Pledge Agreement


    

      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;

       

      
        
          
          

        

        
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        (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.

           

        

      

      
        
          
          

        

        
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      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 

       

      
        
          
          

        

        
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      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.

       

      
        
          
          

        

        
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      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, 

       

      
        
          
          

        

        
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without
          the prior written consent of Pledgee (which consent shall not be unreasonably
          withheld, so long as no Event of Default has occurred and is continuing
          or would
          result therefrom), each Pledgor agrees that it will not vote to enable,
          and will
          not otherwise permit, any issuer of Pledged Interests to (a) issue any
          equity
          interests or other securities of any nature in addition to or in exchange
          or
          substitution for the Pledged Interests or (b) dissolve, liquidate, retire
          any of
          its capital stock, reduce its capital or merge or consolidate with any
          other
          Person.

      

       

      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

          
            

          

        

        
          
          
(collectively
          called the “Indemnified
          Liabilities”),
          under
          federal and state securities laws or otherwise insofar as such loss, liability,
          damage or expense:

      

       

      (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

       

      to
        Pledge
        Agreement

       

      


       

      


       

      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%