Assignment and Recognition Agreement


 Exhibit 10.3 
 EXECUTION COPY 

 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 
 WELLS FARGO BANK, N.A. 
 as Master Servicer 
  







 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, Wells 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. 






 (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 Ada, Irvine, CA 92618
	Attention:	 	Debbie Lonergan
	Telephone:	 	(949) 790-3600
	Facsimile:	 	(949) 790-7514

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

			
	(b) in the case of the Master Servicer,
	
	Wells Fargo Bank, N.A.
	Address:	 	9062 Old Annapolis Road
		 	Columbia, MD 21045
	Attention:	 	Corporate Trust Services – SGMS 2006-OPT2
	Telephone:	 	(410) 884-2000
	Facsimile:	 	(410) 715-2380

 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:	 	 452 Fifth Avenue

		 	 New York, New York 10018

	 Attention:
	 	Corporate Trust
	 Telephone:
	 	(212) 525-1367
	 Facsimile:
	 	(212) 525-1300

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

			
	 (d)    in the case of the Assignor,

	
	 SG Mortgage Securities, LLC

	 Address:
	 	1221 Avenue of the Americas
		 	New York, NY 10020
	 Attention:
	 	Arnaud Denis
	 Telephone:
	 	(212) 278-4430
	 Facsimile:
	 	(212) 278-7320

 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:
	  	1221 Avenue of the Americas
		  	New York, NY 10020
	 Attention:
	  	Carole Mortensen
	 Telephone:
	  	(212) 278-6228
	 Facsimile:
	  	(212) 278-7320

 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. 
  

			
	SG MORTGAGE SECURITIES, LLC, as Assignor
		
	By:	 	 /s/ Abner Figueroa

	Name:	 	Abner Figueroa
	Title:	 	Director


  


					
		  	S-1	  	Assignment & Recognition Agreement









			
	 HSBC BANK USA, NATIONAL ASSOCIATION, not in its individual capacity, but solely as trustee,
 as Assignee

		
	By:	 	 /s/ Elena Zheng

	Name:	 	Elena Zheng
	Title:	 	Assistant Vice President HSBC Bank USA, N.A.


  


					
		  	S-2	  	Assignment & Recognition Agreement









			
	OPTION ONE MORTGAGE CORPORATION, as Servicer
		
	By:	 	 /s/ Charles R. Fulton

	Name:	 	Charles R. Fulton
	Title:	 	Vice President


  


					
		  	S-3	  	Assignment & Recognition Agreement









			
	SG MORTGAGE FINANCE CORP., as Seller
		
	By:	 	 /s/ Carole A. Mortensen

	Name:	 	Carole A. Mortensen
	Title:	 	Director


  


					
		  	S-4	  	Assignment & Recognition Agreement








 Acknowledged and Accepted by: 
  

			
	WELLS FARGO BANK, N.A., as Master Servicer
		
	By:	 	 /s/ Raymond Delli Colli

	Name:	 	Raymond Delli Colli
	Title:	 	Vice President

  


					
		  	S-5	  	Assignment & Recognition Agreement








 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