EX-(E)(2)EMPLOYMENT AGREEMENT(S.W.MILLER)

EXHIBIT E.2

EMPLOYMENT AGREEMENT



THIS EMPLOYMENT AGREEMENT (the "AGREEMENT") is entered into by and between
Stephen W. Miller ("YOU") and SunSource, Inc., a Delaware corporation (the
"COMPANY") and will be effective as of the "EFFECTIVE DATE" as stated in Section
15(c) of this Agreement.

WHEREAS, you will be employed as Vice Chairman of the Hillman Group of
the Company;, and

WHEREAS, the Company has hired you and is willing to continue your
employment based on your particular qualifications, on the condition that you
shall enter into this Agreement and shall fully perform all the responsibilities
and duties and strictly observe all of your obligations hereunder;

NOW, THEREFORE, in consideration of your employment by the Company and
the compensation to be paid by the Company to you in connection therewith and
for other good and valuable consideration, you and the Company hereby agree as
follows:

1. Position and Responsibilities.

(a) Position. The Company agrees to employ you as Vice Chairman of
the Hillman Group of the Company. You shall report to the Chairman of the Board
of Directors. Your duties shall include organizational planning and assisting
the Chief Executive Officer in the management of manufacturing, research and
development and national account functions of the Company, the development of
the Epus program and performing other duties as assigned from time to time by
the Board.

(b) Responsibilities. You shall devote your full business efforts
and time to the Company and perform the responsibilities assigned to you in
accordance with the standards and policies that the Company may from time to
time establish. You shall not render services to any other person or entity or
serve on the board of directors of any other entity without the written consent
of the Chairman of the Board, and such consent will not be unreasonably
withheld. Such consent may be revoked in accordance with Section 10(b). The
foregoing, however, shall not preclude you from engaging in appropriate civic,
charitable or religious activities or from devoting a reasonable amount of time
to private investments that do not interfere or conflict with your
responsibilities and are not injurious to the Company. You and the Company agree
that your position is essential to the Company's success and that the highest
level of performance is required from you.




2. Term of Employment.

(a) Basic Rule. The Company agrees to employ you, and you agree to
remain in employment with the Company, from the Effective Date until the first
anniversary of such date unless your employment terminates earlier pursuant to
Section 5 below (the "TERM").

(b) Renewal of Term. On the first (1st) anniversary and on each
subsequent anniversary of the Effective Date, the Term shall be
renewable for additional one-year periods upon the mutual
written agreement of both parties.

3. Compensation.

(a) Base Compensation. You will be entitled to receive base
compensation during the Term ("BASE COMPENSATION"). Your Base Compensation for
the first year of the Term shall be at the annual rate of $350,000 per year and
your annual Base Compensation for the remainder of the Term shall not be less
than that amount. Base Compensation shall be paid in equal biweekly
installments, less deductions required by law. The Board will review and may
adjust your Base Compensation periodically, usually annually on or about
February 1st. Such review shall be in accordance with performance criteria to be
determined by the Company in its sole discretion.

(b) Bonus Compensation. You shall receive bonus compensation for
2001 in accordance with the performance targets established in January, 2001 by
the Company for 2001, payable during the first quarter of 2002. During the
remainder of the Term, usually on an annual basis, you shall be eligible to
receive an additional cash payment of up to 124% of Base Compensation (less
deductions required by law) ("BONUS COMPENSATION"), which shall be determined
with reference to your performance in accordance with performance criteria to be
determined by the Board in its sole discretion for each calendar year.

(c) Stock Options and Deferred Compensation. During the Term, you
will be eligible to participate in the Company's Stock Option Plan and Deferred
Compensation Plan.

(d) Business Expenses. During the Term, the Company shall pay or
reimburse you for all ordinary and reasonable business-related expenses you
incur in the performance your duties under this Agreement. The Company will
reimburse you for all such expenses upon the presentation by you of an itemized
account of such expenditures, together with supporting receipts and other
appropriate documentation.

4. Employee Benefits.

(a) In General. During the Term, you shall be eligible to
participate in the employee benefit plans and executive compensation and
perquisite programs that the Company may provide, including but not limited to
health, and insurance plans and 401k, subject in each case to the generally
applicable terms and conditions of the plan or program in question and to the
determinations of any person or committee administering such plan or program.
The Company reserves the right to modify or terminate these plans at any time.
The Company will provide you during the Term with benefits and perquisites that
are reasonably comparable to those in effect immediately prior to the Effective
Date.


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(b) Paid Holidays. You shall be entitled to take ten (10) paid
holidays per year as specified by Company policy from time to time for all of
the Company's employees.

(c) Vacation. You shall be entitled to take four (4) weeks of
vacation per year.

5. Termination of Employment. Upon the effective date of termination of
your employment with the Company (the "TERMINATION DATE"), you will not be
eligible for further compensation, benefits or perquisites under Sections 3 and
4 of this Agreement, other than those that have already accrued and with regard
to Bonus Compensation, a pro rata share of your Bonus Compensation for that
year. Termination of your employment may occur under any of the following
circumstances:

(a) Company's Termination of Employment. The Company has the right
to terminate your employment at any time, with or without Cause. For all
purposes under this Agreement, "CAUSE" shall mean:

(i) A willful failure to substantially perform your duties
under this Agreement, other than failure resulting from
complete or partial incapacity due to physical or mental
illness or impairment;

(ii) A willful act which constitutes gross misconduct or
fraud and which is injurious to the Company;

(iii) Conviction of, or plea of "guilty" or "no contest" to a
felony; or

(iv) A material breach of any duty owed to the Company,
including the duty of loyalty and Sections 9, 10, 11 and 12.

No act, or failure to act, by you shall be considered "willful" unless committed
without good faith and without a reasonable belief that the act or omission was
lawful and in the Company's best interest.

(b) Your Resignation from Employment. You have the right to resign
your employment with the Company at any time, with or without Cause or Good
Reason. You agree to provide the Company thirty (30) days prior written notice
of resignation. The Company may in its sole discretion place you on
administrative leave as of any date prior to the end of such thirty (30) day
notice period and request that you no longer be present on Company premises.
During any period of paid administrative leave, you will not be authorized to
act as a representative or make any statements on behalf of the Company.

(c) Death or Disability.

(i) Your employment shall be deemed to have been terminated
by you upon your (A) death or (B) inability to perform
your duties under this Agreement, even with reasonable
accommodation, for more than twenty-six (26) weeks,


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whether or not consecutive, in any twelve-month period
("DISABILITY"). Termination will be effective upon the
occurrence of such event.

(ii) If your employment ends as a result of death or
Disability, you or your estate will receive

(A) A payment for your accrued base salary and
vacation and pro rata share of your bonus for
that year;

(B) In accordance with the Stock Option Plan, your
vested stock options and the acceleration of
vesting of any options that would have vested
during the one-year period after the date of
death or disability; and

(C) The Transition Success Bonus.

(d) Expiration of Term. Your employment shall terminate upon the
first anniversary of the Effective Date, unless the parties have entered
into an agreement to renew in accordance with Section 2(b).

6. Good Reason. For purposes of this Agreement, Good Reason shall mean that
the Company:

(a) has adversely changed your position from the position specified
in Section 1 of this Agreement;

(b) has adversely changed your duties or authority such that they
are no longer consistent with the duties specified in Section 1
of the Agreement;

(c) has reassigned you to a work location that is more than 75 miles
from your present work location;

(d) has removed you from the Board of Directors of the Company for
any reason other than for Cause, if at any time during the Term
you have become a member of the Board; or

(e) has materially breached this Agreement.

7. Severance Payments. If during the Term the Company terminates your
employment without Cause or you resign with Good Reason, or your employment
terminates based on the expiration of the Term, the Company will continue to pay
you an amount equal to the amount of Base and Bonus Compensation that would have
been payable during the Term until the second anniversary of the Effective Date
and benefits as provided below ("Severance Compensation"). To receive such
payments you must within forty-five (45) days of your Termination Date sign a
release of any and all claims in the form provided by the Company. Such payments
shall begin


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at the later of (a) the first pay period following your Termination Date or (b)
ten (10) days after you deliver the signed release to the Company.

(a) Severance Compensation. The Company shall pay the Severance Compensation
as follows:

(i) continue to pay on a biweekly basis your Base
Compensation in accordance with the rate in effect on
the Termination Date;

(ii) pay you Bonus Compensation on the same annual schedule
as if you continued to be employed, and payments of such
Bonus Compensation shall be calculated based on a rate
for any full calendar year that is equal to the greater
of either:

(A) the bonus paid in 2002 for your performance in
2001; or

(B) the average of the bonus actually paid in the
following year for your performance in 1999,
2000 and 2001; and

(iii) pay your monthly COBRA payments for any period of time
that you have applied and qualify for COBRA coverage,
continue your life insurance and disability insurance
coverage to the extent permitted under the applicable
benefit plans, or if not so permitted, provide you with
a payment equal to an amount that would enable you to
purchase similar coverage, and provide you with the
continuation of your auto allowance. Any payments under
this Section 7(a)(iii) shall cease on the date you begin
employment on a basis that provides you with eligibility
for substantially similar benefits for any other entity,
whether as an employee, owner or otherwise, and will be
offset by any similar benefits you receive as a Director
if you are on the Board of Directors of the Company at
any time for which Severance Compensation is being paid.
If the Company terminates your employment for any reason
other than for Cause or you resign without Good Reason
prior to the end of the Term, the Company will pay you
an additional $1,000 for each month (or pro rata amount
for each partial month) between your Termination Date
and the end of the Term.

(b) Transition Success Bonus. On the second anniversary of the Effective
Date, the Company shall pay you a Transition Success Bonus of $188,500, provided
that during the Term (or until your Termination Date if earlier than the end of
the Term if the Company terminates your employment for any reason other than for
Cause or you resign with Good Reason), you performed your duties in a dedicated
manner at the level expected under this Agreement.

This Severance Compensation shall be subject to usual and required withholding.
In the event that your death occurs prior to the completion of payments of
Severance Compensation and the Transition Success Bonus, the remainder of your
Severance Compensation and the Transition


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Success Bonus will be paid in a single lump sum to your estate. In the event
that you have a Disability that occurs prior to the payment of the Transition
Success Bonus, you will receive the Transition Success Bonus on the second
anniversary of the Effective Date. You shall not be required to mitigate the
amount of any payment contemplated by this Section 7, nor shall any such payment
be reduced by any earnings that you may receive from any other source. If you
breach your obligations under Section 10, the Company has no obligation to make
any further payments to you under this Section 7.


8. Other Obligations.

You warrant that you are not subject to any other obligations that would
conflict with or inhibit your ability to perform your duties under this
Agreement. You further warrant that you have not and will not bring to the
Company or use in the performance of your responsibilities at the Company any
equipment, supplies, facility or trade secret information (that is not generally
available to the public) of any current or former employer or organization other
than the Company to which you provided services, unless you have obtained
written authorization for their possession and use.

9. Confidential Information.

You shall not disclose or use at any time, either during or after the
Termination Date, any confidential information ("CONFIDENTIAL INFORMATION")
(defined below) of the Company, whether patentable or not, which you learn as a
result of your employment with the Company, whether or not you developed such
information. Confidential Information shall include, without limitation,
information regarding the Company's, it customers' or its business partners'
trade secrets and:

- any information about existing and prospective investments;

- financing information and sources;

- patent applications, developmental or experimental work,
formulas, test data, prototypes, models, and product
specifications;

- financial information;

- financial projections and pro forma financial information;

- sales and marketing strategies, plans and programs and product
development information;

- employees' and consultants' benefits, perquisites, salaries,
stock options, compensation, formulas or bonuses, and their
non-business addresses and telephone numbers;


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- organizational structure and reporting relationships; and

- business plans.

Information that is or later becomes publicly available in a manner wholly
unrelated to any breach of this Agreement by you will not be considered
Confidential Information as of the date it enters the public domain. If you are
uncertain whether something is Confidential Information you should treat it as
Confidential Information until you receive clarification from the Company that
it is not Confidential Information. Confidential Information shall remain at all
times the property of the Company. You may use or disclose Confidential
Information only:

(a) as authorized and necessary in performing your responsibilities
under this Agreement during your employment with the Company; or

(b) with the Board's prior written consent; or

(c) in a legal proceeding between you and the Company to establish
the rights of either party under this Agreement, provided that you stipulate to
a protective order to prevent any unnecessary use or disclosure;

(d) with respect to employees whose home addresses or telephone
numbers are personally known to you, you may disclose on an occasional and
infrequent basis such information about a single employee to a person who is
known to and has a pre-existing relationship with such employee; you agree that
you will indemnify the Company for the defense of and any liability resulting
from any objection or claim based on such disclosure by such employee against
you or the Company; or

(e) subject to a compulsory legal process that requires disclosure
of such information, provided that you have complied with the following
procedures to ensure that the Company has an adequate opportunity to protect its
legal interests in preventing disclosure.

Upon receipt of a subpoena that could possibly require disclosure of
Confidential Information, you shall provide a copy of the compulsory process and
complete information regarding the circumstances under which you received it to
the Company by hand delivery within a reasonable period of time, and generally
within twenty-four (24) hours. You will not make any disclosure until the latest
possible date for making such disclosure in accordance with the compulsory
process ("LATEST POSSIBLE DATE"). If the Company seeks to prevent disclosure in
accordance with the applicable legal procedures, and provides you with notice
before the Latest Possible Date that it has initiated such procedures, you will
not make disclosures of any Confidential Information that is the subject of such
procedures, until such objections are withdrawn or ruled on.

You hereby acknowledge that any breach of this Section 9 would cause the
Company irreparable harm.


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10. Agreement Not to Compete.

(a) Terms. As used in this Agreement, the following terms relating to Section 10
shall be defined as follows:

(1) The "Restricted Period" means the period of the Term and
continuing for the longer of either a) one year after the Termination Date; b)
the end of the twenty four (24) month period following the Effective Date during
which the Company is making payments under Section 7(a); or c) one year after a
final judicial or arbitral determination that you have violated your obligations
under this Section.

(2) The "Territory" means any part of North America in which the
Company engages in the Restricted Business during the Restricted Period.

(3) The "Restricted Business" means any person, firm, corporation or
business that within the Territory provides products or services that are
similar to those provided by the Company (i) at any time during the one year
prior to the Termination Date and/or (ii) on the Termination Date is actively
preparing to provide within six months following the Termination Date.

(b) Limitation on Competition. During the Restricted Period, you shall not,
at any time within the Territory, directly or indirectly, engage in, or have any
interest on behalf of yourself (whether as an employee, officer, director,
agent, security holder, creditor, partner, joint venturer, beneficiary under a
trust, investor, consultant or otherwise) or others in, a Restricted Business,
except with the Chairman's written consent in compliance with Section 1(b) and
subject to the Chairman's right to revoke such consent if the Chairman
reasonably determines that such revocation is necessary to protect the Company's
legitimate business interests; provided, however, that nothing contained herein
shall prevent or prohibit you or from owning or being a beneficial owner of up
to 5% of the stock or equity of any corporation or other business entity engaged
in the Restricted Business. If and when the Chairman revokes consent under this
Section 10(b), you shall have a reasonable period of time in which to withdraw
from the activity or investment for which consent has been revoked. If a court
determines that the foregoing restrictions are too broad or otherwise
unreasonable under applicable law, including with respect to time, or space, the
court is hereby requested and authorized by the parties hereto to revise the
foregoing restriction to include the maximum restrictions allowable under
applicable law. You acknowledge, however, that this Section 10 has been
negotiated by the parties hereto and that the geographical and time limitations,
as well as the limitation on activities, are reasonable in light of the
circumstances pertaining to the business of the Company. You agree to notify any
person or entity to which you provide services during the Restricted Period of
the terms of your obligations under this Section 10.

11. Non-Solicitation.

For one year from the Termination Date, you will not, directly or
indirectly, individually or as part of or on behalf of any other person,
company, employer or other entity, hire or attempt to solicit for hire a Covered
Employee until at least six (6) months after the person's employment with the
Company ends. "COVERED EMPLOYEe" shall mean any person who at any time during
the six months prior to the Termination Date is an employee of the Company and
(a) who is


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employed in any capacity as a part of the sales force or selling
organization/division(s) of the Company, or (b) whose compensation exceeds
$60,000 per year (indexed by an inflationary factor tied to the consumer price
index annually). If any Covered Employee accepts employment with any person,
company, employer or other entity of which you are an officer, director,
employee, partner, shareholder, (other than of less than 5% of the stock or
equity of any corporation or other business entity), consultant or joint
venturer, it will be presumed that the Covered Employee was hired in violation
of this provision ("PRESUMPTION"). This Presumption may only be overcome by your
showing by a preponderance of the evidence that you were not directly or
indirectly involved in soliciting or encouraging the Covered Employee to leave
employment with the Company. You agree to notify any person or entity to which
you provide services within one year of the Termination Date of the terms of
your obligations under this Section 11.

12. Return of Property.

Upon termination of your employment with the Company for any
reason, you agree to immediately return to the Company all property belonging to
the Company. This includes all documents and other information prepared by you
or on your behalf or provided to you in connection with your duties under this
Agreement, regardless of the form in which such documents or information are
maintained or stored, including computer, typed, written, imaged, audio, video,
micro-fiche, electronic or any other means of recording or storing documents or
other information. You hereby warrant that you will not retain in any form any
such document or other information or copies thereof, except as provided in the
following sentence. You may retain a copy of this Agreement and information
describing any rights you may have after the Termination Date under any employee
benefit plan or other agreements.

13. Remedies.

The Employee expressly acknowledges that the remedy at law for any breach of
Sections 9, 10, 11 and 12 will be inadequate and that upon any such breach or
threatened breach, the Company shall be entitled as a matter of right to
injunctive relief in any court of competent jurisdiction, in equity or
otherwise, and to enforce the specific performance of the Employee's obligations
under these provisions without the necessity of proving the actual damage to the
Company or the inadequacy of a legal remedy. The rights conferred upon the
Company by the preceding sentence shall not be exclusive of, but shall be in
addition to, any other rights or remedies that the Company may have at law, in
equity or otherwise. The parties agree that any breach of Section 11 will
entitle the Company to injunctive relief enforcing Section 11 and to damages
equal to the greater of the actual damages proven or liquidated damages of three
times the amount of the annual total compensation of any person solicited or
hired in breach of Section 11. The parties are agreeing to liquidated damages as
an option to actual damages in recognition that the Company's employees are its
most valuable assets, but it is often difficult to prove the actual damages
resulting from such a breach.


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14. Indemnification.

During the Term and at all times thereafter, you shall be indemnified by
the Company to the fullest extent permitted by the laws of the State of Delaware
from any claims or actions based upon any acts or omissions, or alleged acts or
omissions, by you which arise out of or are related to your employment with the
Company. You shall be a beneficiary of any directors' and officers' liability
insurance policy maintained by the Company as long as you remain an officer or
director.


15. Miscellaneous Provisions.

(a) Notices. Unless otherwise provided herein, any notice or other
information to be provided to the Company will be sent by overnight delivery
with acknowledgement of receipt requested, to:

Chairman, Board of Directors
SunSource, Inc.
One Logan Square
Philadelphia, PA

cc: Sally D. Garr, Esq.
Patton Boggs, LLP
2550 M Street, N.W.
Washington, D.C. 20037

Any notice or other information to be provided to you will be sent by overnight
delivery with acknowledgement of receipt requested, to:

Stephen W. Miller
8601 N. 61st Place
Phoenix, AZ 85048


(b) Dispute Resolution. You and the Company agree that any dispute
between you and the Company will be finally resolved by binding arbitration in
accordance with the Federal Arbitration Act ("FAA"). You and the Company agree
to follow the Dispute Resolution Procedures set forth in Attachment A to this
Agreement.

(c) Nature of Agreement. This Agreement and the attachments hereto
and the letter from Maurice Andrien to you date June 18, 2001 constitute the
entire agreement between you and the Company and supercede all prior agreements
between you and the Company. In making this Agreement, the parties warrant that
they did not rely on any representations or statements other than those
contained in this Agreement. No provision of this Agreement shall be modified,
waived or discharged unless the modification, waiver or discharge is agreed to
in writing and signed by you and by the Chairman of the Board for the Company.
No waiver by either party of any breach of, or of compliance with, any condition
or provision of this Agreement by the other party shall be considered a waiver
of any other condition or provision or of the same condition or provision at
another time. Regardless of the choice of law provisions of Delaware or any
other


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jurisdiction, the parties agree that this Agreement shall be otherwise
interpreted, enforced and governed by the laws of the State of Delaware. This
Agreement shall be binding on the Company's successors and assigns and on you,
your heirs and personal representatives. This Agreement will continue in effect
until all obligations under it are fulfilled. You may not assign this Agreement,
either voluntarily or involuntarily. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full force
and effect and this Agreement shall be interpreted as if the unenforceable
provision had not been included in it. This Agreement may be executed in any
number of counterparts each of which shall be an original, but all of which
together shall constitute one instrument. This Agreement will be effective as of
the Effective Time stated in Section 1.3 of The Agreement and Plan of Merger
dated __________ between Allied Capital Corporation, Allied Capital Lock
Acquisition Corporation and SunSource, Inc. ("EFFECTIVE DATE"). The headings in
this Agreement are for convenience only and shall not effect the interpretation
of this Agreement. You further certify that you fully understand the terms of
this Agreement and have entered into it knowingly and voluntarily.

IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its authorized officer, as of the day and year set
forth under their signatures below.

SUNSOURCE, INC.


/s/ SW MILLER By: /s/ MAURICE P. ANDRIEN, JR.
- ----------------------------------- -----------------------------------
EMPLOYEE

Date: 6/18/01 Date: 18 June 01
------------------------------ ---------------------------------



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ATTACHMENT A


DISPUTE RESOLUTION PROCEDURES


The parties agree to make a good faith effort to informally resolve any dispute
before submitting the dispute to arbitration in accordance with the following
procedures:

(i) The party claiming to be aggrieved shall furnish to the
other a written statement of the grievance, all persons
whose testimony would support the grievance, and the
relief requested or proposed. The written statements
must be delivered to the other party within the time
limits for bringing an administrative or court action
based on that claim.

(ii) If the other party does not agree to furnish the relief
requested or proposed, or otherwise does not satisfy the
demand of the party claiming to be aggrieved within 30
days and the aggrieved party wishes to pursue the issue,
the aggrieved party shall by written notice demand that
the dispute be submitted to non-binding mediation before
a mediator jointly selected by the parties.

(iii) If mediation does not produce a resolution of the
dispute and either party wishes to pursue the issue,
that party shall request arbitration of the dispute by
giving written notice to the other party within 30 days
after mediation. The parties will attempt to agree on a
mutually acceptable arbitrator and, if no agreement is
reached, the parties will request a list of nine
arbitrators from the American Arbitration Association
and select by alternately striking names. Regardless of
whether the American Arbitration Association administers
the arbitration, the arbitration will be conducted
consistent with the American Arbitration Association's
National Rules for Resolution of Employment Disputes
("RULES") that are in effect at the time of the
arbitration. If there is any conflict between those
Rules and the terms of the Employment Agreement
("AGREEMENT"), including all attachments thereto, the
Agreement will govern. The arbitrator shall have
authority to decide whether the conduct complained of
under Subsection (a) above violates the legal rights of
the parties. In any such arbitration proceeding, any
hearing must be transcribed by a certified court
reporter and any decision must be supported by written
findings of fact and conclusions of law. The
arbitrator's findings of fact must be supported by
substantial evidence on the record as a whole and the
conclusions of law and any remedy must be provided for
by and consistent with the laws of the Delaware and
federal law. The arbitrator




shall have no authority to add to, modify, change or
disregard any lawful term of the Agreement. The Company
will pay the arbitrator's fee.

(iv) Arbitration shall be the exclusive means for final
resolution of any dispute between the parties, except
that injunctive relief may be sought from any court of
competent jurisdiction located in the Delaware when
injunctive relief is necessary to preserve the status
quo or to prevent irreparable injury, including, without
limitation, any claims concerning an alleged breach of
Sections 9, 10, 11 or 12 of the Agreement or other
misuse of Confidential Information.




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