Exhibit 10.7


 


GREAT AMERICAN GROUP, INC.


 


AMENDED AND RESTATED EMPLOYMENT AGREEMENT


 


THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT
(this “Agreement”) is entered into as of May 19, 2014, between Great American Group, Inc., a Delaware corporation
(the “Company”‘), and Harvey Yellen (“Executive”).


 


RECITALS


 


A.           Pursuant
to the Acquisition Agreement (“Acquisition Agreement”) dated as of May 19, 2014, by and among the Company and
the other parties named therein, the Company shall acquire the Seller Companies (the “Transaction”). Nothing
in this Agreement is intended to supersede or alter the terms of the Acquisition Agreement. Capitalized terms used herein that
are not otherwise defined shall have the meanings assigned them in the Acquisition Agreement.


 


B.           Executive
and the Company are parties to that certain Employment Agreement dated as of July 31, 2009 (the “Original Agreement”),
and they now desire to amend, restate and supersede the Original Agreement by entering into this Agreement.


 


B.           As
a condition and material inducement for the each of the Company and the other parties to the Transaction to enter into the Acquisition
Agreement and consummate the Transaction, the parties wish to provide for Executive’s continued employment with the Company
following the consummation of the Transaction in accordance with the terms of this Agreement.


 


Agreement


 


NOW THEREFORE, in consideration of the mutual
promises contained in this Agreement and for other good and valuable consideration, the sufficiency of which is hereby agreed,
the Company and Executive agree as follows:


 


1.          Position
and Responsibilities; Term.


 


(a)          Term.
The Company shall employ Executive, and Executive hereby accepts employment with the Company, upon the terms and conditions set
forth in this Agreement for the period beginning on the First Closing (the “Effective Date”) and ending on the
third anniversary of the Effective Date (the “Employment Period”). Commencing on the second anniversary of the
Effective Date and on each anniversary thereafter, the Employment Period shall be automatically extended for one year terms, unless
either Executive or the Company gives the other party not less than 90 days’ prior written notice of the intention
to not extend this Agreement.


 




    	 



    	 



    

 


(b)          Position
and Duties. During the Employment Period, Executive shall serve as the
President of Great American Group, LLC, a wholly-owned subsidiary of the Company and shall have the typical duties, responsibilities,
functions and authority associated with such position, subject to the power and authority of the Company’s Board of Directors.
In addition, during the Employment Period, Executive shall serve as a member of the Board of Directors of the Company. Executive
shall abide by the rules, regulations, and practices as adopted or modified from time to time in the Company’s sole discretion.


 


(c)          Other
Activities. Except upon the prior written consent of the Company, Executive will not, during the term of this Agreement,
(i) accept any other employment, or (ii) engage, directly or indirectly, in any other business activity (whether or not
pursued for pecuniary advantage) that might interfere with Executive’s duties and responsibilities hereunder or create a
conflict of interest with the Company; 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.


 


2.          Compensation
and Benefits.


 


(a)          Base
Salary. In consideration of the services to be rendered under this Agreement, the Company shall pay Executive a salary at the
rate of (i) Three-Hundred-Thousand Dollars ($300,000.00) per year until June 30, 2015, (ii) Two-Hundred-Thousand Dollars ($200,000.00)
per year from July 1, 2015 through June 30, 2016 and (iii) One-Hundred-Thousand Dollars ($100,000.00) per year thereafter (“Base
Salary”). The Base Salary shall be paid in accordance with the Company’s regularly established payroll practice.
Executive’s Base Salary will be reviewed from time to time in accordance with the established procedures of the Company for
adjusting salaries for similarly situated employees and may be adjusted in the sole discretion of the Compensation Committee of
the Company’s Board of Directors (the “Compensation Committee”).


 


(b)          Discretionary
Annual Bonus. Within 60 days after the end of each fiscal year during the Employment Period, including the fiscal year ending
December 31, 2014, the Compensation Committee shall evaluate Executive’s performance in light of factors that such committee
deems relevant. Based on this evaluation, Executive will be eligible to receive an annual bonus award for performance in each fiscal
year. The amount of the annual bonus, if any, shall be determined in the sole discretion of the Compensation Committee and shall
be paid in accordance with the Company’s regularly established payroll practice within 75 days of the end of the relevant
fiscal year.


 


(c)          Equity
Incentive Awards. Executive shall be entitled to the grant of equity incentives at the discretion of the Compensation
Committee.


 


(d)          Business
Expenses. During the Employment Period, the Company shall reimburse Executive for all reasonable business expenses incurred
by him in the course of performing his duties and responsibilities under this Agreement which are consistent with the Company’s
policies in effect from time to time with respect to travel, entertainment and other business expenses, subject to the Company’s
requirements with respect to reporting and documentation of such expenses. Notwithstanding the foregoing, 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.


 




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(e)          Benefits.
In addition to the Base Salary and any annual bonuses or other compensation payable to Executive pursuant to this Section 2,
Executive shall be entitled to participate in all of the Company’s employee benefit programs for which senior executive employees
of the Company and its Subsidiaries are generally eligible on terms and conditions no less favorable than offered to such other
senior employees. Executive will be entitled to paid vacation days and paid holidays in accordance with the normal vacation policy
and applicable paid holiday policy of the Company, provided that in no event shall Executive be entitled to less than twenty
(20) paid vacation days per year.


 


(f)          Indemnification.
The Company 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 claims, and all expenses actually incurred by Executive in connection therewith
by reason of the fact that Executive is or was employed by the Company, served as a director of the Company, or otherwise provided
services to the Company 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 (f) shall be paid to Executive or on Executive’s behalf immediately on Executive incurring such
liability. The Company shall maintain directors’ and officers’ insurance on such terms as determined by the Company,
naming Executive as an additional insured. The Company 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.          Termination.


 


(a)          At-Will
Termination by the Company. Executive’s employment with the Company shall be “at-will” at all times. The
Company may terminate Executive’s employment with the Company at any time, without any advance notice, for any reason or
no reason at all, notwithstanding anything to the contrary contained in or arising from any statements, policies or practices of
the Company relating to the employment, discipline or termination of its employees. Upon and after such termination, all obligations
of the Company under this Agreement shall cease, except as otherwise provided herein.


 


(b)          At-Will
Termination by Executive. Executive may terminate employment with the Company at any time for any reason or no reason at all,
upon four weeks’ advance written notice. During such notice period Executive shall continue to diligently perform all of
Executive’s duties hereunder. The Company shall have the option, in its sole discretion, to make Executive’s termination
effective at any time prior to the end of such notice period. Thereafter all obligations of the Company shall cease, except as
otherwise provided herein.


 


(c)          Effect
of Termination. Upon termination of Executive’s employment, Executive shall be deemed to have resigned from all offices
and directorships then held with the Company. Following any termination of employment, Executive shall cooperate with the Company
in the winding up of pending work on behalf of the Company and the orderly transfer of work to other employees. If the Employment
Period is terminated for any reason, then Executive shall be entitled to receive his Base Salary through the date of termination
or expiration, together with any vested retirement or other benefits accrued on or prior to such termination, accrued life, disability
insurance benefits and accrued but untaken vacation days and other amounts owing hereunder as of the date of such termination that
have not yet been paid, including, but not limited to unreimbursed business expenses. Any outstanding equity or equity-based awards
granted to Executive prior to the date of termination or expiration shall be subject to the terms and conditions of the applicable
plan and award agreement.


 




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(d)          No
Other Benefits. Except as otherwise expressly provided herein, Executive shall not be entitled to any other salary, bonuses,
employee benefits or compensation from the Company or its Subsidiaries after the termination of Executive’s employment by
the Company for any reason and all of Executive’s rights to salary, bonuses, employee benefits and other compensation hereunder
which would have accrued or become payable after the termination of the Employment Period shall cease upon such termination, other
than those expressly required under applicable law (such as COBRA).


 


4.          Confidential
Information.


 


(a)          Protection
of Confidential Information. Executive acknowledges that confidential and proprietary information is important to the continued
success of the Company and its Subsidiaries and Affiliates. All confidential and proprietary information now existing or developed
in the future is referred to in this Agreement as “Confidential Information.” Confidential Information includes
all information (whether remembered or embodied in a tangible or intangible form) (i) related to the Company’s or its
Subsidiaries’ or Affiliates’ current or potential business, and (ii) not generally or publicly known. Confidential
Information includes, without specific limitation: information and data obtained by Executive during the course of his performance
under this Agreement concerning the business and affairs of the Company and its Subsidiaries and Affiliates; information concerning
acquisition opportunities in or reasonably related to the Company’s or its Subsidiaries’ or Affiliates’ business
which Executive becomes aware of during his employment; the identity of current or prospective customers of the Company or its
Subsidiaries or Affiliates; Company and Subsidiary strategic, marketing and expansion plans; Company and Subsidiary financial and
business plans; Company and Subsidiary employee lists and telephone numbers; new and existing Company and Subsidiary programs and
services; and information concerning Company and Subsidiary prices and terms. Executive shall not disclose to any unauthorized
person or use for his own account any Confidential Information without the prior written consent of the Company. Confidential Information
shall not include information which (i) becomes generally known to and available for use by the public other than as a result
of Executive’s acts or omissions to act, (ii) is established by Executive to have been known by Executive on the date hereof
or thereof, (iii) is disclosed by the Company to a third party with no obligation to keep the Confidential Information confidential,
other than inadvertent disclosures which the Company takes reasonable steps to remedy, (iv)  is received by Executive from
a third party without restriction and without breach of any obligations of non-disclosure, or (v) is required to be disclosed
pursuant to any applicable law or court order. Executive agrees to deliver to the Company at the end of the Employment Period,
or at any other time the Company may request in writing, all memoranda, notes, plans, records, reports, studies and other documents,
whether in paper or electronic form (and copies thereof), relating to the business of the Company or its Subsidiaries or Affiliates
(including, without limitation, all Confidential Information) that he may then possess or have under his control.


 




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(b)          Third
Party Information. Executive understands that the Company and its Subsidiaries and Affiliates will receive from third parties
confidential or proprietary information (“Third Party Information”) subject to a duty on the Company’s
and its Subsidiaries’ and Affiliates’ part to maintain the confidentiality of such information and to use it only for
certain limited purposes. During the Employment Period and thereafter, and without in any way limiting the provision of Section 4(a)
above, Executive will hold Third Party Information in the strictest confidence and will not disclose to anyone (other than personnel
of the Company or its Subsidiaries and Affiliates who need to know such information in connection with their work for the Company
or such Subsidiaries and Affiliates) or use, except in connection with his work for the Company or its Subsidiaries and Affiliates,
Third Party Information unless expressly authorized by the third party or by the Company in writing.


 


5.          Intellectual
Property, Inventions and Patents.  Executive acknowledges that all discoveries, concepts, ideas, inventions, innovations, improvements,
developments, methods, designs, analyses, drawings, reports, patent applications, and copyrightable work (whether or not including
any confidential information) and all registrations or applications related thereto, all other proprietary information and all
similar or related information (whether or not patentable) which relate to the Company’s actual or anticipated business,
research and development or existing or future products or services and which are conceived, developed or made by Executive (whether
alone or jointly with others) while employed by the Company or any of its Subsidiaries (“Work Product”), belong
to the Company.


 


6.          Executive’s
Representations. Executive hereby represents and warrants to the Company that, except as previously disclosed in writing to
the Company (i) the execution, delivery and performance of this Agreement by Executive do not and shall not conflict with
breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which Executive is a
party or by which he is bound, (ii) Executive is not a party to or bound by any employment agreement, noncompete agreement
or confidentiality agreement with any other person or entity and (iii) upon the execution and delivery of this Agreement by
the Company, this Agreement shall be the valid and binding obligation of Executive, enforceable in accordance with its terms. Executive
hereby acknowledges and represents that he has consulted with independent legal counsel regarding his rights and obligations under
this Agreement and that he fully understands the terms and conditions contained herein.


 


7.          Survival.
Sections 4 through 15 shall survive and continue in full force in accordance with their terms notwithstanding
the expiration or termination of the Employment Period. If the Acquisition Agreement is terminated in accordance with its terms
prior to the First Closing, this Agreement shall be void ab initio.


 




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8.          Notices.
Any notice provided for in this Agreement shall be in writing and shall be either personally delivered, sent by reputable overnight
courier service or mailed by first class mail, return receipt requested, to the recipient at the address below indicated:


 


Notices to Executive:


 


At the address on file with the Company.


 


Notices to the Company:


 


Great American Group, Inc.


21860 Burbank Blvd.


Suite 300 South


Woodland Hills, CA 91367


Attention: Chief Executive Officer


Facsimile: (818) 884-2976


Email: agumaer@greatamerican.com


 


With a copy to:


 


Morrison & Foerster LLP


12531 High Bluff Drive, Suite 100


San Diego, CA 92130


Attention: Scott Stanton


Facsimile: (858) 523-5941


Email: sstanton@mofo.com


 


or such other address or to the attention of such other person
as the recipient party shall have specified by prior written notice to the sending party. Any notice under this Agreement shall
be deemed to have been given when so delivered, sent or mailed.


 


9.          Severability.
Whenever possible each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable
law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement
or any action in. any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as
if such invalid, illegal or unenforceable provision had never been contained herein.


 


10.         Complete
Agreement. This Agreement embodies the complete agreement and understanding among the parties with respect to, and supersedes
and preempts any prior understandings, agreements or representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way. Without limiting the foregoing, this Agreement supersedes and replaces the Original Agreement,
which shall be deemed terminated and of no further force or effect upon the occurrence of the First Closing.


 




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11.         No
Strict Construction. The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to
express their mutual intent, and no rule of strict construction shall be applied against any party.


 


12.         Counterparts.
This Agreement may be executed in separate counterparts (including by means of facsimile or electronic transmission in portable
document format (pdf)), each of which is deemed to be an original and all of which taken together constitute one and the same agreement.


 


13.         Assignment;
Binding Effect. The performance of Executive is personal hereunder, and Executive agrees that Executive shall have no right
to assign and shall not assign or purport to assign any rights or obligations under this Agreement. This Agreement may be assigned
by the Company, and nothing in this Agreement shall prevent the consolidation, merger or sale of the Company or a sale of any or
all or substantially all of its assets. Subject to the foregoing restriction on assignment by Executive, this Agreement shall inure
to the benefit of and be binding upon each of the parties; the affiliates, officers, directors, agents, successors and assigns
of the Company; and the heirs, devisees, legal representatives, executors and administrators of Executive.


 


14.         Choice
of Law. All issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement shall
be governed by, and construed in accordance with, the laws of the State of California without giving effect to any choice of law
or conflict of law rules or provisions (whether of the State of California or any other jurisdiction) that would cause the application
of the laws of any jurisdiction other than the State of California.


 


15.         Amendment
and Waiver. The provisions of this Agreement may be amended or waived only with the prior written consent of the Company and
Executive. No course of conduct or course of dealing or failure or delay by any party hereto in enforcing or exercising any of
the provisions of this Agreement shall affect the validity, binding effect or enforceability of this Agreement or be deemed to
be an implied waiver of any provision of this Agreement.


 


*          *          *          *          *


 


[Signature page immediately
follows.]


 




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IN WITNESS WHEREOF, the parties hereto have
executed this Amended and Restated Employment Agreement as of the date first written above.


 


	 	Great American Group, Inc.
	 	 	 
	 	By:	/s/ Phillip J. Ahn
	 	Name:  	Phillip J. Ahn
	 	Its:	Chief Financial Officer and
	 	 	Chief Operating Officer
	 	 	 
	 	Executive:
	 	 	 
	 	/s/ Harvey Yellen
	 	Harvey Yellen


 



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