ASSIGNMENT AND RECOGNITION AGREEMENT dated as of December 14, 2006 among SG MORTGAGE SECURITIES, LLC, as Assignor HSBC BANK USA, NATIONAL ASSOCIATION, not in its individual capacity, but solely as trustee, as Assignee or Trustee OPTION ONE MORTGAGE...

Exhibit 10.3

EXECUTION COPY

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ASSIGNMENT AND RECOGNITION AGREEMENT

dated as of December 14, 2006

among

SG MORTGAGE SECURITIES, LLC,

as Assignor

HSBC BANK USA, NATIONAL ASSOCIATION,

not in its individual capacity, but solely as trustee,

as Assignee or Trustee

OPTION ONE MORTGAGE CORPORATION,

as Responsible Party and as Servicer

and

SG MORTGAGE FINANCE CORP.,

as Seller

and acknowledged and agreed by

▇▇▇▇▇ FARGO BANK, N.A.

as Master Servicer

 

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ASSIGNMENT AND RECOGNITION AGREEMENT

This ASSIGNMENT AND RECOGNITION AGREEMENT, dated as of December 14, 2006 (this “Assignment Agreement”), is among SG MORTGAGE SECURITIES, LLC, as assignor (the “Assignor”), HSBC BANK USA, NATIONAL ASSOCIATION, not in its individual capacity but solely as trustee on behalf of SG Mortgage Securities Trust 2006-OPT2 (the “Assignee” or “Trustee”), OPTION ONE MORTGAGE CORPORATION, as servicer (the “Servicer”) and as responsible party (the “Responsible Party”), and SG MORTGAGE FINANCE CORP., as seller (the “Seller”).

WHEREAS, the Responsible Party, the Seller and the Assignor have entered into the Mortgage Loan Purchase Agreement, dated as of November 13, 2006 (the “Mortgage Loan Purchase Agreement”), pursuant to which the Seller will sell and the Assignor will purchase certain mortgage loans (the “Mortgage Loans”) listed on the Mortgage Loan Schedule attached as an exhibit to the Mortgage Loan Purchase Agreement and attached hereto as Exhibit 1;

WHEREAS, ▇▇▇▇▇ Fargo Bank, N.A., as master servicer, securities administrator and custodian (the “Master Servicer”), the Assignor, as depositor, the Servicer and the Trustee, are entering into the Pooling and Servicing Agreement, dated as December 1, 2006 (the “Pooling and Servicing Agreement”), pursuant to which the Assignor will transfer the Mortgage Loans to the Assignee, and the Servicer will be responsible for the servicing of the Mortgage Loans; and

WHEREAS, the Pooling and Servicing Agreement sets forth the servicing provisions, pursuant to which the Servicer will agree to service the Mortgage Loans;

NOW THEREFORE, in consideration of the mutual agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Assignment. (a) The Assignor hereby assigns to the Assignee, as of the date hereof, all of its rights, privileges and powers under the Mortgage Loan Purchase Agreement (including, without limitation, (i) the Assignor’s rights with respect to the representations and warranties made by the Responsible Party pursuant to Sections 5(a) and 6 thereof and by the Seller in Section 5(c) thereof, (ii) the Assignor’s rights with respect to the repurchase obligations of the Seller and the Responsible Party under Section 7 thereof and (iii) all right to indemnification under Section 11 thereof).

(b) The Assignor represents and warrants to the Assignee that the Assignor has not taken any action which would operate to impair or encumber the Assignor’s ownership interest in the Mortgage Loans since the date of the Mortgage Loan Purchase Agreement.

2. Recognition of Assignee.

(a) From and after December 14, 2006 (the “Closing Date”), both the Assignor and the Servicer shall note the transfer of the Mortgage Loans to the Assignee in their respective books and records, and shall recognize the Assignee as the owner of the Mortgage Loans.

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(b) Each of the Servicer and the Seller acknowledges that, from and after the Closing Date, the Servicer will service the Mortgage Loans for the benefit of the Trustee as the owner of the Mortgage Loans and the Master Servicer will monitor, oversee and supervise such servicing.

(c) All documents, reports and other data required to be delivered by the Seller to the Assignor, as “Purchaser” under the Mortgage Loan Purchase Agreement, shall be delivered to the Master Servicer, Securities Administrator or Custodian, as applicable, at the address set forth in Section 6 hereof or to any designee of the Master Servicer, Securities Administrator or Custodian, as applicable, as such party may instruct.

3. Representations and Warranties of the Assignee. The Assignee hereby represents and warrants to the Assignor and the Servicer as follows:

(a) Authority. The Assignee hereto represents and warrants that it is duly and legally authorized to enter into this Assignment Agreement and to perform its obligations hereunder.

(b) Enforceability. The Assignee hereto represents and warrants that this Assignment Agreement has been duly authorized, executed and delivered by it and, assuming due authorization, execution and delivery thereof by each of the other parties hereto, constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and to general principles of equity, regardless of whether such enforcement is considered in a proceeding in equity or at law.

4. Representations and Warranties of the Assignor. The Assignor hereby represents and warrants to the Assignee as follows:

(a) Organization. The Assignor 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 limited liability company power and authority to enter into and perform its obligations under this Assignment Agreement.

(b) Enforceability. This Assignment Agreement has been duly executed and delivered by the Assignor, and, assuming due authorization, execution and delivery by each of the other parties hereto, constitutes its legal, valid, and binding agreement, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency, reorganization, or other similar laws affecting the enforcement of creditors’ rights generally and to general principles of equity regardless of whether enforcement is sought in a proceeding in equity or at law.

(c) No Consent. The execution, delivery and performance by the Assignor of this Assignment Agreement and the consummation of the transactions contemplated hereby do not require the consent or approval of, the giving of notice to, the registration with, or the taking of any other action in respect of, any state, federal or other governmental authority or agency, except such as has been obtained, given, effected or taken prior to the date hereof.

 

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(d) Authorization; No Breach. The execution and delivery of this Assignment Agreement has been duly authorized by all necessary limited liability company action on the part of the Assignor, and neither the execution and delivery by the Assignor of this Assignment Agreement, nor the consummation by the Assignor of the transactions herein contemplated, nor compliance by the Assignor with the provisions hereof, will conflict with or result in a breach of, or constitute a default under, any of the provisions of the governing documents of the Assignor or any law, governmental rule or regulation or any material judgment, decree or order binding on the Assignor or any of its properties, or any of the provisions of any material indenture, mortgage, deed of trust, contract or other instrument to which the Assignor is a party or by which it is bound.

(e) Actions; Proceedings. There are no actions, suits or proceedings pending or, to the knowledge of the Assignor, threatened, before or by any court, administrative agency, arbitrator or governmental body (A) with respect to any of the transactions contemplated by this Assignment Agreement or (B) with respect to any other matter that in the judgment of the Assignor will be determined adversely to the Assignor and will, if determined adversely to the Assignor, materially adversely affect its ability to perform its obligations under this Assignment Agreement.

5. Governing Law.

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

EACH PARTY HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT, OR ANY OTHER DOCUMENTS AND INSTRUMENTS EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF SUCH PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS AGREEMENT.

6. Notices. Any notices or other communications permitted or required hereunder or under the Mortgage Loan Purchase Agreement shall be in writing and shall be deemed conclusively to have been given if personally delivered at or mailed by registered mail, postage prepaid, and return receipt requested or transmitted by telex, telegraph or telecopier and confirmed by a similar mailed writing, to:

 

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(a)    in the case of the Servicer,
Option One Mortgage Corporation
Address:		3 ▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:		▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone:		(▇▇▇) ▇▇▇-▇▇▇▇
Facsimile:		(▇▇▇) ▇▇▇-▇▇▇▇

or such other address as may hereafter be furnished by the Servicer;

 

(b) in the case of the Master Servicer,
▇▇▇▇▇ Fargo Bank, N.A.
Address:		▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
		▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:		Corporate Trust Services – SGMS 2006-OPT2
Telephone:		(▇▇▇) ▇▇▇-▇▇▇▇
Facsimile:		(▇▇▇) ▇▇▇-▇▇▇▇

or such other address as may be hereafter furnished by the Master Servicer;

 

(c) in the case of the Assignee,
HSBC Bank USA, National Association
Address:		▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
		▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:		Corporate Trust
Telephone:		(▇▇▇) ▇▇▇-▇▇▇▇
Facsimile:		(▇▇▇) ▇▇▇-▇▇▇▇

or such other address as may be hereafter furnished by the Assignee;

 

(d)    in the case of the Assignor,
SG Mortgage Securities, LLC
Address:		▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
		▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:		▇▇▇▇▇▇ ▇▇▇▇▇
Telephone:		(▇▇▇) ▇▇▇-▇▇▇▇
Facsimile:		(▇▇▇) ▇▇▇-▇▇▇▇

or such other address as may be hereafter furnished by the Assignor; and

 

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(e)    in the case of the Seller,
SG Mortgage Finance Corp.
Address:		▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
		▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:		▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone:		(▇▇▇) ▇▇▇-▇▇▇▇
Facsimile:		(▇▇▇) ▇▇▇-▇▇▇▇

or such other address as may be hereafter furnished by the Assignor.

7. Counterparts. This Assignment Agreement may be executed in counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same instrument.

8. Definitions. Any capitalized term used but not defined in this Assignment Agreement has the meaning assigned thereto in the Mortgage Loan Purchase Agreement, and if not defined therein, has the meaning assigned thereto in the Pooling and Servicing Agreement.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Assignment Agreement the day and year first above written.

 

 

		S-1		Assignment & Recognition Agreement

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		S-2		Assignment & Recognition Agreement

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		S-3		Assignment & Recognition Agreement

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		S-4		Assignment & Recognition Agreement

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Acknowledged and Accepted by:

 

▇▇▇▇▇ FARGO BANK, N.A., as Master Servicer
By:		/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Colli
Name:		▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
Title:		Vice President

 

		S-5		Assignment & Recognition Agreement

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EXHIBIT 1

Mortgage Loan Schedule

(Please refer to the Mortgage Loan Schedule filed as a free writing prospectus on November 13, 2006.)

 

Ex.1-1