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EXHIBIT 4.2(a)
AMENDMENT NO. 1 TO
RIGHTS AGREEMENT
THIS AMENDMENT NO. 1, dated as of December 16, 1998 (the "Amendment"),
to the Rights Agreement (the "Rights Agreement"), dated as of October 13, 1998
between BNC Mortgage, Inc. (the "Company") and U.S. Stock Transfer Corporation
(the "Rights Agent").
WHEREAS, pursuant to Section 27 of the Rights Agreement, the Company
and the Rights Agent may from time to time supplement or amend certain
provisions of the Rights Agreement in accordance with the terms of Section 27;
NOW, THEREFORE, in consideration of the premises and mutual agreements
herein set forth, the parties hereto agree as follows:
1. The Rights Agreement is hereby amended by deleting the text of
Section 1(a) and replacing it with the following:
"Acquiring Person" shall mean any Person (as defined herein) who or
which, together with all Affiliates and Associates (as defined herein)
of such Person, shall be the Beneficial Owner (as defined herein) of
20% or more of the then outstanding Common Shares (other than as a
result of a Permitted Offer (as defined herein)) or was such a
Beneficial Owner at any time after the date hereof, whether or not such
Person continues to be the Beneficial Owner of 20% or more of the then
outstanding Common Shares. Notwithstanding the foregoing, (A) the term
"Acquiring Person" shall not include (i) the Corporation, (ii) any
Subsidiary of the Corporation, (iii) any employee benefit plan of the
Corporation or any Subsidiary of the Corporation, (iv) any Person
organized, appointed or established by the Corporation for or pursuant
to the terms of any such plan, or (v) any Person, who or which together
with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 20% or more of the then outstanding Common Shares
as a result of the acquisition of Common Shares directly from the
Corporation, and (B) no Person shall be deemed to be an "Acquiring
Person" either (X) as a result of the acquisition of Common Shares by
the Corporation which, by reducing the number of Common Shares
outstanding, increases the proportional number of shares beneficially
owned by such Person, together with all Affiliates and Associates of
such Person; except that if (i) a Person would become an Acquiring
Person (but for the operation of this subclause (X) as a result of the
acquisition of Common Shares by the Corporation, and (ii) after such
share acquisition by the Corporation, such Person, or an Affiliate or
Associate of such Person, becomes the Beneficial Owner of any
additional Common Shares, then such Person shall be deemed an Acquiring
Person, or (Y) if the Board of Directors of the Corporation determines
in good faith that a Person who would otherwise be
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an "Acquiring Person," as defined pursuant to the foregoing provisions
of this Section 1(a), has become such, and such Person divests as
promptly as practicable a sufficient number of Common Shares so that
such Person would no longer be an Acquiring Person, as defined pursuant
to the foregoing provisions of this Section 1(a).
2. The Rights Agreement is hereby further amended by deleting the text
of Section 23(a)(ii) and replacing it with the following:
In addition, the Board of Directors of the Corporation may, at its
option, at any time following the occurrence of a Section 11(a)(ii)
Event and the expiration of any period during which the holder of
Rights may exercise the rights under Section 11(a)(ii) but before any
Section 13 Event, redeem all but not less than all of the then
outstanding Rights at the Redemption Price (x) in connection with any
merger, consolidation or sale or other transfer (in one transaction or
in a series of related transactions) of assets or earning power
aggregating 50% or more of the earning power of the Corporation and its
subsidiaries (taken as a whole) in which all holders of Common Shares
are treated alike and not involving (other than as a holder of Common
Shares being treated like all other such holders) an Interested
Stockholder or (y)(aa) if and for so long as the Acquiring Person is
not thereafter the Beneficial Owner of 20% of the Common Shares, and
(bb) at the time of redemption no other Persons are Acquiring Persons.
3. The Rights Agreement is hereby further amended by deleting the
second sentence of Section 24(a) and replacing it with the following:
Notwithstanding the foregoing, the Board of Directors shall not be
empowered to effect such exchange at any time after any Person (other
than the Corporation, any Subsidiary of the Corporation, any employee
benefit plan of the Corporation or any such Subsidiary, or any entity
holding Common Shares for or pursuant to the terms of any such a plan),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 20% or more of the Common Shares then outstanding.
4. The Rights Agreement is hereby further amendment by deleting the
second sentence of the second paragraph of Exhibit C to the Rights Agreement and
replacing it with the following:
The Rights will separate from the Common Stock upon the earliest to
occur of (i) ten (10) days after an Acquiring Person (as defined in the
Rights Agreement) or group of affiliated or associated persons has
acquired beneficial ownership of 20% or more of the Corporation's
outstanding Common Stock (except pursuant to a Permitted Offer, as
hereinafter defined); or (ii) ten (10) Business Days (as defined in the
Rights Agreement) (or such later date as the Board may determine)
following the commencement of, or announcement of
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an intention to make, a tender offer or exchange offer the consummation
of which would result in a person or group becoming an Acquiring Person
(as hereinafter defined) (the earliest of such dates being called the
"Distribution Date").
This Amendment may be executed in any number of counterparts, and each
of such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed, all as of the date first written above.
BNC MORTGAGE, INC.
By: /s/ XXXXX X. XXXXXXX
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Xxxxx X. Xxxxxxx
President and Chief Financial Officer
Attest:
/s/ XXXX X. XXXXXXX
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Xxxx X. Xxxxxxx
Secretary
U.S. STOCK TRANSFER CORPORATION
By: /s/ XXXXXXX XXXXXX
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Xxxxxxx Xxxxxx
Senior Vice President
Attest:
/s/ XXXX X. XXXXXXXX
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Xxxx X. Xxxxxxxx
Assistant Vice President
