Exhibit 10.2


     

    Exhibit
      10.2


    SUPPLEMENTAL
      INDENTURE

     

    SUPPLEMENTAL
      INDENTURE, dated as of August 11, 2006 (this “Supplemental
      Indenture”),
      between BISHOP’S GATE RESIDENTIAL MORTGAGE TRUST (the “Trust”)
      and
      THE BANK OF NEW YORK, as Indenture Trustee (the “Trustee”).

     

    W I T N E S S E T H
      :

     

    WHEREAS,
      the Trust and the Trustee are parties to that certain Base Indenture, dated
      as
      of December 11, 1998 (the “Base
      Indenture”),
      as
      supplemented by the Series 1999-1 Supplement, dated as of November 22, 1999,
      the
      Series 2001-1 Supplement, dated as of March 30, 2001 and the Series 2001-2
      Supplement, dated as of November 20, 2001 (collectively with the Base Indenture,
      the “Indenture”);

     

    WHEREAS,
      certain Events of Default have occurred under Section 9.1(i)(i) of the Indenture
      as a result of the Trust’s failure to provide to the Trustee (i) the audited
      annual financial statements of the Trust, the Seller and PHH within 105 days
      after the end of the most recent fiscal year of the Trust and the Seller as
      required by Section 8.3(a) of the Base Indenture; and (ii) the unaudited
      financial statements of PHH within 60 days of the most recent quarter end as
      required by Section 8.3(a) of the Base Indenture;

     

    WHEREAS,
      the Trustee has notified the Servicer, the Seller, the Collateral Agent and
      the
      holders of the Residential Mortgage Loan Medium-Term Notes, Variable Rate Notes,
      Series 1999-1, Due 2006 and Variable Rate Notes, Series 2001-2, Due 2008 issued
      under the Indenture that the foregoing Events of Default have
      occurred;

     

    WHEREAS,
      pursuant to and in accordance with Sections 9.5 and 12.2 of the Base Indenture,
      the Trust has obtained, as of the date hereof, the consent of the Required
      Noteholders to the waivers to certain provisions of the Indenture as more
      particularly described in this Supplemental Indenture; and

     

    WHEREAS,
      the Trustee and the Required Noteholders have agreed to consent to the requested
      waivers and modifications, but only on the terms and subject to the conditions
      set forth herein.

     

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

     

    1.  Defined
      Terms.
      Unless
      otherwise defined herein, terms which are defined in the Base Indenture and
      used
      herein (and in the recitals hereto) as defined terms are used as so defined.
      For
      purposes of this Supplemental Indenture, “Disclosure Documents” shall mean the
      collective reference to PHH’s (i) Form 8-K, filed on March 1, 2006, (ii) Form
      8-K, filed on March 17, 2006, (iii) Form 8-K, filed on May 11, 2006, (iv) Form
      8-K, filed on June 12, 2006, and (v) Form 8-K, filed on July 21,
      2006.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    2.  Waiver.
      Notwithstanding anything in the Indenture to the contrary, the Trustee, on
      behalf of the Holders, hereby waives, (i) any Event of Default arising under
      Section 8.10 of the Base Indenture or as a result of the inaccuracy when made
      of
      the representations and warranties contained in Article 7 of the Base Indenture,
      solely to the extent that any inaccuracy of such representations and warranties
      arises out of the matters disclosed by PHH in the Disclosure Documents, and
      (ii)
      any Event of Default arising under Section 8.3(a) of the Base Indenture as
      a
      result of the Trust’s failure to provide to the Trustee, or arising as a result
      of the Trust's failure to provide to any other Person under a Program Document,
      the audited annual financial statements of each of the Trust, the Seller and
      PHH
      for the fiscal year ended December 31, 2005 and the unaudited financial
      statements of PHH for the fiscal quarters ended March 31, 2006, June 30, 2006
      and September 30, 2006 provided,
      in each
      case, that such financial statements are delivered to the Trustee, Moody’s,
      S&P and Fitch on or before the earlier of (A) December 31, 2006 or (B) the
      date on or after September 30, 2006 by which such financial statements are
      required to be delivered to the holders of pari
      passu
      obligations of the Trust (other than the Notes) under their Program Documents
      (after giving effect to any applicable waiver); provided,
      at any
      time that such Program Documents are no longer in effect, such date shall be
      deemed to be December 31, 2006.

     

    3.  Representations
      and Warranties.
      On and
      as of the date hereof, the Trust hereby confirms, reaffirms and restates the
      representations and warranties set forth in Article 7 of the Base Indenture
      mutatis mutandis,
      except
      to the extent that such representations and warranties (i) are the subject
      of
      the waiver contained in Section 2(i) above or (ii) expressly relate to a
      specific earlier date in which case the Trust hereby confirms, reaffirms and
      restates such representations and warranties as of such earlier
      date.

     

    4.  Effectiveness
      of Supplemental Indenture.
      This
      Supplemental Indenture shall become effective as of the date the Trustee shall
      have received (a) evidence satisfactory to the Trustee that the Required
      Noteholders have consented to the Trustee’s execution of this Supplemental
      Indenture; and (b) counterparts of this Supplemental Indenture duly executed
      by
      the Trust and the Trustee. Upon this Supplemental Indenture becoming effective,
      each Event of Default specified above shall be deemed to have been cured for
      every purpose of the Indenture.

     

    5.  Continuing
      Effect; No Other Waivers.
      Except
      as expressly provided herein, all of the terms and provisions of the Indenture
      are and shall remain in full force and effect. The waivers provided for herein
      are limited to the specific subsections of the Indenture specified herein and
      shall not constitute a consent, waiver or amendment of, or an indication of
      the
      Trustee’s or the Holders’ willingness to consent to any action requiring consent
      under any other provisions of the Indenture or the same Section for any other
      date or time period other those specified herein.

     

    6.  Expenses.
      The
      Trust agrees to pay and reimburse the Trustee for all its reasonable costs
      and
      out-of-pocket expenses incurred in connection with the preparation and delivery
      of this Supplemental Indenture, including, without limitation, the reasonable
      fees and disbursements of counsel to the Trustee.

     

    7.  Counterparts.
      This
      Supplemental Indenture may be executed in any number of counterparts by the
      parties hereto (including by facsimile or electronic transmission), each of
      which counterparts when so executed shall be an original, but all the
      counterparts shall together constitute one and the same instrument.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    8.  GOVERNING
      LAW.
      THIS
      SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
      IN
      ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

     

    9.  Trustee
      Makes No Representation.
      The
      Trustee makes no representation as to the validity or sufficiency of this
      Supplemental Indenture.

     

    [remainder
      of page intentionally left blank]

     


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture
      to
      be duly executed and delivered by their proper and duly authorized officers
      as
      of the day and year first above written.

     

    

      
        	 	
                BISHOP’S
                  GATE RESIDENTIAL MORTGAGE TRUST

              
	 	
                 

                By:
                  

              	
                 

                DELAWARE
                  TRUST COMPANY, 

              
	 	 	
                NATIONAL
                  ASSOCIATION, not in its

              
	 	 	
                individual
                  capacity, but solely as Owner

              
	 	 	
                Trustee
                  under the Trust Agreement

              
	 	
                 

                By:

              	
                 

                /s/
                  Sterling C. Correia

              
	 	 	
                Name:
                  Sterling C. Correia

              
	 	 	
                Title:
                  Vice President

                 

              
	 	
                 

                THE
                  BANK OF NEW YORK, as Indenture Trustee

              
	 	
                 

                By:

              	
                 

                /s/
                  Robert A. Massimillo

              
	 	 	
                Name:
                  Robert A. Massimillo

              
	 	 	
                Title:
                  Vice President

              


      

    

     

     

     

    4