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CUSIP No. 867948101 Page 7 of 12 Pages
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JB CAPTIAL PARTNERS L.P.
23 Berkley Lane
Rye Brook, New York 10573
914 939-1793


August 13, 2001


SunSource Inc.
One Logan Square
Philadelphia, PA 19103
Attn: Mr. Arnold S. Hoffman, Chairman of the Special Committee of the Board of
Directors

JB Capital Partners L.P. ("JB Capital") owns 510,975 shares of the Common Stock,
$0.01 par value per share (the "Common Stock"), or 7.42% of the number of
outstanding shares, of Sunsource Inc. ("SunSource"). SunSource is a holding
company that operates through two business units, The Hillman Group, Inc.
("Hillman") and SunSource Technology Services, Inc. ("STS"), and a minority
interest in a limited partnership, G-C Sun Holdings, L.P., operating as Kar
Products ("Kar"). On June 18, 2001, SunSource entered into an Agreement and
Plan of Merger with Allied Capital Corporation ("Allied") and a subsidiary of
Allied, pursuant to which SunSource will become a wholly-owned subsidiary of
Allied (the "Merger") and on July 2, 2001, Allied elected to pay $10.375 in
cash for each share of Common Stock.

In its preliminary proxy statement filed with the Securities and Exchange
Commission (the "SEC") on July 11, 2001 (the "Preliminary Proxy Statement"),
SunSource disclosed that its Board of Directors and the special committee of the
Board of Directors charged with considering and making recommendations regarding
a potential sale of SunSource (the "Special Committee") each relied upon the
fairness opinion (the "Fairness Opinion") of SunSource's financial advisor,
Janney Montgomery Scott LLC ("Janney"). Unfortunately, errors were made in the
Fairness Opinion that vitiate its usefulness. In addition, the process whereby
the sale of SunSource was considered was also flawed. Accordingly, we believe
that the Special Committee, and consequently, the Board of Directors, is unable
to come to the conclusion that the Merger is fair to shareholders of SunSource
from a financial point of view. Due to these errors and the announced sale of
STS, we believe the the Special Committee should sell Hillman through an open
auction to yield the highest price for shareholders.

A. FLAWED FAIRNESS OPINION
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1. INCORRECT VALUES USED IN COMPARABLES FOR HISTORICAL TRANSACTIONS
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CUSIP No. 867948101 Page 8 of 12 Pages
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In the analysis of comparable transactions in the Fairness Opinion with respect
to The Hillman Group, Inc. ("Hillman"), several mistakes were made with respect
to the Enterprise Value and EBITDA for historical transactions and, as a
consequence, the EBITDA multiple at which these acquisitions were made were
erroneous. For example, the acquisition by The Fairchild Corporation of Kaynar
Technologies was not at an Enterprise Value of $222 million, or 6.2x EBITDA, but
instead was at an Enterprise Value of $368 million, or 10.3x EBITDA, as reported
by Fairchild in it Current Report on Form 8-K filed with the SEC on May 5, 1999.
Thus, the Enterprise Value and the EBITDA multiple employed by Janney in its
Fairness Opinion, and used in its analysis, was understated by approximately
66%.

Similar errors were made in at least two of the other comparables. The
acquisition of Axxess Technologies ("Axxess") by SunSource was not at an EBITDA
multiple of 6.3x but at 7.4x EBITDA (see SunSource's Current Report on Form 8-K
filed on April 24, 2000). Also, the acquisition of ASI Aerospace Group ("ASI")
by Pentacon was not at an Enterprise Value and EBITDA multiple of $87 million
and 7.6x but at $89 million and 7.8x EBITDA. Thus, the EBITDA multiples for
these two transactions, and the Enterprise Value for ASI, were understated.
Based on the correct Enterprise Values, the average EBITDA multiple paid in
comparable transactions (eliminating the highest and lowest multiple) was 7.4x
EBITDA. Based upon its EBITDA of $39.9 (Hillman's trailing twelve months EBITDA
as of March 31, 2001), at a 7.4x EBITDA multiple Hillman would be valued at $295
million, not $266 million as stated in the Fairness Opinion.

2. COMPANIES USED AS COMPARABLES NOT COMPARABLE TO THE HILLMAN GROUP, INC.
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We believe that the companies used in the "Analysis of Selected Publicly Traded
Comparable Companies" section of the Fairness Opinion with respect to Hillman
are not comparable to Hillman. Management stated in a recent conference call
that there are not any public companies comparable to Hillman. Because of
Hillman's unique franchise we agree. Janney in the Fairness Opinion compares
Hillman with companies in different businesses based upon "Janney's view as to
the comparability of financial and operating characteristics of these
companies." We do not know if comparing one company with companies in different
businesses will give you a meaningful idea of the worth of the first company.
Investors are willing to pay a higher multiple of EBITDA for certain businesses
than they are for other businesses. However, if we accept hypothetically that
comparing companies in different businesses with similar financial
characteristics can give you a meaningful idea of a company's worth, then the
comparison companies should actually have similar financial characteristics to
the company being valued. As reported by SunSource, Hillman has had EBITDA
growth of no less than 16% every year since 1996. In contrast, both Central
Garden & Pet Company and Source Information Management Co. are experiencing
severe operating difficulties as evidenced by their declining EBIT and EBITDA
over the past year. Also, TBC Corporation, Applied Industrial Corp. and WESCO
all reported lower EBIT or EBITDA during this time period. Handleman Company
reported a loss in 1995. Accordingly, even if we were to accept the


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CUSIP No. 867948101 Page 9 of 12 Pages
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proposition that companies in such diverse businesses such as fasteners, pet
supplies, tires, magazines, lawn products and recorded music are comparable, we
cannot accept that one can meaningfully value Hillman, a company with
consistently increasing EBITDA, with other companies with declining EBITDA. As
a consequence, we believe that the comparison of Hillman to companies in other
businesses does not yield meaningful valuation for Hillman and should be
disregarded.

In addition, we cannot understand why in the Fairness Opinion, which was dated
June 18, 2001, Janney used $11.9 million and $16.8 million, respectively, for
the trailing twelve month EBIT and EBITDA values and an Enterprise Value of $124
million for Source Information Management Co. ("Source"). The correct values
are EBIT and EBITDA of $7.9 million and $12.8 million, respectively, and an
Enterprise Value of $132 million. The effect of this error is to understate the
value of Source at 10.4x EBIT and 7.4x EBITDA, instead of the proper values of
16.7x EBIT and 10.3x EBITDA. The effect of this error was to understate the
EBITDA multiple of Source used in calculating the average EBITDA multiple for
Janney's "comparable companies."

Accordingly, we believe that the choice of comparable companies used by Janney
was poor and does not yield a meaningful valuation for Hillman. In addition,
Janney made at least one significant error that resulted in a lower valuation
for Hillman in the Fairness Opinion based upon the "comparable companies"
selected by Janney.

3. PROPER VALUATION FOR HILLMAN
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Each of the corrected valuation of $295 million from the comparable transactions
analysis and the pre-tax discounted free cash flow values (derived from
information in the Fairness Opinion) of no less than $300 million values Hillman
alone at a higher price than the entire proposed acquisition of SunSource, which
includes STS and Kar. In addition, the Preliminary Proxy Statement states that
STS is expected to be sold for $25 million and, according to Janney, Kar is
estimated to have a value of $20 to $30 million. Accordingly, assuming the
minimal value of $295 million for Hillman (which is less than 6x EBITDA for the
next 12 months based upon SunSource's own projections ) plus a low estimate of
$45 million for Kar and STS would yield a value of $340 million, which after
subtracting $220 million of liabilities leaves a value of $120 million for
SunSource, or a share price in excess of $16 per share.

According to information in the Preliminary Proxy Statement, Hillman has an
implied valuation of $250 million (the transaction value for SunSource less
combined value of STS and Kar). Hillman has a unique franchise with excellent
financial characteristics and numerous growth opportunities. As previously
stated, EBITDA has increased since 1996 in excess of 16% each year. EBITDA
margins are expected by management to exceed 17%. EBITDA in 2002 is expected to
exceed $50 million compared with estimated EBITDA in 2001 of $45 million. While
EBITDA is increasing, capital expenditures are expected by management to decline
to $9 million allowing Hillman to generate greater free cash flow. In the
Merger, Hillman has an implied value of less than 5x estimated EBITDA for 2002,
and 5.5x estimated EBITDA for 2001. The $250 million valuation is simply too


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CUSIP No. 867948101 Page 10 of 12 Pages
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low for a business such as Hillman. The pre-tax discounted free cash flow
derived from information in the Preliminary Proxy Statement suggests a fair
value in excess of $300 million (based on Janney's highly conservative
assumption of a 17% discount rate).

Instead of approaching strategic buyers for SunSource, we believe that the
Board of Directors negotiated with only three financial buyers. We believe that
a strategic buyer would be interested in paying a greater amount for Hillman
than a financial buyer. Hillman's acquisition of Axxess has been a success.
Prior to the Axxess acquisition, Hillman sold its products primarily to
independent hardware stores. Axxess sells products to Lowes, giving Hillman
access to one of the largest "big box" retailers. In addition, Hillman recently
was awarded substantial business to distribute fasteners in Lowes. Accordingly,
we believe that a strategic buyer wanting access to Lowe's and possibly other
"big box" retailers would be very interested in Hillman. Further, we believe
that the way to find out if a strategic buyer would be interested, would be to
auction Hillman. Accordingly, we believe that the Board of Directors failed to
maximize the value of SunSource by failing to maximize the value of Hillman.


B. FLAWED PROCESS TO SELL SUNSOURCE'S BUSINESSES
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1. WE QUESTION THE REASONS FOR THE SALE OF SUNSOURCE TO ALLIED AT THE PRICE
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OFFERED
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One of the reasons the Board of Directors gave for recommending the Merger was
"SunSource's current financial position would limit its access to the equity
markets in the future thereby limiting its ability to support and maintain the
growth of its various business segments." By contrast, on February 8, 2001, in
an earnings release Maurice P. Andrien, Jr., President and CEO of SunSource
stated "With our recent subordinanted debt financing, we have improved the
Company's overall liquidity and capital structure for future growith in our core
businesses". Again, in his letter to shareholders, in the 2000 Annual Report
mailed to shareholders in April 2001, Mr. Andrien wrote the following, "Our
balance sheet has been strengthened at year-end we had total debt to
consolidated capitalization of 45%. The stronger balance sheet gives the
Company better capability to withstand economic downturns and more resources to
take advantage of growth opportunities." In addition, in the same 2000 Annual
Report, Joseph M. Corvino, CFO of SunSource, added that "With [the Allied] debt
issuance, SunSource has improved the Company's overall liquidity and capital
structure to support internal and external growth opportunities in its core
businesses." Thus, at the same time that the Board of Directors and the Special
Committee were considering selling SunSource because of its inability to grow
due to its balance sheet, its two highest executive officers were telling
shareholders that SunSource had a stronger balance sheet and had more capital to
grow both internally and externally. Accordingly, if we believe the Board of
Directors, we cannot believe the two highest executive officers of SunSource and
vice versa. We note further that Messrs. Andrien and Corvino, along with many


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CUSIP No. 867948101 Page 11 of 12 Pages
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other members of senior management, will have the opportunity to participate in
continuing to own the equity of SunSource following the Merger.

Another reason the Board of Directors gave for recommending the Merger was the
performance of STS and "the risks of potential losses of STS customers did not
warrant conducting an open auction or further soliciting other potential buyers
to acquire STS in lieu of the Allied Capital transaction to acquire all business
segments of SunSource." Ironically, members of management have a radically
different view of STS, as they are willing to pay $25 million for STS. We do
not understand why the potential loss of STS customers is a consideration unique
to STS. The effect on the business may always be a consideration in an auction
or sale. However, a sale to the right acquirer may also be a large benefit to a
business.

We have already discussed and found flawed the Fairness Opinion, a third reason
the Board of Directors recommended the Merger.

Two other reasons the Board of Directors recommended the Merger were likelihood
of completion of the Merger and the purchase price premium. However, each of
these reasons presupposes that the consideration offered is fair. We believe
that we have already shown that it is not.

Finally, we are left with the Board of Directors recommended the Merger because
the Special Committee recommended the Merger. But wasn't the Special
Committee's recommendation also based upon the Fairness Opinion?

2. PROCEDURAL PROBLEMS WITH THE SALE OF SUNSOURCE
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Most of the value of SunSource is in Hillman. Accordingly, a proper valuation
for Hillman should have first been determined. Then, concerns regarding the
other businesses should not have driven the sale of Hillman, but instead,
Hillman should have been auctioned to the highest bidder. As noted above, we
believe that the proposed management buy-out of STS for $25 million refutes the
Board of Director's given reason for not auctioning SunSource. Moreover, even
if we were to accept the valuations in the Fairness Opinion, we note that at $25
million, STS is valued at less than 10% of the entire transaction for SunSource.

C. BOARD OF DIRECTORS AND SPECIAL COMMITTEE IS OBLIGATED TO REVIEW AND
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CORRECT MISTAKES IN FAIRNESS OPINION
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We believe that material mistakes were made in the Fairness Opinion, that the
process to sell SunSource was procedurally flawed, that the reasons given for
the Merger at the offered price do not stand up to scrutiny and that the
consideration offered by Allied is not fair value. Accordingly, we believe that
the Special Committee is obligated to obtain a new fairness opinion, review
updated financial results to determine a fair value for Hillman and SunSource -
which we believe will lead to a higher value for all shareholders - and
re-evaluate its reasons for the Merger. Then it is obligated to deal with


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CUSIP No. 867948101 Page 12 of 12 Pages
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Allied based upon the new valuation. We request a written response to this
letter no later than August 20, 2001 detailing how the Board of Directors
intends to remedy this problem.


Sincerely,

JB Capital Partners L.P.

By: /s/ Alan Weber
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Alan Weber, General Partner


cc: M. Andrien, Jr.
S. Bliss
O. Brewer, Jr.
N. Edmonson
R. Keith, Jr.
D. Marshall
G. Shepard
F. Ziegler