Exhibit 10.7

FIRST AMENDED AND RESTATED LIMITED 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 Delaware limited liability company
(“Great American”), as of August 27, 2009, jointly and severally unconditionally
guaranties 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 Great American Group WF, LLC a California limited liability
company.

“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 Credit Agreement dated as of even date
herewith by and between the Borrower and Lender, as amended by the First
Amendment to Credit Agreement, dated as of even date herewith, 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 the Liabilities from and after the date demand
for payment is 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 incurred.

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

 

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

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

(a) Guarantor, 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 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) Borrower, or any Person acting on Borrower’s behalf, diverts,
misappropriates or misapplies any funds received by 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) Guarantor pledges, or causes any other member of the Great American Group to
pledge, any asset or Capital Stock of Borrower or Great American, or any right
of Borrower under any Liquidation Sales Agreement or Liquidator Joint Venture
Agreement in respect to which Lender has provided a Liquidation Loan, to any
Person other than Lender;

(e) In respect to any Liquidation Sale in respect to which Lender has provided a
Liquidation Loan, 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; or

(f) Any Expense Payment made to any Person which is a member of the Great
American Group in connection with any Liquidation Sale in respect to which
Borrower has provided a Liquidation Loan includes a mark up for profit above
such Person’s actual out-of-pocket cost therefor.

“Liabilities” means all Obligations, whether now existing or hereafter arising,
of the 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 the Borrower under the United States
Bankruptcy Code or other Insolvency Proceeding against the Borrower as

 

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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 Borrower to Lender under the Credit Agreement or other
Loan Documents) due in connection with the Credit Agreement and the other Loan
Documents.

2. GUARANTY. Each Guarantor absolutely and unconditionally, jointly and
severally, guarantees and agrees to be liable for the full and indefeasible
payment of the Guaranteed Amount as in effect on the date when demand for
payment is made hereunder on or after the occurrence of the Key Date, provided,
however, that Guarantor shall have no liability for payment of the Guaranteed
Amount unless and until the Key Date shall occur.

3. OBLIGATIONS NOT AFFECTED. The obligations of the Guarantor shall not be
affected by: any fraudulent, illegal, or improper act by the Borrower, the
Guarantor or any 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 the Borrower, the
Guarantor, or any other Person liable or obligated to the Lender for or on 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 the Borrower, or any
other guarantor of the Liabilities, or the disallowance of any claim therefor
against the Borrower.

4. INCORPORATION OF ALL DISCUSSIONS. This Guarantee and the Credit Agreement
incorporate all discussions and negotiations between the Guarantor and the
Lender, concerning the guaranty provided by the Guarantor 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 Guarantor.

5. GENERAL WAIVERS. The Guarantor waives: 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 the Guarantor may
have or to which the Guarantor may become entitled to the extent that such claim
might otherwise cause any transfer to the Lender by or on behalf of the Borrower
to be avoided as having been, or in the nature of, a preference; and notice of
acceptance of this Guaranty.

6. WAIVER OF SURETYSHIP. The Guarantor hereby expressly waives 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.

 

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7. WAIVER OF SUBROGATION. The Guarantor 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:

 

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

 

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

8. SUBORDINATION. The payment of any amounts due with respect to any
indebtedness of the 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 Guarantor 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 Guarantor under this Guaranty.

9. LENDER’S BOOKS AND RECORDS. The books and records of the Lender showing the
account between the Lender and the Borrower 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 Guarantor assents to any indulgence or waiver
which the Lender might grant or give the Borrower and/or any other Person liable
or obligated to the Lender for or on the Liabilities. The Guarantor authorizes
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 Guarantor. 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
Guarantor) and no release of any collateral securing the Liabilities or securing
the obligations of any such other Person shall affect the obligations of the
Guarantor hereunder. No action by the Lender which has been assented to herein
shall affect the obligations of the Guarantor to the Lender.

11. COSTS OF ENFORCEMENT. The Guarantor 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 successors and assigns of
the Guarantor; and shall apply to all Liabilities of the Borrower and any
successor to the Borrower, including any successor by operation of law. The
Guarantor may not 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 Guarantor, or of
any default under any agreement with the 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
Guarantor, and the 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 the Guarantor, the
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 Guarantor 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 Guarantor agrees 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 Guarantor
accepts, submits, and consents generally and unconditionally, to the
jurisdiction of the aforesaid courts.

 

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(b) The Guarantor WAIVES 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 Guarantor at the address listed underneath its
signature or such other address of the Guarantor of which the Lender then has
been provided with written notice by Guarantor, such service to become effective
five (5) business days after such mailing.

(c) The Guarantor WAIVES, at the option of Lender, 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.

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
Guarantor 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 Borrower had
promptly, punctually, and faithfully performed all Liabilities and that the
Guarantor 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 Guarantor from the Lender or from any participant with Lender in
the Liabilities (a “Participant”) and any cash, securities, instruments or other
property of the Guarantor in the possession of the Lender or any Participant)
may be applied or set off against the obligations of the Guarantor to the Lender
hereunder.

20. TERMINATION. The obligations of the Guarantor 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 Lender by Guarantor 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

 

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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 Guarantor represents and warrants that, prior to the
execution of this Guaranty, the Guarantor carefully read and reviewed all of the
provisions of this Guaranty and was afforded an opportunity to consult with
counsel independently selected by the Guarantor. The Guarantor further
represents and warrants that the Guarantor has freely and willingly executed
this Guaranty with full appreciation of the legal effect of this Guaranty. The
Guarantor recognizes that the titles to the paragraphs of the within Guaranty
are for ease of reference; are not part of this Guaranty; and do not alter or
affect substantive provisions hereof.

22. WAIVER OF JURY TRIAL. The Guarantor makes the following waiver knowingly,
voluntarily, and intentionally, and understands that the Lender, in the
establishment and maintenance of its relationship with the Borrower and the
Guarantor, is relying thereon. THE GUARANTOR HEREBY IRREVOCABLY WAIVES ANY
PRESENT OR FUTURE RIGHT OF THE GUARANTOR 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 Guarantor has
been duly authorized and is not in contravention of (i) law or (ii) the terms of
the organizational documentation of Guarantor, or (iii) any indenture, agreement
or undertaking to which Guarantor is a party or by which Guarantor or its
property are bound. This Guaranty constitutes the legal, 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 or limiting creditors’ rights generally or by equitable principles
relating to enforceability. Guarantor is the sole holder of the Borrower’
Capital Stock and in its capacity as such, will derive material financial
benefit from the extensions of credit to the Borrower which may be made under
the Credit Agreement.

24. AMENDMENT AND RESTATEMENT. This Guaranty amends and restates in its entirety
that certain Limited Guaranty, dated as of October 21, 2008, from Great American
Group LLC to the Lender (the “Original Guaranty”). By execution of this
Guaranty, no obligations of Guarantor 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. By:  

/s/ Paul Erickson

Name:  

Paul Erickson

Title:  

Chief Financial Officer

GREAT AMERICAN GROUP, LLC By:  

/s/ Andrew Gumaer

  Andrew Gumaer   Its Manager By:  

/s/ Harvey M. Yellen

  Harvey M. Yellen   Its Manager

 

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