PLEDGE AGREEMENT
THIS
PLEDGE AGREEMENT (this “Agreement”),
dated
as of June 4, 2007, is by and between The Bombay Company, Inc., a Delaware
corporation (the “Pledgor”)
and GB
Merchant Partners, LLC, in its capacity as Administrative Agent (as hereinafter
defined) (in such capacity, the “Pledgee”),
as
agent for the benefit of the “Lenders”
(as
such term is hereinafter defined).
W
I T N E
S S E T H:
WHEREAS,
Pledgor legally and beneficially owns the issued and outstanding equity
interests as described on Exhibit
A
hereto;
and
WHEREAS,
the Borrower, together with the other borrowers signatory thereto, is entering
into that certain Second Lien Term Loan Agreement of even date herewith (the
same, as it may be amended, restated, supplemented or otherwise modified
and in
effect from time to time, the “Term
Loan Agreement”)
with
the lenders signatory thereto (the “Lenders”)
and
Pledgee, as administrative agent for the Lenders (“Administrative
Agent”),
providing for the Pledgee and the Lenders to make available to the Borrower
a
certain term loan (the “Term
Loan”)
on the
terms and conditions set forth therein (the Term Loan, together with all
other
“Obligations” as such term is defined in the Term Loan Agreement, are
collectively referred to herein as the “Obligations”);
and
WHEREAS,
Pledgor will derive substantial benefit and advantage from the Term Loan
and
other financial accommodations as set forth in the Term Loan Agreement;
and
WHEREAS,
to induce the Pledgee and the Lenders to enter into the Term Loan Agreement
and
make the Term Loan thereunder, in order to secure the payment and performance
by
each Pledgor of the Liabilities (as hereinafter defined), Pledgor has agreed
to
pledge to Pledgee, for the benefit of the Pledgee and the Lenders, all of
such
Pledgor’s equity interests in BBA Holdings, LLC, a Delaware limited liability
company, Bombay International, Inc., a Delaware corporation, The Bombay
Furniture Company of Canada, Inc, an Ontario corporation, and The Bombay
Furniture Company, Inc., a Delaware corporation (collectively, the “Pledged
Entities”),
now
or hereafter owned or acquired by Pledgor as security for the
Liabilities;
NOW,
THEREFORE, in consideration of the premises and in order to induce the Pledgee
and the Lenders to enter into the Term Loan Agreement and to make the Term
Loan
and other financial accommodations to each Pledgor under the Term Loan
Agreement, each Pledgor hereby agrees with Pledgee, for benefit of Pledgee
and
the Lenders, as follows:
Section
1. Defined
Terms.
Unless
otherwise defined herein, all capitalized terms used herein shall have the
respective meanings ascribed thereto in the Term Loan Agreement. Terms defined
in the Uniform Commercial Code, as in effect in the State of New York from
time
to time (the “UCC”),
which
are not otherwise defined in this Agreement or in the Term Loan Agreement
are
used in this Agreement as defined in the UCC as in effect on the date hereof.
For purposes hereof, “equity interest” of or in any issuer shall include,
without limitation, all limited liability company membership interests and
units, together with all options, warrants and other rights or instruments
exercisable or exchangeable for, or convertible into, such interests or
units.
Section
2. Pledge.
Each
Pledgor hereby pledges, assigns, hypothecates, transfers, delivers and grants
to
Pledgee, for the ratable benefit of the Pledgee and the Lenders, a security
interest in the following assets, properties and items ((i) whether now existing
or hereafter existing, and (ii) whether consisting of investment property,
accounts, payment intangibles or other general intangibles, or proceeds of
any
Pledged Collateral as hereafter defined (collectively the “Pledged
Collateral”)):
(i)
all of such Pledgor’s equity interests in each Pledged Entity, now owned or
hereafter acquired by such Pledgor, including, without limitation, such
Pledgor’s (A) interests in the profits and losses of each such issuer, (B)
rights and interests to receive distributions of each such issuer’s assets and
properties and (C) rights and interests, if any, to participate in the
management of each such issuer related to such equity interests (collectively,
the “Pledged
Interests”),
(ii)
all rights, privileges, authority and powers of such Pledgor as an owner
or
holder of the limited liability company or membership interests or units
of such
issuers/Pledgors as owners of such issuers, (iii) all other property hereafter
delivered to, or in the possession or in the custody of, Pledgee in substitution
for or in addition to the Pledged Interests, (iv) any other property of such
Pledgor in connection with the Pledged Interests, as described in Section
4
below,
now or hereafter delivered to, or in the possession or custody of Pledgor,
and
(v) all proceeds of the Pledged Collateral, as collateral security
for:
(a) the
prompt and complete payment when due in accordance with the terms of the
Loan
Documents (whether at the stated maturity, by acceleration or otherwise)
of all
the Obligations owed by any Loan Party, and
(b) the
due
and punctual payment and performance by each Pledgor of its obligations and
liabilities under, arising out of or in connection with this
Agreement
(all
of
the foregoing being referred to hereinafter collectively as the “Liabilities”).
Section
3. Representations
and Warranties of Pledgor.
As of
the date hereof, and with respect to any Person who joins this Agreement
following such date, each Pledgor represents and warrants to Pledgee and
each
Lender, and covenants with Pledgee and each Lender, that:
(a) Such
Pledgor is the record and beneficial owner of, and has legal title to, the
Pledged Interests listed on Exhibit
A,
and
after giving effect to the Related Transactions and the transactions
contemplated to occur on the Closing Date of the Term Loan Agreement, such
Pledged Interests are and will remain and all other equity interests
constituting Pledged Collateral will be, free and clear of all pledges, Liens,
security interests and other encumbrances and restrictions whatsoever, except
the Liens and security interests created by this Agreement and the Liens
permitted by Section
7.2
of the
Term Loan Agreement, to the extent applicable to the Pledged
Interests;
(b) Each
Pledgor has full power and authority to execute and deliver this Agreement
and
to pledge the Pledged Interests and Pledged Collateral to Pledgee, for the
ratable benefit of the Pledgee and the Lenders;
(c) this
Agreement has been duly authorized, executed and delivered by each Pledgor
and
constitutes a legal, valid and binding obligation of Pledgor enforceable
against
Pledgor in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, moratorium, reorganization and other similar
laws affecting the enforcement of creditors’ rights generally;
2
(d) there
are
no outstanding options, warrants or other similar agreements with respect
to the
Pledged Interests;
(e) the
Pledged Interests have been, and the Pledged Collateral constituting equity
interests will be, duly and validly authorized and issued, and are or will
be
fully paid and non-assessable. The Pledged Interests listed on Exhibit
A
constitute all of the issued and outstanding equity interests which are
held by
each Pledgor on the date of this Agreement. Unless specifically provided
otherwise in the Intercreditor Agreement, each Pledgor shall cause all
of their
respective Pledged Interests which are certificated securities, including,
without limitation, certificates representing limited liability company
membership interests, to be delivered as of the date hereof to Pledgee,
for the
benefit of Pledgee and the Lenders, with undated assignments or transfers
separate from such certificates, duly executed in blank by each Pledgor,
each in
form and substance reasonably satisfactory to Pledgee. Unless specifically
provided otherwise in the Intercreditor Agreement, Pledgee, on behalf of
the
Lenders, shall maintain possession and custody of the certificates representing
the Pledged Interests and Pledged Collateral.
(f) no
consent, approval or authorization of or designation or filing with any
Governmental Authority on the part of any Pledgor is required in connection
with
the pledge and security interest granted under this Agreement, or, as of
the
date hereof, the exercise by Pledgee of the voting and other rights provided
for
in this Agreement, except for the filing of Uniform Commercial Code financing
statements;
(g) the
execution, delivery and performance of this Agreement by each Pledgor will
not
violate any law or regulation or any order, judgment, writ, award or decree
of
any court, arbitrator or Governmental Authority or of the certificate of
organization, incorporation, or formation, as applicable, by-laws or operating
agreement of such Pledgor or of any such issuer listed on Exhibit
A,
or of
any securities issued by any such issuer, or, after giving effect to the
Term
Loan Agreement and the transactions contemplated by the other Loan Documents
(collectively, the “Transactions”),
any
mortgage, indenture, lease, contract, or other agreement, instrument or
undertaking to which such Pledgor is a party or which purports to be binding
upon such Pledgor or upon any of its assets, and, after giving effect to
the
Transactions contemplated to occur on the Closing Date of the Term Loan
Agreement, will not result in the creation or imposition of any Lien, charge
or
encumbrance on or security interest in any of the assets of such Pledgor
or any
issuer of Pledged Interests except as contemplated by this Agreement and
the
other Loan Documents; and
(h) as
of the
Closing Date, the pledge, assignment and delivery to Pledgee of the Pledged
Interests pursuant to this Agreement creates a valid perfected security
interest
in the Pledged Interests and the proceeds thereof in favor of Pledgee
(subject
to the filing of Uniform Commercial Code financing statement with respect
to
equity interests that are not securities), for the benefit of Pledgee
and the
Lenders, subject to no prior pledge, Lien, mortgage, hypothecation, security
interest, charge, option or encumbrance, except the Liens listed in Section
7.2
of the
Term Loan Agreement, to the extent applicable to the Pledged Interests,
or to
any agreement purporting to grant to any third party a security interest
in the
property or assets of Pledgor which would include the Pledged Interests.
Each
Pledgor covenants and agrees that it shall use its best efforts to defend
Pledgee’s right, title and security interest in and to the Pledged Interests
and
the proceeds thereof against the claims and demands of all Persons
whomsoever.
3
Section
4. Dividends,
Distributions, etc.
If,
while this Agreement is in effect, any Pledgor shall become entitled to receive
or shall receive any certificate (including, without limitation, any certificate
representing an equity dividend or an equity distribution in connection with
any
reclassification, increase or reduction of capital, or issued in connection
with
any reorganization, merger or consolidation), or any options or rights, whether
as an addition to, in substitution for, or in exchange for any of the Pledged
Interests, or otherwise, such Pledgor agrees to accept the same as Pledgee’s
agent and to hold the same in trust for Pledgee, and, except as otherwise
provided in the Intercreditor Agreement, to deliver the same forthwith to
Pledgee in the exact form received, with the endorsement of such Pledgor,
when
necessary and/or appropriate, undated assignments separate from certificate
duly
executed in blank, to be held by Pledgee, for the benefit of Pledgee and
the
Lenders, subject to the terms hereof, as additional Pledged Collateral. Except
as provided in subsection
5(a)(ii)
below,
in case any distribution of capital shall be made on or in respect of the
Pledged Interests or any property shall be distributed upon or with respect
to
the Pledged Interests pursuant to the recapitalization or reclassification
of
the capital of the issuer thereof or pursuant to the reorganization thereof,
the
property so distributed shall, except as otherwise provided in the Intercreditor
Agreement, be delivered to Pledgee to be held by it as additional Pledged
Collateral. Except as provided in subsection
5(a)(ii)
below,
all sums of money and property so paid or distributed in respect of the Pledged
Interests which are received by a Pledgor shall, until paid or delivered
to
Pledgee, be held by such Pledgor in trust as additional Pledged
Collateral.
Section
5. Administration
of Security.
The
following provisions shall govern the administration of the Pledged
Interests:
(a) So
long
as no Event of Default has occurred and is continuing, each Pledgor shall
be
entitled (subject to the other provisions hereof, including, without limitation,
Section
8
below):
(i) to
vote
or consent with respect to its respective Pledged Interests in any manner
permitted or not inconsistent with this Agreement, the Term Loan Agreement
and
the other “Loan Documents” referred to therein; and
(ii) to
receive and retain cash distributions in the ordinary course made in respect
of
the Pledged Interests, to the extent permitted to be paid or otherwise not
prohibited pursuant to the Term Loan Agreement.
Subject
to the Intercreditor Agreement, each Pledgor hereby grants to Pledgee or
its
nominee, on behalf of Pledgee and Lenders, an irrevocable proxy to exercise
all
voting and membership rights relating to the Pledged Interests in any instance,
including, without limitation, to approve any merger involving any Subsidiary
as
a constituent company (“Voting
and Membership Rights”),
which
proxy shall only be exercisable upon the occurrence and during the continuance
of an Event of Default in respect of which Pledgee
4
has
provided each Pledgor with three (3) Business Days notice of its intention
to
exercise its Voting and Membership Rights. After the occurrence and during
the
continuance of an Event of Default, in respect of which Pledgee has provided
a
Pledgor with three (3) Business Days notice of its intention to exercise
its
Voting and Membership Rights, and upon the request of Pledgee, subject to
the
Intercreditor Agreement, such Pledgor agrees to deliver to Pledgee, on behalf
of
Pledgee and Lenders, such further evidence of such irrevocable proxy or such
further irrevocable proxies to vote the Pledged Interests as Pledgee may
request.
(b) Upon
the
occurrence and during the continuance of an Event of Default, in the event
that
a Pledgor, as record and beneficial owner of the Pledged Interests, shall
have
received or shall have become entitled to receive, any cash dividends or
other
distributions in the ordinary course, such Pledgor, subject to the Intercreditor
Agreement, shall deliver to Pledgee, for the benefit of Pledgee and the Lenders,
and Pledgee, for its own benefit and the benefit of the Lenders, shall be
entitled to receive and retain, all such cash or other distributions as
additional Pledged Collateral.
(c) Subject
to any sale or other disposition by Pledgee, on behalf of the Pledgee and
Lenders, of the Pledged Interests or other property pursuant to this Agreement,
the Pledged Interests and any other Pledged Collateral shall be delivered
to
Pledgor upon satisfaction of all of the Obligations.
Section
6. Rights
of Pledgee.
Neither
Pledgee nor any of the Lenders shall be liable for failure to collect or
realize
upon the Obligations or any collateral security or guaranty therefor, or
any
part thereof, or for any delay in so doing, nor shall Pledgee or any of the
Lenders be under any obligation to take any action whatsoever with regard
thereto. Subject to the Intercreditor Agreement, any or all of the Pledged
Interests held by Pledgee hereunder may, if an Event of Default has occurred
and
is continuing, in respect of which Pledgee has provided Pledgor with three
(3)
Business Days notice of its intention to exercise its rights hereunder, be
registered in the name of Pledgee or its nominee (if held in registered form)
and Pledgee or its nominee may thereafter without notice exercise all voting
and
membership rights at any meeting with respect to any issuer of Pledged Interests
and exercise any and all rights of conversion, exchange, subscription or
any
other rights, privileges or options pertaining to any of the Pledged Interests
as if it were the absolute owner thereof, including, without limitation,
the
right to vote in favor of, and to exchange at its discretion any and all
of the
Pledged Interests upon, the merger, consolidation, reorganization,
recapitalization or other readjustment with respect to any issuer of Pledged
Interests or upon the exercise by Pledgor or Pledgee of any right, privilege
or
option pertaining to any of the Pledged Interests, and in connection therewith,
to deposit and deliver any and all of the Pledged Interests with any committee,
depository, transfer agent, registrar or other designated agency upon such
terms
and conditions as Pledgee may reasonably determine, all without liability
except
to account for property actually received by Pledgee, but Pledgee shall have
no
duty to exercise any of the aforesaid rights, privileges or options and shall
not be responsible for any failure to do so or delay in so doing.
5
Section
7. Remedies.
Upon
the occurrence and during the continuance of an Event of Default, Pledgee,
upon
the notice specified below of time and place of public or private sale, but
otherwise without demand of performance or other demand, advertisement or
notice
of any kind to or upon each Pledgor or any other Person (all and each of
which
demands, advertisements and/or notices are hereby expressly waived, except
such
notices as required by applicable law and cannot be waived), may forthwith
collect, receive, appropriate and realize upon the Pledged Collateral, or
any
part thereof, and/or may forthwith sell, assign, give an option or options
to
purchase, contract to sell or otherwise dispose of (including the disposition
by
merger) and deliver said Pledged Collateral, or any part thereof, in one
or more
portions at public or private sale or sales or transactions, at any exchange,
broker’s board or at any of Pledgee’s offices or elsewhere upon such terms and
conditions as Pledgee may deem advisable and at such prices as it may deem
best,
for any combination of cash and/or securities or other property or on credit
or
for future delivery without assumption of any credit risk, with the right
to
Pledgee upon any such sale or sales, public or private, to purchase the whole
or
any part of said Pledged Collateral so sold, free of any right or equity
of
redemption in Pledgor, which right or equity is hereby expressly waived or
released, unless, in each case otherwise required by applicable law. Pledgee,
for its own benefit and the ratable benefit of the Lenders, shall apply the
net
proceeds of any such collection, recovery, receipt, appropriation, realization,
sale or disposition, after deducting all reasonable costs and expenses of
every
kind incurred therein or incidental to the safekeeping of any and all of
the
Pledged Collateral or in any way relating to the rights of Pledgee or any
of the
Lenders hereunder, including reasonable attorneys’ fees and legal expenses, to
the payment, in whole or in part, of the Liabilities in accordance with the
Term
Loan Agreement. After so paying over such net proceeds and after the payment
by
Pledgee of any other amount required by any provision of law, including,
without
limitation, Section 9-608 of the UCC, Pledgee shall, on behalf of the Lenders,
account for the surplus, if any, to each Pledgor. Each Pledgor shall not
remain
liable for any deficiency remaining unpaid after such application. Each Pledgor
agrees that Pledgee shall give not less than ten (10) Business Days notice
of
the time and place of any public sale or of the time after which a private
sale
or other intended disposition is to take place and that such notice is
reasonable notification of such matters. No notification need be given to
any
Pledgor, if such Pledgor has signed, after the occurrence and during the
continuance of an Event of Default, a statement renouncing or modifying any
right to notification of sale or other intended disposition. In addition
to the
rights and remedies granted to Pledgee for the benefit of the Lenders in
this
Agreement and in any other instrument or agreement securing, evidencing or
relating to any of the Liabilities, Pledgee and the Lenders shall have all
the
rights and remedies of a secured party under the UCC and under any other
applicable law.
Section
8. No
Disposition, etc.
Without
the prior written consent of Pledgee, except as expressly permitted under
the
terms and conditions of the Term Loan Agreement, each Pledgor agrees that
Pledgor will not sell, assign, transfer, exchange, or otherwise dispose of,
or
grant any option with respect to, the Pledged Interests or any other Pledged
Collateral, nor will Pledgor create, incur or permit to exist any pledge,
Lien,
mortgage, hypothecation, security interest, charge, option or any other
encumbrance with respect to any of the Pledged Interests, any other Pledged
Collateral or any interest therein, or any proceeds thereof, except for the
Lien
and security interest provided for by this Agreement and the Liens permitted
pursuant to Section
7.2
of the
Term Loan Agreement, to the extent applicable to the Pledged Interests. Except
as expressly permitted by the Term Loan Agreement,
6
Section
9. Sale
of Pledged Interests.
(a) Each
Pledgor recognizes that Pledgee, for its own benefit and on behalf of Lenders,
may be unable to effect a public sale or disposition (including, without
limitation, any disposition in connection with a merger of any issuer of
Pledged
Interests) of any or all the Pledged Collateral by reason of certain
prohibitions contained in the Securities Act of 1933, as amended (the
“Act”),
and
applicable state securities laws, but may be compelled to resort to one or
more
private sales or dispositions thereof to a restricted group of purchasers
who
will be obliged to agree, among other things, to acquire such securities
for
their own account for investment and not with a view to the distribution
or
resale thereof. Pledgor acknowledges and agrees that any such private sale
or
disposition may result in prices and other terms (including the terms of
any
securities or other property received in connection therewith) less favorable
to
the seller than if such sale or disposition were a public sale or disposition
and, notwithstanding such circumstances, agrees that any such private sale
or
disposition shall be deemed to be reasonable and effected in a commercially
reasonable manner. Pledgee shall be under no obligation to delay a sale or
disposition of any of the Pledged Collateral in order to permit Pledgor or
any
issuer of Pledged Interests to register such securities for public sale under
the Act, or under applicable state securities laws, even if Pledgor or any
issuer of Pledged Interests would agree to do so.
(b) Each
Pledgor further agrees to do or cause to be done all such other acts and
things
as may be reasonably necessary to make such sale or sales or dispositions
of any
portion or all of the Pledged Collateral valid and binding and in compliance
with any and all applicable laws, regulations, orders, writs, injunctions,
decrees or awards of any and all courts, arbitrators or governmental
instrumentalities, domestic or foreign, having jurisdiction over any such
sale
or sales or dispositions, all at Pledgor’s expense. Pledgor further agrees that
a breach of any of the covenants contained in Sections
2, 4, 5(b), 8 or 9
hereof
will cause irreparable injury to Pledgee and the Lenders, that Pledgee and
the
Lenders have no adequate remedy at law in respect of such breach and, as
a
consequence, agrees, without limiting the right of Pledgee to seek and obtain
specific performance of other obligations of Pledgor contained in this
Agreement, that each and every covenant referenced above shall be specifically
enforceable against each Pledgor, and each Pledgor hereby waives and agrees
not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred and
is
continuing.
(c) Each
Pledgor further agrees to indemnify and hold harmless Pledgee and the Lenders,
each of their respective successors and assigns, officers, directors, employees,
agents and attorneys, and any Person in control of any thereof, from and
against
any loss, liability, damage and expense, including, without limitation,
reasonable counsel fees
7
(i) arises
out of or is based upon any untrue statement of a material fact by such Pledgor
or any of its Affiliates, officers, directors, employees, agents or attorneys,
or any Person in control of any thereof, contained in any registration
statement, prospectus or offering memorandum or in any preliminary prospectus
or
preliminary offering memorandum or in any amendment or supplement to any
of the
foregoing or in any other writing prepared by Pledgor or any of its Affiliates,
officers, directors, employees, agents or attorneys or any Person in control
of
any thereof, in connection with the offer, sale or resale of all or any portion
of the Pledged Collateral unless such untrue statement of material fact was
provided by Pledgee specifically for inclusion therein; or
(ii) arises
out of or is based upon any omission to state therein a material fact required
to be stated or necessary to make the statements therein not
misleading;
such
indemnification to remain operative regardless of any investigation made
by or
on behalf of Pledgee or any successor thereof, or any Person in control of
any
thereof. In connection with a public sale or other distribution, each Pledgor
will provide customary indemnification to any underwriters, their respective
successors and assigns, their respective officers and directors and each
Person
who controls any such underwriter (within the meaning of the Act). If and
to the
extent that the foregoing undertakings in this Section
9(c)
may be
unenforceable for any reason, each Pledgor agrees to make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. The obligations of
each
Pledgor under this Section
9(c)
shall
survive any termination of this Agreement. Notwithstanding the foregoing,
each
Pledgor shall have no obligations hereunder with respect to Indemnified
Liabilities to the extent such Indemnified Liabilities are caused by the
gross
negligence or willful misconduct of Pledgee as determined by a final
non-appealable judgment by a court of competent jurisdiction.
(d) Each
Pledgor further agrees that it hereby waives any and all rights of subrogation,
reimbursement, exoneration, contribution and similar rights it may have against
any issuer of Pledged Interests, upon the sale or sales or dispositions of
any
portion or all of the Pledged Collateral by Pledgee.
Section
10. Further
Assurances.
Each
Pledgor agrees that at any time and from time to time, upon the written request
of Pledgee, each Pledgor will execute and deliver all assignments separate
from
certificate, financing statements and such further documents and do such
further
acts and things as Pledgee may reasonably request consistent with the provisions
hereof in order to effect the purposes of this Agreement.
Section
11. Severability.
Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of
such prohibition or unenforceability, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8
Section
12. No
Waiver; Cumulative Remedies.
Neither
Pledgee nor any of the Lenders shall by any act, delay, omission or otherwise
be
deemed to have waived any of its remedies hereunder, and no waiver by Pledgee
or
any Lender shall be valid unless in writing and signed by Pledgee or such
Lender
and then only to the extent therein set forth. A waiver by Pledgee, or any
Lender, of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which Pledgee, or such Lender,
would
otherwise have on any further occasion. No course of dealing between any
Pledgor
and Pledgee or any Lender and no failure to exercise, nor any delay in
exercising on the part of Pledgee or any Lender of any right, power or privilege
hereunder or under the Loan Documents shall impair such right or remedy or
operate as a waiver thereof; nor shall any single or partial exercise of
any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights
and
remedies herein provided are cumulative and may be exercised singly or
concurrently, and are not exclusive of any rights or remedies provided by
law.
Section
13. Successors.
This
Agreement and all obligations of each Pledgor hereunder shall be binding
upon
the successors and assigns of such Pledgor, and shall, together with the
rights
and remedies of Pledgee and the Lenders hereunder, inure to the benefit of
Pledgee and the Lenders and their successors and assigns, except that such
Pledgor shall not have any right to assign its obligations under this Agreement
or any interest herein without the prior written consent of
Pledgee.
Section
14. Termination.
This
Agreement and the Liens and security interests granted hereunder shall terminate
upon indefeasible full and complete performance and satisfaction of the
Liabilities (other than contingent indemnification obligations), and promptly
upon the Termination Date, Pledgee shall surrender the certificates evidencing
the Pledged Interests to each Pledgor.
Section
15. Possession
of Pledged Collateral.
Beyond
the exercise of reasonable care to assure the safe custody of the Pledged
Collateral in the physical possession of Pledgee pursuant hereto, neither
Pledgee nor any nominee of Pledgee shall have any duty or liability to collect
any sums due in respect thereof or to protect, preserve or exercise any rights
pertaining thereto, and shall be relieved of all responsibility for the Pledged
Collateral upon surrendering them to Pledgor.
Section
16. Survival
of Representations.
All
representations and warranties of Pledgor contained in this Agreement shall
survive the execution and delivery of this Agreement.
Section
17. Taxes
and Expenses.
Each
Pledgor will upon demand pay to Pledgee all reasonable expenses, including
the
reasonable fees and expenses of counsel for Pledgee and of any experts and
agents that Pledgee may incur in connection with:
(a) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral;
(b) the
administration of this Agreement;
(c) the
exercise or enforcement of any of the rights of Pledgee hereunder;
or
9
(d) the
failure of a Pledgor to perform or observe any of the provisions
hereof.
Section
18. Pledgee
Appointed Attorney-In-Fact.
Each
Pledgor hereby irrevocably appoints Pledgee as such Pledgor’s attorney-in-fact,
effective upon the occurrence and during the continuance of an Event of Default,
subject to the notice provisions contained herein and in the Loan Documents
with
respect to certain actions, with full authority in the place and stead of
Pledgor and in the name of Pledgor or otherwise, from time to time in Pledgee’s
discretion, to take any action and to execute any instrument that Pledgee
deems
reasonably necessary or advisable to accomplish the purposes of this Agreement,
including, without limitation, to receive, endorse and collect all instruments
made payable to Pledgor representing any dividend, interest payment or other
distribution in respect of the Pledged Collateral or any part thereof and
to
give full discharge for the same, when and to the extent permitted by this
Agreement.
Section
19. Notices.
All
notices, approvals, requests, demands and other communications hereunder
shall
be made pursuant to, and in accordance with, and to the contact information
provided in, Section
10.11
of the
Term Loan Agreement or to such other address or addresses or facsimile number
or
numbers as any party hereto may most recently have designated in writing
to the
other party by such notice. All such communications shall be deemed to have
been
given or made (i) if delivered in person, when delivered, (ii) if delivered
by
facsimile, on the date of transmission if transmitted on a Business Day before
5:00 p.m. Massachusetts time, otherwise on the next Business Day, (iii) if
delivered by overnight courier, one (1) Business Day after delivery to the
courier properly addressed and (iv) if mailed, three (3) Business Days after
deposited in the United States
mail,
certified or registered.
Section
20. GOVERNING
LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL
BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF
THE
STATE OF NEW YORK.
Section
21. WAIVER
OF JURY TRIAL.
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES TRIAL BY JURY IN ANY SUIT, ACTION
OR
PROCEEDING WITH RESPECT TO, OR DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR
IN CONNECTION WITH THIS AGREEMENT, ANY OF THE LOAN DOCUMENTS, OR THE
TRANSACTIONS CONTEMPLATED HEREIN OR RELATED HERETO (WHETHER FOUNDED IN CONTRACT,
TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO OTHER
PARTY
AND NO RELATED PERSON OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO
ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT, AS APPLICABLE,
BY
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 21.
Section
22. Changes
in Writing.
No
amendment, modification, termination or waiver of any provision of this
Agreement or consent to any departure by any Pledgor thereof from, shall
in any
event be effective without the written agreement of Pledgee and such Pledgor,
and then only to the extent specifically set forth in such writing.
10
Section
23. Headings.
Section
and subsection headings in this Agreement are included herein for convenience
of
reference only and shall not constitute a part of this Agreement for any
other
purpose or be given any substantive effect.
Section
24. Counterparts.
This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement may be authenticated by manual signature, facsimile or, if approved
in
writing by the Pledgee, electronic means, all of which shall be equally
valid.
Section
25. Entire
Agreement.
This
Agreement embodies the entire agreement and understanding between each Pledgor
and Pledgee with respect to the subject matter hereof and supersedes all
prior
oral and written agreements and understandings between each Pledgor and Pledgee
relating to the subject matter hereof.
[Remainder
of Page Intentionally Left Blank; Signature Page Follows.]
11
IN
WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement to
be duly
executed and delivered as of the day and year first above written.
PLEDGOR:
THE
BOMBAY COMPANY,
INC.,
a
Delaware corporation
By:______________________________________
Name:____________________________________
Title:_____________________________________
PLEDGEE:
GB
MERCHANT PARTNERS,
LLC
By:______________________________________
Name:____________________________________
Title:_____________________________________
ACKNOWLEDGMENT
The
undersigned each hereby (a) acknowledge receipt of a copy of the foregoing
Pledge Agreement, (b) waive any rights or requirement at any time hereafter
to
receive a copy of such Pledge Agreement in connection with the registration
of
any Pledged Interests or any other Pledged Collateral (as such terms are
defined
therein) in the name of Pledgee or its nominee or the exercise of voting
rights
by Pledgee, and (c) agree promptly to note on its books and records the granting
of the security interest in the equity interests of the undersigned as provided
in such Pledge Agreement, including the following legend:
PURSUANT
TO THAT CERTAIN PLEDGE AGREEMENT DATED AS OF MAY __, 2007 (AS FROM TIME TO
TIME
AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED), THE BOMBAY COMPANY,
INC., HAS UNDER THE CIRCUMSTANCES SPECIFIED IN SUCH PLEDGE AGREEMENT, EMPOWERED
GB MERCHANT PARTNERS, LLC, AS ADMINISTRATIVE AGENT FOR CERTAIN LENDERS, TO
VOTE
THE INTERESTS REPRESENTED BY THIS CERTIFICATE PURSUANT TO SUCH PLEDGE
AGREEMENT.
Dated:
June 4, 2007
BBA
HOLDINGS, LLC,
a
Delaware limited liability company
By:______________________________________
Name:______________________________
Title:______________________________
BOMBAY
INTERNATIONAL, INC.,
a
Delaware corporation
By:______________________________________
Name:______________________________
Title:______________________________
THE
BOMBAY FURNITURE COMPANY OF CANADA, INC., an
Ontario corporation
By:______________________________________
Name:______________________________
Title:______________________________
THE
BOMBAY FURNITURE COMPANY, INC., a
Delaware corporation
By:______________________________________
Name:______________________________
Title:______________________________
Exhibit
A
PLEDGOR:
THE BOMBAY COMPANY, INC.
Certificate Date Percentage
of
Issuer
No.
Issued
Class
Interests
BBA
Holdings,
LLC
100%
Bombay
International,
Inc.
100%
The
Bombay
Furniture
Company
of
Canada,
Inc.
100%
The
Bombay
Furniture
Company,
Inc.
100%
