-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AbzpaiZdZOKS2c2r6IP51OZ15Qb/oNjuVYF5BfdgfiM9ND0LwwxE+AwYCmrz8BBM 3wfBRmK+W66BNRmQpfd90A== 0000890566-97-000236.txt : 19970222 0000890566-97-000236.hdr.sgml : 19970222 ACCESSION NUMBER: 0000890566-97-000236 CONFORMED SUBMISSION TYPE: S-4/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19970214 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUN SPORTSWEAR INC CENTRAL INDEX KEY: 0000856711 STANDARD INDUSTRIAL CLASSIFICATION: WOMEN'S, MISSES', AND JUNIORS OUTERWEAR [2330] IRS NUMBER: 911132690 STATE OF INCORPORATION: WA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-17871 FILM NUMBER: 97532246 BUSINESS ADDRESS: STREET 1: 6520 SOUTH 190TH ST CITY: KENT STATE: WA ZIP: 98032 BUSINESS PHONE: 2062513565 S-4/A 1 AMENDMENT #3 TO S-4 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 10, 1997. REGISTRATION NO. 333-17871 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 AMENDMENT NO. 3 TO FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ SUN SPORTSWEAR, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) WASHINGTON 2396 91-1132690 (STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER OF INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
------------------------ KEVIN C. JAMES 6520 SOUTH 190TH STREET SENIOR VICE PRESIDENT AND SECRETARY KENT, WASHINGTON 98032 SUN SPORTSWEAR, INC. (206) 251-3565 6520 SOUTH 190TH STREET (ADDRESS INCLUDING ZIP CODE, AND KENT, WASHINGTON 98032 TELEPHONE (206) 251-3565 NUMBER, INCLUDING AREA CODE, OF (NAME, ADDRESS, INCLUDING ZIP CODE, AND REGISTRANT'S PRINCIPAL EXECUTIVE TELEPHONE NUMBER, INCLUDING AREA CODE OF OFFICES) AGENT FOR SERVICE) ------------------------ WITH COPIES TO: MARION V. LARSON GRAHAM & JAMES LLP/RIDDELL WILLIAMS RICHARD L. WYNNE P.S. PORTER & HEDGES, L.L.P. 1001 FOURTH AVENUE PLAZA, SUITE 4500 700 LOUISIANA, 35TH FLOOR SEATTLE, WASHINGTON 98154-1065 HOUSTON, TEXAS 77002-2370 ------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after this Registration Statement becomes effective. ------------------------ If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. [X] PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Sections 23B.08.500 through 23B.08.600 of the Washington Business Corporation Act authorize a court to award, or a corporation's board of directors to grant, indemnification to directors and officers on terms sufficiently broad to permit indemnification under certain circumstances for liabilities arising under the Securities Act of 1933, as amended (the "Securities Act"). Article 9 of the Registrant's Restated Articles of Incorporation and Article 11 of the Registrant's Bylaws provide for indemnification of the Registrant's directors, officers, employees and agents to the full extent permitted by Washington law. Section 23B.08.320 of the Washington Business Corporation Act authorizes a corporation to limit a director's liability to the corporation or its shareholders for monetary damages for acts or omissions as a director, except in certain circumstances involving intentional misconduct, self dealing or illegal corporate loans or distributions, or any transactions from which the director personally receives a benefit in money, property or services to which the director is not legally entitled. Article 9 of the Registrant's Restated Articles of Incorporation contains provisions implementing, to the full extent permitted by Washington law, such limitations on a director's liability to the Registrant and its shareholders. Section 145 of the Delaware General Corporation Law permits a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or contemplated action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action. In an action brought to obtain a judgment in the corporation's favor, whether by the corporation itself or derivatively by a stockholder, the corporation may only indemnify for expenses, including attorneys' fees, actually and reasonably incurred in connection with the defense or settlement of such action, and the corporation may not indemnify for amounts paid in satisfaction of a judgment or in settlement of the claim. In any such action, no indemnification may be paid in respect of any claim, issue or matter as to which such person shall have been adjudged liable to the corporation except as otherwise approved by the Delaware Court of Chancery or the court in which the claim was brought. In any other type of proceeding, the indemnification may extend to judgments, fines and amounts paid in settlement, actually and reasonably incurred in connection with such other proceeding, as well as to expenses. The statute does not permit indemnification unless the person seeking indemnification has acted in good faith and in a manner reasonably believed to be in, or not opposed to, the best interests of the corporation and, in the case of criminal actions or proceedings, the person had no reasonable cause to believe his conduct was unlawful. The statute contains additional limitations applicable to criminal actions and to actions brought by or in the name of the corporation. The determination as to whether a person seeking indemnification has met the required standard of conduct is to be made (1) by a majority vote of a quorum of disinterested members of the board of directors, (2) by independent legal counsel in a written opinion, if such a quorum does not exist or if the disinterested directors so direct, or (3) by the stockholders. The Certificate of Incorporation and Bylaws of Brazos Delaware require it to indemnify its directors to the fullest extent authorized by the Delaware General Corporation Law or any other applicable law in effect, but if such statute or law is amended, Brazos Delaware may change the standard of indemnification only to the extent that such amended statute or law permits Brazos Delaware to provide broader indemnification rights to its directors. Brazos Delaware's Certificate of Incorporation limits the personal liability of a director to Brazos Delaware or its stockholders to damages for breach of the director's fiduciary duty. Under Section 7.1 of the Merger Agreement (Exhibit 2.1 hereto), to the extent, if any, not provided by any existing right under one of the parties' directors' and officers' liability insurance policies, from and II-1 after the effective time of the merger, the parties have agreed that the Registrant will, to the fullest extent permitted by applicable law, indemnify, defend and hold harmless each person who was, as of November 13, 1996, or was at any time prior to such date, or who becomes prior to the effective time of the merger, a director, officer or employee of the parties to the Merger Agreement or any subsidiary thereof against certain liabilities that are, in whole or in part, based on, arising out of, or pertaining to the transactions contemplated by, the Merger Agreement. In addition, to the fullest extent permitted by applicable law, all existing rights of indemnification will continue in full force and effect for a period of not less than six years from the effective time of the merger. Section 7.1(b) of the Merger Agreement requires that for a period of four years after the effective time of the merger, the Registrant shall maintain policies of directors' and officers' liability insurance maintained by Sun, or so much of such insurance as can be so maintained or obtained at a cost equal to $50,000 annually. ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. (a) EXHIBITS EXHIBIT NO. DESCRIPTION - ------------------------------------------------------------------------------- 2.1 -- Agreement and Plan of Merger dated as of November 13, 1996 by and between the Registrant and BSI Holdings, Inc. (included as Appendix A to the Joint Proxy Statement/Prospectus) 3.1 -- Restated Articles of Incorporation of the Registrant (Filed as an exhibit to Form S-1 Registration Statement (No. 33-31688), and incorporated herein by reference.) 3.2 -- Bylaws of the Registrant (Filed as an exhibit to Form 10-K for the year ended December 31, 1991 and incorporated herein by reference.) *5.1 -- Opinion of Graham & James LLP/Riddell Williams P.S. as to the legality of the securities being registered **8.1 -- Opinion of Graham & James LLP/Riddell Williams, P.C. **8.2 -- Opinion of Porter & Hedges, L.L.P. 10.1 -- 1989 Employee Stock Option Plan of the Registrant (Filed as an exhibit to Form S-1 Registration Statement (No. 33-31688), and incorporated herein by reference.) 10.2.1 -- 1989 Director Stock Option Plan of the Registrant, as amended (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 1995 and incorporated herein by reference.) 10.4 -- Industrial Lease, dated April 3, 1989, between the Registrant and Sabey Corporation (Filed as an exhibit to Form S-1 Registration Statement (No. 33-31688), and incorporated herein by reference.) 10.9 -- Tax Claims and Access Agreement, dated as of October 6, 1989, between the Registrant and David A. Sabey (Filed as an exhibit to Form S-1 Registration Statement (No. 33-31688), and incorporated herein by reference.) 10.12 -- Form of Indemnification Agreement between the Company and its directors (Filed as an exhibit to Form 10-K for the year ended December 31, 1991 and incorporated herein by reference.) *10.18 -- Termination Agreement between Registrant and Kevin James, Senior Vice President and Chief Financial Officer. 10.19 -- Employment Agreement between Registrant and L. Kaye Counts, Executive Vice President and Chief Operating Officer (Filed as an exhibit to Form 10-K for the year ended December 31, 1994 and incorporated herein by reference.) *10.19.1 -- Addendum to Employment Agreement between Registrant and L. Kaye Counts, Executive Vice President and Chief Operating Officer. 10.23.1 -- Employment Agreement between Registrant and Sandra L. Teufel, Senior Vice President -- Sales and Merchandising (Filed as an exhibit to Form 10-K for the year ended December 31, 1995 and incorporated herein by reference.) 10.27 -- Credit Agreement, dated as of February 13, 1996, between the Registrant and Heller Financial, Inc. (Filed as an exhibit to Form 10-K for the year ended December 31, 1995 and incorporated herein by reference.) II-2 *10.27.1 -- Second Amendment to Credit Agreement between the Registrant and Heller Financial, Inc. *11.1 -- BSI Holdings, Inc. Computation of Earnings (Loss) Per Common Share *11.2 -- Computations of Pro Forma Combined Earnings (Loss) Per Common Share *23.1 -- Consent of Price Waterhouse LLP *23.2 -- Consent of Arthur Andersen LLP *23.3 -- Consent of Mahoney Cohen Rashba & Pokart, CPA, PC *23.4 -- Consent of Graham & James LLP/Riddell Williams P.S. (contained in the opinion filed as Exhibit 5.1) *23.5 -- Consent of Rodman & Renshaw, Inc. with respect to its fairness opinion *24.1 -- Power of Attorney (included on signature page) *99.1 -- Form of Proxy for annual meeting of shareholders of the Registrant *99.2 -- Form of Proxy for special meeting of shareholders of BSI Holdings, Inc. *99.3 -- Form of Election for Sun Shareholders electing not to receive cash consideration *99.4 -- Consent of persons named in the Registration Statement as about to become a director who have not signed the Registration Statement to be filed pursuant to Rule 438. - ------------ * Previously filed. ** Filed herewith. (a) FINANCIAL STATEMENT SCHEDULES None. (b) REPORTS, OPINIONS AND APPRAISALS Opinion of Rodman & Renshaw, Inc. (included as Appendix B to the Joint Proxy Statement/Prospectus) ITEMS 22. UNDERTAKINGS. (a) The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement. (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. II-3 (a) The undersigned Registrant hereby undertakes as follows: that prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this Registration Statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. (b) The registrant undertakes that every prospectus: (i) that is filed pursuant to paragraph (b) immediately preceding, or (ii) that purports to meet the requirements of Section 10(a)(3) of the Securities Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the Registration Statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. (d) The undersigned Registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first-class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the Registration Statement through the date of responding to the request. (e) The undersigned Registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the Registration Statement when it became effective. II-4 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THE REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF KENT, STATE OF WASHINGTON, ON THE 14TH DAY OF FEBRUARY, 1997. SUN SPORTSWEAR, INC. By: /s/ KEVIN C. JAMES KEVIN C. JAMES SENIOR VICE PRESIDENT, SECRETARY AND CHIEF FINANCIAL OFFICER PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS AMENDMENT NO. 2 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED BELOW ON THE 14TH DAY OF FEBRUARY, 1997. SIGNATURE TITLE - ------------------------------------------------------------------------- * Chairman of the Board WILLIAM S. WILEY President, Chief Executive Officer and Director (Principal Executive Officer) /s/KEVIN C. JAMES Senior Vice President, Secretary and KEVIN C. JAMES Chief Financial Officer (Principal Financial Officer) * Controller (Principal Accounting MICHAEL J. SANDHORST Officer) * Director LARRY C. MOUNGER * Director JAMES A. WALSH ________________________________ Director JAMES H. WILLIAMS * Director PAUL R. ROLLINS, JR. *By: /s/KEVIN C. JAMES KEVIN C. JAMES SENIOR VICE PRESIDENT, SECRETARY AND CHIEF FINANCIAL OFFICER AS ATTORNEY-IN-FACT II-5 INDEX TO EXHIBITS EXHIBIT NO. DESCRIPTION - ------------------------------------------------------------------------------- 2.1 -- Agreement and Plan of Merger dated as of November 13, 1996 by and between the Registrant and BSI Holdings, Inc. (included as Appendix A to the Joint Proxy Statement/Prospectus) 3.1 -- Restated Articles of Incorporation of the Registrant (Filed as an exhibit to Form S-1 Registration Statement (No. 33-31688), and incorporated herein by reference.) 3.2 -- Bylaws of the Registrant (Filed as an exhibit to Form 10-K for the year ended December 31, 1991 and incorporated herein by reference.) *5.1 -- Opinion of Graham & James LLP/Riddell Williams P.S. as to the legality of the securities being registered **8.1 -- Opinion of Graham & James LLP/Riddell Williams, P.C. **8.2 -- Opinion of Porter & Hedges, L.L.P. 10.1 -- 1989 Employee Stock Option Plan of the Registrant (Filed as an exhibit to Form S-1 Registration Statement (No. 33-31688), and incorporated herein by reference.) 10.2.1 -- 1989 Director Stock Option Plan of the Registrant, as amended (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 1995 and incorporated herein by reference.) 10.4 -- Industrial Lease, dated April 3, 1989, between the Registrant and Sabey Corporation (Filed as an exhibit to Form S-1 Registration Statement (No. 33-31688), and incorporated herein by reference.) 10.9 -- Tax Claims and Access Agreement, dated as of October 6, 1989, between the Registrant and David A. Sabey (Filed as an exhibit to Form S-1 Registration Statement (No. 33-31688), and incorporated herein by reference.) 10.12 -- Form of Indemnification Agreement between the Company and its directors (Filed as an exhibit to Form 10-K for the year ended December 31, 1991 and incorporated herein by reference.) *10.18 -- Termination Agreement between Registrant and Kevin James, Senior Vice President and Chief Financial Officer. 10.19 -- Employment Agreement between Registrant and L. Kaye Counts, Executive Vice President and Chief Operating Officer (Filed as an exhibit to Form 10-K for the year ended December 31, 1994 and incorporated herein by reference.) *10.19.1 -- Addendum to Employment Agreement between Registrant and L. Kaye Counts, Executive Vice President and Chief Operating Officer. 10.23.1 -- Employment Agreement between Registrant and Sandra L. Teufel, Senior Vice President -- Sales and Merchandising (Filed as an exhibit to Form 10-K for the year ended December 31, 1995 and incorporated herein by reference.) 10.27 -- Credit Agreement, dated as of February 13, 1996, between the Registrant and Heller Financial, Inc. (Filed as an exhibit to Form 10-K for the year ended December 31, 1995 and incorporated herein by reference.) *10.27.1 -- Second Amendment to Credit Agreement between the Registrant and Heller Financial, Inc. *11.1 -- BSI Holdings, Inc. Computation of Earnings (Loss) Per Common Share *11.2 -- Computations of Pro Forma Combined Earnings (Loss) Per Common Share *23.1 -- Consent of Price Waterhouse LLP *23.2 -- Consent of Arthur Andersen LLP *23.3 -- Consent of Mahoney Cohen Rashba & Pokart, CPA, PC **23.4 -- Consent of Graham & James LLP/Riddell Williams P.S. (contained in the opinion filed as Exhibit 5.1) *23.5 -- Consent of Rodman & Renshaw, Inc. with respect to its fairness opinion *24.1 -- Power of Attorney (included on signature page) *99.1 -- Form of Proxy for annual meeting of shareholders of the Registrant *99.2 -- Form of Proxy for special meeting of shareholders of BSI Holdings, Inc. *99.3 -- Form of Election for Sun Shareholders electing not to receive cash consideration *99.4 -- Consent of persons named in the Registration Statement as about to become a director who have not signed the Registration Statement to be filed pursuant to Rule 438. - ------------ * Previously filed. ** Filed herewith. EX-8.1 2 EXHIBIT 8.1 [Letterhead of] GRAHAM & JAMES LLP LOGO February 13, 1997 Sun Sportswear, Inc. 6520 South 190th Street Kent, WA 98032 Gentlemen: This opinion is being delivered to you in accordance with Section 5.2.4 of the Plan and Agreement of Merger dated as of November 13, 1996, as amended by the First Amendment to Plan and Agreement of Merger dated December 13, 1996 (such Plan and Agreement of Merger, as amended, being the "Agreement") by and between Sun Sportswear, Inc., a Washington corporation ("Acquiror"), and BSI Holdings, Inc., a Delaware corporation ("Target"). Pursuant to the Agreement, Target will merge with and into Acquiror. Except as otherwise provided, capitalized terms not defined herein have the meanings set forth in the Agreement or in certificates delivered to us by Acquiror and Target containing certain representations of Acquiror and Target, copies of which are attached as Exhibits hereto. All section references, unless otherwise indicated, are to the Internal Revenue Code of 1986, as amended (the "Code"). We have acted as counsel to Acquiror in connection with the Merger. As such, and for the purpose of rendering this opinion, we have examined and are relying upon (without any independent investigation or review thereof) the truth and accuracy, at all relevant times, of the statements, covenants, representations and warranties contained in the following documents (including all exhibits and schedules attached thereto): (a) the Agreement; (b) The Registration Statement on Form S-4 filed by Acquiror with the Securities and Exchange Commission relating to the Merger (the "Registration Statement"; (c) Continuity of Interest Certificates from certain Target shareholders (the "Continuity of Interest Certificates"); (d) An officer's certificate dated February 13, 1997 addressed to us signed by an authorized officer of Acquiror and delivered to us from Acquiror in the form attached hereto as Exhibit A and incorporated hereby reference; (e) An officer's certificate dated February 13, 1997 addressed to us signed by an authorized officer of Target and delivered to us from Target in the form attached hereto as Exhibit B and incorporated hereby by reference; (f) such other instruments and documents related to the formation, organization and operation of Acquiror and Target and related to the consummation of the Merger and the transactions contemplated thereby as we have deemed necessary or appropriate. In connection with rendering this opinion, we have assumed or obtained representations (and are relying thereon), without any independent investigation or review thereof, that: 1. Original documents (including signatures thereto) are authentic, documents submitted to us as copies conform to the original documents, and there has been (or will be by the Effective Time of the Merger) due execution and delivery of all documents where due execution and delivery are prerequisites to effectiveness thereof; 2. All representations, warranties and statements made or agreed to by Acquiror, Target and Target shareholders, including but not limited to, those set forth in the Agreement (including all exhibits and schedules attached thereto), the officer's certificates attached hereto and the Continuity of Interest Certificates, are and will be true and accurate at all relevant times; 3. All covenants contained in the Agreement (including all exhibits thereto), the officer's certificates attached hereto and the Continuity of Interest Certificates will be performed without waiver or breach of any material provision thereof; 4. The continuity of interest requirement as specified in Treas. Reg. Section 1.368-1(b) and as interpreted in certain Internal Revenue Service rulings and federal judicial decisions will be satisfied; and 5. The only property being distributed to any holder of Sun Common Stock in the Merger is a Subordinated Note. Based on the foregoing documents, materials, assumptions and information, and subject to the qualifications and assumptions set forth herein, our opinions are that if the Merger is consummated in accordance with the provisions of the Agreement and the exhibits thereto: I. The Merger of Target with and into Acquiror, with Acquiror surviving the Merger, will qualify as a reorganization within the meaning of Section 368(a) of the Code. II. No gain or loss will be recognized by any holder of Sun Common Stock as a result of the Merger, except in the case of cash or the Subordinated Note paid to those holders of Sun Common Stock who do not properly elect to retain their shares of Sun Common Stock and thus receive the cash consideration or the Subordinated Note, and except for cash paid to holders of Sun Common Stock who dissent from the Merger or cash paid in lieu of fractional shares. Our opinions set forth above are based on the existing provisions of the Code, Treasury Regulations (including Temporary and Proposed Treasury Regulations) promulgated under the Code, published Revenue Rulings, Revenue Procedures and other announcements of the Internal Revenue Service (the "Service") and existing court decisions, any of which could be changed at any time. Any such changes might be retroactive with respect to transactions entered into prior to the date of such changes and could significantly modify the opinion set forth above. Nevertheless, we undertake no responsibility to advise you of any subsequent developments in the application, operation or interpretation of the federal income tax laws. Our opinion concerning certain of the federal tax consequences of the Merger is limited to the specific federal tax consequences presented above. No opinion is expressed as to any transaction other than the Merger, including any transaction undertaken in connection with the Merger. In addition, this opinion does not address any estate, gift, state, or local or foreign tax consequences that may result from the Merger. In particular, we express no opinion regarding: (i) the amount, existence, or availability after the Merger, of any of the federal income tax attributes of Target or Acquiror (including, without limitation, foreign tax credits or net operating loss carryforwards, if any, of Target or Acquiror); (ii) any transaction in which Target capital stock is acquired or Acquiror common stock is disposed; (iii) the potential application of the "disqualifying disposition" rules of Section 421 to dispositions of Target common stock; (iv) the effects of the Merger and Acquiror's assumption of outstanding options to acquire Target common stock on the holders of such options under any Target employee stock option or stock purchase plan; (v) the effects of the Merger on any Target shareholder who pursuant to the Merger exchanges Target stock that was acquired subject to the provisions of Section 83(a) of the Code; (vi) the effects of the Merger on any payment which is or may be subject to the provisions of Section 280G of the Code; and (vii) the application of the collapsible corporation provisions of Section 341 of the Code to Acquiror or Target as a result of the Merger. This opinion is being delivered solely pursuant to Section 5.2.4 of the Agreement. We consent to the use of this opinion as an exhibit to the Registration Statement on Form S-4 filed by Acquiror and to the references to us under the caption "The Merger -- Certain Federal Income Tax Consequences'' in the Joint Proxy Statement/Prospectus filing as part of the Registration Statement. It may not be relied upon or utilized for any other purpose or by any other person or entity, and may not be made available to any other person or entity without our prior written consent. Very truly yours, /s/ GRAHAM & JAMES LLP GRAHAM & JAMES LLP Attachments: Exhibit A -- An officer's certificate dated February 13, 1997 addressed to us signed by an authorized officers of Acquiror. Exhibit B -- An officer's certificate dated February 13, 1997 addressed to us signed by an authorized officer of Target. EX-8.2 3 EXHIBIT 8.2 February 13, 1997 BSI Holdings, Inc. 3860 Virginia Ave. Cincinnati, Ohio 45227 Ladies and Gentlemen: We have acted as counsel to BSI Holdings, Inc., a Delaware corporation ("BSI"), in connection with the transactions contemplated by the Plan and Agreement of Merger dated November 13, 1996, as amended by the First Amendment to Plan and Agreement of Merger dated December 13, 1996 (the "Merger Agreement"), by and among BSI and Sun Sportswear, Inc., a Washington corporation ("Sun"). We have been requested by BSI to render our opinion with respect to the material federal income tax consequences of the proposed merger (the "Merger") of BSI with and into Sun in accordance with the Merger Agreement, with Sun to be the surviving corporation. As a result of the Merger, all of the outstanding shares of BSI Common Stock and BSI Preferred Stock will be converted into shares of Sun Common Stock and Sun Preferred Stock, except for cash paid to BSI stockholders on perfection of dissenters' rights or in lieu of receipt of fractional shares of Sun Common Stock. All capitalized terms used herein and not otherwise defined shall have the meaning set forth in the Merger Agreement. We have examined (i) executed copies of the Merger Agreement, (ii) the Registration Statement on Form S-4 filed by Sun (Registration No. 333-17871), and (iii) have examined or relied upon originals or copies, certified or otherwise identified to our satisfaction, of such corporate records, documents, certificates and other instruments, as we have deemed necessary or appropriate for the purpose of rendering the opinions expressed below. As to certain questions of fact material to the opinions rendered herein, we have relied upon certificates, warranties and covenants made to us by the management of Sun and BSI, as well as certificates of continuity of interest from shareholders of BSI (each of which we have relied upon as true in this opinion without our having performed any independent verification as to their accuracy). We have assumed that the Merger qualifies as a statutory merger under applicable state law. We have further assumed that all signatures on all documents we have examined are genuine, that all documents submitted to us as originals are authentic and that all copies of documents submitted to us are complete and conform to the originals thereof. BSI Holdings, Inc. February 13, 1997 Page 2 In addition, for purposes of rendering this opinion, we have also relied on the following assumptions which are based on representations by Sun, BSI and certain BSI stockholders: (a) Sun has no plan or intention to (i) reacquire any of its Common or Preferred Stock, or (ii) sell or otherwise dispose of any assets of BSI acquired in the Merger except for dispositions made in the ordinary course of business or transfers described in ss.368(a)(2)(C) other than to exchange shares of Sun Common Stock and Sun Preferred Stock received in the Merger for shares of common stock and preferred stock of Brazos Sportswear, Inc., a Delaware corporation and wholly owned subsidiary of Sun ("Brazos"), pursuant to the reincorporation of Sun immediately subsequent to the Merger by means of a merger of Sun with and into Brazos (the "Sun Reincorporation"). (b) There is no intercorporate indebtedness existing between Sun and BSI that was issued, acquired or will be settled at a discount. (c) The payment of cash to BSI stockholders in lieu of the issuance of fractional shares of Sun Common Stock in the Merger is solely for the purpose of avoiding the expense and inconvenience to Sun of issuing fractional shares and does not represent separately bargained for consideration. The total cash payment to BSI stockholders in lieu of issuing fractional shares will not exceed 1% of the total consideration that will be issued in the Merger to the BSI stockholders in exchange for their BSI stock interests. The fractional share interests in Sun Common Stock of each BSI stockholder will be aggregated, and no BSI stockholder will receive cash payments with respect to such fractional shares in an amount equal to or greater than the value of one full share of Sun Common Stock, as determined in accordance with Section 1.9.4.4 of the Merger Agreement. (d) Following the Effective Date of the Merger, Sun will continue the historic business of BSI or use a significant portion of BSI's historic business assets in a business within the meaning of Treasury Regulation Section 1.368-1(d). (e) The fair market value of the Sun Common Stock and Sun Preferred Stock and other consideration, if any, received by each BSI stockholder will be approximately equal to the fair market value of the BSI Common Stock and/or BSI Preferred Stock surrendered by such stockholder in the Merger. We have, with the consent of BSI, reviewed the fairness opinion of Rodman & Renshaw and note that the conclusions of that opinion are consistent with this assumption. (f) Except for the Sun Reincorporation, there is no present plan or intention by the BSI stockholders who own 1% or more of the BSI Common Stock or BSI Preferred Stock and, to the best knowledge of BSI Management, there is no plan or intention on the part of the remaining BSI stockholders, to sell, exchange or otherwise dispose of a number of shares of Sun Common BSI Holdings, Inc. February 13, 1997 Page 3 Stock or Sun Preferred Stock received in the Merger that would reduce BSI stockholders' ownership of Sun Common Stock and Sun Preferred Stock to a number of shares having a value, as of the date of the Merger, of less than fifty percent of the value of all of the shares of BSI Common Stock and BSI Holdings, Inc. February 13, 1997 Page 4 BSI Preferred Stock issued and outstanding immediately prior to the Merger. For purposes of this assumption, shares of BSI Common Stock or BSI Preferred Stock exchanged for cash or other property, surrendered by dissenters or exchanged for cash in lieu of fractional shares of Sun Common Stock and/or Sun Preferred Stock will be treated as outstanding BSI Common Stock and BSI Preferred Stock immediately prior to the Merger. Moreover, shares of BSI Common Stock or BSI Preferred Stock held by BSI stockholders and otherwise sold, redeemed, or disposed of prior or subsequent to the Merger are taken into account in making this determination. (g) The liabilities of BSI assumed by Sun, if any, and the liabilities to which the transferred assets of BSI are subject, if any, were incurred by BSI in the ordinary course of its business. (h) Each of the parties to the Merger and the BSI stockholders will pay their respective expenses, if any, incurred in connection with the Merger. (i) No two parties to the Merger are investment companies as defined in Section 368(a)(2)(F)(iii) and (iv) of the Code. (j) BSI is not under the jurisdiction of a court in a Title 11 or similar case within the meaning of Section 368(a)(3)(A) of the Code. (k) At the Effective Date of the Merger, the fair market value of the assets of BSI will equal or exceed the sum of its liabilities, plus the amount of liabilities, if any, to which those assets are subject. (l) None of the compensation received or to be received by any stockholder- employee of BSI, will be separate consideration for, or allocable to, any of their shares of BSI Common Stock and/or BSI Preferred Stock. None of the shares of Sun Common Stock or Sun Preferred Stock received by any stockholder-employee of BSI pursuant to the Merger will be separate consideration for, or allocable to, any employment agreement. Any compensation paid to any stockholder-employee of BSI subsequent to the Merger will be for services actually rendered and will be commensurate with amounts paid to third parties bargaining at arm's-length for similar services. (m) Following the Effective Date of the Merger, Sun and BSI will comply with all federal income tax reporting requirements mandated by the Code and, to the best knowledge of the management of BSI and Sun, there is no plan or intention on the part of the BSI or Sun stockholders not to comply with such reporting requirements. BSI Holdings, Inc. February 13, 1997 Page 5 Based on the representations and qualifications contained herein, and assuming further that the Merger is carried out in the manner set forth in the Merger Agreement and the Registration Statement, we are of the opinion that the following are the material federal income tax consequences resulting from the consummation of the Merger and that: 1. The Merger will constitute a reorganization within the meaning of Sections 368(a)(1)(A) of the Code and BSI and Sun will be a party to a reorganization within the meaning of Section 368(b) of the Code. 2. No gain or loss will be recognized by BSI as a result of the Merger. 3. No gain or loss will be recognized by any BSI stockholder with respect to the exchange of their BSI Common Stock solely for Sun Common Stock pursuant to the Merger, except in the case of cash paid to dissenters or cash paid in lieu of issuing fractional shares of Sun Common Stock. 4. No gain or loss will be recognized by any BSI stockholder with respect to the exchange of their BSI Preferred Stock solely for Sun Preferred Stock pursuant to the Merger, except in the case of cash paid to dissenters or cash paid in lieu of issuing fractional shares of Sun Preferred Stock. 5. The payment of cash to a BSI stockholder in lieu of a fractional share interest in Sun Common Stock will be treated as if the fractional share interest was distributed as part of the Merger and then redeemed by Sun. Accordingly, the tax consequences of such a cash payment will be determined in accordance with Section 302 of the Code. Unless the redemption is essentially equivalent to a dividend, such a redemption will be treated as a sale or exchange of the fractional share interest under Section 302 of the Code and gain or loss (which will constitute capital gain or loss if the related BSI Common Stock and/or BSI Preferred Stock was held as a capital asset) will be recognized by the stockholder measured by the difference between the cash or other property received in lieu of the fractional share and the portion of the BSI stockholder's tax basis that is allocated to such fractional share. A redemption of BSI stockholders' fractional share interest in Sun will not be essentially equivalent to a dividend if such stockholder incurs a "meaningful reduction" in his proportionate equity interest in Sun by reason of the redemption. Although the determination of whether there has been a meaningful reduction is a factual matter in which no opinion is being given hereunder, generally a redemption of public company shares held by a minority stockholder will be treated as a meaningful reduction where such stockholder's proportionate equity interest in the corporation has been reduced. BSI Holdings, Inc. February 13, 1997 Page 6 6. The aggregate tax basis of the Sun Common Stock and/or Sun Preferred Stock received by a BSI stockholder in the Merger will be the same as the aggregate tax basis of the BSI Common Stock and/or BSI Preferred Stock exchanged for the Sun Common Stock and/or Sun Preferred Stock (less any portion of such basis allocable to fractional shares redeemed for cash). BSI Holdings, Inc. February 13, 1997 Page 7 7. The holding period of Sun Common Stock and/or Sun Preferred Stock (including any fractional shares deemed issued and then redeemed) received by a BSI stockholder in exchange for the BSI Common Stock and/or BSI Preferred Stock pursuant to the Merger will include the holding period of the BSI Common Stock and/or BSI Preferred Stock that was converted into the Sun Common Stock and/or Sun Preferred Stock, provided that such BSI Common Stock and/or BSI Preferred Stock was held as a capital asset at the time of the Merger. 8. No gain or loss will be recognized by the holders of compensatory options to purchase BSI Common Stock upon the receipt of options to purchase Sun Common Stock due to the conversion of their BSI options. However, we note that such holders may recognize compensation income upon the future exercise or disposition of such options. The foregoing opinions are qualified, and no opinions are expressed, as to the federal income tax consequences, if any, with respect to the following matters due to the uncertainty of the law regarding such matters: (i) We are expressing no opinion regarding the federal income tax consequences of the conversion of BSI warrants into warrants to purchase Sun Common Stock since the Treasury Regulations take the position that warrants are neither stock nor securities qualifying for tax free treatment. (ii) The ability of Sun or the Sun consolidated group to utilize net operating loss carryforwards of Sun and BSI subsequent to the Merger may be restricted due to the occurrence of an "ownership change" under Section 382 of the Code as a result of the Merger, as well as the application of the consolidated return regulations under Section 1502 of the Code. Such limitations could defer, and possibly eliminate, any potential tax benefit from offsetting such net operating loss carryforwards against future income of Sun or the Sun consolidated group. (iii) We are expressing no opinion regarding the federal income tax consequences of the redemption of Sun Common Stock owned by existing Sun stockholders pursuant to the Merger. However, we note that we believe that such redemption will not affect the requirement that there be continuity of interest by the target corporation shareholders after a reorganization within the meaning of ss.368(a)(1)(A) because BSI will be considered to be the target corporation. Our opinion has been requested by BSI on behalf of (i) itself, (ii) the BSI stockholders receiving Sun Common Stock and/or Sun Preferred Stock in exchange for BSI Common Stock and/or BSI Preferred Stock pursuant to the Merger, (iii) the holders of compensatory options to purchase BSI Common Stock that are receiving options to purchase Sun Common Stock pursuant BSI Holdings, Inc. February 13, 1997 Page 8 to the Merger, and (iv) the holders of warrants to purchase BSI Common Stock that are receiving warrants to purchase Sun Common Stock pursuant to the Merger. No other individual or entity, whether or not party to the Merger Agreement, may rely upon this opinion without the express, prior written consent of both BSI and the undersigned. Our opinion is limited to the matters discussed herein. The opinion does not deal with the specific circumstances of any particular BSI stockholder, nor does it cover the application of state, local, foreign or other tax laws. In particular, the conclusions herein regarding the treatment of BSI stockholders may not be applicable to BSI stockholders who hold BSI capital stock as part of a straddle or hedge, or are dealers in securities, insurance companies, tax exempt organizations, financial institutions, broker-dealers, S-corporations, foreign corporations, or persons who are not citizens or residents of the United States. We note that the opinion of counsel has no binding effect or official status of any kind with the Internal Revenue Service or the courts. We believe that subject to the conditions and assumptions noted above, it is more likely than not that the conclusions set forth herein would be sustained by the courts if contested by the Internal Revenue Service. However, due to uncertainties inherent in the application of federal tax laws to the Merger, there can be no assurance of such success. If there were ultimately an adverse determination as to any of the tax issues discussed herein or in the Registration Statement, Sun, BSI and the BSI stockholders could sustain different tax consequences than are described herein or in the Registration Statement. Further, our opinion is based upon existing laws, regulations, administrative authorities and judicial decisions, all of which could change with retroactive effect. We have no duty, and do not intend, to update or modify this opinion for changes in the applicable law, regulations or interpretations occurring after the date hereof. Similarly, any change in the facts and assumptions stated above, upon which this opinion is based, could modify our conclusions. We consent to the use of this opinion as an exhibit to the Registration Statement on Form S-4 filed by Sun and to the reference to us under the caption "The Merger--Certain Federal Income Tax Consequences" in the Joint Proxy Statement/Prospectus forming a part of the Registration Statement. Very truly yours, /s/ PORTER & HEDGES, L.L.P. PORTER & HEDGES, L.L.P. -----END PRIVACY-ENHANCED MESSAGE-----