twenty
(20) paid vacation days per year.

(c) Executive shall be entitled to all of the same paid holidays provided by
Employer to its full-time employees in the United States.

(d) Executive shall be entitled to reimbursement for the cost of first class air
travel for any domestic or international travel reasonably related to
Executive’s duties.

7. Protection of Employer’s Interests

(a) Property of the Employer. All rights worldwide with respect to any and all
intellectual or other property of any nature produced, created or suggested by
Executive, whether on Executive’s own time or not, alone or with others, during
the term of Executive’s employment or resulting from Executive’s services which
(i) relate in any manner at the time of conception or reduction to practice to
the actual or demonstrably anticipated business of the Employer or its parents,
predecessors, subsidiaries, joint venturers and other affiliates (collectively,
the “Employer Group”), (ii) result from or are suggested by any task assigned to
Executive or any work performed by Executive on behalf of the Employer Group,
(iii) were created using the time or resources of the Employer Group, or
(iv) are based on any property owned or idea conceived by the Employer Group,
shall be deemed to be a work made for hire and shall be the sole and exclusive
property of the Employer Group. Executive agrees to execute, acknowledge and
deliver to the Employer, at the Employer’s request, such further documents,
including copyright and patent assignments, as the Employer finds appropriate to
evidence the Employer Group’s rights in such property. Executive’s agreement to
assign to the Employer any of Executive’s rights as set forth in this
Section 7(a) shall not apply to any invention that qualifies fully under the
provisions of California Labor Code Section 2870, where no equipment, supplies,
facility or trade secret information of the Employer Group was used, where the
invention was developed entirely on Executive’s own time, where the invention
does not relate to the Employer Group’s business, and where the invention does
not result from any work performed by Executive for the Employer Group.
Executive represents to Employer that Executive has not conceived or acquired an
ownership interest in any inventions, patents, or copyrights, except those
described in Exhibit A hereto, and that Executive will not incorporate, or
permit to be incorporated, any inventions listed in Exhibit A hereto in any
Employer Group process, Employer Group product or Employer Group inventions
without Employer’s prior written consent. If Executive incorporates an invention
listed on Exhibit A into a Employer Group product, Employer Group process or
Employer Group invention (with or without Employer’s consent), Executive hereby
grants to the Employer Group a nonexclusive, paid-up royalty-free, irrevocable,
world-wide license (with rights to sublicense through multiple tiers of
sub-licensees) to make, have, modify, use, sell, copy and create derivative
works of such inventions. Executive owns no inventions, patents, or copyrights
individually or jointly with others, except those described in Exhibit A
attached hereto and that Exhibit A lists any and all agreements that might
contain any of the restrictions described in this Section 7 or require the
assignment of inventions, copyrightable works or of contributions to
copyrightable works

 

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(b) Confidentiality. Executive acknowledges, and the Employer agrees, that
during Executive’s employment Executive will have access to and become informed
of confidential and proprietary information concerning the Employer Group.
During Executive’s employment and at all times following the termination of
Executive’s employment, confidential or proprietary information of any entity in
the Employer Group shall not be used by Executive or disclosed or made available
by Executive to any person except as required in the course of Executive’s
employment with Employer. Upon the termination of Executive’s employment (or at
any time on the Employer’s request), Executive shall return to the Employer all
such information that exists, whether in electronic, written, or other form (and
all copies or extracts thereof) under Executive’s control and shall not retain
such information in any form, including without limitation on any devices, disks
or other media.

(c) Return of Property and Resignation from Office. Executive acknowledges that,
upon termination of Executive’s employment for any reason whatsoever (or at any
time on Employer’s request), Executive will promptly deliver to Employer or
surrender to Employer’s representative all of Employer’s property, including,
without limitation, all documents and other materials (and all copies thereof)
relating to Employer’s business, all identification and access cards, all
contact lists and third party business cards, however and wherever preserved,
and any equipment provided by Employer, including, without limitation,
computers, telephones, personal digital assistants, memory cards, and similar
devices which Executive possesses or are in Executive’s custody or under
Executive’s control.

(d) Non-solicitation. For a period of 12 months after the termination of
Executive’s employment, Executive will not, either directly or indirectly,
either alone or in concert with others, recruit or attempt to recruit, directly
or indirectly, any employee of the Employer Group for employment with any other
organization.

(e) Former Employers. Executive represents that Executive is not subject to any
employment, confidentiality, or other agreement or restriction that would
prevent Executive from fully satisfying Executive’s duties under this Agreement
or that would be violated if Executive did so. Without the Employer’s prior
written approval, Executive promises that Executive will not disclose to the
Employer Group any proprietary information belonging to a former employer or
other entity without its written permission.

8. Termination of Employment

(a) By Employer Without Cause. At any time during the Term, Employer may
terminate Executive’s employment with the consequences set forth herein.

(b) By Employer for Cause. At any time during the Term, Employer may terminate
Executive’s employment for “Cause,” which for purposes of this Agreement, shall
mean Executive (i) engaged in gross misconduct or gross negligence in the
performance of Executive’s duties or willfully and continuously failed or
refused to perform any duties reasonably requested in the course of Executive’s
employment consistent with Executive’s position with Employer; (ii) engaged in
fraud, dishonesty, or any other improper conduct that causes material harm to
Employer or its business or reputation; (iii) materially breached this
Agreement; or (iv) was convicted of, or pled guilty or no contest to, a felony
or crime involving dishonesty or moral turpitude (excluding traffic offenses).

 

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(c) By Executive for Good Reason. At any time during the Term, Executive may
terminate Executive’s employment for “Good Reason,” which, for purposes of this
Agreement, shall mean that without Executive’s written agreement, there is (i) a
material diminution in Executive’s Base Salary, authority, duties, or
responsibilities; (ii) a material diminution in the budget over which Executive
retains authority; (iii) a material change in the geographic location at which
Executive must perform services; or (iv) any other action or inaction that
constitutes a material breach of the terms of this Agreement. Executive must
(i) provide Employer with written notice of Executive’s intent to terminate
Executive’s employment and a description of the event Executive believes
constitutes Good Reason within 120 days after the initial existence of the
event, and (ii) Employer shall have thirty days after Executive provides the
notice described above to cure the default that constitutes Good Reason (“Cure
Period”). Executive will have thirty days following the end of the Cure Period
to terminate Executive’s employment, after which Good Reason will no longer
exist.

(d) By Executive Without Good Reason. At any time during the Term, Executive may
terminate Executive’s employment without Good Reason.

(e) Death. In the event of Executive’s death during the Term, Executive’s
employment shall terminate immediately as of the date of Executive’s death.

(f) Disability. At any time during the Term, Employer may terminate Executive’s
employment on account of Disability with the consequences set forth herein.

9. Termination of Obligations and Severance Payments

(a) General. Upon the termination of Executive’s employment pursuant to
Section 8, Executive’s rights and Employer’s obligations to Executive under this
Agreement immediately shall terminate except as provided in this Section 9 or
Section 10(m), and Executive (or Executive’s heirs or estate, as applicable)
shall be entitled to receive any amounts or benefits set forth below (subject in
all cases to Section 10(k)). Notwithstanding anything to the contrary contained
in this Agreement, upon termination of Executive’s employment for whatever
reason, Employer immediately shall pay to Executive (or his estate if Executive
is deceased) (1) any Base Salary earned but unpaid as of the Termination Date;
(2) payment in lieu of any vacation accrued under Section 6 but unused as of the
Termination Date; (3) any business expenses incurred but not reimbursed under
Section 5 as of the Termination Date; and (4) any amounts or benefits under any
compensation, incentive, or benefit plans vested but not paid as of the
Termination Date.

For the purposes of this Agreement, the following terms shall have the following
meanings:

“Disabled” or “Disability” shall mean either (i) Executive is unable to engage
in the duties of his position by reason of any medically determinable physical
or mental impairment which can be expected to result in death or last for a
continuous period of not less than twelve months, or (ii) by reason of any
medically determinable physical or mental impairment which

 

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can be expected to result in death or last for a continuous period of not less
than twelve months, Executive is receiving income replacement benefits for a
period of not less than three months under an accident and health plan covering
employees of Employer. Whether Executive is Disabled shall be determined by a
physician mutually agreed upon by Executive and Employer. If Executive and
Employer are unable to agree on such a physician, Executive and Employer shall
each appoint one physician and those two physicians shall appoint a third
physician who shall make the determination of whether Executive is Disabled.

“Severance” shall mean payment within fifteen days of Executive’s Termination
Date of (1) a lump sum equal to one year of Executive’s Base Salary; (2) a lump
sum equal to the highest Annual Bonus Executive was paid during the Term (or the
first target Annual Bonus in the event that Executive is terminated prior to any
Annual Bonus being paid); and (3) a lump sum equal to twelve times the monthly
COBRA premium for Executive and Executive’s spouse and dependents, calculated as
of the date of Executive’s Termination Date, with respect to each
Company-sponsored group health plan in which Executive participates on the date
Executive’s employment terminates.

“Termination Date” shall mean the effective date of Executive’s termination of
employment pursuant to Section 8.

(b) Death, Disability, Termination by Employer Without Cause, or Termination by
Executive for Good Reason. In the event Employer terminates Executive’s
Employment Without Cause, Executive terminates employment for Good Reason,
Employer terminates Executive’s employment for Disability or Executive dies, in
addition to the amounts set forth in Section 9(a), Employer shall pay Executive
(or Executive’s heirs or estate, if applicable) Severance in the amounts and at
the time outlined above.

(c) Termination by Executive Without Good Reason or Termination by Employer for
Cause. In the event Executive terminates Executive’s employment without Good
Reason or Employer terminates Executive’s employment for Cause, Employer shall
pay Executive the amounts set forth in Section 9(a).

10. General Provisions

(a) Entire Agreement. This Agreement supersedes all prior or contemporaneous
agreements and statements, whether written or oral, concerning the terms of
Executive’s employment with Employer (other than the Release), and no amendment
or modification of these agreements shall be binding unless it is set forth in a
writing signed by both Employer and Executive. To the extent that this Agreement
conflicts with any of Employer’s policies, procedures, rules, or regulations,
this Agreement shall supersede the other policies, procedures, rules, or
regulations.

(b) Assignment. This Agreement and the rights and obligations hereunder shall
not be assignable or transferable by Executive or Employer without the prior
written consent of both parties.

(c) Successors. This Agreement shall be binding on and inure to the benefit of
Employer and its successors and assigns. This Agreement also shall be binding on
and inure to the benefit of Executive and Executive’s heirs, executors,
administrators, and legal representatives.

 

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(d) Waiver. No waiver by Executive or Employer at any time of any breach by the
other party of, or compliance with, any condition or provision of this Agreement
to be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time. No waiver of any provision of this Agreement shall be implied from any
course of dealing between or among the parties hereto or from any failure by any
party hereto to assert its rights hereunder on any occasion or series of
occasions.

(e) Expiration. This Agreement does not constitute a commitment of Employer with
regard to Executive’s employment, express or implied, other than to the extent
expressly provided for herein.

(f) Taxation. Employer may withhold from any payments made under the Agreement
all federal, state, city, or other applicable taxes or amounts as shall be
required or permitted pursuant to any law, governmental regulation or ruling, or
agreement with Executive.

(g) Choice of Law. Except to the extent governed by Federal law, this Agreement
shall be governed by and construed in accordance with the laws of the State of
California, without regard to conflict of law principles.

(h) Immigration. In accordance with the Immigration Reform and Control Act of
1986, employment under this Agreement is conditioned upon satisfactory proof of
Executive’s identity and legal ability to work in the United States.

(i) Severability. If any provision of this Agreement is held to be illegal,
invalid, or unenforceable under, or would require the commission of any act
contrary to, existing or future laws effective during the Term, such provisions
shall be fully severable; the Agreement shall be construed and enforced as if
such illegal, invalid, or unenforceable provision had never comprised a part of
this Agreement; and the remaining provisions of this Agreement shall remain in
full force and effect and shall not be affected by the illegal, invalid, or
unenforceable provision or by its severance from this Agreement. Furthermore, in
lieu of such illegal, invalid, or unenforceable provision, there shall be added
automatically as part of this Agreement a legal and enforceable provision as
similar in terms to such illegal, invalid, or unenforceable provision as may be
possible.

(j) Headings. The headings set forth herein are included solely for the purpose
of identification and shall not be used for the purpose of construing the
meaning of the provisions of this Agreement.

(k) Section 409A. Severance pay under this Agreement is intended to comply with
the “short-term deferral” exception to Section 409A. Notwithstanding anything
contained in this Agreement to the contrary, Executive shall not be considered
to have terminated employment with Employer for purposes of the Agreement and no
payments that become due under this Agreement as a result of Executive’s
termination of employment shall be due to Executive under this Agreement unless
Executive would be considered to have incurred a “separation from service” from
Employer within the meaning of Section 409A. If and to the extent required in

 

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order to avoid accelerated taxation and/or tax penalties under Section 409A,
amounts that would otherwise be payable and benefits that would otherwise be
provided pursuant to this Agreement during the six-month period immediately
following Executive’s termination of employment instead shall be paid on the
first business day after the date that is six months following Executive’s
termination of employment (or upon Executive’s death, if earlier). For purposes
of this Agreement, each amount to be paid or benefit to be provided to Executive
pursuant to Section 9 of this Agreement shall be construed as a separate,
identified payment for purposes of Section 409A. With respect to expenses
eligible for reimbursement under the terms of this Agreement, (i) the amount of
such expenses eligible for reimbursement in any taxable year shall not affect
the expenses eligible for reimbursement in another taxable year and (ii) any
reimbursements of such expenses shall be made no later than the end of the
calendar year following the calendar year in which the related expenses were
incurred, except, in each case, to the extent that the right to reimbursement
does not provide for a “deferral of compensation” within the meaning of
Section 409A.

(l) 280G. Notwithstanding anything herein to the contrary, in the event that
Executive receives any payments or distributions, whether payable, distributed,
or distributable pursuant to the terms of this Agreement or otherwise, which
constitute “parachute payments” within the meaning of Section 280G of the Code,
and the net after-tax amount of the parachute payment is less than the net
after-tax amount if the aggregate payment to be made to Executive were three
times Executive’s “base amount” (as defined in Section 280G(b)(3) of the Code),
less $1.00, then the aggregate of the amounts constituting the parachute payment
shall be reduced to an amount that will equal three times Executive’s base
amount, less $1.00. The determinations to be made with respect to this
Section 10(l) shall be made by a certified public accounting firm designated by
Employer.

(m) Survivability. The provisions of Sections 7, 9 and 10 shall survive the
termination or expiration of this Agreement.

(n) Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original and both of which together shall constitute one and
the same instrument.

11. Notices

All notices which either party is required or may desire to give the other shall
be in writing and given either personally or by depositing the same in the
United States mail addressed to the party to be given notice as follows:

 

To the Employer:   

21860 Burbank Blvd

Suite 300 South

Woodland Hills, CA 91367

To Executive:    At the most recent address listed
in Executive’s personnel file

 

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Either party may by written notice designate a different address for giving of
notices. The date of mailing of any such notices shall be deemed to be the date
on which such notice is given.

[Signature Page Follows]

 

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ACCEPTED AND AGREED TO:

 

Employer     Employee GREAT AMERICAN GROUP, INC.     By:  

/s/    Andrew Gumaer

   

/s/    Scott Carpenter

NAME   Andrew Gumaer     Scott Carpenter TITLE   Chief Executive Officer    
Date: July 31, 2009     Date: July 31, 2009

[Signature Page to Employment Agreement]

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Exhibit A

Inventions, Patents, Copyrights and Agreements

Any item below left blank shall mean that Executive’s response to such item is
“None.”

 

1. Previously Conceived Inventions

(Please describe any inventions which you have developed or in which you have
some ownership interest.)

 

2. Patents

(Please list or describe all patents you own individually with others, or for
which applications are pending.)

 

3. Copyrights

(Please describe any matters for which you claim the copyright either
individually or with others).

 

4. Other Agreements

(Please list and provide copies of pertinent portions of all agreements with
former employers or others containing any of the restrictions described in
Section 7 or requiring the assignment of inventions, copyrightable works or of
contributions to copyrightable works.)

 

 

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