PFSWEB INC
STOCK PLEDGE AGREEMENT
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>6
<FILENAME>d08362exv10w4.txt
<DESCRIPTION>STOCK PLEDGE AGREEMENT
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.4

                             STOCK PLEDGE AGREEMENT
                           Supplies Distributors, Inc.

         THIS STOCK PLEDGE AGREEMENT (this "Agreement") is entered into on March
29, 2002 between SUPPLIES DISTRIBUTORS, INC., a Delaware corporation
("Pledgor"), and CONGRESS FINANCIAL CORPORATION (SOUTHWEST), a Texas Corporation
("Pledgee").

         1.       For good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and as collateral security for and
to secure the prompt payment and performance in full of the Secured Obligations
(hereinafter defined), Pledgor hereby assigns to Pledgee and grants to Pledgee a
continuing security interest in sixty-five percent (65%) of the issued and
outstanding shares of capital stock (including, without limitation, sixty-five
percent (65%) of the shares of common stock represented by the stock
certificates identified on Schedule I attached hereto) of Supplies Distributors
of Canada, Inc., an Ontario corporation ("Company"), whether now or hereafter
issued by Company, together with all proceeds, products and increases thereof
and substitutions and replacements therefor (collectively, the "Collateral").

                  As used in this Agreement, the term "Secured Obligations"
shall mean (i) any and all obligations, liabilities and indebtedness of Pledgor
to Pledgee under that certain Loan and Security Agreement dated the date hereof
by and between Pledgee and Pledgor (as hereafter amended from time to time, the
"Loan Agreement") and (ii) any and all extensions, renewals, modifications,
increases and replacements of the foregoing. The term "Secured Obligations"
shall include, without limitation, all unpaid accrued interest thereon and all
costs and expenses payable by Pledgor to Pledgee under the Loan Agreement as
hereinafter provided: (i) whether now existing or hereafter incurred; (ii)
whether direct, indirect, primary, absolute, secondary, contingent, secured,
unsecured, matured or unmatured; (iii) whether such indebtedness is from time to
time reduced and thereafter increased, or entirely extinguished and thereafter
reincurred; (iv) whether such indebtedness was originally contracted with
Pledgee; (v) whether or not such indebtedness is evidenced by a negotiable or
nonnegotiable instrument or any other writing; and (vi) whether such
indebtedness is contracted by Pledgor individually or jointly or severally with
another or others.

         2.       Pledgor represents and warrants that (i) Pledgor holds record
and beneficial ownership of the Collateral, free and clear of all liens and
encumbrances other than any liens in favor of IBM Credit Corporation, a Delaware
corporation; (ii) there are no restrictions upon the transfer of any of the
Collateral, other than as may appear and may be referenced on the face of the
certificates or other than arising under applicable state or federal securities
laws; (iii) Pledgor owns 100% of the issued and outstanding capital stock of
Company; (iv) there are no existing obligations to issue capital stock or
securities convertible into capital stock of Company and in no event will
Pledgor permit any such stock or securities to be issued prior to payment in
full of the Secured Obligations; and (v) there are no existing securities or
obligations of Company, the amount of which obligation is based, in whole or in
part, on the value of Company's capital stock or any increase thereof, nor will
Pledgor permit any such securities or obligations to exist prior to payment in
full of the Secured Obligations.

<PAGE>

                                                                    EXHIBIT 10.4

         3.       In furtherance of Pledgee's security interest in the
Collateral, Pledgor agrees to deliver to Pledgee, on the date of this Agreement,
the stock certificates identified on Schedule I attached hereto, together with
stock powers duly executed in blank by Pledgor, to hold as collateral security
pursuant to the terms of this Agreement.

         4.       With respect to the Collateral and all proceeds, products and
increases thereof and substitutions therefor, Pledgor hereby appoints Pledgee
its attorney-in-fact, to arrange for the transfer of the Collateral on the books
of Company to the name of Pledgee subsequent to the occurrence and during the
continuance of any Event of Default (as hereinafter defined) hereunder. However,
Pledgee shall be under no obligation to do so.

         5.       During the term of this Agreement, provided no Event of
Default has occurred and then exists hereunder, Pledgor shall have the right,
where applicable, to vote the Collateral on all corporate questions, and Pledgee
shall, if necessary, execute due and timely proxies in favor of Pledgor for this
purpose.

         6.       Upon the occurrence of any Event of Default and during the
continuance thereof, Pledgee may exercise all of the rights and privileges in
connection with the Collateral to which a transferee may be entitled as the
record holder thereof, together with the rights and privileges otherwise granted
hereunder. Pledgee shall be under no obligation to exercise any of such rights
or privileges.

         7.       If, with the consent of Pledgee, Pledgor shall substitute or
exchange other securities in place of those herein mentioned, all of the rights
and privileges of Pledgee and all of the obligations of Pledgor with respect to
the securities originally pledged or held as Collateral hereunder shall be
forthwith applicable to such substituted or exchanged securities.

         8.       Upon the occurrence of any Event of Default and during the
continuance thereof, Pledgee shall be authorized to collect all dividends,
interest payments, and other amounts (including amounts received or receivable
upon redemption or repurchase) that may be, or become, due on any of the
Collateral. If Pledgor receives any such dividends, payments or amounts after
the occurrence and during the continuance of an Event of Default, it shall
immediately endorse and deliver the same to Pledgee in the form received. All
such amounts which Pledgee receives and retains in accordance with the terms of
this paragraph 8 shall be applied to reduce the principal amount outstanding on
the Secured Obligations in inverse order of maturity. Pledgee is, furthermore,
authorized to give receipts in the name of Pledgor for any amounts so received.
Pledgee shall be under no obligation to collect any such amounts.

         9.       In the event that, during the term of this Agreement,
subscription warrants or any other rights or options shall be issued in
connection with the Collateral, such warrants, rights, or options shall be
immediately assigned, if necessary, by Pledgor to Pledgee. If any such warrants,
rights, or options are exercised by Pledgor, all new securities so acquired by
Pledgor shall be immediately assigned to Pledgee, shall become part of the
Collateral and shall be endorsed to,

<PAGE>

                                                                    EXHIBIT 10.4

delivered to and held by Pledgee under the terms of this Agreement in the same
manner as the securities originally pledged.

         10.      In the event that, during the term of this Agreement, any
share, dividend, reclassification, readjustment or other change is declared or
made in the capital structure of Company, all new, substituted and additional
shares, or other securities, issued by reason of any such change shall become
part of the Collateral and shall be endorsed to, delivered to and held by
Pledgee under the terms of this Agreement in the same manner as the securities
originally pledged.

         11.      Pledgor authorizes Pledgee, without notice or demand, and
without affecting the liability of Pledgor hereunder, from time to time to:

                  (A)      hold security in addition to and other than the
Collateral for the payment of the Secured Obligations or any part thereof, and
exchange, enforce, waive and release any Collateral or any part thereof, or any
other such security, or part thereof;

                  (B)      release any of the endorsers or guarantors of the
Secured Obligations secured hereunder or any part thereof, or any other person
whomsoever liable for or on account of such Secured Obligations;

                  (C)      on the transfer of all or any part of the Secured
Obligations secured hereunder, Pledgee may assign all or any part of Pledgee's
security interest in the Collateral and shall be fully discharged thereafter
from all liability and responsibility with respect to the Collateral so
transferred, provided that in no event shall Pledgee be liable for any act or
omission or negligent act or negligent omission with respect to the Collateral,
other than acts or omissions constituting gross negligence, willful misconduct
or tortious breach of contract. The transferee of the Collateral shall be vested
with the rights, powers and remedies of Pledgee hereunder, and with respect to
any Collateral not so transferred, Pledgee shall retain all rights, powers and
remedies hereby given; and

                  (D)      Pledgor hereby waives any right to require Pledgee to
proceed against Pledgor, Company or any other person whomsoever, to proceed
against or exhaust any collateral or any other security held by Pledgee, or to
pursue any other remedy available to Pledgee. Pledgor further waives any defense
arising by reason of any liability or other defense of Pledgor or of any other
person. Pledgor shall have no right to require Pledgee to marshal collateral.

         12.      It shall not be necessary for Pledgee to inquire into the
powers of Pledgor or the officers, directors or agents acting or purporting to
act on behalf of Pledgor, and any obligations made or created in reliance on the
professed exercise of such powers shall be secured hereunder.

         13.      To the extent permitted by applicable law and in the Loan
Agreement, Pledgee shall be under no duty or obligation whatsoever to make or
give any presentments, demands for performance, notices of non-performance,
protests, notices of protest, or notices of dishonor in connection with the
Secured Obligations.

<PAGE>

                                                                    EXHIBIT 10.4

         14.      The occurrence of any of the following events shall, at the
option of Pledgee, constitute an "Event of Default" under this Agreement:

                  (A)      the occurrence of an Event of Default, as such term
is defined in the Loan Agreement; or

                  (B)      the default or nonperformance by Pledgor of any term
or condition of this Agreement.

         15.      Upon the occurrence and during the continuance of any Event of
Default, the Secured Obligations shall, at the option of Pledgee, become
immediately due and payable, and Pledgee shall have all the rights and remedies
provided in the Uniform Commercial Code of Texas at the date of this Agreement
and, in this connection, the Pledgee may, upon ten (10) days' notice to the
Pledgor sent to the persons identified in and in the same manner as provided in
the Loan Agreement, without liability for any diminution in value or price which
may have occurred, sell all or any part of the Collateral in such manner and for
such price as Pledgee may determine. At any public sale Pledgee shall be free to
purchase all or any part of the Collateral. Pledgee shall receive the proceeds
of any such sale or sales, and, after deducting therefrom any and all reasonable
costs and expenses incurred in connection with the sale thereof, apply the net
proceeds toward the payment of the Secured Obligations secured hereunder,
including interest, reasonable attorneys' fees, and all other reasonable costs
and expenses incurred by Pledgee hereunder and under any other agreement between
Pledgor and Pledgee. If such proceeds be more than sufficient to pay the same,
then in case of a surplus, such surplus shall be accounted for and paid over to
Pledgor, provided Pledgor be not then indebted to Pledgee otherwise under this
Agreement or any other Agreement or for any cause whatsoever.

         16.      Upon indefeasible repayment in full in cash of the Secured
Obligations, Pledgee will promptly, at Pledgor's reasonable expense, deliver all
of the Collateral to Pledgor along with all instruments of assignment executed
in connection therewith, and execute and deliver to Pledgor such documents as
Pledgor shall reasonably request to evidence Pledgee's release of its security
interest hereunder.

         17.      THIS AGREEMENT SHALL BE INTERPRETED AND THE RIGHTS AND
LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LOCAL LAW OF
THE STATE OF TEXAS EXCLUDING ANY CONFLICTS OF LAW RULE OR PRINCIPLE THAT MIGHT
OTHERWISE REFER CONSTRUCTION OR INTERPRETATION OF THIS AGREEMENT TO THE
SUBSTANTIVE LAW OF ANOTHER JURISDICTION.

         [REMAINDER OF PAGE INTENTIONALLY BLANK; SIGNATURE PAGE FOLLOWS]

<PAGE>

         IN WITNESS WHEREOF, Pledgor and Pledgee have executed this Agreement as
of the date first above written.

                                                  PLEDGOR:

                                                  SUPPLIES DISTRIBUTORS, INC.

                                                  By:___________________________
                                                     Joe Farrell
                                                     President

                                                  PLEDGEE:

                                                  CONGRESS FINANCIAL CORPORATION
                                                  (SOUTHWEST)

                                                  By:___________________________
                                                     Mike Sheff
                                                     Senior Vice President

<PAGE>

                                   SCHEDULE I
                                       TO
                             STOCK PLEDGE AGREEMENT

<TABLE>
<CAPTION>
                                             Percentage of Issued
         Company          Number of Shares  and Outstanding Shares
         -------          ----------------  ----------------------
<S>                       <C>               <C>
Supplies Distributors of        100                   100%
Canada, Inc.
</TABLE>


</TEXT>
</DOCUMENT>
