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                            NOTE AND PLEDGE AGREEMENT


         NOTE AND PLEDGE AGREEMENT (the "Note and Pledge Agreement"), dated as
of February 24, 2000, between Maurice P. Andrien (the "Maker" and SUNSOURCE
INC. (the "Payee").

                              PRELIMINARY STATEMENT

         The Maker has received a restricted stock grant from the Payee
effective January 26, 2000 pursuant to a Restricted Stock Grant effective
January 26, 2000 (the "Grant Letter"), under the SunSource Inc. 1998 Equity
Compensation Plan, whereby the Maker will receive a grant of 100,000 shares (the
"Shares") of common stock of the Payee. Concurrently therewith, the Maker is
making an election under Section 83(b) of the Internal Revenue Code to be taxed
on the date of grant ("83(b) Election" of the Shares, the Payee is making a loan
(the "Loan") to the Maker of the amount of taxes resulting to the Maker as a
result of the 83(b) Election, and the Maker is delivering this Note and Pledge
Agreement to the Payee, whereby the Maker promises, among other things, to pay
the principal amount of $206,350.20 (the "Note") in repayment of the Loan and to
pledge to the Payee the Shares to secure the payment of the Loan (the "Pledge").
Under the terms of the Pledge, the Payee shall continue to hold the Pledged
Securities (as defined below) hereunder until released in accordance with
Section B.8 hereof or the termination of this Note and Pledge Agreement.

                                   WITNESSETH:

         NOW, THEREFORE, to induce the Payee to make a loan under this Note and
Pledge Agreement and in consideration of the mutual covenants contained herein,
the parties hereto, each intending to be legally bound hereby, covenant and
agree as follows:

A. Promissory Note.

         1. Terms. FOR VALUE RECEIVED, and intending to be legally bound, the
Maker hereby promises to pay, in lawful money of the United States of America,
without demand, defalcation, set off or deduction, to the order of Payee, at the
address of the Payee's executive offices, or at such other place as the holder
hereof shall from time to time designate in writing, the principal amount of
$206,350.20, in three equal annual installments commencing upon February 24,
2001 with interest on the unpaid principal balance until paid at the annual rate
of 6.11%, calculated on the basis of a 360-day year consisting of twelve 30-day
months. If not sooner paid, the outstanding principal amount, together with
accrued interest thereon, shall be immediately due and payable on the first to
occur of (i) the date on which the Maker's employment with the Payee terminates
for any reason, (ii) a Change of Control of the Payee (as defined in the
SunSource Inc. 1998 Equity Compensation Plan), (iii) the date on which the Maker
sells or otherwise disposes of any of the Shares, or agrees to sell or otherwise
dispose of any of the Shares or (iv) February 24, 2003.


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         2. Prepayment. The Maker may prepay at any time all or part of the
outstanding principal balance hereof without penalty, provided that when making
such prepayment the Maker shall pay all interest then accrued and all other sums
then due hereunder. Partial prepayments shall be applied to reduce the remaining
payments in the inverse order of maturity.

         3. Default.

            (a) The Maker shall be in default hereunder upon the occurrence of
any of the following events (each an "Event of Default"): (i) if the Maker fails
to pay the principal or interest or any other sum due hereunder on the
applicable due date therefor and such failure continues for at least 30 days
after notice of the failure; (ii) if the Maker shall (A) apply for or consent to
the appointment of a receiver, custodian, trustee or liquidator of himself or of
all or a substantial part of his property, (B) make a general assignment for the
benefit of his creditors, (C) file a petition seeking to take advantage of any
law providing for the relief of debtors, or (D) take any action for the purpose
of effecting any of the foregoing; (iii) if a proceeding or case shall be
commenced against the Maker in any court of competent jurisdiction for (A) the
winding up, or composition or readjustment of debts, of the Maker, (B) the
appointment of a trustee, receiver, custodian, liquidator or the like of the
Maker or of all or any substantial part of his property, or (C) similar relief
in respect of the Maker under any law providing for the relief of debtors, and
such proceeding or case shall continue undismissed, or unstayed and in effect,
for a period of 60 days, or an order for relief against the Maker shall be
entered in an involuntary case under such Bankruptcy Code; or (iv) if there
shall be a default under the Pledge.

            (b) Upon the occurrence of an Event of Default, which shall be
continuing, the balance of principal of and all accrued interest upon this Note
shall become immediately due and payable (i) without any action or notice of any
kind on the part of any holder of this Note in the case of the occurrence of an
Event of Default described in subparagraph (ii) or (iii) of paragraph (a) above;
or (ii) in the case of other Events of Default, only upon declaration of such
default delivered to the Maker by the holder.

            (c) The Maker shall pay on demand all costs of collection, including
without limitation reasonable attorneys' fees, incurred by the holder hereof
with respect to any default by the Maker hereunder. Such amounts, until paid by
the Maker, shall be added to the principal hereof, bear interest at the rate set
forth in Section A.1. above and be secured by the Pledge.

         4. Forgiveness. This Note shall be forgiven and the Payee shall release
to the Maker all of the Pledged Securities upon the Maker's involuntary
termination from the Payee without "Cause" (as defined in the SunSource Inc.
1998 Equity Compensation Plan).

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B. Pledge Agreement.

         1. Pledge of Stock. As collateral security for the punctual payment and
performance of all existing and future indebtedness, obligations and other
liabilities, absolute or contingent, direct or indirect, primary or secondary,
of the Maker to the Payee of any nature whatsoever under this Note and Pledge
Agreement (all of such indebtedness, obligations and liabilities of the Maker
being hereinafter sometimes referred to collectively as the "Obligations"), the
Maker hereby deposits with and pledges and hypothecates to the Payee for its
benefit and grants to the Payee for its benefit, and agrees that the Payee shall
have a first security interest in and pledge of, the number of shares of Shares
(the "Pledged Securities") of the Payee set forth below:


           Class of Security      Certificate Number    Number of Shares Pledged
           -----------------      ------------------    ------------------------
             Common Stock             __________               100,000

         2. Representations and Warranties of the Maker. The Maker represents
and warrants to and agrees with Payee as follows:

            (a) The Pledged Securities have been duly and validly pledged
hereunder in accordance with all applicable laws, and the Maker warrants and
covenants to defend the Payee's right, security interest and special property in
and to the Pledged Securities against the claims and demands of all persons
whomsoever. Except for the security interest created hereby in favor of the
Payee and certain contractual restrictions on the transfer thereof, as set forth
in the Grant Letter, the Maker is the exclusive legal and equitable owner of,
and has good title to, all of the Pledged Securities identified in Section B.1
as being owned by the Maker, free and clear of all claims, liens, security
interests and other encumbrances, and the Maker has the unqualified legal right
to pledge the same hereunder.

            (b) The Maker and his representatives, successors and assigns hereby
irrevocably waive and release all preemptive, first-refusal and other similar
rights of the Maker to purchase any or all of the Pledged Securities upon any
sale thereof by the Payee hereunder, whether such right to purchase arises under
the articles of incorporation or any bylaw of the Payee, by agreement, by
operation of law or otherwise.

            (c) All of the foregoing representations, warranties and agreements
shall survive the execution and delivery of this Note and Pledge Agreement and
the making of the loan hereunder.

         3. Representations and Warranties of the Payee. The Payee represents
and warrants to the Maker that the Payee is issuing to the Maker good title to
all of the Pledged Securities identified in Section B.1, free and clear of all
claims, liens, security interests and other encumbrances except for certain
contractual restrictions on the transfer thereof, as set forth in the Grant
Letter, and that the Payee has the unqualified legal right to issue the same to
the Maker.

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         4. Reservation of Voting Rights. Upon the occurrence of an Event of
Default that shall be continuing, the Payee shall be entitled to exercise any
and all voting power with respect to the Pledged Securities. At all other times,
the Maker shall be entitled to exercise as he deems appropriate, but in a manner
consistent with the provisions of this Note and Pledge Agreement, all voting
power with respect to the Pledged Securities.

         5. Additional Collateral Security. If any stock dividend shall be
declared on any of the Pledged Securities, or any shares of stock or fractions
thereof shall be issued pursuant to any stock split involving any of the Pledged
Securities, or any distribution of capital shall be made on any of the Pledged
Securities, or any property shall be distributed upon or with respect to the
Pledged Securities pursuant to any recapitalization or reclassification of the
capital of the Payee or pursuant to a reorganization thereof, the shares or
other property so distributed shall be delivered to the Payee to be held by it
in pledge as additional collateral security for the Obligations.

         6. Remedies. Upon the occurrence of an Event of Default that shall be
continuing, the Payee shall have the right at any time and from time to time to
take such actions as it deems appropriate with respect to the Pledged
Securities. Without limiting the foregoing, the parties acknowledge that the
Pledged Securities are subject to the restrictions of the Grant Letter.

         7. Right to Execute Endorsements. Upon the occurrence of any Event of
Default, the Payee shall have the right, for and in the name, place and stead of
the Maker and acting as its attorney-in-fact if necessary, to execute
endorsements, assignments and other instruments of conveyance or transfer with
respect to all or any of the Pledged Securities whenever any such execution is
required or permitted hereunder.

         8. Release of Pledged Securities. Upon payment of any portion of the
principal amount of the Note, plus all accrued interest thereon, the Payee may
release to the Maker a proportionate number of the Pledged Securities, provided
that no Event of Default shall exist at that time. Upon payment of the full
amount due under the Note, the Payee shall release the remainder of the Pledged
Securities to the Maker. The Payee shall release to the Maker all of the Pledged
Securities upon the Maker's involuntary termination from the Payee without
"Cause" (as defined in the SunSource Inc. 1998 Equity Compensation Plan).

C. Remedies, Termination, Waiver and Miscellaneous.

         1. Remedies Cumulative; Indemnities, etc. The rights, powers and
remedies provided herein in favor of the Payee shall not be deemed exclusive,
but shall be cumulative, and shall be in addition to all other rights and
remedies in favor of the Payee existing at law or in equity, including without
limitation all of the rights, powers and remedies available to a secured
creditor under the Uniform Commercial Code as in effect in the State of Delaware
or any other appropriate jurisdiction, and may be exercised concurrently,
independently or successively by the holder hereof in such holder"s discretion.
The Maker shall indemnify and hold harmless the Payee from and against any and
all liabilities, losses and damages that the Payee may incur in the exercise or
performance of any of its or their rights, powers or remedies set forth herein,
provided, however, that the Maker shall have no obligation to indemnify any such
indemnitee against any liability, loss or damage resulting from such
indemnitee's own gross negligence or bad faith.
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         2. Waivers; Amendments. No delay on the part of the Payee in exercising
any of its options, powers or rights, and no partial or single exercise thereof,
shall constitute a waiver thereof or of any other option, power or right. The
Payee shall not be deemed by any act or omission to have waived any such right
or remedy or any default by the Maker hereunder or under the Pledge unless such
waiver is in writing and signed by the holder, and then only to the extent
specifically set forth in the writing. Any such waiver shall not be construed as
a continuing waiver or as a bar to or waiver of any right or remedy with respect
to any other default by the Maker. None of the terms and conditions of this Note
and Pledge Agreement may be amended, modified or waived orally but only in a
writing signed by the Payee and the Maker.

         3. Return of Collateral. Upon the full payment and performance of all
of the Obligations, this Note and Pledge Agreement shall expire and the Maker
(except to the extent otherwise contemplated hereby) shall be entitled to the
return of all of the Pledged Securities and other property and cash held in
pledge hereunder that have not been used or applied to the payment of the
Obligations.

         4. Transfers of Interest. Upon any assignment or other transfer by the
Payee of any of the Obligations, the Payee may transfer its interest in the
Pledged Securities, or any part thereof, to the assignee or transferee, who
shall thereupon become vested with all the rights, remedies, powers, security
interests and liens herein granted to the Payee in respect of the Pledged
Securities or the transferred part thereof, subject, however, to the
restrictions contained herein.

         5. Expenses. The Pledged Securities secure, and the Maker shall pay on
demand, all reasonable expenses (including but not limited to reasonable
attorneys' fees and costs for legal services, costs of insurance and payments of
taxes or other charges) of, or incidental to, the custody, care, sale or
realization on any of the Pledged Securities or in any way relating to the
enforcement or protection of the rights of the Payee hereunder.

         6. Notices. All notices, requests, demands, directions, declarations
and other communications provided for herein shall be in writing and shall be
deemed effectively given (a) upon personal delivery to the party to be notified,
(b) three days after notice shall be deposited with the United States Post
Office, by registered or certified mail, postage prepaid and addressed to the
party to be notified (i) if to the Maker, at the address set forth below, and
(ii) if to the Payee, at the address designated for payments hereunder from time
to time, or (c) upon confirmation that notice shall have been received by fax at
the fax number specified for such party with its address. Any party may change
its address or fax number for notice purposes by giving advance notice hereunder
to the other party in accordance with this Section C.6.
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         7. Governing Law. This Agreement and the rights and obligations of the
parties hereunder shall be governed by and construed and enforced in accordance
with the laws of the State of Delaware.

         8. Certain Waivers; Integration, etc.

            (a) The Maker waives presentment for payment, demand, notice of
nonpayment, notice of protest, protest and notice of dishonor of this Note, and
all other notices in connection with the delivery, acceptance, performance,
default or enforcement of the payment of this Note and Pledge Agreement.

            (b) The Maker hereby waives any and all present and future laws and
rules of court exempting any of the Pledged Securities or any other property,
real or personal, or any of the proceeds arising from any sale of such property,
from attachment, levy, sale or execution, or providing for any stay of
execution, appraisement, exemption from civil process or extension of time for
payment.

            (c) This instrument states the entire agreement of the parties
concerning the subject matter hereof, and it is acknowledged that there are no
customs, usages, representations, or assurances referring to the subject matter,
and no inducements leading to the execution or delivery hereof, other than those
expressed herein.

         9. Miscellaneous. This Note and Pledge Agreement shall bind and inure
to the benefit of the Maker and the Payee and their respective heirs, executors,
administrators, personal representatives, successors and assigns, except that
the Maker shall not have the right to assign any of the Maker's rights hereunder
or interests herein without the written consent of the Payee. No persons other
than the Maker and the Payee and the respective assignees of the Payee
(including any creditors of Payee to which the Payee may assign its rights
hereunder) are intended to be benefitted hereby or shall have any rights
hereunder, as third-party beneficiaries or otherwise. The Maker acknowledges
that this Note and Pledge Agreement and the obligations of the Maker hereunder
and the security interest created or intended to be created hereby have
constituted, and were intended by the Maker to constitute, a material inducement
to the Payee to enter into this Note and Pledge Agreement and make the loan
contemplated hereby, knowing that the Payee will rely upon this Agreement. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original, and all such counterparts shall together constitute but one
and the same instrument. Any provision of this Note and Pledge Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without affecting the validity or enforceability of the
remainder of this Agreement or the validity or enforceability of such provision
in any other jurisdiction. Words of any gender herein shall include any other
genders, and the singular shall include the plural and vice versa, whenever the
same is necessary to produce a fair and meaningful construction. The term
"Payee" shall apply equally to the initial Payee specified above and to any
holder to which this Note may be assigned.


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         IN WITNESS WHEREOF, the Maker has executed this Note and Pledge
Agreement and intending to be legally bound as of the day and year first written
above.

                                                     MAKER


                                                     ___________________________


                                                     Address:

                                                     ___________________________
                                                     ___________________________
                                                     ___________________________

                                                     PAYEE

                                                     SUNSOURCE INC.


                                                     By:________________________