<PAGE>   1
                                                                     EXHIBIT 2.1


--------------------------------------------------------------------------------


                          PLAN AND AGREEMENT OF MERGER


                                       OF


                              SUN SPORTSWEAR, INC.


                                      AND


                               BSI HOLDINGS, INC.


                   -----------------------------------------


                               NOVEMBER 13, 1996


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<PAGE>   2
                               TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                                                       PAGE NO. 
                                                                                                                       ---------
<S>              <C>                                                                                                          <C>
ARTICLE I

         MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
         1.1.    Surviving Corporation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
         1.2.    Stockholder Approval.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
         1.3.    Effective Date.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
         1.4.    Name and Continued Corporate Existence of Surviving Corporation; Tax Treatment . . . . . . . . . . . . . . . 2
                 1.4.1.   Name and Existence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
                 1.4.2.   Tax Treatment with Respect to Conversion of BSI Capital Stock.  . . . . . . . . . . . . . . . . . . 2
         1.5.    Governing Law and Articles of Incorporation of Surviving Corporation . . . . . . . . . . . . . . . . . . . . 2
                 1.5.1.   Washington Law Governs and Sun Articles of Incorporation, as Amended and Restated, Survive. . . . . 2
         1.6.    Bylaws of Surviving Corporation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
                 1.6.1.   Sun Bylaws Survive. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
         1.7.    Directors of Surviving Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
                 1.7.1.   Directors of Surviving Corporation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
                 1.7.2.   Vacancies.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
         1.8.    Capital Stock of Surviving Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
                 1.8.1.   Capital Stock of Surviving Corporation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
         1.9.    Conversion of BSI Securities upon Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
                 1.9.1.   General.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
                 1.9.2.   Cancellation of Certain BSI Common and Preferred Stock.   . . . . . . . . . . . . . . . . . . . . . 4
                 1.9.3.   Conversion of BSI Capital Stock.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
                 1.9.4.   Exchange of Certificates  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
                          1.9.4.1.         Deposit With Exchange Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
                          1.9.4.2.         Exchange Procedures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
                          1.9.4.3.         Distributions With Respect to Unexchanged Shares.  . . . . . . . . . . . . . . . . 5
                          1.9.4.4.         No Fractional Securities.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
                          1.9.4.5.         Closing of Transfer Books. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
                          1.9.4.6.         Termination of Duties of Exchange Agent. . . . . . . . . . . . . . . . . . . . . . 6
         1.10.   Conversion of Sun Securities Upon Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
                 1.10.1.  General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
                 1.10.2.  Conversion of Sun Common Stock held by Election Right Holders . . . . . . . . . . . . . . . . . . . 7
                 1.10.3.  Procedure for Election by Election Right Holders. . . . . . . . . . . . . . . . . . . . . . . . . . 7
                 1.10.4.  Revocation of Election; Return of Certificates  . . . . . . . . . . . . . . . . . . . . . . . . . . 7
                 1.10.5.  Conversion of Sun Common Stock held by SeaFirst.  . . . . . . . . . . . . . . . . . . . . . . . . . 7
</TABLE>
<PAGE>   3
<TABLE>
<S>                                                                                                                           <C>
                 1.10.6.  Effect of Conversions of Sun Common Stock.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
                 1.10.7.  Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
                 1.10.8.  Exchange of Sun Common Stock Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
         1.11.   Dissenting Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
                 1.11.1   BSI Dissenting Common Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
                 1.11.2   BSI Dissenting Preferred Shares.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
                 1.11.3   Sun Dissenting Common Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
         1.12.   Effects of the Merger  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   10
                 1.12.1.  General.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   10
                 1.12.2.  Accounting Treatment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   10
                 1.13.    Agreement of SeaFirst . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   10
         1.14.   Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   10

ARTICLE II
         REPRESENTATIONS AND WARRANTIES OF BSI. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   11
         2.1.    Representations and Warranties of BSI  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   11
                 2.1.1.   Organization and Standing.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   11
                 2.1.2.   Authority; Noncontravention; Statutory Approvals; Compliance  . . . . . . . . . . . . . . . . . .   11
                          2.1.2.1.  Authority.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   11
                          2.1.2.2.  Noncontravention. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   12
                          2.1.2.3.  Statutory Approvals.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   12
                          2.1.2.4.  Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   13
                 2.1.3.   Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   13
                 2.1.4.   BSI Subsidiaries  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   14
                 2.1.5.   Financial Statements  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   14
                 2.1.6.   Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   14
                 2.1.7.   Additional BSI Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   14
                          2.1.7.1.   Real Estate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   15
                          2.1.7.2.   Machinery and Equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   15
                          2.1.7.3.   Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   15
                          2.1.7.4.   Receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   15
                          2.1.7.5.   Payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   15
                          2.1.7.6.   Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   15
                          2.1.7.7.   Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   15
                          2.1.7.8.   Employee Compensation Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   15
                          2.1.7.9.   Certain Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   16
                          2.1.7.10.  Employee Agreements  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   16
                          2.1.7.11.  Patents  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   16
                          2.1.7.12.  Trade Names  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   16
                          2.1.7.13.  Promissory Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   16
                          2.1.7.14.  Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   16
</TABLE>





                                      (ii)
<PAGE>   4
<TABLE>
<S>                                                                                                                           <C>
                          2.1.7.15.  Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   16
                 2.1.8.   No Undisclosed Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   16
                 2.1.9.   Absence of Certain Changes or Events. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   16
                 2.1.10.  Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   17
                 2.1.11.  Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   17
                 2.1.12.  Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   18
                 2.1.13.  Litigation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   18
                 2.1.14.  Environmental Compliance  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   18
                          2.1.14.1.  Environmental Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   18
                          2.1.14.2.  Permits, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   19
                          2.1.14.3.  Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   19
                          2.1.14.4.  Past Compliance  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   19
                          2.1.14.5.  Environmental Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   19
                          2.1.14.6.  Renewals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   19
                 2.1.15.  Compliance with Other Laws  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   19
                 2.1.16.  Finder's Fee  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   20
                 2.1.17.  Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   20
                 2.1.18.  Investigations; Litigation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   21
                 2.1.19.  Information for Registration Statement and Proxy Statement/Prospectus.  . . . . . . . . . . . . .   21
                 2.1.20.  Ownership of Sun Common Stock.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   22
                 2.1.21.  Vote Required.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   22

ARTICLE III

         REPRESENTATIONS AND WARRANTIES OF SUN  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   22
         3.1.    Representations and Warranties of Sun  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   22
                 3.1.1.   Organization and Standing.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   22
                 3.1.2.   Authority; Noncontravention; Statutory Approvals; Compliance. . . . . . . . . . . . . . . . . . .   23
                          3.1.2.1.  Authority.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   23
                          3.1.2.2.  Noncontravention  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   23
                          3.1.2.3.  Statutory Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   24
                          3.1.2.4.  Compliance  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   24
                 3.1.3.   Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   24
                 3.1.4.   Sun Subsidiaries  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   25
                 3.1.5.   Reports and Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   25
                 3.1.6.   Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   26
                 3.1.7.   Additional Sun Information  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   26
                          3.1.7.1.  Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   26
                          3.1.7.2.  Machinery and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   26
                          3.1.7.3.  Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   26
                          3.1.7.4.  Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   26
                          3.1.7.5.  Payables  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   26
</TABLE>





                                     (iii)
<PAGE>   5
<TABLE>
<S>                                                                                                                           <C>
                          3.1.7.6.   Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   26
                          3.1.7.7.   Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   26
                          3.1.7.8.   Employee Compensation Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   27
                          3.1.7.9.   Certain Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   27
                          3.1.7.10.  Employee Agreements  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   27
                          3.1.7.11.  Patents  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   27
                          3.1.7.12.  Trade Names  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   27
                          3.1.7.13.  Promissory Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   27
                          3.1.7.14.  Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   27
                          3.1.7.15.  Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   27
                 3.1.8.   No Undisclosed Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   28
                 3.1.9.   Absence of Certain Changes or Events. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   28
                 3.1.10.  Taxes.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   28
                 3.1.11.  Intellectual Property.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   28
                 3.1.12.  Title to Properties.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   29
                 3.1.13.  Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   29
                 3.1.14.  Environmental Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   29
                          3.1.14.1.  Environmental Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   29
                          3.1.14.2.  Permits, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   30
                          3.1.14.3.  Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   30
                          3.1.14.4.  Past Compliance  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   30
                          3.1.14.5.  Environmental Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   30
                          3.1.14.6.  Renewals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   30
                 3.1.15.  Compliance with Other Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   30
                 3.1.16.  Finder's Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   30
                 3.1.17.  Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   31
                 3.1.18.  Investigations; Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   32
                 3.1.19.  Information for Registration Statement and Proxy Statement/Prospectus.  . . . . . . . . . . . . .   32
                 3.1.20.  Ownership of BSI Common Stock.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   33
                 3.1.21.  Vote Required.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   33

ARTICLE IV

         OBLIGATIONS PENDING EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   33
         4.1.    Agreements of Sun and BSI  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   33
                 4.1.1.   Maintenance of Present Business.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   33
                 4.1.2.   Maintenance of Properties.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   33
                 4.1.3.   Maintenance of Books and Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   33
                 4.1.4.   Compliance with Law.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   33
                 4.1.5.   Inspection of Each Merging Corporation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   33
         4.2.    Additional Agreements of Sun and BSI.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   34
                 4.2.1.   Hart-Scott-Rodino.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   34
</TABLE>





                                      (iv)
<PAGE>   6
<TABLE>
<S>                                                                                                                           <C>
                 4.2.2.   Proxy Statement/Prospectus. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   35
                 4.2.3.   Notice of Material Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   35
         4.3.    Additional Agreements of BSI.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   35
                 4.3.1.   Prohibition of Certain Employment Contracts.  . . . . . . . . . . . . . . . . . . . . . . . . . .   35
                 4.3.2.   Prohibition of Certain Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   35
                 4.3.3.   Prohibition of Certain Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   35
                 4.3.4.   Disposal of Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   35
                 4.3.5.   Maintenance of Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   35
                 4.3.6.   No Amendment to Certificate of Incorporation, etc.  . . . . . . . . . . . . . . . . . . . . . . .   36
                 4.3.7.   No Issuance, Sale, or Purchase of Securities. . . . . . . . . . . . . . . . . . . . . . . . . . .   36
                 4.3.8.   Prohibition on Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   36
         4.4.    Additional Agreements of Sun.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   36
                 4.4.1.   Prohibition of Certain Employment Contracts.  . . . . . . . . . . . . . . . . . . . . . . . . . .   36
                 4.4.2.   Prohibition of Certain Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   36
                 4.4.3.   Prohibition of Certain Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   37
                 4.4.4.   Disposal of Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   37
                 4.4.5.   Maintenance of Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   37
                 4.4.6.   No Amendment to Articles of Incorporation, etc. . . . . . . . . . . . . . . . . . . . . . . . . .   37
                 4.4.7.   No Issuance, Sale, or Purchase of Securities. . . . . . . . . . . . . . . . . . . . . . . . . . .   37
                 4.4.8.   Prohibition on Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   37
                 4.4.9.   Listing of Sun Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   37
                 4.4.10.  Notice of Certain Developments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   38
         4.5.  Stockholders' Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   38
         4.6.    Joint Proxy Statement and Registration Statement.  . . . . . . . . . . . . . . . . . . . . . . . . . . . .   38
                 4.6.1.   Preparation and Filing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   38
                 4.6.2.   Fairness Opinions.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   38
         4.7.    Additional Agreements regarding Operation of Sun Pending Effective Date  . . . . . . . . . . . . . . . . .   39
         4.8.    Disclosure Statement.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   41

ARTICLE V

         CONDITIONS PRECEDENT TO OBLIGATIONS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   41
         5.1.    Conditions Precedent to Obligations of BSI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   41
                 5.1.1.   Representations and Warranties of Sun; Performance of Obligations.  . . . . . . . . . . . . . . .   42
                 5.1.2.   No Injunction.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   42
                 5.1.3.   Opinion of Sun Counsel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   42
                 5.1.4.   Tax Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   43
                 5.1.5.   Stockholder Approval. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   43
                 5.1.6.   Hart-Scott-Rodino, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   43
                 5.1.7.   Listing of Sun Common Stock.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   43
                 5.1.8.   Consent of Certain Parties in Privity With Sun  . . . . . . . . . . . . . . . . . . . . . . . . .   43
                 5.1.9.   Resignations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   43
</TABLE>





                                      (v)
<PAGE>   7
<TABLE>
<S>                                                                                                                           <C>
                 5.1.10.  Sun Dissenters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   43
                 5.1.11.  Registration Statement Effective. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   44
                 5.1.12.  Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   44
                 5.1.13.  Lock-Up Agreement of SeaFirst.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   44
                 5.1.14.  Additional Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   44
         5.2.    Conditions Precedent to Obligations of Sun.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   44
                 5.2.1.   Representations and Warranties of BSI; Performance of Obligations.  . . . . . . . . . . . . . . .   44
                 5.2.2.   No Injunction.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   45
                 5.2.3.   Opinion of BSI's Counsel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   45
                 5.2.4.   Tax Opinion.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   45
                 5.2.5.   Stockholder Approval. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   45
                 5.2.6.   Hart-Scott-Rodino, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   45
                 5.2.7.   Fairness Opinion  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   45
                 5.2.8.   Consent of Certain Parties in Privity With BSI. . . . . . . . . . . . . . . . . . . . . . . . . .   46
                 5.2.9.   Registration Statement Effective. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   46
                 5.2.10.  BSI Dissenters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   46
                 5.2.11.  Equity Investment.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   46
                 5.2.12.  Additional Matters  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   46
         5.3.    Additional Condition Precedent.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   46

ARTICLE VI

         TERMINATION AND ABANDONMENT  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   47
         6.1.    Termination  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   47
                 6.1.1.   By Mutual Consent.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   47
                 6.1.2.   By Sun Because of Conditions Precedent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   47
                 6.1.3.   By BSI Because of Conditions Precedent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   47
                 6.1.4.   By Sun or BSI if Merger not Effective by April 30, 1997 . . . . . . . . . . . . . . . . . . . . .   47
                 6.1.5.   By BSI under Section 4.7  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   48
                 6.1.6.   By BSI or Sun under Section 5.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   48
                 6.1.7.   By Sun or BSI Because of Alternate Business Combination . . . . . . . . . . . . . . . . . . . . .   48
         6.2.    Termination by Board of Directors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   49
         6.3.    Effect of Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   49
         6.4.    Waiver of Conditions.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   49
         6.5.    Expense on Termination.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   49

ARTICLE VII

         ADDITIONAL AGREEMENTS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   50
         7.1.    Directors' and Officers' Indemnification.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   50
         7.2.    Undertaking to File Reports and Cooperate in Rule 144 and Rule 145 Transactions; Rule 14 Affiliates  . . .   52
         7.3.    BSI Options and Warrants.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   53
</TABLE>





                                      (vi)
<PAGE>   8
<TABLE>
<S>                                                                                                                           <C>
         7.4.    WARN Act Issues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   53

ARTICLE VIII

         MISCELLANEOUS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   53
         8.1.    Entirety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   53
         8.2.    Counterparts.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   53
         8.3.    Notices and Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   53
         8.4.    Termination of Representations, Warranties, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   54
         8.5.    Table of Contents and Captions.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   54
         8.6.    Successors and Assigns.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   54
         8.7.    Severability.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   54
         8.8.    Applicable Law.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   55
         8.9.    Public Announcements.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   55
</TABLE>





                                     (vii)
<PAGE>   9
                          PLAN AND AGREEMENT OF MERGER


         PLAN AND AGREEMENT OF MERGER, dated as of November 13, 1996, by and
between Sun Sportswear, Inc., a Washington corporation ("Sun" or the "Surviving
Corporation"), and BSI Holdings, Inc., a Delaware corporation ("BSI").  Sun and
BSI are hereinafter collectively referred to as the "Merging Corporations."

         WHEREAS, the respective boards of directors of Sun and BSI deem it
desirable and in the best interests of their respective corporations and their
respective stockholders that BSI be merged into Sun, pursuant to the provisions
of Section 252 of the General Corporation Law of the State of Delaware (the
"DGCL") and Section 23B.11.070 of the Washington Business Corporation Act (the
"WBCA"), in exchange for the consideration herein provided for, and have
proposed, declared advisable, and approved such merger pursuant to this Plan
and Agreement of Merger (the "Agreement"), which Agreement has been duly
approved by resolutions of the respective boards of directors of Sun and BSI;
and

         WHEREAS, immediately subsequent to the consummation of the merger
contemplated herein, the Surviving Corporation will merge into a Delaware
corporation which is a wholly-owned subsidiary of the Surviving Corporation
("Sun Delaware"), on the terms set forth in Appendix I hereto, which shall
include the conversion of each outstanding share of Surviving Corporation
common stock into 0.2 of a share of Sun Delaware common stock (the
"Reincorporation").

         NOW, THEREFORE, in consideration of the premises and of the
representations, warranties and covenants herein contained, the parties hereto
agree as follows:

                                   ARTICLE I

                                     MERGER

         1.1.    Surviving Corporation.  Subject to the adoption and approval
of this Agreement by the requisite vote of the stockholders of each of the
Merging Corporations and to the other conditions hereinafter set forth, Sun and
BSI shall be, upon the Effective Date of the merger as defined in Section 1.3
hereof, merged into a single surviving corporation (the "Merger"), which shall
be Sun, one of the Merging Corporations, which shall continue, prior to the
Reincorporation, its corporate existence and remain a Washington corporation
governed by and subject to the laws of that state.

         1.2.    Stockholder Approval.  This Agreement shall be submitted for
adoption and approval by the stockholders of each of the Merging Corporations
in accordance with their respective articles or certificates of incorporation
and the applicable laws of the State of Washington and the State of Delaware,
respectively, at separate meetings called and held for such purpose.





                                       1
<PAGE>   10
                 1.3.     Effective Date.  On the Closing Date (as hereinafter
         defined), articles or a certificate of merger shall be executed by the
         parties to the Merger and filed with the Secretary of State of the
         State of Washington pursuant to Section 23B.11.050 of the WBCA and
         with the Secretary of State of the State of Delaware in accordance
         with Section 252(c) of the DGCL.  The Merger shall become effective at
         the time specified in the articles or certificate of merger as so
         filed, such time being herein called the "Effective Date."

                 1.4.     Name and Continued Corporate Existence of Surviving
                          Corporation; Tax Treatment

                 1.4.1.   Name and Existence.  On the Effective Date, the
         Articles of Incorporation of Sun, the corporation whose corporate
         existence is to survive the Merger and continue thereafter as the
         surviving corporation, shall be amended and restated in its entirety
         into the form annexed hereto as Appendix II (the "Restated Articles of
         Incorporation"), which shall provide that the name of the Surviving
         Corporation shall be changed to "Brazos Sportswear, Inc."  In all
         other respects the identity, existence, purposes, powers, objects,
         franchises, rights, and immunities of Sun, the surviving corporation
         of the Merger, shall continue unaffected and unimpaired by the Merger,
         and the corporate identity, existence, purposes, powers, objects,
         franchises, rights, and immunities of BSI shall be wholly merged into
         Sun, and Sun shall be fully vested therewith.  Accordingly, on the
         Effective Date, the separate existence of BSI, except insofar as
         continued by statute, shall cease.

                 1.4.2.   Tax Treatment with Respect to Conversion of BSI
         Capital Stock.  With respect to the conversion of shares of BSI common
         stock, par value $.01 per share (the "BSI Common Stock"), and BSI
         Preferred Stock (as hereinafter defined) the merger is intended to
         qualify as and, subject to the requirements of Section  368(a)(1)(A)
         of the Internal Revenue Code of 1986, as amended (the "Code"), shall
         be characterized as a tax-free merger  transaction described in
         Section  368(a)(1)(A) of the Code.

    1.5.    Governing Law and Articles of Incorporation of Surviving Corporation

                 1.5.1.   Washington Law Governs and Sun Articles of
         Incorporation, as Amended and Restated, Survive.  The laws of the
         State of Washington shall continue to govern the Surviving
         Corporation.  On the Effective Date, the Restated Articles of
         Incorporation shall be the articles of incorporation of Sun until
         further amended in the manner provided by law.

         1.6.    Bylaws of Surviving Corporation

                 1.6.1.   Sun Bylaws Survive.  Effective as of the Effective
         Date, the bylaws of Sun shall be amended and restated in their
         entirety in the form attached hereto as Appendix III (the "Restated
         Bylaws"), and the Restated Bylaws shall be the bylaws of the Surviving
         Corporation until altered, amended, or repealed, or until new bylaws
         shall be adopted in accordance with the provisions of law, the
         Restated Articles of Incorporation and the Restated Bylaws.





                                       2
<PAGE>   11
         1.7.    Directors of Surviving Corporation

                 1.7.1.   Directors of Surviving Corporation.  The names and
         addresses of the persons who, upon the Effective Date, shall
         constitute the board of directors of the Surviving Corporation, and
         who shall hold office until their successors are duly elected and
         qualified, are as follows:

                        Name                               Address
                        ----                               -------
          Randall B. Hale                    2929 Allen Parkway, Suite 2500
                                             Houston, Texas  77019

          Nolan Lehmann                      2929 Allen Parkway, Suite 2500
                                             Houston, Texas  77019

          Alan Elenson                       330 Tompkins Avenue
                                             Staten Island, NY 10304

          Michael S. Chadwick                3100 Texas Commerce Tower
                                             Houston, Texas 77002

          Ford Taylor                        3860 Virgina Avenue
                                             Cincinnati, Ohio 45243


                 1.7.2.   Vacancies.  On or after the Effective Date, if a
         vacancy shall exist for any reason in the board of directors of the
         Surviving Corporation, such vacancy shall be filled in the manner
         provided in the Restated Articles of Incorporation and/or Restated
         Bylaws of the Surviving Corporation.

         1.8.    Capital Stock of Surviving Corporation

                 1.8.1.   Capital Stock of Surviving Corporation.  The
         authorized number of shares of capital stock of the Surviving
         Corporation, and the par value, designations, preferences, rights, and
         limitations thereof, and the express terms thereof, shall be as set
         forth in the Restated Articles of Incorporation.

         1.9.    Conversion of BSI Securities upon Merger

                 1.9.1.   General.  The manner and basis of converting the
         issued and outstanding shares of the capital stock of BSI into shares
         of the capital stock of Sun shall be as hereinafter set forth in this
         Section 1.9.





                                       3
<PAGE>   12
                 1.9.2.   Cancellation of Certain BSI Common and Preferred
         Stock.  Each share of BSI Common Stock or BSI Preferred Stock owned by
         any BSI subsidiary shall be cancelled and shall cease to exist.

                 1.9.3.   Conversion of BSI Capital Stock.  (a) On the
         Effective Date, each share of BSI Common Stock then issued and
         outstanding, other than BSI Dissenting Common Shares (as defined in
         Section 1.11.1) and the shares cancelled pursuant to Section 1.9.2,
         without any action on the part of the holders thereof, shall
         automatically become and be converted into the right to receive
         certificates evidencing 40.2 fully paid and nonassessable shares of
         issued and outstanding Sun common stock, no par value per share ("Sun
         Common Stock"), upon surrender, in accordance with Section 1.9.4.2
         hereof, of certificates theretofore evidencing shares of BSI Common
         Stock.  Upon such conversion, all such shares of BSI Common Stock
         shall be cancelled and cease to exist, and each holder of a
         certificate representing any such shares shall cease to have any
         rights with respect thereto, except the right to receive the shares of
         Sun Common Stock to be issued in consideration therefor upon the
         surrender of such certificate in accordance herewith.

                 (b)      On the Effective Date, each share of preferred stock
         of BSI ("BSI Preferred Stock") then issued and outstanding, other than
         BSI Dissenting Preferred Shares (as defined in Section 1.11.2) and the
         shares cancelled pursuant to Section 1.9.2, without any action on the
         part of the holders thereof, shall automatically become and be
         converted into the right to receive certificates evidencing one fully
         paid and nonassessable share of issued and outstanding Sun preferred
         stock ("Sun Preferred Stock") (which shall be convertible into Sun
         Common Stock at $2.20 per share) upon surrender, in accordance with
         Section 1.9.4.2, of certificates theretofore evidencing shares of BSI
         Preferred Stock.   All shares of Sun Preferred Stock so issued shall
         have the same rights and preferences as the outstanding preferred
         stock of BSI, as the terms thereof shall be amended after the date
         hereof with respect to conversion (at $2.20 per share of Sun Common
         Stock) and mandatory redemption rights which exist as of the date
         hereof and which will be in effect upon and after the Effective Date.
         Upon such conversion, all such shares of BSI Preferred Stock shall be
         cancelled and cease to exist, and each holder of a certificate
         representing any such shares shall cease to have any rights with
         respect thereto, except the right to receive the shares of Sun
         Preferred Stock to be issued in consideration therefor upon the
         surrender of such certificate in accordance with Section 1.9.4.2.
         Prior to the Effective Date, the terms of the outstanding preferred
         stock of Brazos Sportswear, Inc., a subsidiary of BSI, shall be
         amended to permit exchange for BSI Preferred Stock, which upon
         issuance will have terms substantially comparable to the BSI Preferred
         Stock.

                 1.9.4.   Exchange of Certificates

                          1.9.4.1.         Deposit With Exchange Agent.  As
                 soon as practicable after the Effective Date, the Surviving
                 Corporation shall deposit with a bank or trust company
                 mutually agreeable to BSI and Sun (the "Exchange Agent")
                 certificates





                                       4
<PAGE>   13
                 representing shares of Sun Common Stock and Sun Preferred
                 Stock, required to effect the exchanges completed hereby,
                 together with cash payable in respect of fractional shares.

                          1.9.4.2.         Exchange Procedures.  As soon as
                 practicable after the Effective Date, the Exchange Agent shall
                 mail to each holder of record a certificate or certificates
                 which immediately prior to the Effective Date represented
                 outstanding shares of BSI Common Stock or BSI Preferred Stock
                 (the "Certificates") that were converted (the "Converted
                 Shares") into the right to receive shares of Sun Common Stock
                 or Sun Preferred Stock, as applicable (together, the "Sun
                 Shares"), (i) a letter of transmittal (which shall specify
                 that delivery shall be effected, and risk of loss and title to
                 the Certificates shall pass, only upon actual delivery of the
                 Certificates to the Exchange Agent) and (ii) instructions for
                 use in effecting the surrender of the Certificates in exchange
                 for certificates representing Sun Shares.  Upon surrender of a
                 Certificate to the Exchange Agent (or to such other agent or
                 agents as may be appointed by agreement of Sun and BSI),
                 together with a duly executed letter of transmittal and such
                 other documents as the Exchange Agent shall require, the
                 holder of such Certificate shall be entitled to receive in
                 exchange therefor a certificate representing that number of
                 whole Sun Shares which such holder has the right to receive
                 pursuant to the provisions of this Section 1.9.4.2.  In the
                 event of a transfer of ownership of Converted Shares which is
                 not registered in the transfer records of BSI or Sun, as the
                 case may be, a certificate representing the proper number of
                 Sun Shares may be issued to a transferee if the Certificate
                 representing such Converted Shares is presented to the
                 Exchange Agent, accompanied by all documents required to
                 evidence and effect such transfer and by evidence satisfactory
                 to the Exchange Agent that any applicable stock transfer taxes
                 have been paid.  If any Certificate shall have been lost,
                 stolen, mislaid or destroyed, upon receipt of (i) an affidavit
                 of that fact from the holder claiming such Certificate to be
                 lost, stolen, mislaid or destroyed, (ii) such bond, security
                 or indemnity as the Surviving Corporation or the Exchange
                 Agent may reasonably require, and (iii) any other
                 documentation necessary to evidence and effect the bona fide
                 exchange thereof, the Exchange Agent shall issue to such
                 holder a certificate representing the number of Sun Shares
                 into which the shares represented by such lost, stolen,
                 mislaid or destroyed Certificate shall have been converted.
                 Until surrendered as contemplated by this Section 1.9.4.2,
                 each Certificate shall be deemed at any time after the
                 Effective Date to represent only the right to receive upon
                 such surrender a certificate representing Sun Shares and cash
                 in lieu of any fractional shares of Sun Common Stock as
                 contemplated by this Section 1.9.4.2.

                          1.9.4.3.         Distributions With Respect to
                 Unexchanged Shares.  No dividends or other distributions
                 declared or made after the Effective Date with respect to Sun
                 Shares with a record date after the Effective Date shall be
                 paid to the holder of any unsurrendered Certificate with
                 respect to the Sun Shares represented thereby,





                                       5
<PAGE>   14
                 and no cash payment in lieu of fractional shares shall be paid
                 to any such holder, until the holder of record of such
                 Certificate shall surrender such Certificate as contemplated
                 hereby.  Subject to the effect of unclaimed property, escheat
                 and other applicable laws, following surrender of any such
                 Certificate, there shall be paid to the record holder of the
                 certificates representing whole Sun Shares issued in exchange
                 therefor, without interest, (i) at the time of such surrender,
                 the amount of any cash payable in lieu of a fractional share
                 of Sun Common Stock to which such holder is entitled hereto
                 and the amount of dividends or other distributions with a
                 record date after the Effective Date theretofore paid with
                 respect to such whole Sun Shares and (ii) at the appropriate
                 payment date, the amount of dividends or other distributions
                 with a record date after the Effective Date but prior to
                 surrender and a payment date subsequent to surrender payable
                 with respect to such whole Sun Shares.

                          1.9.4.4.         No Fractional Securities.
                 Notwithstanding any other provision of this Agreement, the
                 Surviving Corporation shall not issue any fractional share of
                 Sun Common Stock upon the surrender for exchange of
                 Certificates.  In lieu of any such fractional shares, any
                 holder of BSI Common Stock who would otherwise have been
                 entitled to a fractional share of Sun Common Stock shall be
                 entitled to receive a cash payment in lieu of such fractional
                 share on the basis of the lesser of $2.20 per share or the
                 product of such fraction multiplied by the closing price for
                 Sun Common Stock on the Nasdaq Stock Market on the last
                 trading day before the Effective Date without any interest
                 thereon.

                          1.9.4.5.         Closing of Transfer Books.  From and
                 after the Effective Date, the stock transfer books of BSI
                 shall be closed and no transfer of any capital stock of BSI
                 shall thereafter be made.  If, after the Effective Time,
                 Certificates are presented to the Surviving Corporation for
                 registration or transfer, they shall be cancelled and
                 exchanged for certificates representing the appropriate Sun
                 Shares.

                          1.9.4.6.         Termination of Duties of Exchange
                 Agent.  Any certificates representing Sun Shares deposited
                 with the Exchange Agent pursuant hereto and not exchanged
                 within one year after the Effective Date pursuant to this
                 section shall be returned by the Exchange Agent to the
                 Surviving Corporation, which shall thereafter act as Exchange
                 Agent.  All funds held by the Exchange Agent for payment to
                 the holders of unsurrendered Certificates and unclaimed at the
                 end of one year from the Effective Date shall be returned to
                 the Surviving Corporation, whereupon any holder of
                 unsurrendered Certificates shall look as a general unsecured
                 creditor only to the Surviving Corporation for payment of any
                 funds to which any holder may be entitled, subject to
                 applicable law.  The Surviving Corporation shall not be liable
                 to any person for such shares or funds delivered to a public
                 official pursuant to any applicable abandoned property,
                 escheat or similar law.





                                       6
<PAGE>   15
         1.10.    Conversion of Sun Securities Upon Merger

                 1.10.1.  General.  The manner and basis of converting the
         issued and outstanding shares of Sun Common Stock shall be as
         hereinafter set forth in this Section 1.10.

                 1.10.2.  Conversion of Sun Common Stock held by Election Right
         Holders.  On the Effective Date, each holder of an outstanding
         certificate or certificates representing shares of Sun Common Stock
         (other than SeaFirst Bank, N.A. ("SeaFirst") and Sun Dissenting Common
         Shares, as hereinafter defined) shall have 50% of the shares held by
         such holder converted into the right to receive $2.20 in cash (the
         "Cash Consideration") for each share of Sun Common Stock so converted
         in accordance with this section; provided, however, such holders (the
         "Election Right Holders") shall have the right to elect to retain all
         shares of Sun Common Stock (and not have 50% of such shares converted)
         in accordance with Section 1.10.3 hereof.

                 1.10.3.  Procedure for Election by Election Right Holders.
         Elections  to retain shares of Sun Common Stock must be made as to
         all, but not less than all, of the shares of Sun Common Stock held by
         an Election Right Holder on a form to be mutually agreed upon by Sun
         and BSI (a "Form of Election") to be provided by the Exchange Agent
         promptly after the Effective Date for that purpose to holders of
         record of Sun Common Stock who are Election Right Holders, together
         with appropriate transmittal materials.  Elections shall be made by
         mailing to the Exchange Agent a duly completed Form of Election.  To
         be effective, a Form of Election must be properly completed, signed
         and submitted to the Exchange Agent at its designated office by 5:00
         p.m. not later than 60 days subsequent to the Effective Date (the
         "Election Deadline").  Neither Sun nor the Exchange Agent will be
         under any obligation to notify any person of any defect in a Form of
         Election submitted to the Exchange Agent.  A holder of shares of Sun
         Common Stock that does not submit an effective Form of Election prior
         to the Election Deadline shall be deemed to have made a non-election
         (a "Non-Election").  All shares of Sun Common Stock which are subject
         to a Non-Election ("Non-Election Shares") shall be converted as set
         forth in Section 1.10.2 hereof.

                 1.10.4.  Revocation of Election; Return of Certificates.  An
         election may be revoked, but only by written notice received by the
         Exchange Agent prior to the Election Deadline.  Upon any such
         revocation, unless a duly completed Form of Election is thereafter
         submitted in accordance with Section 1.10.3, such shares shall be
         Non-Election Shares.

                 1.10.5.  Conversion of Sun Common Stock held by SeaFirst.  On
         the Effective Date, except as provided below, 48.28% of all shares of
         Sun Common Stock held by SeaFirst shall be converted into the right to
         receive consideration of $2.20 for each share of Sun Common Stock so
         converted, consisting of $1.3824 in cash and $.8176 in the form of a
         subordinated note (the "Subordinated Note") issued by Brazos
         Sportswear, Inc., a Delaware corporation which shall be a subsidiary
         of the Surviving Corporation, substantially in the form attached
         hereto as Appendix IV; provided, however, to the extent that the
         Election Right Holders elect





                                       7
<PAGE>   16
         to retain Sun Common Stock, for each such share so retained, SeaFirst
         shall have an additional share of Sun Common Stock converted into cash
         in the amount of $2.20 per share.  The number of shares of Sun Common
         Stock held by SeaFirst which shall be converted shall be calculated
         immediately following the Election Deadline.  The Subordinated Note
         will contain customary provisions regarding covenants and financial
         reporting obligations, will provide for the holder to have board
         visitation rights, and will be automatically due and payable upon the
         Surviving Corporation completing a qualifying public offering of
         securities; in addition, if the Subordinated Note is not paid in full
         at maturity, any remaining principal balance will be convertible at
         the option of the holder into Sun Common Stock at a price of $2.20 per
         share, and the holder shall be entitled to one demand registration
         right (at the expense of the Surviving Corporation) with respect to
         such shares.

                 1.10.6.  Effect of Conversions of Sun Common Stock.  Upon
         completion of all conversions of shares of Sun Common Stock under this
         Section 1.10, (i) 48.86% of all shares of Sun Common Stock outstanding
         immediately prior to the Effective Date shall have been converted into
         consideration in the aggregate amount of $6,179,637, which shall be in
         cash except with respect to certain of the consideration payable to
         SeaFirst, which shall receive $1,500,000 of such the consideration in
         the form of the Subordinated Note, and (ii) 51.14% of all shares of
         Sun Common Stock outstanding immediately prior to the Effective Date
         shall remain outstanding.

                 1.10.7.  Fractional Shares.  No fractional shares shall be
         issued upon conversion of the Sun Common Stock as provided in this
         section, but in lieu thereof, Sun will settle all such fractional
         share interests in cash on the basis of the lesser of $2.20 per share
         or the closing price for the Sun Common Stock on The Nasdaq Stock
         Market on the last trading day before the Effective Date.

                 1.10.8.  Exchange of Sun Common Stock Certificates.  (a) Upon
         the surrender of each certificate representing shares of Sun Common
         Stock converted hereunder, the Exchange Agent shall pay the holder of
         such certificate the consideration to which such holder is entitled
         multiplied by the number of shares of Sun Common Stock formerly
         represented by such certificate in exchange therefor (and cash in lieu
         of fractional interests in accordance with Section 1.10.7), such
         certificate shall forthwith be cancelled and a balance certificate
         will be issued for the shares not converted.  No interest shall be
         paid or accrue on the consideration paid.  Immediately following the
         Election Deadline, the Exchange Agent shall calculate the number of
         shares of Sun Common Stock held by SeaFirst which are converted, and
         upon surrender by SeaFirst of certificates, the consideration payable
         upon conversion shall be delivered by the Exchange Agent, Sun or
         Brazos Sportswear, Inc., as appropriate, and SeaFirst shall be issued
         a balance certificate for the shares not converted.  The Subordinated
         Note shall be delivered to SeaFirst upon the surrender of certificates
         as provided herein.

                 (b)      On the Effective Date, BSI, on behalf of Sun, shall
         deposit or cause to be deposited, in trust with the Exchange Agent,
         for the benefit of the holders of shares of Sun





                                       8
<PAGE>   17
         Common Stock, for exchange in accordance with this Article, the
         aggregate cash consideration (a total of $4,679,637) payable upon
         conversion of the Sun Common Stock.

                 (c)      If prior to mailing of the Joint Proxy
         Statement/Prospectus (as hereinafter defined) to the shareholders of
         Sun and BSI, Sun settles a currently outstanding dispute with Samsung,
         which is described in the Sun Disclosure Statement, which results in a
         cash payment to Sun in excess of $200,000, then the cash consideration
         to be paid to the Sun Common Stock holders (as exist prior to
         Effective Date) upon consummation of the Merger shall be increased to
         reflect such excess recovery (net of expenses in connection with such
         settlement).

         1.11.   Dissenting Shares.

                 1.11.1   BSI Dissenting Common Shares.  Shares of BSI Common
         Stock held by any holder entitled to and seeking relief as a
         dissenting shareholder under Section 262 of the DGCL (the "BSI
         Dissenting Common Shares") shall not be converted into the right to
         receive Sun Common Stock but shall be converted into such
         consideration as may be due with respect to such shares pursuant to
         the applicable provisions of the DGCL, unless and until the right of
         such holder to receive fair cash value for such BSI Dissenting Common
         Shares terminates in accordance with Section 262 of the DGCL.  If such
         right is terminated otherwise than by the purchase of such shares by
         the Surviving Corporation, then such shares shall cease to be BSI
         Dissenting Common Shares and shall be converted into and represent the
         right to receive Sun Common Stock as provided in Section 1.9.3(a).

                 1.11.2   BSI Dissenting Preferred Shares.  Shares of BSI
         Preferred Stock held by any holder entitled to and seeking relief as a
         dissenting shareholder under Section 262 of the DGCL (the "BSI
         Dissenting Preferred Shares" and, together with the BSI Dissenting
         Common Shares, the "BSI Dissenting Shares") shall not be converted
         into the right to receive Sun Preferred Stock but shall be converted
         into such consideration as may be due with respect to such shares
         pursuant to the applicable provisions of the DGCL, unless and until
         the right of such holder to receive fair cash value for such BSI
         Dissenting Preferred Shares terminates in accordance with Section 262
         of the DGCL.  If such right is terminated otherwise than by the
         purchase of such shares by the Surviving Corporation, then such shares
         shall cease to be BSI Dissenting Preferred Shares and shall be
         converted into and represent the right to receive Sun Preferred Stock
         as provided in Section 1.9.3(b).

                 1.11.3   Sun Dissenting Common Shares.  Shares of Sun Common
         Stock held by any holder entitled to and seeking relief as a
         dissenting shareholder under Section 23B.13 of the WBCA (the "Sun
         Dissenting Common Shares") shall be converted into such consideration
         as may be due with respect to such shares pursuant to the applicable
         provisions of the WBCA, unless and until the right of such holder to
         receive fair cash value for such Sun Dissenting Common Shares
         terminates in accordance with Section 23B.13 of the WBCA.  If such
         right is terminated otherwise than by the purchase of such shares by
         the Surviving Corporation, then such shares shall cease to be Sun
         Dissenting Common Shares and shall be accorded the





                                       9
<PAGE>   18
         treatment of Sun Common Stock pursuant to 1.10.2 (other than Sun
         Common Stock held by SeaFirst and Sun Dissenting Common Shares).

         1.12.   Effects of the Merger.

                 1.12.1.  General. The Merger shall have the effects set forth
         in the WBCA and DGCL, respectively.  Without limiting the generality
         of the foregoing and subject thereto, at the Effective Date, all of
         the properties, rights, privileges, powers and franchises of Sun and
         BSI shall vest in the Surviving Corporation, and all debts,
         liabilities, obligations and duties of BSI shall become the debts,
         liabilities and duties of the Surviving Corporation.

                 1.12.2.  Accounting Treatment.  The assets and liabilities of
         the Merging Corporations shall be taken up on the books of the
         Surviving Corporation in accordance with generally accepted accounting
         principles, and the retained earnings and shareholders' equity
         accounts of the Surviving Corporation shall be determined, in
         accordance with generally accepted accounting principles, by the board
         of directors of the Surviving Corporation.  Nothing herein shall
         prevent the board of directors of the Surviving Corporation from
         making any future changes in its accounts in accordance with law.

         1.13.  Agreement of SeaFirst.  Upon execution of this Agreement,
SeaFirst, the holder of 3,800,000 shares of Sun Common Stock, shall agree to
vote all of SeaFirst's Sun Common Stock for the approval of this Agreement
(including the Reincorporation) and the transactions contemplated hereby as
required by the WBCA at the Sun Meeting; provided, however, that
notwithstanding the foregoing, in the event that Sun's Board of Directors shall
terminate this Agreement pursuant to Section 6.1.7(a), SeaFirst shall be free
to vote its Sun Common Stock for such other transaction as shall be presented
to the shareholders of Sun for their approval at the Sun Meeting or such other
meeting as may be called by Sun.  In addition, upon execution of this
Agreement, SeaFirst shall agree that prior to the closing of the Merger, unless
this Agreement shall have been terminated in accordance with Article VI hereof,
it will not transfer or assign, directly or indirectly, any shares of Sun
Common Stock.

         1.14.   Closing.  The closing (the "Closing") of the Merger shall take
place at the offices of Porter & Hedges, L.L.P., 700 Louisiana, Houston, Texas
77002 at 10:00 a.m., local time, on the second business day immediately
following the date on which the last of the conditions set forth in Article V
hereof is fulfilled or waived, or at such other time and date and place as BSI
and Sun shall mutually agree (the "Closing Date").





                                       10
<PAGE>   19
                                   ARTICLE II

                         REPRESENTATIONS AND WARRANTIES
                                     OF BSI

                 2.1.     Representations and Warranties of BSI.  BSI represents
and warrants to Sun as follows:

                 2.1.1.   Organization and Standing.  BSI is a corporation duly
         organized, validly existing and in good standing under the laws of the
         State of Delaware, has full requisite corporate power and authority to
         carry on its business as it is currently conducted, and to own and
         operate the properties currently owned and operated by it, and is duly
         qualified or licensed to do business and is in good standing as a
         foreign corporation authorized to do business in all jurisdictions in
         which the character of the properties owned or the nature of the
         business conducted by it would make such qualification or licensing
         necessary other than in such jurisdictions where the failure to be so
         qualified and in good standing would not, when taken together with all
         other such failures, have a material adverse effect on the business,
         operations, properties, assets, financial condition, results of
         operations or prospects of BSI or the BSI Subsidiaries taken as a
         whole or on the consummation of this Agreement (any such material
         adverse effect being hereinafter referred to as a "BSI Material
         Adverse Effect").  As used in this Agreement, (a) the term
         "subsidiary" of a person shall mean any corporation or other entity
         (including partnerships and other business associations) in which such
         person directly or indirectly owns at least a majority of any class of
         the outstanding voting securities or equity and (b) the term "BSI
         Subsidiaries" means all direct or indirect subsidiaries of BSI.  True,
         accurate and complete copies of the Certificate of Incorporation and
         Bylaws of BSI, in effect on the date hereof, have been delivered to
         Sun.  In addition, for the purposes of this Agreement, "knowledge"
         with respect to any person or entity shall mean the actual knowledge
         of any director, officer or other person in a supervisory or
         managerial role, and the knowledge such person would be expected to
         have upon making due inquiry with respect to the matter in question.

                 2.1.2.   Authority; Noncontravention; Statutory Approvals;
         Compliance

                          2.1.2.1.  Authority.  BSI has all requisite power and
                 authority to enter into this Agreement and, subject to the
                 applicable BSI Shareholders' Approval (as defined in Section
                 4.5), to consummate the transactions contemplated hereby.  The
                 execution and delivery of this Agreement and the consummation
                 by BSI of the transactions contemplated hereby, have been duly
                 authorized by all necessary corporate action on the part of
                 BSI, subject in the case of this Agreement to obtaining the
                 applicable BSI Shareholders' Approval.  This Agreement has
                 been duly and validly executed and delivered by BSI and,
                 assuming the due authorization, execution and delivery hereof
                 and thereof by Sun, constitutes the valid and binding
                 obligation of BSI enforceable





                                       11
<PAGE>   20
                 against BSI in accordance with its terms, except as
                 enforceability may be limited by bankruptcy, insolvency,
                 reorganization, debtor relief or similar laws affecting the
                 rights of creditors' generally.

                          2.1.2.2.  Noncontravention.  Except as set forth in
                 Section 2.1.2.2 of the BSI Disclosure Statement, the execution
                 and delivery of this Agreement by BSI do not, and the
                 consummation of the transactions contemplated hereby will not,
                 violate, conflict with, or result in a breach of any provision
                 of, or constitute a default (with or without notice or lapse
                 of time or both) under, or result in the termination or
                 modification of, or accelerate the performance required by, or
                 result in a right of termination, modification, cancellation
                 or acceleration of any obligation or the loss of a material
                 benefit under, or result in the creation of any lien, security
                 interest, charge or encumbrance upon any of the properties or
                 assets (any such violation, conflict, breach, default, right
                 of termination, modification, cancellation or acceleration,
                 loss or creation, a "Violation" with respect to BSI or any of
                 the BSI Subsidiaries; such term when used in Article III
                 having a correlative meaning with respect to Sun or any of the
                 Sun Subsidiaries) of BSI or any of the BSI Subsidiaries
                 pursuant to any provisions of (i) the articles of
                 incorporation, bylaws or similar governing documents of BSI or
                 any of the BSI Subsidiaries, (ii) subject to obtaining the BSI
                 Shareholders' Approvals, any statute, law, ordinance, rule,
                 regulation, judgment, decree, order, injunction, writ, permit
                 or license of any Governmental Authority (as defined in
                 Section 2.1.2.3) applicable to BSI or any of the BSI
                 Subsidiaries or any of their respective properties or assets
                 or (iii) subject to obtaining the third-party consents or
                 other approvals set forth in Section 2.1.2.2 of the BSI
                 Disclosure Statement (the "BSI Required Consents"), any note,
                 bond, mortgage, indenture, deed of trust, license, franchise,
                 permit, concession, contract, lease or other instrument,
                 obligation or agreement of any kind to which BSI or any of the
                 BSI Subsidiaries is now a party or by which it or any of its
                 properties or assets may be bound or affected, excluding from
                 the foregoing clauses (ii) and (iii) such Violations that
                 would not, in the aggregate, have a BSI Material Adverse
                 Effect.

                          2.1.2.3.  Statutory Approvals.  No declaration,
                 filing or registration with, or notice to or authorization,
                 consent or approval of, any court, federal, state, local or
                 foreign governmental or regulatory body (including a stock
                 exchange or other self-regulatory body) or authority (each, a
                 "Governmental Authority"), the failure to obtain, make or give
                 which would have, in the aggregate, a BSI Material Adverse
                 Effect, is necessary for the execution and delivery of this
                 Agreement by BSI or the consummation by BSI of the
                 transactions contemplated hereby, except as described in
                 Section 2.1.2.3 of the BSI Disclosure Statement (the "BSI
                 Required Statutory Approvals," it being understood that
                 references in this Agreement to "obtaining" such BSI Required
                 Statutory Approvals shall mean making such declarations,
                 filings or registrations; giving such notices; obtaining such
                 authorizations, consents or





                                       12
<PAGE>   21
                 approvals; and having such waiting periods expire as are 
                 necessary to avoid a violation of law).

                          2.1.2.4.  Compliance.  Except as set forth in Section
                 2.1.2.4 of the BSI Disclosure Statement, neither BSI nor any
                 BSI Subsidiary, is in violation of or is under investigation
                 with respect to any violation of, or has been given notice or
                 been charged with any violation of, any law, statute, order,
                 rule, regulation, ordinance or judgment (including, without
                 limitation, any applicable environmental law, ordinance or
                 regulation) of any Governmental Authority except for
                 violations which in the aggregate do not and, insofar as
                 reasonably can be foreseen, will not have a BSI Material
                 Adverse Effect.  Except as set forth in Section 2.1.2.4 of the
                 BSI Disclosure Statement, BSI and the BSI Subsidiaries have
                 all permits, licenses, franchises and other governmental
                 authorizations, consents and approvals necessary to conduct
                 their businesses as currently conducted in all material
                 respects except for those which the failure to obtain would
                 not, in the aggregate, have a BSI Material Adverse Effect.
                 Except as set forth in Section 2.1.2.4 of the BSI Disclosure
                 Statement, neither BSI nor any BSI Subsidiary is in material
                 breach or violation of or in material default in the
                 performance or observance of any term or provision of, and no
                 event has occurred which, with lapse of time or action by a
                 third party, could result in a material default under, (i) its
                 articles of incorporation or bylaws or (ii) any contract,
                 commitment, agreement, indenture, mortgage, loan agreement,
                 note, lease, bond, license, approval or other instrument to
                 which it is a party or by which it is bound or to which any of
                 its property is subject except in the case of clause (ii) for
                 violations and defaults which would not, in the aggregate,
                 have a BSI Material Adverse Effect.

                 2.1.3.   Capitalization.  (a) The authorized capitalization of
         BSI consists of 10,000,000 shares of preferred stock, par value $.01
         per share, 650,000 of which have been designated Series A-1 Preferred
         Stock, 650,000 of which are issued and outstanding, 300,000 of which
         have been designated Series A-2 Preferred Stock, 300,000 of which are
         issued and outstanding, 8,000,000 of which have been designated Series
         B Preferred Stock, 4,456,285 of which are issued and outstanding and
         10,000,000 shares of common stock, par value $.01 per share (the "BSI
         Common Stock"), of which at the date hereof, 330,555 shares were
         issued and outstanding. Except as set forth in Section 2.1.3 of the
         BSI Disclosure Statement, there exist no (a) outstanding options,
         subscriptions, warrants, calls, or similar commitments to purchase,
         issue or sell or to convert any securities or obligations into any of
         the authorized or issued capital stock of BSI or any securities or
         obligations convertible into or exchangeable for such capital stock or
         (b) registration rights, stockholder agreements or voting agreements
         with respect to the outstanding shares of capital stock of BSI.

                 (b)      BSI has obtained commitments from its shareholders
         and/or third parties with respect to such parties' agreement to invest
         not less than $2,000,000 and up to $3,500,000 in equity funds (or
         funds which are substantially equivalent to equity funds) into BSI on
         or before the Effective Date.  To the extent that warrants or options
         to purchase BSI capital





                                       13
<PAGE>   22
         stock are issued in connection with such equity investment, the
         exchange ratio for the BSI Common Stock shall be proportionately
         adjusted.  Written commitments will be provided to Sun upon its
         request.

                 2.1.4.   BSI Subsidiaries.  All outstanding shares of stock of
         the BSI Subsidiaries are validly issued, fully paid, and nonassessable
         and owned by BSI, and BSI has good and indefeasible title thereto free
         and clear of any mortgage, pledge, lien, charge, security interest,
         option, right of first refusal, preferential purchase right, defect,
         encumbrance or other right or interest of any other person
         (collectively, an "Encumbrance").  Each such subsidiary is a
         corporation duly organized, validly existing, and in good standing
         under the laws of the jurisdiction under which it is incorporated and
         has full requisite corporate power and authority to own its property
         and carry on its business as presently conducted by it and is duly
         qualified or licensed to do business and is in good standing as a
         foreign corporation authorized to do business in all jurisdictions in
         which the character of the properties owned or the nature of the
         business conducted makes such qualification or licensing necessary,
         except where the failure to be so qualified or licensed would not have
         a BSI Material Adverse Effect with respect to such subsidiary.  As
         hereinafter used in this Article II, the term "BSI" also includes any
         and all of its directly and indirectly held subsidiaries, except where
         the context indicates to the contrary.

                 2.1.5.   Financial Statements.  BSI has delivered to Sun
         copies of BSI's audited consolidated balance sheet and related
         statements of income, shareholders' equity (deficit), and cash flows,
         with appended notes which are an integral part of such statements, as
         at and for BSI's fiscal year ended December 31, 1995, and its
         unaudited balance sheet and related statement of income for the
         nine-month period ending September 30, 1996.  In addition, BSI has
         delivered to Sun the financial statements of each of the BSI
         Subsidiaries.  Such financial statements are complete in all material
         respects, present fairly, in all material respects, the financial
         condition of BSI and the BSI Subsidiaries as at the dates indicated,
         and the results of operations for the respective periods indicated (in
         the case of unaudited statements, subject to year-end audit
         adjustments and the absence of complete footnotes), and have been
         prepared in accordance with generally accepted accounting principles
         applied on a consistent basis, except as noted therein.

                 2.1.6.   Liabilities.  BSI does not have any liabilities or
         obligations, either accrued, absolute, contingent, or otherwise, or
         have any knowledge of any potential liabilities or obligations, which
         would constitute or result in a BSI Material Adverse Effect, other
         than those (i) reflected or reserved against in the September 30, 1996
         unaudited consolidated balance sheet of BSI, (ii) incurred in the
         ordinary course of business since September 30, 1996 or (iii) set
         forth in Section 2.1.6 of the BSI Disclosure Statement.

                 2.1.7.   Additional BSI Information.  Section 2.1.7 of the BSI
         Disclosure Statement contains true, complete and correct lists of the
         following items, and BSI has furnished to Sun true, complete and
         correct copies of all documents referred to in such lists:





                                       14
<PAGE>   23
                          2.1.7.1.  Real Estate.  All real property and
                 structures thereon owned, leased or subject to a contract of
                 purchase and sale, or lease commitment, by BSI, with a
                 description of the nature and amount of any  Encumbrances
                 thereto;

                          2.1.7.2.  Machinery and Equipment.  All machinery,
                 transportation equipment, tools, equipment, furnishings, and
                 fixtures (excluding such items as did not have a cost basis of
                 $5,000 or more at their respective dates of acquisition by
                 BSI) owned, leased or subject to a contract of purchase and
                 sale, or lease commitment, by BSI with a description of the
                 nature and amount of any Encumbrances thereon;

                          2.1.7.3.  Inventory.  All inventory items or groups
                 of inventory items owned by BSI, together with the amount of
                 any Encumbrances thereon;

                          2.1.7.4.  Receivables.  All accounts and notes
                 receivable of BSI, together with (i) aging schedules by
                 invoice date and due date, (ii) the amounts provided for as an
                 allowance for bad debts, (iii) the identity and location of
                 any asset in which BSI holds a security interest to secure
                 payment of the underlying indebtedness, and (iv) a description
                 of the nature and amount of any Encumbrances on such accounts
                 and notes receivable;

                          2.1.7.5.  Payables.  All accounts and notes payable 
                 of BSI, together with an appropriate aging schedule;

                          2.1.7.6.  Insurance.  All insurance policies or bonds
                 currently maintained by BSI, including title insurance
                 policies, with respect to BSI, including those covering BSI's
                 properties, buildings, machinery, equipment, fixtures,
                 employees and operations, as well as a listing of any
                 premiums, audit adjustments or retroactive adjustments due or
                 pending on such policies or any predecessor policies;

                          2.1.7.7.  Material Contracts.  All material contracts
                 and license agreements, which shall include, but shall not be
                 limited to, agreements which are to be performed in whole or
                 in part after the Effective Date, and which involve or may
                 involve aggregate payments by or to BSI of $50,000 or more
                 after such date ("Material Contracts");

                          2.1.7.8.  Employee Compensation Plans.  All bonus,
                 incentive compensation, deferred compensation, profit-sharing,
                 retirement, pension, welfare, group insurance, death benefit,
                 or other fringe benefit plans, arrangements or trust
                 agreements of BSI, together with copies of the most recent
                 reports with respect to such plans, arrangements, or trust
                 agreements filed with any governmental agency and all Internal
                 Revenue Service determination letters that have been received
                 with respect to such plans (collectively, "Employee Plans");





                                       15
<PAGE>   24
                          2.1.7.9.  Certain Salaries.  The names and salary
                 rates of all present officers and employees of BSI whose
                 current regular annual salary rate is $50,000 or more,
                 together with any bonuses paid or payable to such persons for
                 the year ended December 31, 1995, or since that date, and, to
                 the extent existing on the date of this Agreement, all
                 arrangements with respect to any bonuses to be paid to them
                 from and after the date of this Agreement;

                          2.1.7.10.  Employee Agreements.  Any collective
                 bargaining agreements of BSI with any labor union or other
                 representative of employees, including amendments and
                 supplements, and all employment and consulting agreements of
                 BSI;

                          2.1.7.11.  Patents.  All patents, trademarks,
                 copyrights and other material intellectual property rights
                 owned, licensed, or used by BSI;

                          2.1.7.12.  Trade Names.  All trade names and
                 fictitious names used or held by BSI, whether and where such
                 names are registered and where used;

                          2.1.7.13.  Promissory Notes.  All long-term and
                 short-term promissory notes, installment contracts, loan
                 agreements, credit agreements, and any other agreements of BSI
                 relating thereto or with respect to collateral securing the
                 same;

                          2.1.7.14.  Guaranties.  All indebtedness, liabilities
                 and commitments of others and as to which BSI is a guarantor,
                 endorser, co-maker, surety, or accommodation maker, or is
                 contingently liable therefor (excluding liabilities as an
                 endorser of checks and the like in the ordinary course of
                 business) and all letters of credit, whether stand-by or
                 documentary, issued by any third party;

                          2.1.7.15.  Financial Statements.  Financial statements
                 containing the information described in Paragraphs 2.1.5;

                 Section 2.1.7 of the BSI Disclosure Statement shall be true,
         complete and correct as of the Effective Date, except for items
         contained in Paragraphs 2.1.7.3; 2.1.7.4; 2.1.7.5; and 2.1.7.15  which
         are true, complete and correct as of September 30, 1996 or such other
         date as therein indicated.

                 2.1.8.   No Undisclosed Defaults.  Except as may be specified
         in Section 2.1.8 of the BSI Disclosure Statement, BSI is not a party
         to, or bound by, any material contract or arrangement of any kind to
         be performed after the Effective Date, nor is BSI in default in any
         material obligation or covenant on its part to be performed under any
         material obligation, lease, contract, order, plan or other arrangement
         except as identified in such section.

                 2.1.9.   Absence of Certain Changes or Events.  Except as
         disclosed in the BSI Disclosure Statement, from September 30, 1996,
         through the date hereof, (a) BSI and each





                                       16
<PAGE>   25
         of the BSI Subsidiaries has conducted its business only in the
         ordinary course of business consistent with past practice and (b)
         there has not been, and no fact or condition exists which would have
         or, insofar as reasonably can be foreseen, could have, a BSI Material
         Adverse Effect.

                 2.1.10.  Taxes.  Except as set forth in Section 2.1.10 of the
         BSI Disclosure Statement, and except with respect to failures which,
         in the aggregate, would not result in a material adverse change with
         respect to BSI, proper and accurate federal, state and local income,
         value added, sales, use, franchise, gross revenue, turnover, excise,
         payroll, property, employment, customs duties and any and all other
         tax returns, reports, and estimates have been filed with appropriate
         governmental agencies, domestic and foreign, by BSI for each period
         for which any returns, reports, or estimates were due (taking into
         account any extensions of time to file before the date hereof); all
         taxes shown by such returns to be payable and any other taxes due and
         payable have been paid other than those being contested in good faith
         by BSI; and the tax provision reflected in BSI's financial statements
         as of September 30, 1996 is adequate, in accordance with generally
         accepted accounting principles, to cover liabilities of BSI at the
         date thereof for all taxes, including any interest, penalties and
         additions to taxes of any character whatsoever applicable to BSI or
         its assets or business.  Except as set forth on Section 2.1.10 of the
         BSI Disclosure Statement, no waiver of any statute of limitations
         executed by BSI with respect to federal or state income or other tax
         is in effect for any period.  The federal income tax returns of BSI
         have never been examined by the Internal Revenue Service.  There are
         no tax liens on any assets of BSI except for taxes not yet currently
         due and those which could not reasonably be expected to result in a
         Material Adverse Effect.

                 2.1.11.  Intellectual Property.  Except as set forth in
         Section 2.1.11 of the BSI Disclosure Statement, BSI owns or possesses
         licenses to use all patents, patent applications, trademarks and
         service marks (including registrations and applications therefor),
         trade names, copyrights and written know-how, trade secrets and all
         other similar proprietary data and the goodwill associated therewith
         (collectively, the "Intellectual Property") that are either material
         to the business of BSI or that are necessary for the manufacture, use
         or sale of any products manufactured, used or sold by BSI, including
         all such Intellectual Property listed in Section 2.1.11 of the BSI
         Disclosure Statement.  The Intellectual Property is owned or licensed
         by BSI free and clear of any Encumbrance other than such Encumbrances
         as are listed in Section 2.1.11 of the BSI Disclosure Statement.
         Except as otherwise indicated in such schedule, BSI has not granted to
         any other person any license to use any Intellectual Property.  Except
         as described in Section 2.1.11 of the BSI Disclosure Statement, to the
         knowledge of BSI, none of the Intellectual Property violates,
         conflicts with or infringes the rights of any third parties. BSI has
         not received any notice of infringement, misappropriation, or conflict
         with, the intellectual property rights of others in connection with
         the use by BSI of the Intellectual Property.





                                       17
<PAGE>   26
                 2.1.12.  Title to Properties.  With exceptions which in the
         aggregate are not material, and except for merchandise and other
         property sold, used or otherwise disposed of in the ordinary course of
         business for fair value, BSI has good and indefeasible title to all
         its properties, interests in properties and assets, real and personal,
         reflected in the September 30, 1996 financial statements referred to
         in Paragraph 2.1.5 or in Section 2.1.7 of the BSI Disclosure Schedule,
         free and clear of any Encumbrance of any nature whatsoever, except (i)
         liens and Encumbrances reflected in the balance sheet of BSI dated
         September 30, 1996 referred to in Paragraph 2.1.5 or in Section 2.1.7
         of the BSI Disclosure Statement, (ii) liens for current taxes not yet
         due and payable, and (iii) such imperfections of title, easements and
         Encumbrances, if any, as are not substantial in character, amount, or
         extent and do not and will not materially detract from the value, or
         interfere with the present use, of the property subject thereto or
         affected thereby, or otherwise materially impair business operations.
         All leases pursuant to which BSI leases (whether as lessee or lessor)
         any real or personal property for rental or lease payments in excess
         of $100,000 on an annualized basis are in good standing, valid, and
         effective; and there is not, under any such leases, any existing or
         prospective default or event of default or event which with notice or
         lapse of time, or both, would constitute a default by BSI and in
         respect to which BSI has not taken adequate steps to prevent a
         default from occurring.  The buildings and premises of BSI that are
         used in its business are in good operating condition and repair,
         subject only to ordinary wear and tear.  All equipment of BSI and the
         BSI Subsidiaries is in good operating condition and in a state of
         reasonable maintenance and repair, ordinary wear and tear excepted,
         and is free from any known defects except as may be repaired by
         routine maintenance and such minor defects as to not substantially
         interfere with the continued use thereof in the conduct of normal
         operations.

                 2.1.13.  Litigation.  Except as set forth in Section 2.1.13 of
         the BSI Disclosure Statement, (a) there are no material claims, suits,
         actions or proceedings, pending or, to the knowledge of BSI,
         threatened, nor are there, to the knowledge of BSI, any material
         investigations or reviews pending or threatened against, relating to
         or affecting BSI, any BSI Subsidiary or any BSI Benefit Plan (as
         defined in Section 2.1.17 hereof), (b) there are no material
         judgments, decrees, injunctions, rules or orders of any court,
         governmental department, commission, agency, instrumentality or
         authority or any arbitrator applicable to BSI or any BSI Subsidiary,
         and (c) there have not been any material developments with respect to
         such disclosed claims, suits, actions, proceedings, investigations or
         reviews.

                 2.1.14.  Environmental Compliance.  Except as set forth in
         Section 2.1.14 of the BSI Disclosure Statement:

                          2.1.14.1.  Environmental Conditions.  There are no
                 environmental conditions or circumstances, such as the
                 presence or release of any hazardous substance, on any
                 property presently or previously owned by BSI that could
                 result in a BSI Material Adverse Effect.





                                       18
<PAGE>   27
                          2.1.14.2.  Permits, etc.  BSI has in full force and
                 effect all environmental permits, licenses, approvals and
                 other authorizations required to conduct its operations and is
                 operating in material compliance thereunder.

                          2.1.14.3.  Compliance.  BSI's operations and use of
                 its assets do not violate any applicable federal, state or
                 local law, statute, ordinance, rule, regulation, order or
                 notice requirement pertaining to (a) the condition or
                 protection of air, groundwater, surface water, soil, or other
                 environmental media, (b) the environment, including natural
                 resources or any activity which affects the environment, or
                 (c) the regulation of any pollutants, contaminants, waste,
                 substances (whether or not hazardous or toxic), including,
                 without limitation, the Comprehensive Environmental Response
                 Compensation and Liability Act (42 U.S.C. Section  9601 et
                 seq.), the Hazardous Materials Transportation Act (49 U.S.C.
                 Section  1801 et seq.), the Resource Conservation and Recovery
                 Act (42 U.S.C. Section  1609 et seq.), the Clean Water Act (33
                 U.S.C.  1251 et seq.), the Clean Air Act (42 U.S.C. Section
                 7401 et seq.), the Toxic Substances Control Act (17 U.S.C.
                 Section  2601  et seq.), the Federal Insecticide Fungicide and
                 Rodenticide Act (7 U.S.C. Section  136 et seq.), the Safe
                 Drinking Water Act (42 U.S.C.  Section  201 and Section  300f
                 et seq.), the Rivers and Harbors Act (33 U.S.C. Section  401
                 et seq.), the Oil Pollution Act (33 U.S.C. Section  2701 et
                 seq.) and analogous state and local provisions, as any of the
                 foregoing may have been amended or supplemented from time to
                 time (collectively the "Applicable Environmental Laws"),
                 except for violations which, either singly or in the
                 aggregate, would not result in a BSI Material Adverse Effect.

                          2.1.14.4.  Past Compliance.  None of the operations
                 or assets of BSI has ever been conducted or used in such a
                 manner as to constitute violation of any of the Applicable
                 Environmental Laws, except for violations which, either singly
                 or in the aggregate, would not result in a BSI Material
                 Adverse Effect.

                          2.1.14.5.  Environmental Claims.  No notice has been
                 served on BSI from any entity, governmental agency or
                 individual regarding any existing, pending or threatened
                 investigation or inquiry related to alleged violations under
                 any Applicable Environmental Laws, or regarding any claims for
                 remedial obligations or contribution under any Applicable
                 Environmental Laws, other than any of the foregoing which,
                 either singly or in the aggregate, would not result in a
                 material adverse change with respect to BSI Material Adverse
                 Effect.

                          2.1.14.6.  Renewals.  BSI does not know of any reason
                 Sun would not be able to renew any of the permits, licenses,
                 or other authorizations required pursuant to any Applicable
                 Environmental Laws to operate and use any of BSI's assets for
                 their current purposes and uses.

                 2.1.15.  Compliance with Other Laws.  Except as set forth in
         Section 2.1.15 of the BSI Disclosure Statement, BSI is not in
         violation of or in default with respect to, or in alleged





                                       19
<PAGE>   28
         violation of or alleged default with respect to, the Occupational
         Safety and Health Act (29 U.S.C. Section Section 651 et seq.) as
         amended ("OSHA"), or any other applicable law or any applicable rule,
         regulation, or any writ or decree of any court or any governmental
         commission, board, bureau, agency, or instrumentality, or delinquent
         with respect to any report required to be filed with any governmental
         commission, board, bureau, agency or instrumentality, except for
         violations which, either singly or in the aggregate, do not and are
         not expected to result in a BSI Material Adverse Effect.

                 2.1.16.  Finder's Fee.  Except as set forth on Section 2.1.16
         of the BSI Disclosure Statement, all negotiations relative to this
         Agreement and the transactions contemplated hereby have been carried
         on by BSI and its counsel directly with Sun and its counsel, without
         the intervention of any other person as the result of any act of BSI,
         and so far as is known to BSI, without the intervention of any other
         person in such manner as to give rise to any valid claim against any
         of the parties hereto for a brokerage commission, finder's fee or any
         similar payments.

                 2.1.17.  Compliance with ERISA.  (a) BSI has delivered to, or
         upon request will deliver to, Sun copies of the health and life
         insurance plans, bonus, deferred compensation, pension, profit sharing
         and retirement plans and all other employee benefit plans, programs or
         arrangements providing benefits for employees (or former employees) of
         BSI, all of which are listed on Section 2.1.7.8 of the BSI Disclosure
         Statement  (the "BSI Benefit Plans"); a copy of the most recent
         favorable determination letter received with respect to a BSI Benefit
         Plan from the Internal Revenue Service (if the plan is a tax-qualified
         plan under the Code); the most recent annual report (Form 5500) filed
         with the Internal Revenue Service with respect to each BSI Benefit
         Plan (if any such report was required); and the most recent summary
         plan description for each BSI Benefit Plan for which a summary plan
         description is required.  Each of the BSI Benefit Plans has been
         administered and maintained in material compliance with the
         requirements of the Employee Retirement Income Security Act of 1974,
         as amended ("ERISA"), and, if applicable, the Code and all other
         applicable laws.  There is no "accumulated funding deficiency" (as
         such term is defined in Section 302 of ERISA or Section 412 of the
         Code) with respect to a BSI Benefit Plan that is an "employee pension
         benefit plan" (as defined in Section 3(2) of ERISA), and there has
         been no application for a waiver of the minimum funding standards
         imposed by Code Section 412 with respect to any such plan.  There are
         no pending or, to the knowledge of BSI, threatened claims by or on
         behalf of the BSI Benefit Plans, the United States Department of
         Labor, the Internal Revenue Service, or by any current or former
         employee of BSI or beneficiary of such current or former employee
         alleging a breach of any fiduciary duties or a violation of applicable
         state or federal law which could result in a material liability on the
         part of BSI or a BSI Benefit Plan under ERISA or any other law (other
         than benefit claims and funding obligations in the ordinary course of
         business).  BSI has not suffered or otherwise caused a "complete
         withdrawal" or "partial withdrawal," as such terms are respectively
         defined in Sections 4203 and 4205 of ERISA, from any Multiemployer
         Pension Plan, as such term is defined in Section 3(37) of ERISA; BSI
         is not a party to any such Multiemployer Pension Plan.





                                       20
<PAGE>   29
                 (b)      Except as set forth in Section 2.1.17 of the BSI
         Disclosure Statement, (i) neither BSI nor any BSI Subsidiary is a
         party to any collective bargaining agreement or other labor agreement
         with any union or labor organization; (ii) to the knowledge of BSI,
         there is no current union representation election or controversy
         involving employees of BSI or any of the BSI Subsidiaries, nor does
         BSI know of any activity or proceeding of any labor organization (or
         representative thereof) or employee group (or representative thereof)
         to organize any such employees; (iii) there is no material unfair
         labor practice charge or material grievance arising out of a
         collective bargaining agreement or other material grievance procedure
         against BSI or any of the BSI Subsidiaries pending, or to the
         knowledge of BSI, threatened; (iv) there is no material complaint,
         lawsuit or proceeding in any forum by or on behalf of any present or
         former employee, any applicant for employment or classes of the
         foregoing alleging breach of any express or implied contract of
         employment, any law or regulation governing employment or the
         termination thereof or other discriminatory, wrongful or tortious
         conduct in connection with the employment relationship against BSI or
         any of the BSI Subsidiaries pending, or to the knowledge of BSI,
         threatened; (v) there is no strike, dispute, slowdown, work stoppage
         or lockout pending, or to the knowledge of BSI , threatened, against
         or involving BSI or any of the BSI Subsidiaries; (vi) BSI and the BSI
         Subsidiaries are in compliance in all material respects with all
         applicable laws respecting employment and employment practices, terms
         and conditions of employment, wages, hours of work and occupational
         safety and health; and (vii) there is no proceeding, claim, suit,
         action or governmental investigation pending or, to the knowledge of
         BSI, threatened, in respect of which any director, officer, employee
         or agent of BSI or any of the BSI Subsidiaries is or may be entitled
         to claim indemnification from BSI or any of the BSI Subsidiaries
         pursuant to their respective articles of incorporation or bylaws or as
         provided in any indemnification agreements.

                 2.1.18.  Investigations; Litigation.   Except as required
         pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976
         and the rules and regulations promulgated thereunder (collectively,
         "HSR"), (i) no investigation or review by any governmental entity with
         respect to BSI or any of the transactions contemplated by this
         Agreement is pending or, to the best of BSI's knowledge, threatened,
         nor has any governmental entity indicated to BSI an intention to
         conduct the same, and (ii) there is no action, suit or proceeding
         pending or, to the best of BSI's knowledge, threatened against or
         affecting BSI at law or in equity, or before any federal, state,
         municipal or other governmental department, commission, board, bureau,
         agency or instrumentality, which either individually or in the
         aggregate, does or is likely to result in a BSI Material Adverse
         Effect.

                 2.1.19.  Information for Registration Statement and Proxy
         Statement/Prospectus.  None of the information supplied or to be
         supplied by or on behalf of BSI for inclusion in or incorporation by
         reference in (a) the registration statement on form S-4 to be filed
         with the SEC by Sun in connection with the issuance of shares of Sun
         Common Stock and Sun Preferred Stock in the Merger (the "Registration
         Statement") will, at the time the Registration Statement is filed with
         the SEC and at the time it becomes effective under the Securities Act,





                                       21
<PAGE>   30
         contain any untrue statement of a material fact or omit to state a
         material fact necessary in order to make the statements contained
         therein not misleading and (b) the proxy and information statement in
         definitive form relating to the meetings of the shareholders of Sun
         and BSI to be held in connection with the Merger and the prospectus
         relating to the Sun Common Stock and Sun Preferred Stock to be issued
         in the Merger (the "Joint Proxy Statement/Prospectus") will, at the
         dates mailed to such shareholders and, as the same may be amended or
         supplemented, at the times of such meetings, contain any untrue
         statement of a material fact or omit to state any material fact
         required to be stated therein or necessary in order to make the
         statements therein, in light of the circumstances under which they are
         made, not misleading, and will comply as to form in all material
         respects with the provisions of the Securities Act and the Securities
         Exchange Act and the rules and regulations thereunder.

                 2.1.20.  Ownership of Sun Common Stock.  BSI does not
         "beneficially own" (as such term is defined for purposes of Section
         13(d) of the Securities Exchange Act) any shares of Sun Common Stock.

                 2.1.21.  Vote Required.  The approval of the Merger by a
         majority of all votes entitled to be cast by all holders of BSI Common
         Stock at a BSI Meeting at which a quorum is present, are the only
         votes of the holders of any class or series of the capital stock of
         BSI required to approve this Agreement, the Merger and the other
         transactions contemplated hereby (herein the "BSI Shareholders'
         Approval").

                                  ARTICLE III

                     REPRESENTATIONS AND WARRANTIES OF SUN

                 3.1.     Representations and Warranties of Sun.  Sun
         represents and warrants to BSI as follows:

                 3.1.1.   Organization and Standing.  Sun is a corporation duly
         organized, validly existing and in good standing under the laws of the
         State of Washington, has full requisite corporate power and authority
         to carry on its business as it is currently conducted, and to own and
         operate the properties currently owned and operated by it, and is duly
         qualified or licensed to do business and is in good standing as a
         foreign corporation authorized to do business in all jurisdictions in
         which the character of the properties owned or the nature of the
         business conducted by it would make such qualification or licensing
         necessary other than in such jurisdictions where the failure to be so
         qualified and in good standing would not, when taken together with all
         other such failures, have a material adverse effect on the business,
         operations, properties, assets, financial condition, results of
         operations or prospects of Sun or the Sun Subsidiaries taken as a
         whole or on the consummation of this Agreement (any such material
         adverse effect being hereinafter referred to as a "Sun Material
         Adverse Effect").  As used in this Agreement, (a) the term
         "subsidiary" of a person shall mean any corporation or





                                       22
<PAGE>   31
         other entity (including partnerships and other business associations)
         in which such person directly or indirectly owns at least a majority
         of any class of the outstanding voting securities or equity and (b)
         the term "Sun Subsidiaries" means all direct or indirect subsidiaries
         of Sun.  True, accurate and complete copies of the Certificate of
         Incorporation and Bylaws of Sun, in effect on the date hereof, have
         been delivered to BSI.

                 3.1.2.   Authority; Noncontravention; Statutory Approvals;
         Compliance.

                          3.1.2.1.  Authority.  Sun has all requisite power and
                 authority to enter into this Agreement and, subject to the
                 applicable Sun Shareholders' Approval (as defined in Section
                 4.5), to consummate the transactions contemplated hereby.  The
                 execution and delivery of this Agreement and the consummation
                 by Sun of the transactions contemplated hereby, have been duly
                 authorized by all necessary corporate action on the part of
                 Sun, subject in the case of this Agreement to obtaining the
                 applicable Sun Shareholders' Approval.  This Agreement has
                 been duly and validly executed and delivered by Sun and,
                 assuming the due authorization, execution and delivery hereof
                 and thereof by BSI, constitutes the valid and binding
                 obligation of Sun enforceable against Sun in accordance with
                 its terms, except as enforceability may be limited by
                 bankruptcy, insolvency, reorganization, debtor relief or
                 similar laws affecting the rights of creditors' generally.

                          3.1.2.2.  Noncontravention.  Except as set forth in
                 Section 3.1.2.2 of the Sun Disclosure Statement, the execution
                 and delivery of this Agreement by Sun do not, and the
                 consummation of the transactions contemplated hereby will not,
                 violate, conflict with, or result in a breach of any provision
                 of, or constitute a default (with or without notice or lapse
                 of time or both) under, or result in the termination or
                 modification of, or accelerate the performance required by, or
                 result in a right of termination, modification, cancellation
                 or acceleration of any obligation or the loss of a material
                 benefit under, or result in the creation of any lien, security
                 interest, charge or encumbrance upon any of the properties or
                 assets (any such violation, conflict, breach, default, right
                 of termination, modification, cancellation or acceleration,
                 loss or creation, a "Violation" with respect to Sun or any of
                 the Sun Subsidiaries) pursuant to any provisions of (i) the
                 articles of incorporation, bylaws or similar governing
                 documents of Sun or any of the Sun Subsidiaries, (ii) subject
                 to obtaining the Sun Shareholders' Approvals, any statute,
                 law, ordinance, rule, regulation, judgment, decree, order,
                 injunction, writ, permit or license of any Governmental
                 Authority (as defined in Section 3.1.2.3) applicable to Sun or
                 any of the Sun Subsidiaries or any of their respective
                 properties or assets or (iii) subject to obtaining the
                 third-party consents or other approvals set forth in Section
                 3.1.2.2 of the Sun Disclosure Statement (the "Sun Required
                 Consents"), any note, bond, mortgage, indenture, deed of
                 trust, license, franchise, permit, concession, contract, lease
                 or other instrument, obligation or agreement of any kind to
                 which Sun or any of the Sun Subsidiaries is now a party or by
                 which it or any of its properties or assets may be bound or
                 affected,





                                       23
<PAGE>   32
                 excluding from the foregoing clauses (ii) and (iii) such
                 Violations that would not, in the aggregate, have a Sun
                 Material Adverse Effect.

                          3.1.2.3.  Statutory Approvals.  No declaration,
                 filing or registration with, or notice to or authorization,
                 consent or approval of, any court, federal, state, local or
                 foreign governmental or regulatory body (including a stock
                 exchange or other self-regulatory body) or authority (each, a
                 "Governmental Authority"), the failure to obtain, make or give
                 which would have, in the aggregate, a Sun Material Adverse
                 Effect, is necessary for the execution and delivery of this
                 Agreement by Sun or the consummation by Sun of the
                 transactions contemplated hereby, except as described in
                 Section 3.1.2.3 of the Sun Disclosure Statement (the "Sun
                 Required Statutory Approvals," it being understood that
                 references in this Agreement to "obtaining" such Sun Required
                 Statutory Approvals shall mean making such declarations,
                 filings or registrations; giving such notices; obtaining such
                 authorizations, consents or approvals; and having such waiting
                 periods expire as are necessary to avoid a violation of law).

                          3.1.2.4.  Compliance.  Except as set forth in Section
                 3.1.2.4 of the Sun Disclosure Statement, neither Sun nor any
                 Sun Subsidiary, is in violation of or is under investigation
                 with respect to any violation of, or has been given notice or
                 been charged with any violation of, any law, statute, order,
                 rule, regulation, ordinance or judgment (including, without
                 limitation, any applicable environmental law, ordinance or
                 regulation) of any Governmental Authority except for
                 violations which in the aggregate do not and, insofar as
                 reasonably can be foreseen, will not have a Sun Material
                 Adverse Effect.  Except as set forth in Section 3.1.2.4 of the
                 Sun Disclosure Statement, Sun and the Sun Subsidiaries have
                 all permits, licenses, franchises and other governmental
                 authorizations, consents and approvals necessary to conduct
                 their businesses as currently conducted in all material
                 respects except for those which the failure to obtain would
                 not, in the aggregate, have a Sun Material Adverse Effect.
                 Except as set forth in Section 3.1.2.4 of the Sun Disclosure
                 Statement, neither Sun nor any Sun Subsidiary is in material
                 breach or violation of or in material default in the
                 performance or observance of any term or provision of, and no
                 event has occurred which, with lapse of time or action by a
                 third party, could result in a material default under, (i) its
                 articles of incorporation or bylaws or (ii) any contract,
                 commitment, agreement, indenture, mortgage, loan agreement,
                 note, lease, bond, license, approval or other instrument to
                 which it is a party or by which it is bound or to which any of
                 its property is subject except in the case of clause (ii) for
                 violations and defaults which would not, in the aggregate,
                 have a Sun Material Adverse Effect.

                 3.1.3.   Capitalization.  The authorized capitalization of Sun
         consists of 20,000,000 shares of common stock, no par value (the "Sun
         Common Stock"), of which at the date hereof, 5,748,500 shares were
         issued and outstanding and 1,000,000 shares of preferred stock, $.01
         par value per share (the "Sun Preferred Stock"), at which at the date
         hereof no





                                       24
<PAGE>   33
         shares were issued and outstanding.  Except as set forth in Section
         3.1.3 of the Sun Disclosure Statement, there exist no (a) outstanding
         options, subscriptions, warrants, calls, or similar commitments to
         purchase, issue or sell or to convert any securities or obligations
         into any of the authorized or issued capital stock of Sun or any
         securities or obligations convertible into or exchangeable for such
         capital stock or (b) registration rights, stockholder agreements or
         voting agreements with respect to the outstanding shares of capital
         stock of Sun.  The Sun Disclosure Schedule shall disclose that as of
         the date hereof and as of the Effective Date, there are outstanding
         not less than 290,250 options to purchase Sun Common Stock under Sun's
         existing stock option plans, such number of options otherwise will be
         available under the plans for issuance.

                 3.1.4.   Sun Subsidiaries.  All outstanding shares of stock of
         the Sun Subsidiaries are validly issued, fully paid, and nonassessable
         and owned by Sun, and Sun has good and indefeasible title thereto free
         and clear of any Encumbrance.  Each such subsidiary is a corporation
         duly organized, validly existing, and in good standing under the laws
         of the jurisdiction under which it is incorporated and has full
         requisite corporate power and authority to own its property and carry
         on its business as presently conducted by it and is duly qualified or
         licensed to do business and is in good standing as a foreign
         corporation authorized to do business in all jurisdictions in which
         the character of the properties owned or the nature of the business
         conducted makes such qualification or licensing necessary, except
         where the failure to be so qualified or licensed would not have a Sun
         Material Adverse Effect with respect to such subsidiary.  As
         hereinafter used in this Article III, the term "Sun" also includes any
         and all of its directly and indirectly held subsidiaries, except where
         the context indicates to the contrary.

                 3.1.5.   Reports and Financial Statements.  Sun has previously
         furnished to BSI true and complete copies of (a) all annual reports on
         Form 10-K and quarterly reports on Form 10-Q filed with the Securities
         and Exchange Commission (the "Commission") pursuant to the Securities
         Exchange Act of 1934, as amended (the "Exchange Act"), since December
         31, 1991, (b) Sun's other reports filed with the Commission since
         December 31, 1991, (c) all definitive proxy solicitation materials
         filed with the Commission since December 31, 1991, (d) any
         registration statements declared effective by the Commission since
         December 31, 1991 and (e) any other reports filed with the Commission
         by Sun after the date hereof under the Exchange Act (collectively, the
         "Reports"), and such Reports were, or will be, prepared in accordance
         with generally accepted accounting principles applied on a consistent
         basis as of and for the periods involved and fairly present, or will
         present, the consolidated financial position for Sun and the Sun
         Subsidiaries as of the dates thereof and the consolidated results of
         their operations and changes in financial position as of and for the
         periods then ended; and the Reports did not and will not contain any
         untrue statement of a material fact or omit to state a material fact
         required to be stated therein or necessary to make the statements
         therein, in light of the circumstances under which they were made, not
         misleading.  Since December 31, 1991, Sun has filed with the
         Commission all reports required to be filed by Sun under the Exchange
         Act and the rules and regulations of the Commission.





                                       25
<PAGE>   34
                 3.1.6.   Liabilities.  Sun does not have any liabilities or
         obligations, either accrued, absolute, contingent, or otherwise, or
         have any knowledge of any potential liabilities or obligations, which
         would constitute or result in a Sun Material Adverse Effect, other
         than those (i) disclosed in the Reports, (ii) reflected or reserved
         against in the September 30, 1996 unaudited consolidated balance sheet
         of Sun, (iii) incurred in the ordinary course of business since
         September 30, 1996 or (iv) set forth in Section 3.1.6 of the Sun
         Disclosure Statement.

                 3.1.7.   Additional Sun Information.  Section 3.1.7 of the BSI
         Disclosure Statement contains true, complete and correct lists of the
         following items, and Sun has furnished to BSI true, complete and
         correct copies of all documents referred to in such lists:

                          3.1.7.1.  Real Estate.  All real property and
                 structures thereon owned, leased or subject to a contract of
                 purchase and sale, or lease commitment, by Sun, with a
                 description of the nature and amount of any  Encumbrances
                 thereto;

                          3.1.7.2.  Machinery and Equipment.  All machinery,
                 transportation equipment, tools, equipment, furnishings, and
                 fixtures (excluding such items as did not have a cost basis of
                 $5,000 or more at their respective dates of acquisition by
                 Sun) owned, leased or subject to a contract of purchase and
                 sale, or lease commitment, by Sun with a description of the
                 nature and amount of any Encumbrances thereon;

                          3.1.7.3.  Inventory.  All inventory items or groups
                 of inventory items owned by Sun, together with the amount of
                 any Encumbrances thereon;

                          3.1.7.4.  Receivables.  All accounts and notes
                 receivable of Sun, together with (i) aging schedules by
                 invoice date and due date, (ii) the amounts provided for as an
                 allowance for bad debts, (iii) the identity and location of
                 any asset in which Sun holds a security interest to secure
                 payment of the underlying indebtedness, and (iv) a description
                 of the nature and amount of any Encumbrances on such accounts
                 and notes receivable;

                          3.1.7.5.  Payables.  All accounts and notes payable 
                 of Sun, together with an appropriate aging schedule;

                          3.1.7.6.  Insurance.  All insurance policies or bonds
                 currently maintained by Sun, including title insurance
                 policies, with respect to Sun, including those covering Sun's
                 properties, buildings, machinery, equipment, fixtures,
                 employees and operations, as well as a listing of any
                 premiums, audit adjustments or retroactive adjustments due or
                 pending on such policies or any predecessor policies;

                          3.1.7.7.  Material Contracts.  All material contracts
                 and license agreements, which shall include, but shall not be
                 limited to, all agreements or commitments to purchase raw
                 materials or inventory and all agreements which are to be
                 performed in





                                       26
<PAGE>   35
                 whole or in part after the Effective Date, and which involve
                 or may involve aggregate payments by or to Sun of $50,000 or
                 more after such date ("Material Contracts"); such list shall
                 also include any obligations of Sun or its affiliates to make
                 any payments or provide any consideration to any person as a
                 result of the consummation of this Agreement;

                          3.1.7.8.  Employee Compensation Plans.  All Employee
                 Plans;

                          3.1.7.9.  Certain Salaries.  The names and salary
                 rates of all present officers and employees of Sun whose
                 current regular annual salary rate is $50,000 or more,
                 together with any bonuses paid or payable to such persons for
                 the fiscal year ended December 31, 1995, and, to the extent
                 existing on the date of this Agreement, all arrangements with
                 respect to any bonuses to be paid to them from and after the
                 date of this Agreement;

                          3.1.7.10.  Employee Agreements.  Any collective
                 bargaining agreements of Sun with any labor union or other
                 representative of employees, including amendments and
                 supplements, and all employment and consulting agreements of
                 Sun;

                          3.1.7.11.  Patents.  All patents, trademarks,
                 copyrights and other material intellectual property rights
                 owned, licensed, or used by Sun;

                          3.1.7.12.  Trade Names.  All trade names and
                 fictitious names used or held by Sun, whether and where such
                 names are registered and where used;

                          3.1.7.13.  Promissory Notes.  All long-term and
                 short-term promissory notes, installment contracts, loan
                 agreements, credit agreements, and any other agreements of Sun
                 relating thereto or with respect to collateral securing the
                 same;

                          3.1.7.14.  Guaranties.  All indebtedness, liabilities
                 and commitments of others and as to which Sun is a guarantor,
                 endorser, co-maker, surety, or accommodation maker, or is
                 contingently liable therefor (excluding liabilities as an
                 endorser of checks and the like in the ordinary course of
                 business) and all letters of credit, whether stand-by or
                 documentary, issued by any third party;

                          3.1.7.15.  Financial Statements.  The September 30,
                 1996 unaudited consolidated balance sheet and related
                 statement of income of Sun.

                 Section 3.1.7 of the Sun Disclosure Statement shall be true,
complete and correct as of the Effective Date, except for items contained in
Paragraphs 3.1.7.3; 3.1.7.4; 3.1.7.5; and 3.1.7.15, which are true, complete and
correct as of September 30, 1996 or such other date as therein indicated. In
addition, Sun shall, on BSI's request, furnish BSI copies of all Reports filed
by Sun with the Commission after the date hereof through the Effective Date.





                                       27
<PAGE>   36
                 3.1.8.   No Undisclosed Defaults.  Except as may be specified
         in the Reports or in Section 3.1.8 of the Sun Disclosure Statement,
         Sun is not a party to, or bound by, any material contract or
         arrangement of any kind to be performed after the Effective Date, nor
         is Sun in default in any material obligation or covenant on its part
         to be performed under any material obligation, lease, contract, order,
         plan or other arrangement except as identified in the Reports or in
         such section.

                 3.1.9.   Absence of Certain Changes or Events.  Except as
         disclosed in the Sun Disclosure Statement, from September 30, 1996,
         through the date hereof, (a) Sun and each of the Sun Subsidiaries has
         conducted its business only in the ordinary course of business
         consistent with past practice and (b) there has not been, and no fact
         or condition exists which would have or, insofar as reasonably can be
         foreseen, could have, a Sun Material Adverse Effect.

                 3.1.10.  Taxes.  Except as set forth in Section 3.1.10 of the
         Sun Disclosure Statement, and except with respect to failures which in
         the aggregate, would not result in a material adverse change with
         respect to Sun, proper and accurate federal, state and local income,
         value added, sales, use, franchise, gross revenue, turnover, excise,
         payroll, property, employment, customs duties and any and all other
         tax returns, reports, and estimates have been filed with appropriate
         governmental agencies, domestic and foreign, by Sun for each period
         for which any returns, reports, or estimates were due (taking into
         account any extensions of time to file before the date hereof); all
         taxes shown by such returns to be payable and any other taxes due and
         payable have been paid other than those being contested in good faith
         by Sun; and the tax provision reflected in Sun's financial statements
         as of September 30, 1996 (which have been or will be delivered to BSI)
         is adequate, in accordance with generally accepted accounting
         principles, to cover liabilities of Sun at the date thereof for all
         taxes, including any interest, penalties and additions to taxes of any
         character whatsoever applicable to Sun or its assets or business.
         Except as set forth on Section 3.1.10 of the Sun Disclosure Statement,
         no waiver of any statute of limitations executed by Sun with respect
         to federal or state income or other tax is in effect for any period.
         The federal income tax returns of Sun have never been examined by the
         Internal Revenue Service.  There are no tax liens on any assets of Sun
         except for taxes not yet currently due and those which could not
         reasonably be expected to result in a Sun Material Adverse Effect.

                 3.1.11.  Intellectual Property.  Except as set forth in
         Section 3.1.11 of the Sun Disclosure Statement, Sun owns or possesses
         licenses to use all Intellectual Property that is either material to
         the business of Sun or that is necessary for the manufacture, use or
         sale of any products manufactured, used or sold by Sun, including all
         such Intellectual Property listed in the Reports.  The Intellectual
         Property is owned or licensed by Sun free and clear of any Encumbrance
         other than such Encumbrances as are listed in Section 3.1.11 of the
         Sun Disclosure Statement.  Except as otherwise indicated in such
         section, Sun has not granted to any other person any license to use
         any Intellectual Property.  Except as described in Section 3.1.11 of
         the Sun Disclosure Statement, none of the Intellectual Property
         violates,





                                       28
<PAGE>   37
         conflicts with or infringes the rights of any third parties.  Sun has
         not received any notice of infringement, misappropriation, or conflict
         with, the intellectual property rights of others in connection with
         the use by Sun of its Intellectual Property.

                 3.1.12.  Title to Properties.  With exceptions which in the
         aggregate are not material, and except for merchandise and other
         property sold, used or otherwise disposed of in the ordinary course of
         business for fair value, Sun has good and indefeasible title to all
         its properties, interests in properties and assets, real and personal,
         reflected in the financial statements contained in the Reports, free
         and clear of any Encumbrance of any nature whatsoever, except (i)
         liens and Encumbrances reflected in the balance sheet of Sun included
         in the Reports, (ii) liens for current taxes not yet due and payable,
         and (iii) such imperfections of title, easements and Encumbrances, if
         any, as are not substantial in character, amount, or extent and do not
         and will not materially detract from the value, or interfere with the
         present use, of the property subject thereto or affected thereby, or
         otherwise materially impair business operations.  All leases pursuant
         to which Sun leases (whether as lessee or lessor) any real or personal
         property for rental or lease payments in excess of $100,000 on an
         annualized basis are in good standing, valid, and effective; and there
         is not, under any such leases, any existing or prospective default or
         event of default or event which with notice or lapse of time, or both,
         would constitute a default by Sun and in respect to which Sun has not
         taken adequate steps to prevent a  default from occurring.  The
         buildings and premises of Sun that are used in its business are in
         good operating condition and repair, subject only to ordinary wear and
         tear.  All equipment of Sun and the Sun Subsidiaries is in good
         operating condition and in a state of reasonable maintenance and
         repair, ordinary wear and tear excepted, and is free from any known
         defects except as may be repaired by routine maintenance and such
         minor defects as to not substantially interfere with the continued use
         thereof in the conduct of normal operations.

                 3.1.13.  Litigation.  Except as set forth in Section 3.1.13 of
         the Sun Disclosure Statement, (a) there are no material claims, suits,
         actions or proceedings, pending or, to the knowledge of Sun,
         threatened, nor are there, to the knowledge of Sun, any material
         investigations or reviews pending or threatened against, relating to
         or affecting Sun, any Sun Subsidiary or any Sun Benefit Plan (as
         defined in Section 3.1.17 hereof), (b) there are no material
         judgments, decrees, injunctions, rules or orders of any court,
         governmental department, commission, agency, instrumentality or
         authority or any arbitrator applicable to Sun or any Sun Subsidiary,
         and (c) there have not been any material developments with respect to
         such disclosed claims, suits, actions, proceedings, investigations or
         reviews.

                 3.1.14.  Environmental Compliance.  Except as set forth in 
         Section 3.1.14 of the Sun Disclosure Statement:

                          3.1.14.1.  Environmental Conditions.  There are no
                 environmental conditions or circumstances such as the presence
                 or release of any hazardous substance on any





                                       29
<PAGE>   38
                 property presently or previously owned by Sun that could 
                 result in a Sun Material Adverse Effect.

                          3.1.14.2.  Permits, etc.  Sun has in full force and
                 effect all environmental permits, licenses, approvals and
                 other authorizations required to conduct its operations and is
                 operating in material compliance thereunder.

                          3.1.14.3.  Compliance.  Sun's operations and use of
                 its assets do not violate any Applicable Environmental Laws,
                 except for violations which, either singly or in the
                 aggregate, would not result in a Sun Material Adverse Effect.

                          3.1.14.4.  Past Compliance.  None of the operations
                 or assets of Sun has ever been conducted or used in such a
                 manner as to constitute violation of any of the Applicable
                 Environmental Laws except for violations which, either singly
                 or in the aggregate, would not result in a Sun Material
                 Adverse Effect.

                          3.1.14.5.  Environmental Claims.  No notice has been
                 served on Sun from any entity, governmental agency or
                 individual regarding any existing, pending or threatened
                 investigation or inquiry related to alleged violations under
                 any Applicable Environmental Laws, or regarding any claims for
                 remedial obligations or contribution under any Applicable
                 Environmental Laws, other than any of the foregoing which,
                 either singly or in the aggregate, would not result in a Sun
                 Material Adverse Effect.

                          3.1.14.6.  Renewals.  Sun does not know of any reason
                 Sun would not be able to renew any of the permits, licenses,
                 or other authorizations required pursuant to any Applicable
                 Environmental Laws to operate and use any of Sun's assets for
                 their current purposes and uses.

                 3.1.15.  Compliance with Other Laws.  Except as set forth in
         the Reports or in Section 3.1.15 of the Sun Disclosure Statement, Sun
         is not in violation of or in default with respect to, or in alleged
         violation of or alleged default with respect to, OSHA or any other
         applicable law or any applicable rule, regulation, or any writ or
         decree of any court or any governmental commission, board, bureau,
         agency, or instrumentality, or delinquent with respect to any report
         required to be filed with any governmental commission, board, bureau,
         agency or instrumentality, except for violations which, either singly
         or in the aggregate, do not and are not expected to result in a Sun
         Material Adverse Effect.

                 3.1.16.  Finder's Fee.  Except as set forth in Section 3.1.16
         of the Sun Disclosure Statement, all negotiations relative to this
         Agreement and the transactions contemplated hereby have been carried
         on by Sun and its counsel, directly with BSI or its counsel, without
         the intervention of any other person as the result of an act of Sun
         and, so far as known to Sun, without the intervention of any other
         person in such manner as to give rise to any valid





                                       30
<PAGE>   39
         claim against any of the parties hereto for a brokerage commission, 
         finder's fee, or any similar payments.

                 3.1.17.  Compliance with ERISA.  (a) Sun has delivered to, or
         upon request will deliver to, BSI copies of the health and life
         insurance plans, bonus, deferred compensation, pension, profit sharing
         and retirement plans and all other employee benefit plans, programs or
         arrangements providing benefits for employees (or former employees) of
         Sun, all of which are listed on Section 3.1.7.8 of the Sun Disclosure
         Statement (the "Sun Benefit Plans"); a copy of the most recent
         favorable determination letter received with respect to a Sun Benefit
         Plan from the Internal Revenue Service (if the plan is a tax-qualified
         plan under the Code); the most recent annual report (Form 5500) filed
         with the Internal Revenue Service with respect to each Sun Benefit
         Plan (if any such report was required); and the most recent summary
         plan description for each Sun Benefit Plan for which a summary plan
         description is required.  Each of the Sun Benefit Plans has been
         administered and maintained in material compliance with the
         requirements of the Employee Retirement Income Security Act of 1974,
         as amended ("ERISA"), and, if applicable, the Code and all other
         applicable laws.  There is no "accumulated funding deficiency" (as
         such term is defined in Section 302 of ERISA or Section 412 of the
         Code) with respect to a Sun Benefit Plan that is an "employee pension
         benefit plan" (as defined in Section 3(2) of ERISA), and there has
         been no application for a waiver of the minimum funding standards
         imposed by Code Section 412 with respect to any such plan.  There are
         no pending or, to the knowledge of Sun, threatened claims by or on
         behalf of the Sun Benefit Plans, the United States Department of
         Labor, the Internal Revenue Service, or by any current or former
         employee of Sun or beneficiary of such current or former employee
         alleging a breach of any fiduciary duties or a violation of applicable
         state or federal law which could result in a material liability on the
         part of Sun or a Sun Benefit Plan under ERISA or any other law (other
         than benefit claims and funding obligations in the ordinary course of
         business).  Sun has not suffered or otherwise caused a "complete
         withdrawal" or "partial withdrawal," as such terms are respectively
         defined in Sections 4203 and 4205 of ERISA, from any Multiemployer
         Pension Plan, as such term is defined in Section 3(37) of ERISA; Sun
         is not a party to any such Multiemployer Pension Plan.

                 (b)      Except as set forth in Section 3.1.17 of the Sun
         Disclosure Statement, (i) neither Sun nor any Sun Subsidiary is a
         party to any collective bargaining agreement or other labor agreement
         with any union or labor organization; (ii) to the  knowledge of Sun,
         there is no current union representation election or controversy
         involving employees of Sun or any of the Sun Subsidiaries, nor does
         Sun know of any activity or proceeding of any labor organization (or
         representative thereof) or employee group (or representative thereof)
         to organize any such employees; (iii) there is no material unfair
         labor practice charge or material grievance arising out of a
         collective bargaining agreement or other material grievance procedure
         against Sun or any of the Sun Subsidiaries pending, or to the
         knowledge of Sun, threatened; (iv) there is no material complaint,
         lawsuit or proceeding in any forum by or on behalf of any present or
         former employee, any applicant for employment or classes of the
         foregoing alleging breach of any express or implied contract of
         employment, any law or





                                       31
<PAGE>   40
         regulation governing employment or the termination thereof or other
         discriminatory, wrongful or tortious conduct in connection with the
         employment relationship against Sun or any of the Sun Subsidiaries
         pending, or to the knowledge of Sun, threatened; (v) there is no
         strike, dispute, slowdown, work stoppage or lockout pending, or to the
         knowledge of Sun, threatened, against or involving Sun or any of the
         Sun Subsidiaries; (vi) Sun and the Sun Subsidiaries are in compliance
         in all material respects with all applicable laws respecting
         employment and employment practices, terms and conditions of
         employment, wages, hours of work and occupational safety and health;
         and (vii) there is no proceeding, claim, suit, action or governmental
         investigation pending or, to the knowledge of Sun, threatened, in
         respect of which any director, officer, employee or agent of Sun or
         any of the Sun Subsidiaries is or may be entitled to claim
         indemnification from Sun or any of the Sun Subsidiaries pursuant to
         their respective articles of incorporation or bylaws or as provided in
         any indemnification agreements.

                 3.1.18.  Investigations; Litigation.  Except as required
         pursuant to HSR, (i) no investigation or review by any governmental
         entity with respect to Sun in connection with any of the transactions
         contemplated by this Agreement is pending or, to the best of Sun's
         knowledge, threatened, nor has any governmental entity indicated to
         Sun an intention to conduct the same and (ii) there is no action, suit
         or proceeding pending or, to the best of Sun's knowledge, threatened
         against or affecting Sun or the Sun Subsidiaries at law or in equity,
         or before any federal, state, municipal or other governmental
         department, commission, board, bureau, agency or instrumentality,
         which either individually or in the aggregate, does or is likely to
         result in a Sun Material Adverse Effect.

                 3.1.19.  Information for Registration Statement and Proxy
         Statement/Prospectus.  None of the information supplied or to be
         supplied by or on behalf of Sun for inclusion in or incorporation by
         reference in (a) the registration statement on form S-4 to be filed
         with the SEC by Sun in connection with the issuance of shares of Sun
         Common Stock and Sun Preferred Stock in the Merger (the "Registration
         Statement") will, at the time the Registration Statement is filed with
         the SEC and at the time it becomes effective under the Securities Act,
         contain any untrue statement of a material fact or omit to state a
         material fact necessary in order to make the statements contained
         therein not misleading and (b) the proxy and information statement in
         definitive form relating to the meetings of the shareholders of BSI
         and Sun to be held in connection with the Merger and the prospectus
         relating to the Sun Common Stock and Sun Preferred Stock to be issued
         in the Merger (the "Joint Proxy Statement/Prospectus") will, at the
         dates mailed to such shareholders and, as the same may be amended or
         supplemented, at the times of such meetings, contain any untrue
         statement of a material fact or omit to state any material fact
         required to be stated therein or necessary in order to make the
         statements therein, in light of the circumstances under which they are
         made, not misleading, and will comply as to form in all material
         respects with the provisions of the Securities Act and the Securities
         Exchange Act and the rules and regulations thereunder.





                                       32
<PAGE>   41
                 3.1.20.  Ownership of BSI Common Stock.  Sun does not
         "beneficially own" (as such term is defined for purposes of Section
         13(d) of the Securities Exchange Act) any shares of BSI Common or
         Preferred Stock.

                 3.1.21.  Vote Required.  The approval of the Merger by
         two-thirds of all votes entitled to be cast by all holders of Sun
         Common Stock at a Sun Meeting at which a quorum is present are the
         only votes of the holders of any class or series of the capital stock
         of Sun required to approve this Agreement, the Merger and the other
         transactions contemplated hereby (herein, the "Sun Shareholders'
         Approval").

                                   ARTICLE IV

                       OBLIGATIONS PENDING EFFECTIVE DATE

         4.1.    Agreements of Sun and BSI.  Subject to the provisions of
Section 4.7 hereof with respect to Sun, each of Sun and BSI agrees that from
the date hereof to the Effective Date, except as otherwise set forth in the
Disclosure Statement, it will (and unless otherwise indicated by the context,
since September 30, 1996 or the date of the last Report, it has):

                 4.1.1.   Maintenance of Present Business.  Other than as
         contemplated by this Agreement, operate its business only in the
         usual, regular, and ordinary manner so as to maintain the goodwill it
         now enjoys and, to the extent consistent with such operation, use all
         reasonable efforts to preserve intact its present business
         organization, keep available the services of its present officers and
         employees, and preserve its relationships with customers, suppliers,
         jobbers, distributors, and others having business dealings with it;

                 4.1.2.   Maintenance of Properties.  At its expense, maintain
         all of its property and assets in customary repair, order, and
         condition, reasonable wear and use and damage by fire or unavoidable
         casualty excepted;

                 4.1.3.   Maintenance of Books and Records.  Maintain its books
         of account and records in the usual, regular, and ordinary manner, in
         accordance with generally accepted accounting principles applied on a
         consistent basis;

                 4.1.4.   Compliance with Law.  Duly comply in all material
         respects with all laws applicable to it and to the conduct of its
         business;

                 4.1.5.   Inspection of Each Merging Corporation.  Permit the
         other party hereto, and its officers, directors, employees,
         accountants, counsel, investment bankers, financial advisors and other
         authorized representatives (collectively the "Representatives"),
         during normal business hours, to inspect its records and to consult
         with its officers, employees, attorneys, and agents for the purpose of
         determining the accuracy of the representations and warranties
         hereinabove made and the compliance with covenants contained in this
         Agreement.  Sun and





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<PAGE>   42
         BSI each agrees that it and its officers and representatives shall
         hold all data and information obtained with respect to the other party
         hereto in confidence and each further agrees that it will not use such
         data or information or disclose the same to others, except to the
         extent such data or information either are, or become, published or a
         matter of public knowledge; and

                 4.1.6.   No Solicitation. No party hereto shall, and each such
         party shall cause its subsidiaries not to, permit any of its
         Representatives to, and shall use its best efforts to cause such
         persons not to, directly or indirectly, initiate, solicit or
         encourage, or take any action to facilitate the making of any offer or
         proposal which constitutes or is reasonably likely to lead to any
         Takeover Proposal (as defined below), or, in the event of any
         unsolicited Takeover Proposal, engage in negotiations or provide any
         confidential information or data to any person relating to any
         Takeover Proposal.  Notwithstanding the foregoing, in the event of an
         unsolicited Takeover Proposal, unless the Sun Shareholder Approval and
         the BSI Shareholder Approval shall have both been obtained, Sun or BSI
         may, to the extent that its Board of Directors is advised in a
         written, reasoned opinion of outside counsel that such action is
         required by its fiduciary duties under law, participate in discussions
         or negotiations with and furnish information to any person in
         connection with an unsolicited Takeover Proposal made by such person.
         Each party hereto shall notify the other party orally and in writing
         of any such inquiries, offers or proposals (including, without
         limitation, the terms and conditions of any such proposal and the
         identity of the person making it), within 24 hours of the receipt
         thereof, shall keep the other party informed of the status and details
         of any such inquiry and shall give the other party five days' advance
         notice of any agreement to be entered into with or any information to
         be supplied to any person making such inquiry, offer or proposal.
         Each party hereto shall immediately cease and cause to be terminated
         all existing discussions and negotiations, if any, with any parties
         conducted heretofore with respect to any Takeover Proposal.  As used
         in this Section 4.1.6, "Takeover Proposal" shall mean any tender or
         exchange offer, proposal for a merger, consolidation or other business
         combination involving any party to this Agreement or any of its
         material subsidiaries, or any proposal or offer (in each case, whether
         or not in writing and whether or not delivered to the stockholders of
         a party generally) to acquire in any manner, directly or indirectly, a
         substantial equity interest in, or a substantial portion of the assets
         of any party to this Agreement or any of its material subsidiaries,
         other than pursuant to the transactions contemplated by this
         Agreement.  Nothing contained herein shall prohibit a party from
         taking and disclosing to its shareholders a position contemplated by
         Rule 14c-2(a) under the Exchange Act with respect to a Takeover
         Proposal by means of a tender offer.

                 4.2.     Additional Agreements of Sun and BSI.  Sun and BSI
         agree to take the following actions after the date hereof:

                 4.2.1.   Hart-Scott-Rodino.  Within 20 days of the date
         hereof, each party (or their affiliates) shall file such materials as
         are required under the HSR Act with respect to the transaction
         contemplated hereby and shall cooperate with the other party to the
         extent necessary to assist the other party in the preparation of such
         filings.





                                       34
<PAGE>   43
                 4.2.2.   Proxy Statement/Prospectus.  Sun and BSI shall
         cooperate in the preparation and prompt filing of the Joint Proxy
         Statement/Prospectus contemplated by Section 4.6 hereof with the
         Commission with respect to, among other things, the meetings of Sun's
         and BSI's stockholders called for the purpose of securing stockholder
         approval of the merger contemplated by this Agreement.  Each of Sun
         and BSI shall use all reasonable efforts to have such proxy
         statement/prospectus cleared by the Commission.

                 4.2.3.  Notice of Material Developments.  Each of Sun and BSI
         will promptly notify the other party in writing of any Material
         Adverse Effect with respect Sun or BSI, respectively.

         4.3.    Additional Agreements of BSI.  Except as otherwise set forth
in the BSI Disclosure Statement, BSI agrees that from September 30, 1996 it has
not, and from the date hereof to the Effective Date, it will:

                 4.3.1.   Prohibition of Certain Employment Contracts.  Not
         enter into any contracts of employment which (i) cannot be terminated
         on notice of 14 days or less or (ii) provide for any severance
         payments or benefits covering a period beyond the termination date
         except as may be required by law;

                 4.3.2.   Prohibition of Certain Loans.  Not incur any
         borrowings except (i) the refinancing of indebtedness now outstanding
         or additional borrowings under its existing revolving credit
         facilities, (ii) the prepayment by customers of amounts due or to
         become due for goods sold or services rendered or to be rendered in
         the future, (iii) trade payables incurred in the ordinary course of
         business, (iv) other borrowings incurred in the ordinary course of
         business to finance normal operations or (v) as is otherwise agreed to
         in writing by Sun;

                 4.3.3.   Prohibition of Certain Commitments.  Not enter into
         commitments for capital expenditures which would exceed $100,000 in
         the aggregate, except (i) as may be necessary for the maintenance of
         existing facilities, machinery and equipment in good operating
         condition and repair in the ordinary course of business, (ii) as may
         be required by law or (iii) as is otherwise agreed to in writing by
         Sun;

                 4.3.4.   Disposal of Assets.  Not sell, dispose of, or
         encumber, any property or assets, except (i) in the ordinary course of
         business or (ii) as is otherwise agreed to in writing by Sun;

                 4.3.5.   Maintenance of Insurance.  Maintain insurance upon
         all its properties and with respect to the conduct of its business of
         such kinds and in such amounts as is customary in the type of business
         in which it is engaged, but not less than that presently carried by
         it, which insurance may be added to from time to time in its
         discretion; provided, that if during the period from the date hereof
         to and including the Effective Date any of its property or assets are
         damaged or destroyed by fire or other casualty, the obligations of Sun
         and BSI under this





                                       35
<PAGE>   44
         Agreement shall not be affected thereby (subject, however, to the
         provision that the coverage limits of such policies are adequate in
         amount to cover the replacement value of such property or assets and
         loss of profits during replacement, less commercially reasonable
         deductible, if of material significance to the assets or operations of
         BSI) but it shall promptly notify Sun in writing thereof and proceed
         with the repair or restoration of such property or assets in such
         manner and to such extent as may be approved by Sun, and upon the
         Effective Date all proceeds of insurance and claims of every kind
         arising as a result of any such damage or destruction shall remain the
         property of Surviving Corporation;

                 4.3.6.   No Amendment to Certificate of Incorporation, etc.
         Not amend its certificate of incorporation or bylaws or other
         organizational documents or merge or consolidate with or into any
         other corporation or change in any manner the rights of its capital
         stock or the character of its business;

                 4.3.7.   No Issuance, Sale, or Purchase of Securities.  Except
         with respect to exercises of currently outstanding warrants or options
         and the proposed equity investment described in Section 2.1.3(b)
         hereof, not issue or sell, or issue options or rights to subscribe to
         (or cancel or amend any options currently outstanding), or enter into
         any contract or commitment to issue or sell (upon conversion or
         otherwise), any shares of its capital stock or subdivide or in any way
         reclassify any shares of its capital stock, or acquire, or agree to
         acquire, any shares of its capital stock; and

                 4.3.8.   Prohibition on Dividends.  Not declare or pay any
         dividend on shares of its capital stock or make any other distribution
         of assets to the holders thereof.

         4.4.    Additional Agreements of Sun.  Except as otherwise set forth
in the Sun Disclosure Statement, subject to the provisions of Section 4.7
hereof, Sun agrees that from the date of its last Report, it has not, and from
the date hereof to the Effective Date, it will:

                 4.4.1.   Prohibition of Certain Employment Contracts.  Not
         enter into any contracts of employment which (i) cannot be terminated
         on notice of 14 days or less or (ii) provide for any severance
         payments or benefits covering a period beyond the termination date
         except as may be required by law, provided, however, any severance
         agreement or payment or any incentive bonus plan entered into prior
         to the date hereof is subject to approval by BSI;

                 4.4.2.   Prohibition of Certain Loans.  Not incur any
         borrowings except (i) the refinancing of indebtedness now outstanding
         or additional borrowings under its existing revolving credit
         facilities, (ii) the prepayment by customers of amounts due or to
         become due for goods sold or services rendered or to be rendered in
         the future, (iii) trade payables incurred in the ordinary course of
         business, (iv) other borrowings incurred in the ordinary course of
         business to finance normal operations or (v) as is otherwise agreed to
         in writing by BSI;





                                       36
<PAGE>   45
                 4.4.3.   Prohibition of Certain Commitments.  Not (a) enter
         into commitments for capital expenditures which would exceed $500,000,
         in the aggregate, except (i) as may be necessary for the maintenance
         of existing facilities, machinery and equipment in good operating
         condition and repair in the ordinary course of business, (ii) as may
         be required by law or (iii) as is otherwise agreed to in writing by
         BSI or (b) enter into any agreement with any affiliate of Sun without
         BSI's written consent;

                 4.4.4.   Disposal of Assets.  Not sell, dispose of, or
         encumber, any property or assets, except (i) in the ordinary course of
         business or (ii) as is otherwise agreed to in writing by BSI;

                 4.4.5.   Maintenance of Insurance.  Maintain insurance upon
         all its properties and with respect to the conduct of its business of
         such kinds and in such amounts as is customary in the type of business
         in which it is engaged, but not less than that presently carried by
         it, which insurance may be added to from time to time in its
         discretion; provided, that if during the period from the date hereof
         to and including the Effective Date any of its property or assets are
         damaged or destroyed by fire or other casualty, the obligations of Sun
         and BSI under this Agreement shall not be affected thereby (subject,
         however, to the provision that the coverage limits of such policies
         are adequate in amount to cover the replacement value of such property
         or assets and loss of profits during replacement, less commercially
         reasonable deductible, if of material significance to the assets or
         operations of Sun) but it shall promptly notify BSI in writing thereof
         and proceed with the repair or restoration of such property or assets
         in such manner and to such extent as may be approved by BSI, and upon
         the Effective Date all proceeds of insurance and claims of every kind
         arising as a result of any such damage or destruction shall remain the
         property of Surviving Corporation;

                 4.4.6.   No Amendment to Articles of Incorporation, etc.
         Except as otherwise provided herein, not amend its articles of
         incorporation or bylaws or other organizational documents or merge
         into any other corporation or change in any manner the rights of its
         capital stock or the character of its business;

                 4.4.7.   No Issuance, Sale, or Purchase of Securities.  Except
         with respect to exercises of currently outstanding warrants or
         options, not issue or sell, or issue options or rights to subscribe to
         (or cancel or amend any options currently outstanding), or enter into
         any contract or commitment to issue or sell (upon conversion or
         otherwise), any shares of its capital stock or subdivide or in any way
         reclassify any shares of its capital stock, or acquire, or agree to
         acquire, any shares of its capital stock;

                 4.4.8.   Prohibition on Dividends.  Not declare or pay any
         dividend on shares of its capital stock or make any other distribution
         of assets to the holders thereof;

                 4.4.9.  Listing of Sun Common Stock.  Use its best efforts to
         cause, as of the Effective Date, the listing on The Nasdaq Stock
         Market of the shares of Sun Common Stock to be issued pursuant to this
         Agreement; and





                                       37
<PAGE>   46
                 4.4.10.  Notice of Certain Developments.  Promptly furnish to
         BSI copies of all communications from Sun to its stockholders and all
         reports filed by it with the Commission and The Nasdaq Stock Market,
         and relating to periodic or other material developments concerning
         Sun's financial condition, business, or affairs.

         4.5.  Stockholders' Meetings.  Each party shall promptly call and hold
a meeting of stockholders (the "BSI Meeting" and the "Sun Meeting",
respectively) for the purpose of considering and acting upon proposals to
approve the Merger contemplated by this Agreement (and the Reincorporation with
respect to Surviving Corporation) and any other matters requiring stockholder
approval in connection herewith (the "BSI Shareholder Approval" and the "Sun
Shareholder Approval", respectively).

         4.6.    Joint Proxy Statement and Registration Statement.

                 4.6.1.   Preparation and Filing.   As promptly as reasonably
         practicable after the date hereof, Sun will prepare and file (with the
         cooperation of BSI) with the Securities and Exchange Commission (the
         "Commission") in accordance with the Securities Act and Securities
         Exchange Act, a combined joint proxy statement (the "Joint Proxy
         Statement/Prospectus") and registration statement on Form S-4 (the
         "Registration Statement"), relating to approval and adoption of this
         Agreement and the transactions contemplated hereby by the stockholders
         of Sun and BSI.  The parties will take such actions as may be
         reasonably required to cause the Registration Statement to be declared
         effective under the Securities Act as promptly as practicable after
         such filing and to cause the shares of Sun Common Stock and Sun
         Preferred Stock issuable in connection with the Merger to be
         registered or to obtain an exemption from registration under
         applicable state "blue sky" or securities laws; provided, however,
         that no party shall be required to register or qualify as a foreign
         corporation or to take other action which would subject it to general
         service of process in any jurisdiction where it will not be, following
         the Merger, so subject.  Each of the parties hereto shall furnish all
         information concerning itself which is required or customary for
         inclusion in the Registration Statement or the Joint Proxy
         Statement/Prospectus.  As soon as reasonably practicable after the
         Registration Statement has been declared effective by the Commission,
         Sun and BSI shall promptly mail to each of the respective stockholders
         in Sun and BSI the Joint Proxy Statement/Prospectus.  Subject to the
         exercise of fiduciary obligations under applicable law as advised in
         writing by outside counsel (a copy of which will be provided promptly
         to BSI), Sun shall, through its Board of Directors, include in the
         Joint Proxy Statement/Prospectus the recommendation of the Board of
         Directors of Sun that the stockholders of Sun adopt this Agreement,
         and shall use its best efforts to obtain such adoption.

                 4.6.2.   Fairness Opinions.  It shall be a condition to the
         mailing of the Joint Proxy Statement/Prospectus to the shareholders of
         BSI and Sun that Sun shall have received an opinion from Rodman &
         Renshaw dated the date of the Joint Proxy Statement/Prospectus, to the
         effect that, as of the date thereof, the consideration to be paid in
         the Merger is fair from





                                       38
<PAGE>   47
         a financial point of view to the holders of Sun Common Stock;
         provided, however, that the opinion need not address the consideration
         to be paid to SeaFirst.

         4.7.    Additional Agreements regarding Operation of Sun Pending
Effective Date.

                 (a)      On or prior to the date hereof, Sun's Board of
         Directors has approved the business plan prepared by BSI with respect
         to Sun's operations pending the Effective Date ("Plan"), which
         approval includes the direction by such board to Sun's management to
         implement the Plan.  Accordingly, subject to the following provisions,
         Sun hereby agrees to implement the Plan in all material respects.  Sun
         shall not be obligated to implement any particular provision of the
         Plan if the Board determines that such actions are, based on more
         recent information or events, inconsistent with the objectives of the
         Plan and are not in the best interests of Sun and its shareholders.
         Sun and BSI agree that BSI shall have no authority to take any action
         on behalf of Sun with respect to the Plan (or the Additional
         Recommendations, as defined below) and shall not be involved in the
         implementation of the Plan except as requested by Sun.

                 (b)      Prior to the Effective Date, Sun agrees to provide to
         BSI on the first and fifteenth day of each month a written summary
         report regarding the status of the Plan and the results thereof, which
         report shall include a listing of all matters which have not yet been
         implemented in material compliance with the Plan.  Based on these
         reports and BSI's independent inspection of Sun's operations, BSI will
         make other recommendations and suggestions regarding Sun's operations
         prior to the Effective Date (the "Additional Recommendations").  BSI
         will discuss with Sun's management and/or Board of Directors the
         Additional Recommendations, the reasons for the Additional
         Recommendations and how such Additional Recommendations affect or
         complement the Plan.  Sun hereby agrees to implement the Additional
         Recommendations in all material respects; provided, however, that Sun
         shall have no obligation to implement the Additional Recommendations
         unless the Board finds that the Additional Recommendations are
         consistent with the Plan and are in the best interest of Sun and its
         shareholders.

                 (c)      Notwithstanding any other term or provision of this
         Agreement, BSI hereby agrees that all actions taken by Sun in
         accordance with the Plan or the Additional Recommendations (and the
         consequences thereof) shall in no event constitute a breach of any
         representation, warranty, covenant or agreement herein.

                 (d)      Sun hereby agrees that in the event the Plan and the
         Additional Recommendations are not timely implemented in all material
         respects notwithstanding any determination by the Sun Board of
         Directors regarding the advisability of the Plan or the Additional
         Recommendations, BSI may elect to notify Sun of its intent to
         terminate this Agreement, and upon such termination shall have the
         right to reimbursement of all documented legal, accounting and other
         out-of-pocket expenses incurred by BSI in connection with the
         negotiation, execution and performance of this Agreement (such
         expenses





                                       39
<PAGE>   48
         not to exceed $500,000 for the purposes of this section only);
         provided, however, BSI shall give Sun ten days prior written notice of
         any such proposed termination, and Sun shall have such ten day period
         in which to cure its failure to implement the Plan and/or the
         Additional Recommendations.  If such failure is not cured within such
         ten day period, BSI shall be entitled to terminate this Agreement and
         to immediate expense reimbursement as hereinabove provided.

                 (e)      (i) In the event the Merger is not consummated, Sun
         hereby agrees to indemnify and hold harmless BSI, and its officers,
         directors, affiliates, shareholders and agents (collectively,
         "indemnitees"), from and against any and all claims, damages,
         lawsuits, expenses, costs, judgments and liabilities (including
         counsel fees and expenses) of any nature whatsoever ("Losses")
         relating to the Plan or the Additional Recommendations, to the extent
         the indemnitees incur any Losses as a result of Sun's implementation
         thereof, or with respect to any third-party claim against the
         indemnitees with respect to the actions taken by Sun which relate to
         the Plan or the Additional Recommendations.

                          (ii)    Promptly after BSI becomes aware of one or
         more facts, occurrences, happenings or events (including, without
         limitation, the commencement of any action) which may give rise to a
         claim for indemnification under this section, BSI shall notify Sun in
         writing of such facts, occurrences, happenings or events, but failure
         to give such notice shall not relieve Sun of any liability hereunder
         except for any fees or expenses unreasonably incurred in connection
         therewith or to the extent such failure actually prejudices Sun with
         respect to such claim or action.  Thereafter, BSI shall deliver to
         Sun, promptly after BSI's receipt thereof, copies of all notices and
         documents received by BSI relating to such claim or action.  Any
         claims for indemnification under this section must be asserted in
         writing (setting forth in reasonable detail a description of such
         claim) to Sun.

                          (iii)   BSI shall provide Sun with prompt notice of
         the payment or occurrence of any Losses.  Upon the payment or
         occurrence of any Loss, Sun shall pay the indemnitee the amount of
         such Loss.

                          (iv)    If, pursuant to this section, BSI notifies
         Sun of any claim or legal proceeding by any person (other than BSI or
         any other indemnitee) which might give rise to a claim for
         indemnification against Sun, Sun, at its sole cost and expense, may,
         upon written notice to BSI, assume the defense of such claim or
         related legal proceeding.  If Sun assumes the defense of any such
         claim or legal proceeding, Sun shall select counsel reasonably
         acceptable to BSI to conduct the defense of such claim or legal
         proceeding and, at the sole cost and expense of Sun, shall take all
         steps reasonably necessary in the defense, compromise or settlement
         thereof; provided, that Sun shall not expressly consent to a
         settlement or compromise of, or expressly consent to the entry of any
         judgment arising from, any such claim or legal proceeding without the
         prior written consent of BSI (which consent shall not be unreasonably
         withheld or delayed, although BSI may, in considering whether or not
         to give such consent, assess the implications of such settlement,
         compromise or judgment on the





                                       40
<PAGE>   49
         current or future conduct of BSI's business activities).  BSI and any
         other indemnitee shall be entitled to participate in (but not control)
         the defense of any such action, with their own counsel and at their
         own expense.

                 If, with respect to a third-party claim, Sun neither
         acknowledges nor disclaims in writing to BSI Sun's obligation to
         indemnify the indemnitees pursuant hereto, BSI or any other indemnitee
         may defend against such claim or related legal proceeding with such
         counsel and in such manner as they deem appropriate, and may consent
         to the settlement or compromise of, or consent to the entry of a
         judgment arising from, such claim or legal proceeding without the
         consent of Sun.  Sun and its agents and representatives shall be
         entitled to participate in (but not control) the defense of any such
         action, with Sun's own counsel and at its own expense.

                 Whether or not Sun chooses to defend any claim or litigation
         for which BSI or any other indemnitee may be entitled to
         indemnification under this section, each of the parties hereto shall
         cooperate in the defense thereof.  Such cooperation shall include the
         retention and the provision of records and information that are
         reasonably relevant to such claim or litigation, and making employees
         available on a mutually convenient basis to provide additional
         information and explanation of any material provided hereunder.

         4.8.    Disclosure Statement.  On the date of this Agreement, (i) BSI
has delivered to Sun a Statement (the "BSI Disclosure Statement"), accompanied
by a certificate signed by the chief financial officer of BSI stating that the
BSI Disclosure Statement is being delivered pursuant to this Section 4.8(i),
and (ii) Sun has delivered to BSI a Statement (the "Sun Disclosure Statement"),
accompanied by a certificate signed by the chief financial officer of Sun
stating that the Sun Disclosure Statement is being delivered pursuant to this
Section 4.8(ii).  The BSI Disclosure Statement and the Sun Disclosure Statement
are collectively referred to herein as the "Disclosure Statements." The
Disclosure Statements, when so delivered, shall be deemed to constitute an
integral part of this Agreement and to modify or otherwise affect the
respective representations, warranties, covenants or agreements of the parties
hereto contained herein to the extent that such representations, warranties,
covenants or agreements expressly refer to the Disclosure Statements.  Except
as otherwise contained herein or in the Disclosure Statements, any and all
statements, representations, warranties or disclosures set forth in the
Disclosure Statements shall be deemed to have been made on and as of the date
of this Agreement.

                                   ARTICLE V

                      CONDITIONS PRECEDENT TO OBLIGATIONS

         5.1.    Conditions Precedent to Obligations of BSI.  The obligations
of BSI to consummate and effect the Merger hereunder shall be subject to the
satisfaction of the following conditions, or to the waiver thereof by BSI in
the manner contemplated by Section 6.4 on or before the Closing Date:





                                       41
<PAGE>   50
                 5.1.1.   Representations and Warranties of Sun; Performance of
         Obligations.  The representations and warranties of Sun herein
         contained shall be true and correct as of the date hereof and as of
         the Closing Date with the same effect as though made at such date
         (except to the extent such representations and warranties speak only
         as of any other date, which need only be true and correct as of such
         other date), except as affected by transactions permitted or
         contemplated by this Agreement; except in each case for such failures
         of representations and warranties to be true and correct (without
         regard to any materiality qualifications contained therein) which
         individually, or in the aggregate, have not had and would not be
         reasonably likely to result in a Sun Material Adverse Effect.  Sun
         shall have performed and complied, in all material respects, with all
         its agreements and covenants contained in or contemplated by this
         Agreement to be performed or complied with by Sun before the Closing
         Date; and Sun shall have delivered to BSI a certificate, dated the
         Closing Date and signed by its chairman of the board or its president,
         and by its chief financial or accounting officer, and its secretary,
         to the effect that, to the best of such officer's knowledge, such
         conditions have been satisfied; provided however, BSI acknowledges
         that Sun has delivered to BSI, on or before the date of this
         Agreement, its business plan for the remainder of 1996 and for the
         first quarter of 1997 the (the "Sun Business Plan") and BSI agrees
         that if Sun achieves the results forecasted in the Sun Business Plan
         in all material respects, BSI will not assert that such financial
         results constitute a Sun Material Adverse Effect even though such
         financial results show a decline from the results of operations set
         forth in the financial statements dated September 30, 1996 delivered
         to BSI pursuant to the Agreement; provided further, the foregoing
         provisions shall not preclude BSI from asserting that a Sun Material
         Adverse Effect has occurred as a result of other occurrences which
         might constitute a Sun Material Adverse Effect.

                 5.1.2.   No Injunction.  No injunction or restraining order
         shall be in effect in any court of competent jurisdiction which would
         restrain or prohibit the consummation of the merger contemplated
         hereby.

                 5.1.3.   Opinion of Sun Counsel.  BSI shall have received a
         favorable opinion, dated as of the Effective Date, from Graham &
         James, LLP/Riddell Williams P.S., counsel for Sun, in form and
         substance reasonably satisfactory to BSI, to the effect that (i) Sun
         has been duly incorporated and is validly existing as a corporation in
         good standing under the laws of the State of Washington; (ii) all
         corporate proceedings required to be taken by or on the part of Sun to
         authorize the execution of this Agreement and the implementation of
         the merger contemplated hereby have been taken; (iii) the shares of
         Sun Common and Preferred Stock which are to be delivered in accordance
         with this Agreement will, when issued, be validly issued, fully paid
         and nonassessable outstanding securities of Sun; and (iv) this
         Agreement has been duly executed and delivered by, and is the legal,
         valid and binding obligation of Sun and is enforceable against Sun in
         accordance with its respective terms, except as enforceability may be
         limited by (a) equitable principles of general applicability or (b)
         bankruptcy,





                                       42
<PAGE>   51
         insolvency, reorganization, fraudulent conveyance or similar laws
         affecting the rights of creditors generally.  Such opinion also shall
         cover such other matters incident to the transactions herein
         contemplated as BSI and its counsel may reasonably request.  In
         rendering such opinion, such counsel may rely upon (i) certificates of
         public officials and of officers of Sun as to matters of fact and (ii)
         the opinion or opinions of other counsel, which opinions shall be
         reasonably satisfactory to BSI, as to matters other than federal or
         Washington law.

                 5.1.4.   Tax Opinion.  BSI shall have received an opinion of
         Porter & Hedges, L.L.P., in form and substance satisfactory to BSI,
         dated the Effective Date, that BSI and holders of BSI Common Stock and
         BSI Preferred Stock (except to the extent any stockholders receive
         cash in lieu of fractional shares and except for payments to any
         dissenting stockholder) will recognize no gain or loss for federal
         income tax purposes as a result of consummation of the Merger.

                 5.1.5.   Stockholder Approval.  The approval of a requisite
         majority of the stockholders of Sun of the Merger contemplated by this
         Agreement shall have been obtained.

                 5.1.6.   Hart-Scott-Rodino, etc.  All waiting periods required
         by HSR shall have expired with respect to the transactions
         contemplated by this Agreement, or early termination with respect
         thereto shall have been obtained without the imposition of any
         governmental request or order requiring the sale or disposition or
         holding separate (through a trust or otherwise) of particular assets
         or businesses of Sun, its affiliates or any component of BSI or other
         actions as a precondition to the expiration of any waiting period or
         the receipt of any necessary governmental approval or consent.

                 5.1.7.   Listing of Sun Common Stock.  The Nasdaq Stock Market
         shall have agreed that on the Effective Date it will list the shares
         of Sun Common Stock issuable at the Effective Date of this Agreement.

                 5.1.8.   Consent of Certain Parties in Privity With Sun.  The
         holders of any material indebtedness of Sun, the lessors of any
         material property leased by Sun, and the other parties to any other
         material agreements (including those licensors listed in Section 5.1.8
         of the Sun Disclosure Statement hereto) to which Sun is a party shall
         have, if required by the terms of the respective agreement, consented
         to the Merger contemplated hereby (which consents shall have been
         obtained without any material charge or expense imposed by the
         consenting party and without any material adverse amendments to any
         underlying agreements).

                 5.1.9.   Resignations.  All officers and directors of Sun
         shall have provided written resignations to BSI with respect to such
         positions.

                 5.1.10. Sun Dissenters.  The holders of not more than 1% of
         the issued and outstanding shares of Sun Common Stock (the "Sun
         Dissenting Shareholders") shall have delivered a written demand for
         appraisal of such shares in the manner provided in the WBCA.





                                       43
<PAGE>   52
                 5.1.11.  Registration Statement Effective.  The Registration
         Statement shall have been declared effective by the Commission, the
         information contained therein shall be true and correct in all
         material respects, no stop order shall have been issued or proceedings
         instituted or threatened suspending the effectiveness of the
         Registration Statement and all approvals, consents, permits, licenses
         or qualifications from authorities administering the securities or
         "blue-sky" laws of any state having jurisdiction, required in the
         reasonable judgment of BSI for the consummation of the merger, shall
         have been obtained and shall be effective, and no such approval,
         consent, permit, license, or qualification shall contain any condition
         which in the judgment of BSI is unduly burdensome.

                 5.1.12.  Financing.  BSI shall have obtained debt financing in
         an amount sufficient in its reasonable judgment for the consummation
         of the Merger.

                 5.1.13.  Lock-Up Agreement of SeaFirst.  SeaFirst shall have
         executed a 180 day "Lock-up" agreement with respect to its shares of
         Sun Common Stock held at the Effective Date, such agreement to be in a
         form acceptable to BSI.

                 5.1.14.  Additional Matters.  Sun shall have provided to BSI
         such additional resolutions and certificates as may be reasonably
         required in connection with the consummation of the Merger.

         5.2.    Conditions Precedent to Obligations of Sun.  The obligations
of Sun to consummate and effect the Merger hereunder shall be subject to the
satisfaction of the following conditions, or to the waiver thereof by Sun in
the manner contemplated by Section 6.4 on or before the Closing Date:

                 5.2.1.   Representations and Warranties of BSI; Performance of
         Obligations.  The representations and warranties of BSI herein
         contained shall be true and correct as of the date hereof and as of
         the Closing Date with the same effect as though made at such date
         (except to the extent such representations and warranties speak only
         as of any other date, which need only be true and correct as of such
         other date), except as affected by transactions permitted or
         contemplated by this Agreement; except in each case for such failures
         of representations and warranties to be true and correct (without
         regard to any materiality qualifications contained therein) which
         individually, or in the aggregate, have not had and would not be
         reasonably likely to result in a BSI Material Adverse Effect.  BSI
         shall have performed and complied, in all material respects, with all
         its agreements and covenants contained in or contemplated by this
         Agreement to be performed or complied with by BSI before the Closing
         Date; and BSI shall have delivered to Sun a certificate, dated the
         Closing Date and signed by its chairman of the board or its president,
         and by its chief financial or accounting officer, and its secretary,
         to the effect that, to the best of such officer's knowledge, such
         conditions have been satisfied.





                                       44
<PAGE>   53
                 5.2.2.   No Injunction.  No injunction or restraining order
         shall be in effect in any court of competent jurisdiction which would
         restrain or prohibit the consummation of the merger contemplated
         hereby.

                 5.2.3.   Opinion of BSI's Counsel.  Sun shall have received a
         favorable opinion, dated the Effective Date, from Porter & Hedges,
         L.L.P., counsel to BSI, in form and substance reasonably satisfactory
         to Sun, to the effect that (i) BSI has been duly incorporated and is
         validly existing as a corporation in good standing under the laws of
         the State of Delaware; (ii) all corporate or other proceedings
         required to be taken by or on the part of BSI to authorize the
         execution of this Agreement and the implementation of the merger
         contemplated hereby have been taken; and (iii) this Agreement has been
         duly executed and delivered by, and is the legal, valid and binding
         obligation of BSI and is enforceable against BSI in accordance with
         its terms, except as the enforceability may be limited by (a)
         equitable principles of general applicability or (b) bankruptcy,
         insolvency, reorganization, fraudulent conveyance or similar laws
         affecting the rights of creditors generally.  Such opinion shall also
         cover such other matters incident to the transactions herein
         contemplated as Sun and its counsel may reasonably request.  In
         rendering such opinion, such counsel may rely upon (i) certificates of
         public officials and of officers of BSI as to matters of fact and (ii)
         on the opinion or opinions of other counsel, which opinions shall be
         reasonably satisfactory to Sun, as to matters other than federal or
         Texas law.

                 5.2.4.   Tax Opinion.  Sun shall have received an opinion of
         Graham & James LLP/Riddell Williams P.S. in form and substance
         satisfactory to Sun, dated the Effective Date, that Sun and holders of
         Sun Common Stock (except to the extent any stockholders receive the
         Cash Consideration or cash in lieu of fractional shares and except for
         payments to any dissenting shareholder) will recognize no gain or loss
         for federal income tax purposes as a result of consummation of the
         Merger.

                 5.2.5.   Stockholder Approval.  The approval of the requisite
         majority of the stockholders of BSI and Sun of the Merger contemplated
         by this Agreement shall have been obtained.

                 5.2.6.   Hart-Scott-Rodino, etc.  All waiting periods required
         by HSR shall have expired with respect to the transactions
         contemplated by this Agreement, or early termination with respect
         thereto shall have been obtained without the imposition of any
         governmental request or order requiring the sale or disposition or
         holding separate (through a trust or otherwise) of particular assets
         or businesses of Sun, its affiliates or any component of BSI or other
         actions as a precondition to the expiration of any waiting period or
         the receipt of any necessary governmental approval or consent.

                 5.2.7.   Fairness Opinion.  Sun shall have received a
         favorable opinion from Rodman & Renshaw for inclusion in the Joint
         Proxy Statement/Prospectus as to the fairness, from a





                                       45
<PAGE>   54
         financial point of view, to the holders of Sun Common Stock (other
         than SeaFirst) of the consideration to be paid in the merger.

                 5.2.8.   Consent of Certain Parties in Privity With BSI.  The
         holders of any material indebtedness of BSI, the lessors of any
         material property leased by BSI, and the other parties to any other
         material agreements (including those licensors listed on Section 5.2.8
         of the BSI Disclosure Statement hereto) to which BSI is a party shall
         have, if required by the terms of the respective agreements, consented
         to the Merger contemplated hereby (which consents shall have been
         obtained without any material charge or expense imposed by the
         consenting party and without any material adverse amendments to any
         underlying agreements).

                 5.2.9.   Registration Statement Effective.  The Registration
         Statement shall have been declared effective by the Commission, the
         information contained therein shall be true and correct in all
         material respects, no stop order shall have been issued or proceedings
         instituted or threatened suspending the effectiveness of the
         Registration Statement or, in the reasonable opinion of Sun's counsel,
         the issuance of the Sun Common Stock and Sun Preferred Stock to the
         BSI stockholders shall be exempt from registration under federal
         securities laws.

                 5.2.10.  BSI Dissenters.  The holders of not more than 1% of
         the issued and outstanding BSI Common Stock and BSI Preferred Stock
         shall have dissented with respect to the Merger as provided in the
         DGCL.

                 5.2.11.  Equity Investment.  BSI shall have obtained the
         equity investment as contemplated by Section 2.1.3(b) hereof.

                 5.2.12.  Additional Matters.  BSI shall have provided to Sun
         such additional resolutions and certificates as may be reasonably
         required in connection with the consummation of the merger.

         5.3.    Additional Condition Precedent.  The obligations of BSI and
Sun to consummate and effect the Merger also shall be subject to the condition
that BSI shall have secured, on or prior to the earlier to occur of the mailing
of the Joint Proxy Statement/Prospectus or January 15, 1997 (the "Financing
Termination Date"), a commitment letter in customary form (the "Commitment")
for debt financing in addition to that already in place of not less than
$5,000,000 for purposes of the consummation of the Merger.  The Commitment
shall be from a lender reasonably acceptable to Sun.  BSI shall deliver a copy
of the Commitment to Sun on or prior to the Financing Termination Date.  In the
event that BSI has not secured the Commitment and delivered a copy of the same
to Sun on or prior to the Financing Termination Date, BSI or Sun each shall be
entitled to terminate this Agreement at any time thereafter upon written notice
to the other in the manner provided for in Article VI of this Agreement.





                                       46
<PAGE>   55
                                   ARTICLE VI

                          TERMINATION AND ABANDONMENT


         6.1.    Termination.  Anything contained in this Agreement to the
contrary notwithstanding, this Agreement may be terminated and the Merger
contemplated hereby abandoned at any time (whether before or after the approval
and adoption thereof by the stockholders of BSI or Sun contemplated by this
Agreement) before the Effective Date:

                 6.1.1.   By Mutual Consent.  By mutual written consent of Sun
         and BSI.

                 6.1.2.   By Sun Because of Conditions Precedent.  By Sun, if
         any condition set forth in Paragraph 5.2 hereof has not been met and
         has not been waived prior to the Effective Date; provided however,
         that prior to any termination of this Agreement by Sun on the basis
         that BSI has not met the conditions of Section 5.2.1, Sun shall first
         provide written notice to BSI, of (i) any breaches of the
         representations and warranties of BSI made herein as of the date
         hereof which breaches, individually or in the aggregate, have had,
         would or would be reasonably likely to result in a BSI Material
         Adverse Effect, and BSI shall have 20 days to remedy such breaches
         after receipt by BSI of notice in writing from Sun, specifying the
         nature of such breaches and requesting that they be remedied, or (ii)
         any failure to perform and comply with in all material respects its
         agreements and covenants hereunder, and BSI shall have 20 days to
         perform such agreement or covenants after receipt by BSI of notice in
         writing from Sun, specifying the nature of such failure and requesting
         that it be remedied.

                 6.1.3.   By BSI Because of Conditions Precedent.  By BSI, if
         any condition set forth in Paragraph 5.1 hereof has not been met and
         has not been waived prior to the Effective Date; provided however,
         that prior to any termination of this Agreement by BSI on the basis
         that  Sun has not met the conditions of Section 5.1.1, BSI shall first
         provide written notice to Sun, of (i) any breaches of the
         representations and warranties of Sun made herein as of the date
         hereof which breaches, individually or in the aggregate, have had,
         would or would be reasonably likely to result in a Sun Material
         Adverse Effect, and Sun shall have 20 days to remedy such breaches
         after receipt by Sun of notice in writing from BSI, specifying the
         nature of such breaches and requesting that they be remedied, or (ii)
         any failure to perform and comply with in all material respects its
         agreements and covenants hereunder, and Sun shall have 20 days to
         perform such agreement or covenants after receipt by Sun of notice in
         writing from BSI, specifying the nature of such failure and requesting
         that it be remedied.

                 6.1.4.  By Sun or BSI if Merger not Effective by April 30,
         1997.  By either Sun or BSI, if the Merger shall not have become
         effective on or before April 30, 1997; provided, such date shall be
         extended for up to 60 additional days in order (a) to satisfy the
         requirements of the Commission (or any condition to Closing related to
         the requirements of the Commission), (b) to obtain clearance under HSR
         or (c) to obtain relief from any





                                       47
<PAGE>   56
         injunction or restraining order prohibiting consummation of the
         merger; provided, further, that a party in default or in breach of its
         obligations or agreements under this Agreement shall have no right to
         terminate the Agreement under this Section 6.1.4.

                 6.1.5.  By BSI under Section 4.7.  By BSI under the provisions
         of Section 4.7 hereof.

                 6.1.6.  By BSI or Sun under Section 5.3.  By BSI or Sun under
         the provisions of Section 5.3 hereof.

                 6.1.7. By Sun or BSI Because of Alternate Business
         Combination.

                 (a)      by Sun, upon two days' prior notice to BSI, if, as a
         result of a tender offer by a party other than BSI or any of its
         affiliates or any written offer or proposal with respect to a merger,
         sale of a material portion of its assets or other business combination
         (each, a "Business Combination") by a party other than BSI or any of
         its affiliates, the Board of Directors of Sun determines in good faith
         that the fiduciary obligations of such directors under applicable law
         require that such tender offer or other written offer or proposal be
         accepted; provided, however, that (i) the Board of Directors of Sun
         shall have been advised in writing by outside counsel that
         notwithstanding a binding commitment to consummate an agreement of the
         nature of this Agreement entered into in the proper exercise of their
         applicable fiduciary duties, and notwithstanding all concessions which
         may be offered by BSI in negotiations entered into pursuant to clause
         (ii) below, such fiduciary duties would also require the directors to
         reconsider such commitment as a result of such tender offer or other
         written offer or proposal; and (ii) prior to any such termination, Sun
         shall, and shall cause its respective financial and legal advisors to,
         negotiate with BSI to make such adjustments in the terms and
         conditions of this Agreement as would enable Sun to proceed with the
         transactions contemplated herein; provided further, that BSI and Sun
         acknowledge and affirm that, notwithstanding anything in this Section
         6.1.7(a) to the contrary, BSI and Sun intend this Agreement to be an
         exclusive agreement and, accordingly, nothing in this Agreement is
         intended to constitute a solicitation of an offer or proposal for a
         Business Combination, it being acknowledged and agreed that any such
         offer or proposal would interfere with the strategic advantages and
         benefits that BSI and Sun expect to derive from the Merger and other
         transactions contemplated hereby;

                 (b)      by BSI, upon two days' prior notice to Sun, if, as a
         result of a tender offer by a party other than Sun or any of its
         affiliates or any written offer or proposal with respect to a Business
         Combination by a party other than Sun or any of its affiliates, the
         Board of Directors of BSI determines in good faith that the fiduciary
         obligations of such directors under applicable law require that such
         tender offer or other written offer or proposal be accepted; provided,
         however, that (i) the Board of Directors of BSI shall have been
         advised in writing by outside counsel that notwithstanding a binding
         commitment to consummate an agreement of the nature of this Agreement
         entered into in the proper exercise of their applicable fiduciary
         duties and notwithstanding all concessions which may be offered by Sun





                                       48
<PAGE>   57
         in negotiations entered into pursuant to clause (ii) below, such
         fiduciary duties would also require the directors to reconsider such
         commitment as a result of such tender offer or other written offer or
         proposal; and (ii) prior to any such termination, BSI shall, and shall
         cause its respective financial and legal advisors to, negotiate with
         Sun to make such adjustments in the terms and conditions of this
         Agreement as would enable BSI to proceed with the transactions
         contemplated herein; provided, further, that Sun and BSI acknowledge
         and affirm that, notwithstanding anything in this Section 6.1.7(b) to
         the contrary, Sun and BSI intend this Agreement to be an exclusive
         agreement and, accordingly, nothing in this Agreement is intended to
         constitute a solicitation of an offer or proposal for a Business
         Combination, it being acknowledged and agreed that any such offer or
         proposal would interfere with the strategic advantages and benefits
         that Sun and BSI expect to derive from the Merger and other
         transactions contemplated hereby;

         6.2.    Termination by Board of Directors.  An election of Sun or BSI
to terminate this Agreement and abandon the merger as provided in Paragraph 6.1
shall be exercised by such party's board of directors.

         6.3.    Effect of Termination.  In the event of the termination and
abandonment of this Agreement pursuant to and in accordance with the provisions
of Paragraph 6.1 hereof, this Agreement shall become void and have no effect
and there shall be no liability on the part of either BSI or Sun or their
respective officers or directors hereunder, except as provided in Section 6.5
and except that (i) Sections 4.7, 6.5 and the agreement contained in the last
sentence of Section 4.1.5 shall survive any such termination and (ii) no such
termination shall relieve any party from liability for breach of any
representation, warranty or agreement contained herein; provided, however, that
no party hereto shall waive any term or condition hereof, unless in the
judgment of the board of directors taking the action, such waiver will not have
a materially adverse effect on the benefits intended under this Agreement to
the stockholders of its corporation.

         6.4.    Waiver of Conditions.  Subject to the requirements of any
applicable law, any of the terms or conditions of this Agreement may be waived
in writing at any time by the party which is entitled to the benefit thereof,
by action taken by its board of directors, the executive committee of its board
of directors, or its chief executive officer.

         6.5.    Expense on Termination.  If the merger contemplated hereby is
terminated pursuant to and in accordance with the provisions of Paragraph 6.1
hereof, all expenses will be paid by the party incurring them, provided,
however, (i) that if either Sun or BSI terminates this Agreement as a result of
a breach of or default in the other party's obligations hereunder, then the
party that so breached or defaulted hereunder shall pay all of the other
party's documented costs and expenses, including legal,  accounting and
financial advisory fees and expenses, incurred in connection with the
negotiation and implementation of this Agreement (and if Sun is the terminating
party, BSI shall reimburse Sun for 50% of the filing fee and printing costs
associated with the Joint Proxy Statement/Prospectus), (ii) that if Sun or BSI,
respectively, terminates this Agreement pursuant to Section 6.1.7(a) or
6.1.7(b), respectively, the terminating party shall pay the other party the sum
of





                                       49
<PAGE>   58
$750,000 (which amount shall be deemed to constitute full payment of such
parties' fees and expenses incurred in connection with the negotiation and
implementation of this Agreement) and (iii) if BSI terminates the agreement
because the condition precedent contained in Section 5.1.12 (Financing) has not
been satisfied prior to the Closing Date (so long as the Commitment has been
received not later than the Financing Termination Date), BSI shall pay Sun's
documented costs and expenses, including legal, accounting and financial
advisory fees and expenses.  In addition to the foregoing provisions, if BSI
terminates this Agreement pursuant to Section 5.1.2, upon such termination Sun
shall issue to BSI a warrant (the "Warrant") to purchase 1,500,000 shares of
Sun Common Stock (as adjusted to reflect any changes in the capital structure
of Sun) at an exercise price equal to the average closing price for 20 trading
days prior to issuance.  The Warrant shall be exercisable for a period of ten
years after the date of issuance, shall contain customary anti-dilution and
"cheap stock" protection and shall contain a "cashless exercise" provision.
BSI and Sun shall mutually agree on the form of such warrant within 15 days of
the date hereof.

                                  ARTICLE VII

                             ADDITIONAL AGREEMENTS

         7.1.    Directors' and Officers' Indemnification.

                 (a)      Indemnification.  To the extent, if any, not provided
         by an existing right under one of the parties' directors and officers
         liability insurance policies, from and after the Effective Date, the
         Surviving Corporation shall, to the fullest extent permitted by
         applicable law, indemnify, defend and hold harmless each person who is
         now, or has been at any time prior to the date hereof, or who becomes
         prior to the Effective Date, a director, officer or employee of the
         parties hereto or any subsidiary thereof (each an "Indemnified Party"
         and, collectively, the "Indemnified Parties") against all losses,
         expenses (including reasonable attorneys' fees and expenses), claims,
         damages or liabilities or, subject to the proviso of the next
         succeeding sentence, amounts paid in settlement, arising out of
         actions or omissions occurring at or prior to the Effective Date and
         whether asserted or claimed prior to, at or after the Effective Date)
         that are in whole or in part (i) based on, or arising out of the fact
         that such person is or was a director, officer or employee of such
         party or a subsidiary of such party or (ii) based on, arising out of
         or pertaining to the transactions contemplated by this Agreement.  In
         the event of any such loss, expense, claim, damage or liability
         (whether or not arising before the Effective Date), (i) the Surviving
         Corporation shall pay the reasonable fees and expenses of counsel
         selected by the Indemnified Parties, which counsel shall be reasonably
         satisfactory to the Surviving Corporation, promptly after statements
         therefor are received and otherwise advance to such Indemnified Party
         upon request reimbursement of documented expenses reasonably incurred,
         in either case to the extent not prohibited by the WBCA (or the law of
         jurisdiction of incorporation of the Surviving Corporation) and upon
         receipt of any affirmation and undertaking required by the WBCA (or
         the law of jurisdiction of incorporation of the Surviving
         Corporation), (ii) the Surviving Corporation will cooperate in the
         defense of any such matter and (iii) any determination required to be
         made with respect





                                       50
<PAGE>   59
         to whether an Indemnified Party's conduct complies with the standards
         set forth under Washington law (or the law of jurisdiction of
         incorporation of the Surviving Corporation) and the Surviving
         Corporation's Restated Articles of Incorporation or Bylaws shall be
         made by independent counsel mutually acceptable to the Surviving
         Corporation and the Indemnified Party; provided, however, that the
         Surviving Corporation shall not be liable for any settlement effected
         without its written consent (which consent shall not be unreasonably
         withheld).  The Indemnified Parties as a group may retain only one law
         firm with respect to each related matter except to the extent, there
         is, in the opinion of counsel to an Indemnified Party, under
         applicable standards of professional conduct, a conflict on any
         significant issue between positions of any two or more Indemnified
         Parties.

                 (b)      Insurance.  For a period of four years after the
         Effective Date, the Surviving Corporation shall cause to be maintained
         in effect the policies of directors' and officers' liability insurance
         maintained by BSI and Sun for the benefit of those persons who are
         covered by such policies at the Effective Date (or the Surviving
         Corporation may substitute therefor policies of at least the same
         coverage with respect to matters occurring prior to the Effective
         Time), to the extent that such liability insurance can be maintained
         annually at a cost to the Surviving Corporation not greater than
         $50,000; provided that if such insurance cannot be so maintained or
         obtained at such cost, the Surviving Corporation shall maintain or
         obtain as much of such insurance as can be so maintained or obtained
         at a cost equal to $50,000 annually.

                 (c)      Successors.  In the event the Surviving Corporation
         or any of its successors or assigns (i) consolidates with or merges
         into any other person and shall not be the continuing or surviving
         corporation or entity of such consolidation or merger or (ii)
         transfers all or substantially all of its properties and assets to any
         person, then and in either such case, proper provision shall be made
         so that the successors and assigns of the Surviving Corporation shall
         assume the obligations set forth in this Section 7.1.

                 (d)      Survival of Indemnification.  To the fullest extent
         permitted by law, from and after the Effective Date, all rights to
         indemnification now existing in favor of the employees, agents,
         directors or officers of BSI, Sun and their respective subsidiaries
         with respect to their activities as such prior to the Effective Date,
         as provided in their respective Articles of or Certificate of
         Incorporation or Bylaws, in effect on the date thereof or otherwise in
         effect on the date hereof, shall survive the Merger and shall continue
         in full force and effect for a period of not less than six years from
         the Effective Date.

                 (e)      Benefit.  The provisions of this Section 7.1 are
         intended to be for the benefit of, and shall be enforceable by, each
         Indemnified Party, his or her heirs and his or her representatives.





                                       51
<PAGE>   60
         7.2.    Undertaking to File Reports and Cooperate in Rule 144 and 
Rule 145 Transactions; Rule 145 Affiliates.

                 (a)      For as long as any stockholders of BSI who are
         subject to Rule 144 or Rule 145 of the Securities Act continue to hold
         the shares of Sun Common Stock issued pursuant to the terms hereof,
         Sun will use reasonable commercial efforts to timely file all annual,
         quarterly and other reports required to be filed by it under Section
         13 or 15(d) of the Exchange Act and the rules and regulations of the
         Commission thereunder, as amended from time to time.  If any such
         stockholder proposes to sell any Sun Common Stock pursuant to Rule 144
         and 145, Sun shall cooperate with such stockholders so as to enable
         such sales to be made in accordance with applicable laws, rules and
         regulations, the requirements of Sun's transfer agent, and the
         reasonable requirements of the broker through which the sales are
         proposed to be executed.  Without limiting the generality of the
         foregoing, Sun shall, upon request, furnish with respect to each such
         sale (i) a written statement certifying that Sun has complied with the
         public information requirements of Rule 144 and 145 and (ii) an
         opinion of Sun's counsel regarding such matters as Sun's transfer
         agent or such stockholder's broker may reasonably desire to confirm.


                 (b)      BSI shall identify in a letter to Sun all persons who
         will be, at the Closing Date, "affiliates" of BSI, as such term is
         used in Rule 145 under the Securities Act.  BSI shall use all
         reasonable efforts to cause its affiliates to deliver to Sun on or
         prior to the Closing Date a written agreement substantially in the
         form attached as Appendix V (each, an "Affiliate Agreement").  If any
         affiliate refuses to provide such a written agreement, Sun shall, in
         lieu of receipt of such written agreement, be entitled to place
         appropriate legends on the certificates evidencing the Sun Common
         Stock to be received by such affiliate pursuant to the terms of this
         Agreement, and to issue appropriate stock transfer instructions to the
         transfer agent for Sun Common Stock, to the effect that the shares of
         Sun Common Stock received or to be received by such affiliate pursuant
         to the terms of this Agreement may only be sold, transferred or
         otherwise conveyed, and the holder thereof may only reduce his
         interest in or risks relating to such shares of Sun Common Stock,
         pursuant to an effective registration statement under the Securities
         Act, in compliance with Rule 145, as amended from time to time, or in
         a transaction which, in the opinion of legal counsel satisfactory to
         the Sun, is exempt from the registration requirements of the
         Securities Act.  The foregoing restrictions on the transferability of
         Sun Common Stock shall apply to all purported sales, transfers and
         other conveyances of the shares of Sun Common Stock received or to be
         received by such affiliate pursuant to this Agreement and to all
         purported reductions in the interest in or risks relating to such
         shares of Sun Common Stock, whether or not such affiliate has
         exchanged the certificates previously evidencing such affiliates'
         shares of BSI Common Stock for certificates evidencing the shares of
         Sun Common Stock into which such shares were converted.  The Joint
         Proxy Statement/Prospectus and the Registration Statement shall
         disclose the foregoing in a reasonably prominent manner.





                                       52
<PAGE>   61
         7.3.    BSI Options and Warrants.  As of the Effective Date, each of
the then outstanding options and warrants to purchase BSI Common Stock will and
without further action on the part of the holder thereof be exchanged for an
option or warrant, as the case may be, to purchase that number of shares of Sun
Common Stock determined by multiplying the number of shares of BSI Common Stock
subject to such BSI option or warrant at the Effective Date, times the
applicable exchange rate for the BSI Common Stock set forth in Article I
hereof, and the exercise price thereof shall adjust in accordance with the
terms and provisions of such option or warrant.  If the foregoing calculation
results in an exchanged BSI option or warrant being exercisable for a fraction
of a share of Sun Common Stock, then the number of shares of Sun Common Stock
subject to such option or warrant will be rounded down to the nearest whole
number of shares, and the total exercise price for the option or warrant will
be reduced by the exercise price of the fractional share.  The term,
exerciseability, vesting schedule and all other terms and conditions of the BSI
options or warrants will otherwise be unchanged by the provisions of this
paragraph and shall operate in accordance with their terms.  All shares of Sun
Common Stock issued upon exercise of any BSI employee stock options shall be
registered under an effective form S-8 Registration Statement filed with the
Commission.

         7.4.    WARN Act Issues.  Prior to the Effective Date, Sun shall be
responsible for providing and discharging any and all notifications, benefits
and liabilities to Sun employees, former employees and government agencies
required by the Worker Adjustment and Retraining Notification Act of 1988
("WARN Act") or any other applicable law including any requirements that may be
imposed as a result of the transactions contemplated by this Agreement.  Sun
shall provide to BSI copies of all such notifications provided under the WARN
Act or similar laws or regulations.

                                  ARTICLE VIII

                                 MISCELLANEOUS


         8.1.    Entirety.  This Agreement and the agreements to be entered
into in connection herewith embody the entire agreement between the parties
with respect to the subject matter hereof, and all prior agreements between the
parties with respect thereto are hereby superseded in their entirety.

         8.2.    Counterparts.  Any number of counterparts of this Agreement
may be executed and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
instrument.

         8.3.    Notices and Waivers.  Any notice or waiver to be given to any
party hereto shall be in writing and shall be delivered by courier, sent by
facsimile transmission or first class registered or certified mail, postage
prepaid.





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<PAGE>   62
                                   IF TO BSI

 Addressed to:                                 With a copy to:

 BSI Holdings, Inc.                            Porter & Hedges, L.L.P.
 3860 Virginia Avenue                          700 Louisiana, 35th Floor
 Cincinnati, Ohio 45243                        Houston, Texas 77210-4744
 Attention: President                          Attention: Richard L. Wynne
 Facsimile: (513) 272-2812                     Facsimile:  (713) 228-1331

                                   IF TO SUN

 Addressed to:                                 With a copy to:

 Sun Sportswear, Inc.                          Graham & James LLP/Riddell 
 6520 South 190th Street                       Williams P.S.
 Kent, Washington 98032                        1001 Fourth Avenue Plaza
 Attenton: President                           Suite 4500
 Facsimile:  (206) 251-3565                    Seattle, Washington 98154-1065
                                               Attention: Marion V. Larson
                                               Facsimile:  (206) 389-1708

         Any communication so addressed and mailed by first-class registered or
certified mail, postage prepaid, shall be deemed to be received on the third
business day after so mailed, and if delivered by courier or facsimile to such
address, upon delivery during normal business hours on any business day.

         8.4.    Termination of Representations, Warranties, etc.  The
respective representations and warranties contained in Articles II and III
shall expire with, and be terminated and extinguished by, the merger pursuant
to this Agreement at the time of the consummation thereof on the Effective
Date.  This Paragraph 8.4 shall have no effect upon any other right or
obligation of the parties in connection with this Agreement or otherwise,
whether to be exercised or performed before or after the Effective Date.

         8.5.    Table of Contents and Captions.  The table of contents and
captions contained in this Agreement are solely for convenient reference and
shall not be deemed to affect the meaning or interpretation of any article,
section, or paragraph hereof.

         8.6.    Successors and Assigns.  This Agreement shall be binding upon
and shall inure to the benefit of and be enforceable by the successors and
assigns of the parties hereto.

         8.7.    Severability.  If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
void, or unenforceable, the remainder of the terms, provisions, covenants and
restrictions shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.  It is hereby stipulated and declared to be
the intention of the parties





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<PAGE>   63
that they would have executed the remaining terms, provisions, covenants and
restrictions without including any of such which may be hereafter declared
invalid, void or unenforceable.

         8.8.    Applicable Law.  This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware
(except to the extent that the form and content of the Articles of Merger and
the consequences of the filing thereof shall be governed by the WBCA).

         8.9.    Public Announcements.  The parties agree that before the
Effective Date that they shall consult with each other before the making of any
public announcement regarding the existence of this Agreement, the contents
hereof or the transactions contemplated hereby, and to obtain the prior
approval of the other party as to the content of such announcement, which
approval shall not be unreasonably withheld.  However, the foregoing shall not
apply to any announcement or written statement which, upon the written advice
of counsel, is required by law or the National Association at Securities
Dealers (the "NASD") to be made, except that the party required to make such
announcement shall, whenever practicable, consult with and solicit prior
approval from such other party concerning the timing and content of such
legally required announcement or statement before it is made.





                                       55
<PAGE>   64
         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed in their respective corporate names by their respective duly
authorized representatives, all as of the day and year first above written.

                          BSI HOLDINGS, INC.


                          By:_______________________________________
                               Randall B. Hale, Chairman of the Board



                          SUN SPORTSWEAR, INC.


                          By:_______________________________________
                               William S. Wiley, President





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