EXHIBIT 99.3
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Bond Securitization, L.L.C.
$937,292,000
(Approximate)
C-BASS Mortgage Loan Asset-Backed Certificates Series 2006-CB2
February 28, 2006
UNDERWRITING AGREEMENT
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J.P. Morgan Securities Inc.
As Representative of the
Underwriters Listed
in Schedule
I
c/o J.P. Morgan Securities Inc.
270 Park Avenue
New York, New York
10017
Ladies and Gentlemen:
1.
Introduction.
Bond Securitization, L.L.C., a limited liability company
organized
and existing under the laws of the State of Delaware (the
"Depositor"),
proposes to sell to J.P. Morgan Securities Inc., acting on its own
behalf and
as representative (the "Representative") of the underwriters listed
in
Schedule I hereto (the "Underwriters") twelve (12) classes of the
Depositor's
C-BASS Mortgage Loan Asset-Backed Certificates, Series 2006-CB2.
Such classes
have been designated as the Class AV, Class AF-1, Class AF-2, Class
AF-3,
Class AF-4, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
Class M-6
and Class M-7 Certificates (collectively, the "Underwritten
Certificates").
Only the Underwritten Certificates are being purchased by the
Underwriters
hereunder. The Underwritten Certificates are to be issued together
with the
Depositor's C-BASS Mortgage Loan Asset-Backed Certificates, Series
2006-CB2
Class B-1, Class B-2, Class B-3, Class B-4, Class CE, Class P,
Class R and
Class R-X Certificates (such classes, together with the
Underwritten
Certificates, the "Certificates"). The Certificates will represent
the entire
beneficial ownership interest in the C-BASS 2006-CB2 Trust (the
"Issuing
Entity"). The assets of the Issuing Entity initially will consist
primarily of
(i) a pool of fixed-rate and adjustable-rate mortgage loans secured
by first
and second liens on primarily one- to four-family residential
properties (the
"Mortgage Loans") conveyed to the Issuing Entity on February 28,
2006 (the
"Closing Date") pursuant to a Pooling and Servicing Agreement dated
as of
February 1, 2006 (the "Pooling Agreement"), among the Depositor,
Credit-Based
Asset Servicing and Securitization LLC, as seller (the "Seller"),
Litton Loan
Servicing LP, as servicer (the "Servicer"), and U.S. Bank
National
Association, as Trustee (the "Trustee") and (ii) the amount on
deposit in the
Accounts. These Mortgage Loans, with an aggregate principal balance
of
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approximately $951,572,898 as of February 1, 2006 (the "Cut-off
Date"), were
transferred by the Seller, pursuant to a mortgage loan purchase
agreement
between the Depositor and the Seller dated as of February 1, 2006
(the "Loan
Purchase Agreement"). The Certificates are to be issued pursuant to
the
Pooling Agreement.
The Certificates are more fully described in the Registration
Statement (as such term is defined in Section 2(a)), which the
Depositor has
furnished to the Underwriters. The Depositor will elect to treat
the Issuing
Entity as one or more "real estate mortgage investment conduits"
(each, a
"REMIC") under the Internal Revenue Code of 1986, as amended (the
"Code").
Capitalized terms used herein but not defined herein shall have
the
meanings provided in the Pooling Agreement.
2.
Representations and Warranties of the Depositor.
The Depositor represents and warrants to the Underwriters as of
the
date hereof and as of the date of the Pooling Agreement, as
follows:
(a) A registration statement on Form S-3 (No. 333-87146), including
a
prospectus and such amendments thereto as may have been required to
the date
hereof, relating to the Underwritten Certificates and the offering
of each
Series thereof from time to time in accordance with Rule 415 under
the
Securities Act of 1933, as amended (the "Act"), has been filed with
the
Securities and Exchange Commission (the "Commission") and such
registration
statement, as amended, has become effective. For purposes of this
Agreement,
"Effective Time" means the date and time as of which such
registration
statement, or the most recent post-effective amendment thereto (if
any) filed
prior to the execution and delivery of this Agreement, was declared
effective
by the Commission, and "Effective Date" means the date of the
Effective Time.
Such registration statement, as amended, and the base prospectus
and related
prospectus supplement that the Depositor has filed with the
Commission
pursuant to Rule 424(b) relating to the sale of the Underwritten
Certificates
of the applicable Series offered thereby constituting a part
thereof, as from
time to time amended or supplemented (including any prospectus
filed with the
Commission pursuant to Rule 424(b) of the rules and regulations of
the
Commission promulgated under the Act (the "Rules and
Regulations")), including
all documents incorporated therein by reference, are respectively
referred to
as the "Registration Statement", the "Base Prospectus" and the
"Prospectus
Supplement"; provided, however, that a supplement to the Base
Prospectus
prepared pursuant to Section 5(a) shall be deemed to have
supplemented the
Base Prospectus only with respect to the offering of the Series of
the
Underwritten Certificates to which it relates. The conditions to
the use of a
registration statement on Form S-3 under the Act, as set forth in
the General
Instructions to Form S-3, and the conditions of Rule 415 under the
Act, have
been satisfied with respect to the Registration Statement.
The Base Prospectus and the Prospectus Supplement are
collectively
referred to herein as the "Prospectus."
(b) The Registration Statement, as of the Effective Date, as of the
date of
the related Prospectus Supplement and as of the date of each
Contract of Sale
(as defined in Rule 159 of the Act) conformed in all material
respects to the
requirements of the Act and the Rules and Regulations,
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and did not include any untrue statement of a material fact or omit
to state
any material fact required to be stated therein or necessary to
make the
statements therein not misleading, and the Base Prospectus as of
its issue
date, as of the date of the Prospectus Supplement and as revised,
amended or
supplemented by the Prospectus Supplement and filed with the
Commission
conforms and will conform in all material respects to the
requirements of the
Act and the Rules and Regulations, and does not include and will
not include,
any untrue statement of a material fact and does not omit and will
not omit to
state any material fact necessary in order to make the statements
therein, in
the light of the circumstances under which they were made, not
misleading. The
Base Prospectus delivered to the Underwriters for use in connection
with the
related offering was identical to the electronically transmitted
copies
thereof filed with the Commission pursuant to its Electronic Data
Gathering,
Analysis and Retrieval system, except to the extent permitted by
Regulation
S-T. The two immediately preceding sentences do not apply to
statements or
omissions from either of such documents based upon written
information
furnished to the Depositor by any Underwriter specifically for use
therein.
(c) The free writing prospectus of the Issuing Entity the "Free
Writing
Prospectus" as of its date (the "Start Date") and as of each
day
through
the Closing Date, constitutes and will constitute an "issuer
free
writing prospectus" as defined in Rule 433 of the Act and does
not
and will
not as of any such time conflict with the information in the
Registration Statement or the Base Prospectus as supplemented by
the
Prospectus
Supplement. The Free Writing Prospectus of the Issuer has
been filed
with the Commission as required by Rule 433. The Free Writing
Prospectus
and the Base Prospectus (collectively, the "Disclosure
Package")
as of the Start Date and as of each day through the Closing
Date does
not and will not include an untrue statement of a material
fact and
does not and will not omit to state a material fact necessary
to make
the statements therein, in light of the circumstances under
which they
were made, not misleading.
(d) The Seller Mortgage Loan Information (as defined in the
Indemnification Agreement) as of the date it is forwarded to an
Underwriter, is accurate in all material respects.
(e) The Depositor has been duly organized and is validly existing
as a limited
liability company in good standing under the laws of the State of
Delaware,
with full power and authority to own its assets and conduct its
business as
described in the Base Prospectus, is duly qualified as a foreign
limited
liability company in good standing in all jurisdictions in which
the ownership
or lease of its property or the conduct of its business requires
such
qualification, except where the failure to be so qualified would
not have a
material adverse effect on the Depositor, and is conducting its
business so as
to comply in all material respects with the applicable statutes,
ordinances,
rules and regulations of the jurisdictions in which it is
conducting business.
(f) The Pooling Agreement and the Certificates conform, or will
conform as of
the Closing Date, to the description thereof contained in the
Registration
Statement, the Prospectus and the Free Writing Prospectus; and
the
Certificates, on the related Closing Date, will have been duly and
validly
authorized and, when such Certificates are duly and validly
executed by the
Depositor or the Trustee, authenticated by the Trustee and
delivered in
accordance with such Pooling
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Agreement and delivered and paid for as provided herein, will be
validly
issued and outstanding and entitled to the benefits and security
afforded by
the Pooling Agreement.
(g) The execution and delivery by the Depositor of this Agreement,
the Pooling
Agreement and the Loan Purchase Agreement are within the limited
liability
company power of the Depositor and have been, or will have been,
duly
authorized by all necessary limited liability company action on the
part of
the Depositor; and neither the execution and delivery by the
Depositor of such
instruments, nor the consummation by the Depositor of the
transactions herein
or therein contemplated, nor the compliance by the Depositor with
the
provisions hereof or thereof, will (i) conflict with or result in a
breach of,
or constitute a default under, any of the provisions of the
certificate of
formation or limited liability company agreement of the Depositor,
(ii)
conflict with any of the provisions of any law, governmental rule,
regulation,
judgment, decree or order binding on the Depositor or its
properties, (iii)
conflict with any of the provisions of any indenture, mortgage,
contract or
other instrument to which the Depositor is a party or by which it
is bound, or
(iv) result in the creation or imposition of any lien, charge or
encumbrance
upon any of its property pursuant to the terms of any such
indenture,
mortgage, contract or other instrument.
(h) At the date thereof, the Pooling Agreement will constitute a
legal, valid
and binding obligation of the Depositor, enforceable against the
Depositor in
accordance with its terms, subject, as to enforcement of remedies,
to
applicable bankruptcy, reorganization, insolvency, moratorium and
other
similar laws affecting creditors' rights generally from time to
time in
effect, and to general principles of equity.
(i) All approvals, authorizations, consents, orders or other
actions of any
person, corporation or other organization, or of any court,
governmental
agency or body or official (except with respect to the state
securities or
Blue Sky laws of various jurisdictions) required in connection with
the valid
and proper authorization, issuance and sale of the Certificates
pursuant to
this Agreement and the Pooling Agreement have been or will be taken
or
obtained on or prior to the Closing Date.
(j) At the Closing Date, each of the Mortgage Loans included in the
Issuing
Entity will meet the criteria for selection described in the
Prospectus and
the Free Writing Prospectus.
(k) The characteristics of the Issuing Entity will not subject the
Issuing
Entity to registration as an investment company under the
Investment Company
Act of 1940, as amended (the "Investment Company Act"). The
characteristics of
the Depositor will not subject the Depositor as an investment
company under
the Investment Company Act.
(l) Since the respective dates as of which information is given in
the Free
Writing Prospectus and the Prospectus, there has not been any
material adverse
change in the general affairs, management, financial condition, or
results of
operations of the Depositor, otherwise than as set forth or
contemplated in
the Free Writing Prospectus and the Prospectus as supplemented or
amended as
of the Closing Date.
(m) There are no actions, proceedings or investigations pending
before or
threatened by any court, administrative agency or other tribunal to
which the
Depositor is a party or of which any
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of its properties is the subject (i) which if determined adversely
to the
Depositor would have a material adverse effect on the business or
financial
condition of the Depositor, (ii) asserting the invalidity of the
Agreements or
the Certificates, (iii) seeking to prevent the issuance of the
Certificates or
the consummation by the Depositor of any of the transactions
contemplated by
any of the Agreements or (iv) which might materially and adversely
affect the
performance by the Depositor of its obligations under, or the
validity or
enforceability of, any of the Agreements or the Certificates.
(n) The direction by the Depositor to the Trustee to execute,
authenticate,
issue and deliver the Certificates has been duly authorized by the
Depositor,
and assuming the Trustee has been duly authorized to do so, when
executed,
authenticated, issued and delivered by the Trustee in accordance
with the
Pooling Agreement, the Certificates will be validly issued and
outstanding and
will be entitled to the benefits provided by the Pooling
Agreement.
(o) At the time of execution and delivery of the Pooling Agreement,
the
Depositor will: (i) have equitable title to the Mortgage Loans
conveyed by the
Seller, free and clear of any lien, mortgage, pledge, charge,
encumbrance,
adverse claim or other security interest (collectively, "Liens");
(ii) not
have assigned to any person (other than the Trustee) any of its
right, title
or interest in the Mortgage Loans (other than liens that have been
released at
the time the Mortgage Loans are conveyed to the Trustee); and (iii)
have the
power and authority to sell its interest in the Mortgage Loans to
the Trustee
and to sell the Underwritten Certificates to the Underwriters. Upon
execution
and delivery of the Pooling Agreement by the Trustee, the Trustee
will have
acquired beneficial ownership of all of Depositor's right, title
and interest
in and to the Mortgage Loans. Upon delivery to the Underwriters of
the
Underwritten Certificates, the Underwritten Certificates will be
free of any
Liens.
(p) At the Closing Date, the Certificates and the Pooling Agreement
will
conform in all material respects to the descriptions thereof
contained in the
Prospectus and the Free Writing Prospectus.
(q) At the Closing Date, each of the representations and warranties
of the
Depositor set forth in Section 2.03 of the Pooling Agreement will
be true and
correct in all material respects.
(r) As of the earliest time after filing of the Registration
Statement the
Issuing Entity or another offering participant made a bona fide
offer (within
the meaning of Rule 164(h)(2) under the Act) of the Public
Certificates, the
Issuing Entity was not and will not be an "ineligible issuer" as
defined in
Rule 405 under the Act.
(s) Other than the Base Prospectus and the Free Writing Prospectus,
the
Issuing Entity has not made and will not make any offer relating to
the Public
Certificates that would constitute a "free writing prospectus" as
defined in
Rule 405 under the Act;
(t) The Issuing Entity has complied and will comply with the
requirements of
Rule 433 under the Act applicable to the Free Writing Prospectus,
including
timely filing with the Commission or retention where required and
legending.
3. Purchase,
Sale and Delivery of Certificates.
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The commitment of the Underwriters to purchase the Underwritten
Certificates pursuant to this Agreement shall be deemed to have
been made on
the basis of the representations and warranties herein contained
and shall be
subject to the satisfaction of the terms set forth herein. The
Depositor
agrees to instruct the Trustee to issue and agrees to sell to
the
Underwriters, and the Underwriters agree (except as provided by
sections 9 and
11 hereof) to purchase from the Depositor, the Underwritten
Certificates at
the purchase prices set forth in Schedule I.
Delivery of and payment for the Underwritten Certificates to
which
this Agreement applies will be made at the office of J.P. Morgan
Securities
Inc. or such other place as the parties hereto agree as the
Underwriters and
the Depositor shall agree upon, such time being herein referred to
as a
"Closing Date". Delivery of such Certificates shall be made by the
Depositor
to the Underwriters against payment of the purchase price specified
in the
applicable Pooling Agreement in same day funds wired to such bank
as may be
designated by the Depositor, or by such other manner of payment as
may be
agreed upon by the Depositor and the Underwriters. Each Class of
Underwritten
Certificates sold to the Underwriters will be represented initially
by one or
more certificates registered in the name of Cede & Co., the
nominee of The
Depository Trust Company ("DTC") (the "DTC Certificates"). The
interests of
the beneficial owners of the DTC Certificates will be represented
by book
entries on the records of DTC and participating members thereof.
Definitive
certificates for the DTC Certificates will be made available only
under the
limited circumstances specified in the Pooling Agreement.
The Depositor acknowledges and agrees that the Underwriters are
acting solely in the capacity of an arm's length contractual
counterparty to
the Depositor with respect to the offering of Certificates
contemplated hereby
(including in connection with determining the terms of the
offering) and not
as a financial advisor or a fiduciary to, or an agent of, the
Company or any
other person.
4. Offering by
the Underwriter.
(a) It is understood that the Underwriters propose to offer the
Underwritten
Certificates subject to this Agreement for sale to the public as
set forth in
the Prospectus.
(b) Each Underwriter agrees that it shall not enter into any
Contract of Sale
with any investor with respect to any class of Underwritten
Certificates with
a minimum denomination of $1,000 until the Prospectus has been
delivered to
such investor.
(c) In the event that an Underwriter uses a "road show" (as defined
in Rule
433(h)(4) under the Act) in connection with the offering of the
Underwritten
Certificates, the Underwriter agrees that all information in such
road show
shall be provided orally only and not as a "written communication"
(as defined
in Rule 405 under the Act). Each Underwriter agrees that any
slideshow used in
connection with a road show (i) shall only be provided as part of
the road
show and not separately, (ii) if handed out at any meeting as a
hard copy,
shall be retrieved prior to the end of the meeting and (iii) will
otherwise be
used only in a manner that does cause the slideshow to be treated
as a "free
writing prospectus" (as defined in Rule 405 under the Act).
(d) If any "written communication" (as defined in Rule 405 under
the Act) in
connection with the offering of the Underwritten Certificates
contains an
untrue statement of material fact or
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omits to state a material fact necessary to make the statements, in
light of
the circumstances under which they were made, not misleading at the
time that
a Contract of Sale was entered into, when taken together with all
information
that was conveyed to any person with whom a Contract of Sale was
entered into,
then the applicable Underwriter shall provide any such person with
the
following:
(i) Adequate disclosure of the contractual arrangement;
(ii) Adequate disclosure of the person's rights under the
existing
Contract of Sale at the time termination is sought;
(iii) Adequate disclosure of the new information that is necessary
to
correct the misstatements or omissions in the information given at
the time of
the original Contract; and
(iv) A meaningful ability to elect to terminate or not terminate
the
prior Contract of Sale and to elect to enter into or not enter into
a new
Contract of Sale.
5. Covenants of
the Depositor.
The Depositor covenants and agrees with the Underwriters
participating in the applicable offering of the Underwritten
Certificates
that:
(a) The Depositor will not file, for so long as the delivery of a
Prospectus
is required in connection with the offering or sale of such
Underwritten
Certificates, any amendments to the Registration Statement as in
effect with
respect to such Underwritten Certificates, or any amendments or
supplements to
the Prospectus, unless it shall first have delivered copies of such
amendments
or supplements to the Underwriters and the Underwriters have
consented to the
amendments or supplements thereof, which shall not be unreasonably
withheld;
the Depositor will, during such period, immediately advise the
Underwriters or
your counsel (i) when notice is received from the Commission that
any
post-effective amendment to the Registration Statement has become
or will
become effective and (ii) of any order or communications suspending
or
preventing, or threatening to suspend or prevent, the offer and
sale of the
Underwritten Certificates or of any proceedings or examinations
that may lead
to such an order or communication, whether by or of the Commission
or any
authority administering any state securities or Blue Sky law, as
soon as the
Depositor is advised thereof, and will use its best efforts to
prevent the
issuance of any such order or communication and to obtain as soon
as possible
its lifting, if issued.
(b) If, at any time when a Prospectus relating to the
Underwritten
Certificates is required to be delivered under the Act, any event
occurs as a
result of which the Prospectus as then amended or supplemented
would include
an untrue statement of a material fact or omit to state a material
fact
necessary in order to make the statements therein, in the light of
the
circumstances under which they were made, not misleading, or if it
is
necessary at any time to amend or supplement the Prospectus to
comply with the
Act or the Rules and Regulations, the Depositor will promptly
prepare and file
with the Commission, an amendment or supplement that will correct
such
statement or omission or an amendment that will effect such
compliance.
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(c) If, at any time after the Start Date and prior to the Closing
Date any
event occurs as a result of which the Base Prospectus and the Free
Writing
Prospectus as then amended or supplemented would include any untrue
statement
of a material fact or omit to state a material fact necessary to
make the
statements therein, in light of the circumstances under which they
were made,
not misleading, or would conflict with the information in the
Registration
Statement, the Depositor promptly will notify each Underwriter and
will, upon
the request of any Underwriter, or may, after consultation with
each
Underwriter, prepare and file with the Commission (as may be
required under
the Rules and Regulations) a revision, amendment or supplement
which will
correct such conflict, statement or omission, and furnish without
charge to
each Underwriter as many copies as such Underwriter may from time
to time
reasonably request of such revision, amendment or supplement.
(d) The Depositor will cause to be delivered
