<PAGE>
EXHIBIT 4.2
AMENDMENT NO. 1 TO RIGHTS AGREEMENT
AMENDMENT, dated as of August 31, 2000, between Burnham Pacific Properties,
Inc., a Maryland corporation (the "Company") and First Chicago Trust Company of
New York, a New York corporation, as Rights Agent (the "Rights Agent").
WHEREAS, the parties hereto are parties to a Rights Agreement dated as of
June 19, 1999 (the "Agreement"); and
WHEREAS, the parties hereto desire to amend the Agreement;
NOW THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
Section 1. DEFINITIONS; REFERENCES. Unless otherwise specifically defined
herein, each term used herein which is defined in the Agreement shall have the
meaning assigned to such term in the Agreement. Each reference to "hereof,"
"hereunder," "herein" and "hereby" and each other similar reference and each
reference to "this Agreement" and each other similar reference contained in the
Agreement shall from and after the date hereof refer to the Agreement as amended
hereby.
Section 2. AMENDMENT OF SECTION 1 OF THE AGREEMENT. Section 1(a) of this
Agreement is hereby amended and modified by inserting the following as the third
and fourth paragraphs of that section:
Notwithstanding the foregoing, neither (i) Blackacre SMC Master Holdings,
LLC, Blackacre SMC II Holdings, LLC or any of their respective Affiliates
or successors (collectively, the "Blackacre Members") nor (ii) Westbrook
Burnham Holdings, L.L.C., Westbrook Burnham Co-Holdings, L.L.C. or any of
their respective Affiliates or successors (collectively, the "Westbrook
Members" and, with the Blackacre Members, the "Series C Preferred
Stockholders") shall become or be deemed to become an Acquiring Person as a
result of the issuance to them of shares of the Series 2000-C Convertible
Preferred Stock, par value $.01 per share, of the Company (the "Series C
Preferred Stock") or of any shares of Common Stock of the Company received
by such Series C Preferred Stockholders upon the conversion of any such
shares of Series C Preferred Stock.
Notwithstanding anything in Section 1(e) to the contrary, the formation or
existence of a Group consisting of, or the entering into or existence of
any other agreement, arrangement or understanding between, one or more of
the Blackacre Members and one or more of the Westbrook Members shall not
cause (i) any of the Blackacre Members to be or be deemed to be the
Beneficial Owner of shares of Common Stock of the
<PAGE>
Company which are Beneficially Owned by any of the Westbrook Members or
(ii) any of the Westbrook Members to be or be deemed to be the Beneficial
Owner of shares of Common Stock of the Company which are Beneficially
Owned by any of the Blackacre Members.
Section 3. GOVERNING LAW. This Amendment shall be deemed to be a contract
made under the laws of the State of Maryland and for all purposes shall be
governed by and construed in accordance with the laws of such State applicable
to contracts to be made and performed entirely within Maryland.
Section 4. COUNTERPARTS. This Amendment may be executed in counterparts and
each of such counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the same
instrument. This amendment shall become effective when each party shall have
executed a counterpart hereof signed by the other party hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed, all as of the day and year first above written.
Attest: BURNHAM PACIFIC PROPERTIES,
INC.
By: /s/ Penny M. Evans By: /s/ Scott C. Verges
------------------------------ --------------------------------
Title: Assistant Secretary Title: President and Interim CEO
Attest: FIRST CHICAGO TRUST COMPANY
OF NEW YORK, as Rights Agent
By: /s/ Kevin Laurita By: /s/ Jerry O'Leary
------------------------------ --------------------------------
Title: Managing Director Title: Managing Director
