POOLING AND SERVICING AGREEMENT

Pooling and Servicing Agreement

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Corporate Trust Services | EMC MORTGAGE CORPORATION | McGraw-Hill Companies, Inc | Rating Agencies, Moody's Investors Service, Inc | Structured Asset Mortgage Investments II Inc | US BANK NATIONAL ASSOCIATION | WELLS FARGO BANK, NA

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Title: POOLING AND SERVICING AGREEMENT
Governing Law: New York Date: 1/14/2005

POOLING AND SERVICING AGREEMENT, Parties: corporate trust services , emc mortgage corporation , mcgraw-hill companies inc , rating agencies moody's investors service inc , structured asset mortgage investments ii inc , us bank national association , wells fargo bank na

Exhibit 4.1

STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.,

DEPOSITOR

U.S. BANK NATIONAL ASSOCIATION

TRUSTEE

WELLS FARGO BANK, N.A.,

MASTER SERVICER AND SECURITIES ADMINISTRATOR

and

EMC MORTGAGE CORPORATION

SELLER AND COMPANY

POOLING AND SERVICING AGREEMENT

Dated as of December 1, 2004

Structured Asset Mortgage Investments II Inc.

Bear Stearns ARM Trust, Mortgage Pass-Through Certificates

Series 2004-12

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TABLE OF CONTENTS

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Page

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ARTICLE I Definitions........................................................................................3

ARTICLE II..................................................................................................39

Conveyance of Mortgage Loans; Original Issuance of Certificates.............................................39

Section 2.01 Conveyance of Mortgage Loans to Trustee...................................................39

Section 2.02 Acceptance of Mortgage Loans by Trustee...................................................42

Section 2.03 Assignment of Interest in the Mortgage Loan Purchase Agreement and Subsequent Mortgage

Loan Purchase Agreement...................................................................44

Section 2.04 Substitution of Mortgage Loans............................................................45

Section 2.05 Issuance of Certificates..................................................................46

Section 2.06 Representations and Warranties Concerning the Depositor...................................47

Section 2.07 Conveyance of the Subsequent Mortgage Loans...............................................48

ARTICLE III Administration and Servicing of Mortgage Loans..................................................52

Section 3.01 Master Servicer...........................................................................52

Section 3.02 REMIC-Related Covenants...................................................................53

Section 3.03 Monitoring of Servicers...................................................................53

Section 3.04 Fidelity Bond.............................................................................54

Section 3.05 Power to Act; Procedures..................................................................54

Section 3.06 Due-on-Sale Clauses; Assumption Agreements................................................55

Section 3.07 Release of Mortgage Files.................................................................55

Section 3.08 Documents, Records and Funds in Possession of Master Servicer To Be Held for Trustee......56

Section 3.09 Standard Hazard Insurance and Flood Insurance Policies....................................57

Section 3.10 Presentment of Claims and Collection of Proceeds..........................................58

Section 3.11 Maintenance of the Primary Mortgage Insurance Policies....................................58

Section 3.12 Trustee to Retain Possession of Certain Insurance Policies and Documents..................59

Section 3.13 Realization Upon Defaulted Mortgage Loans.................................................59

Section 3.14 Compensation for the Master Servicer......................................................59

Section 3.15 REO Property..............................................................................59

Section 3.16 Annual Officer's Certificate as to Compliance.............................................60

Section 3.17 Annual Independent Accountant's Servicing Report..........................................61

Section 3.18 Reports Filed with Securities and Exchange Commission.....................................61

Section 3.19 UCC.......................................................................................62

Section 3.20 Optional Purchase of Defaulted Mortgage Loans.............................................62

ARTICLE IV Accounts.........................................................................................64

Section 4.01 Protected Accounts........................................................................64

Section 4.02 Master Servicer Collection Account........................................................65

Section 4.03 Permitted Withdrawals and Transfers from the Master Servicer Collection Account...........66

Section 4.04 Distribution Account......................................................................67

Section 4.05 Permitted Withdrawals and Transfers from the Distribution Account.........................68

Section 4.06 Pre-Funding Accounts......................................................................69

Section 4.07 Interest Coverage Account.................................................................71

ARTICLE V Certificates......................................................................................73

Section 5.01 Certificates..............................................................................73

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Section 5.02 Registration of Transfer and Exchange of Certificates.....................................82

Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.........................................85

Section 5.04 Persons Deemed Owners.....................................................................86

Section 5.05 Transfer Restrictions on Residual Certificates............................................86

Section 5.06 Restrictions on Transferability of Certificates...........................................87

Section 5.07 ERISA Restrictions........................................................................88

Section 5.08 Rule 144A Information.....................................................................89

ARTICLE VI Payments to Certificateholders...................................................................90

Section 6.01 Distributions on the Certificates.........................................................90

Section 6.02 Allocation of Losses......................................................................94

Section 6.03 Payments..................................................................................96

Section 6.04 Statements to Certificateholders..........................................................96

Section 6.05 Monthly Advances..........................................................................99

Section 6.06 Compensating Interest Payments...........................................................100

ARTICLE VII The Master Servicer............................................................................101

Section 7.01 Liabilities of the Master Servicer.......................................................101

Section 7.02 Merger or Consolidation of the Master Servicer...........................................101

Section 7.03 Indemnification of the Trustee, the Master Servicer and the Securities Administrator.....101

Section 7.04 Limitations on Liability of the Master Servicer and Others...............................102

Section 7.05 Master Servicer Not to Resign............................................................103

Section 7.06 Successor Master Servicer................................................................103

Section 7.07 Sale and Assignment of Master Servicing..................................................103

ARTICLE VIII Default.......................................................................................105

Section 8.01 Events of Default........................................................................105

Section 8.02 Trustee to Act; Appointment of Successor.................................................107

Section 8.03 Notification to Certificateholders.......................................................108

Section 8.04 Waiver of Defaults.......................................................................108

Section 8.05 List of Certificateholders...............................................................108

ARTICLE IX Concerning the Trustee and the Securities Administrator.........................................109

Section 9.01 Duties of Trustee........................................................................109

Section 9.02 Certain Matters Affecting the Trustee and the Securities Administrator...................111

Section 9.03 Trustee and Securities Administrator Not Liable for Certificates or Mortgage Loans.......113

Section 9.04 Trustee and Securities Administrator May Own Certificates................................113

Section 9.05 Trustee's and Securities Administrator's Fees and Expenses...............................113

Section 9.06 Eligibility Requirements for Trustee and Securities Administrator........................114

Section 9.07 Insurance................................................................................114

Section 9.08 Resignation and Removal of the Trustee and Securities Administrator......................115

Section 9.09 Successor Trustee and Successor Securities Administrator.................................116

Section 9.10 Merger or Consolidation of Trustee or Securities Administrator...........................116

Section 9.11 Appointment of Co-Trustee or Separate Trustee............................................117

Section 9.12 Federal Information Returns and Reports to Certificateholders; REMIC Administration......118

ARTICLE X Termination......................................................................................120

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Section 10.01 Termination Upon Repurchase by the Depositor or its Designee or Liquidation of the

Mortgage Loans...........................................................................120

Section 10.02 Additional Termination Requirements......................................................122

ARTICLE XI Miscellaneous Provisions........................................................................124

Section 11.01 Intent of Parties........................................................................124

Section 11.02 Amendment................................................................................124

Section 11.03 Recordation of Agreement.................................................................125

Section 11.04 Limitation on Rights of Certificateholders...............................................125

Section 11.05 Acts of Certificateholders...............................................................126

Section 11.06 Governing Law............................................................................127

Section 11.07 Notices..................................................................................127

Section 11.08 Severability of Provisions...............................................................128

Section 11.09 Successors and Assigns...................................................................128

Section 11.10 Article and Section Headings.............................................................128

Section 11.11 Counterparts.............................................................................128

Section 11.12 Notice to Rating Agencies................................................................128

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EXHIBITS

Exhibit A-1 - Form of Class A Certificates and Class X Certificates

Exhibit A-2 - Form of Class M Certificates and Class B Certificates

Exhibit A-3 - Form of Class R Certificates

Exhibit B - Mortgage Loan Schedule

Exhibit C - [Reserved]

Exhibit D - Request for Release of Documents

Exhibit E - Form of Affidavit pursuant to Section 860E(e)(4)

Exhibit F-1 - Form of Investment Letter

Exhibit F-2 - Form of Rule 144A and Related Matters Certificate

Exhibit G - Form of Custodial Agreement

Exhibit H-1 to H-7 - Servicing Agreements

Exhibit I - Assignment Agreements

Exhibit J - Mortgage Loan Purchase Agreement

Exhibit K - Form of Subsequent Mortgage Loan Purchase Agreement

Exhibit L - Form of Subsequent Transfer Instrument

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POOLING AND SERVICING AGREEMENT

Pooling and Servicing Agreement dated as of December 1, 2004, among

Structured Asset Mortgage Investments II Inc., a Delaware corporation, as

depositor (the "Depositor"), U.S. Bank National Association, a national banking

association, not in its individual capacity but solely as trustee (the

"Trustee"), Wells Fargo Bank, N.A., as master servicer (in such capacity, the

"Master Servicer") and as securities administrator (in such capacity, the

"Securities Administrator"), and EMC Mortgage Corporation, as seller (in such

capacity, the "Seller") and as company (in such capacity, the "Company").

PRELIMINARY STATEMENT

On or prior to the Closing Date, the Depositor acquired the Initial

Mortgage Loans from the Seller. On the Closing Date, the Depositor will sell the

Initial Mortgage Loans and certain other property to the Trust Fund and receive

in consideration therefor Certificates evidencing the entire beneficial

ownership interest in the Trust Fund. On or prior to any Subsequent Transfer

Date, the Depositor acquired the Subsequent Mortgage Loans, which will be sold

to the Trust on the related Subsequent Transfer Date.

The Trustee on behalf of the Trust shall make an election for the assets

constituting REMIC I to be treated for federal income tax purposes as a REMIC.

On the Startup Day, the REMIC I Regular Interests will be designated "regular

interests" in such REMIC and the Class R-I Certificate will be designated the

"residual interest" in such REMIC.

The Trustee on behalf of the Trust shall make an election for the assets

constituting REMIC II to be treated for federal income tax purposes as a REMIC.

On the Startup Day, the REMIC II Regular Interests will be designated "regular

interests" in such REMIC and the Class R-II Certificate will be designated the

"residual interest" in such REMIC.

The Trustee on behalf of the Trust shall make an election for the assets

constituting REMIC III to be treated for federal income tax purposes as a REMIC.

On the Startup Day, the REMIC III Regular Interests will be designated "regular

interests" in such REMIC and the Class R-III Certificate will be designated the

"residual interest" in such REMIC.

The Mortgage Loans will have an Outstanding Principal Balance as of the

Cut-off Date, after deducting all Scheduled Principal due on or before the

Cut-off Date, of $1,104,576,142.23. The initial principal amount of the

Certificates will not exceed such Outstanding Principal Balance. The Group I

Mortgage Loans will have an Outstanding Principal Balance as of the Cut-off

Date, after deducting all Scheduled Principal due on or before the Cut-off Date,

of $275,536,525.04. The Group II Mortgage Loans will have an Outstanding

Principal Balance as of the Cut-off Date, after deducting all Scheduled

Principal due on or before the Cut-off Date, of $703,720,808.70. The Group III

Mortgage Loans will have an Outstanding Principal Balance as of the Cut-off

Date, after deducting all Scheduled Principal due on or before the Cut-off Date,

of $71,503,329.51. The Group IV Mortgage Loans will have an Outstanding

Principal Balance as of the Cut-off Date, after deducting all Scheduled

Principal due on or before the Cut-off Date, of $53,815,478.98.

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In consideration of the mutual agreements herein contained, the Depositor,

the Master Servicer, the Securities Administrator, the Seller, the Company and

the Trustee agree as follows:

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ARTICLE I

Definitions

Whenever used in this Agreement, the following words and phrases, unless

otherwise expressly provided or unless the context otherwise requires, shall

have the meanings specified in this Article.

Accepted Master Servicing Practices: With respect to any Mortgage Loan,

those customary mortgage servicing practices of prudent mortgage servicing

institutions that master service mortgage loans of the same type and quality as

such Mortgage Loan in the jurisdiction where the related Mortgaged Property is

located, to the extent applicable to the Trustee or the Master Servicer (except

in its capacity as successor to a Servicer).

Account: The Master Servicer Collection Account, the Distribution Account,

the Pre-Funding Account, the Interest Coverage Account, and the Protected

Account as the context may require.

Accrued Certificate Interest: For any Certificate for any Distribution

Date, the interest accrued during the related Interest Accrual Period at the

applicable Pass-Through Rate on the Current Principal Amount, or Notional Amount

in the case of the Interest Only Certificates, of such Certificate immediately

prior to such Distribution Date, on the basis of a 360-day year consisting of

twelve 30-day months, less (i) in the case of a Senior Certificate, such

Certificate's share of any Net Interest Shortfall from the related Mortgage

Loans and, after the Cross-Over Date, the interest portion of any Realized

Losses on the related Mortgage Loans allocated thereto in accordance with

Section 6.02(g) and (ii) in the case of a Subordinate Certificate, such

Certificate's share of any Net Interest Shortfall from the related Mortgage

Loans and the interest portion of any Realized Losses on the related Mortgage

Loans allocated thereto in accordance with Section 6.02(g).

Affiliate: As to any Person, any other Person controlling, controlled by

or under common control with such Person. "Control" means the power to direct

the management and policies of a Person, directly or indirectly, whether through

ownership of voting securities, by contract or otherwise. "Controlled" and

"Controlling" have meanings correlative to the foregoing. The Trustee may

conclusively presume that a Person is not an Affiliate of another Person unless

a Responsible Officer of the Trustee has actual knowledge to the contrary.

Aggregate Expense Rate: With respect to any Mortgage Loan, the sum of the

Servicing Fee Rate and the Lender-Paid PMI Rate (if applicable).

Agreement: This Pooling and Servicing Agreement and all amendments hereof

and supplements hereto.

Allocable Share: With respect to each Class of Subordinate Certificates:

(a) as to any Distribution Date and amounts distributable pursuant to

clauses (i) and (iv) of the definition of Subordinate Optimal Principal Amount,

the fraction, expressed as a percentage, the numerator of which is the Current

Principal Amount of such Class and the

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denominator of which is the aggregate Current Principal Amount of all Classes of

the Subordinate Certificates; and

(b) as to any Distribution Date and amounts distributable pursuant to

clauses (ii), (iii) and (v) of the definition of Subordinate Optimal Principal

Amount, and as to each Class of Subordinate Certificates (other than the Class

of Subordinate Certificates having the lowest numerical designation as to which

the Class Prepayment Distribution Trigger shall not be applicable) for which (x)

the Class Prepayment Distribution Trigger has been satisfied on such

Distribution Date, the fraction, expressed as a percentage, the numerator of

which is the Current Principal Amount of such Class and the denominator of which

is the aggregate Current Principal Amount of all such Classes of Subordinate

Certificates and (y) the Class Prepayment Distribution Trigger has not been

satisfied on such Distribution Date, 0%; provided that if on a Distribution

Date, the Current Principal Amount of any Class of Subordinate Certificates for

which the Class Prepayment Distribution Trigger was satisfied on such

Distribution Date is reduced to zero, any amounts distributed pursuant to this

clause (b), to the extent of such Class's remaining Allocable Share, shall be

distributed to the remaining Classes of Subordinate Certificates which satisfy

the Class Prepayment Distribution Trigger and to the Class of Subordinate

Certificates having the lowest numerical Class designation in reduction of their

respective Current Principal Amounts in the order of their numerical Class

designations.

Applicable Credit Rating: For any long-term deposit or security, a credit

rating of AAA in the case of S&P or Aaa in the case of Moody's. For any

short-term deposit or security, or a rating of A-l+ in the case of S&P or P-1 in

the case of Moody's.

Applicable State Law: For purposes of Section 9.12(d), the Applicable

State Law shall be (a) the law of the State of New York and (b) such other state

law whose applicability shall have been brought to the attention of the

Securities Administrator and the Trustee by either (i) an Opinion of Counsel

reasonably acceptable to the Securities Administrator and the Trustee delivered

to it by the Master Servicer or the Depositor, or (ii) written notice from the

appropriate taxing authority as to the applicability of such state law.

Appraised Value: For any Mortgaged Property related to a Mortgage Loan,

the amount set forth as the appraised value of such Mortgaged Property in an

appraisal made for the mortgage originator in connection with its origination of

the related Mortgage Loan.

Assignment Agreements: The agreements attached hereto as Exhibit I,

whereby the Servicing Agreements were assigned to the Trustee for the benefit of

the Certificateholders.

Assumed Final Distribution Date: February 25, 2035, or if such day is not

a Business Day, the next succeeding Business Day.

Available Funds: With respect to any Distribution Date, the sum of the

Group I, Group II, Group III and Group IV Available Funds for such Distribution

Date.

Average Loss Severity Percentage: With respect to any Distribution Date

and each Loan Group, the percentage equivalent of a fraction, the numerator of

which is the sum of the Loss

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Severity Percentages for each Mortgage Loan in such Loan Group which had a

Realized Loss and the denominator of which is the number of Mortgage Loans in

the related Loan Group which had Realized Losses.

Bank of America: Bank of America, N.A., or its successor in interest.

Bank of America Servicing Agreement: The Flow Mortgage Loan Sale and

Servicing Agreement, dated March 1, 2003 between the Seller and Bank of America,

attached hereto as Exhibit H-1, as modified by the related Assignment Agreement.

Bankruptcy Code: The United States Bankruptcy Code, as amended as codified

in 11 U.S.C. ss.ss.101-1330.

Bankruptcy Loss: With respect to any Mortgage Loan, any Deficient

Valuation or Debt Service Reduction related to such Mortgage Loan as reported by

the applicable Servicer to the Master Servicer.

Book-Entry Certificates: Initially, all Classes of Certificates other than

the Private Certificates and the Residual Certificates.

Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a day

on which the New York Stock Exchange or Federal Reserve is closed or on which

banking institutions in the jurisdiction in which the Trustee, the Master

Servicer, any Servicer or the Securities Administrator is located are authorized

or obligated by law or executive order to be closed.

Cendant: Cendant Mortgage Corporation, or its successor in interest.

Cendant Servicing Agreement: The Mortgage Loan Flow Purchase, Sale and

Servicing Agreement, dated as of April 26, 2001, among the Seller, Bishop's Gate

Residential Mortgage Trust and Cendant, attached hereto as Exhibit H-2, as

modified by the related Assignment Agreement.

Certificate: Any mortgage pass-through certificate evidencing a beneficial

ownership interest in the Trust Fund signed and countersigned by the Trustee in

substantially the forms annexed hereto as Exhibits A-1, A-2 and A-3 with the

blanks therein appropriately completed.

Certificate Group: The Group I Senior Certificates, Group II Senior

Certificates, Group III Senior Certificates and Group IV Senior Certificates, as

applicable.

Certificate Owner: Any Person who is the beneficial owner of a Certificate

registered in the name of the Depository or its nominee.

Certificate Register: The register maintained pursuant to Section 5.02.

Certificateholder: A Holder of a Certificate.

Chevy Chase: Chevy Chase Bank F.S.B., or its successor in interest.

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Chevy Chase Servicing Agreement: The Purchase, Warranties and Servicing

Agreement, dated as of July 1, 2001, between the Seller and Chevy Chase, as

amended by Amendment No. 1, dated as of January 13, 2003, attached hereto as

Exhibit H-3, as modified by the related Assignment Agreement.

Class: With respect to the Certificates, I-A-1, I-X-1, II-A-1, II-X-1,

II-A-2, II-X-2, II-A-3, II-X-3, III-A-1, IV-A-1, R-I, R-II, R-III, M-1, B-1,

B-2, B-3, B-4, B-5, B-6 and B-7.

Class Prepayment Distribution Trigger: For a Class of Subordinate

Certificates for any Distribution Date, the Class Prepayment Distribution

Trigger is satisfied if the fraction (expressed as a percentage), the numerator

of which is the aggregate Current Principal Amount of such Class and each Class

of Subordinate Certificates subordinate thereto, if any, and the denominator of

which is the Scheduled Principal Balance of all of the Mortgage Loans as of the

related Due Date, equals or exceeds such percentage calculated as of the Closing

Date.

Class R Certificates: The Class R-I, Class R-II and Class R-III

Certificates.

Closing Date: December 30, 2004.

Code: The Internal Revenue Code of 1986, as amended.

Compensating Interest Payment: As defined in Section 6.06.

Corporate Trust Office: The office of the Trustee at which at any

particular time its corporate trust business is administered, which office, at

the date of the execution of this Agreement, is located at U.S. Bank Corporate

Trust Services, One Federal Street, 3rd Floor, Boston, Massachusetts 02110,

Attention: Corporate Trust Services/BART Series 2004-12. For purposes of

registration and transfer and exchange only, the Corporate Trust Office shall be

located at U.S. Bank National Association, 60 Livingston Avenue, Bond Drop

Window, St. Paul, Minnesota 55107.

Corresponding Certificates: With respect to each REMIC II Regular

Interest, the Class with the same designation.

Countrywide: Countrywide Home Loans Servicing LP, as successor to

Countrywide Home Loans, Inc., or its successor in interest.

Countrywide Servicing Agreement: The Seller's Warranties and Servicing

Agreement, dated as of September 1, 2002, as amended on January 1, 2003 and

September 1, 2004, between the Seller and Countrywide, attached hereto as

Exhibit H-4, as modified by the related Assignment Agreement.

Cross-Over Date: The first Distribution Date on which the aggregate

Current Principal Amount of the Subordinate Certificates has been reduced to

zero (giving effect to all distributions on such Distribution Date).

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Current Principal Amount: With respect to any Certificate (other than the

Interest Only Certificates) as of any Distribution Date, the initial principal

amount of such Certificate plus any Subsequent Recoveries added to the Current

Principal Amount of such Certificate pursuant to Section 6.02(h), and reduced by

(i) all amounts distributed on previous Distribution Dates on such Certificate

with respect to principal, (ii) the principal portion of all Realized Losses

allocated prior to such Distribution Date to such Certificate, taking account of

the Loss Allocation Limitation and (iii) in the case of a Subordinate

Certificate, such Certificate's pro rata share, if any, of the applicable

Subordinate Certificate Writedown Amount for previous Distribution Dates. With

respect to any Class of Certificates (other than the Interest Only Certificates)

the Current Principal Amount thereof will equal the sum of the Current Principal

Amounts of all Certificates in such Class. Notwithstanding the foregoing, solely

for purposes of giving consents, directions, waivers, approvals, requests and

notices, the Class R-I, Class R-II and Class R-III Certificates after the

Distribution Date on which they each receive the distribution of the last dollar

of their respective original principal amount shall be deemed to have Current

Principal Amounts equal to their respective Current Principal Amounts on the day

immediately preceding such Distribution Date.

Custodial Agreement: An agreement, dated as of the Closing Date among the

Depositor, the Master Servicer, the Trustee and the Custodian in substantially

the form of Exhibit G hereto.

Custodian: Wells Fargo Bank, N.A., or any successor custodian appointed

pursuant to the provisions hereof and of the Custodial Agreement.

Cut-off Date: December 1, 2004.

Cut-off Date Balance: $1,104,576,142.23.

Debt Service Reduction: Any reduction of the Scheduled Payments which a

Mortgagor is obligated to pay with respect to a Mortgage Loan as a result of any

proceeding under the Bankruptcy Code or any other similar state law or other

proceeding.

Deficient Valuation: With respect to any Mortgage Loan, a valuation of the

Mortgaged Property by a court of competent jurisdiction in an amount less than

the then outstanding indebtedness under the Mortgage Loan, which valuation

results from a proceeding initiated under the Bankruptcy Code or any other

similar state law or other proceeding.

Depositor: Structured Asset Mortgage Investments II Inc., a Delaware

corporation, or its successors in interest.

Depository: The Depository Trust Company, the nominee of which is Cede &

Co., or any successor thereto.

Depository Agreement: The meaning specified in Subsection 5.01(a) hereof.

Depository Participant: A broker, dealer, bank or other financial

institution or other Person for whom from time to time the Depository effects

book-entry transfers and pledges of securities deposited with the Depository.

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Designated Depository Institution: A depository institution (commercial

bank, federal savings bank, mutual savings bank or savings and loan association)

or trust company (which may include the Trustee), the deposits of which are

fully insured by the FDIC to the extent provided by law.

Determination Date: With respect to each Mortgage Loan, the Determination

Date as defined in the related Servicing Agreement.

Disqualified Organization: Any of the following: (i) the United States,

any State or political subdivision thereof, any possession of the United States,

or any agency or instrumentality of any of the foregoing (other than an

instrumentality which is a corporation if all of its activities are subject to

tax and, except for the Freddie Mac or any successor thereto, a majority of its

board of directors is not selected by such governmental unit), (ii) any foreign

government, any international organization, or any agency or instrumentality of

any of the foregoing, (iii) any organization (other than certain farmers'

cooperatives described in Section 521 of the Code) which is exempt from the tax

imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of

the Code on unrelated business taxable income), (iv) rural electric and

telephone cooperatives described in Section 1381(a)(2)(C) of the Code or (v) any

other Person so designated by the Trustee based upon an Opinion of Counsel that

the holding of an ownership interest in a Residual Certificate by such Person

may cause any REMIC contained in the Trust or any Person having an ownership

interest in the Residual Certificate (other than such Person) to incur a

liability for any federal tax imposed under the Code that would not otherwise be

imposed but for the transfer of an ownership interest in a Residual Certificate

to such Person. The terms "United States," "State" and "international

organization" shall have the meanings set forth in Section 7701 of the Code or

successor provisions.

Distribution Account: The trust account or accounts created and maintained

pursuant to Section 4.04, which shall be denominated "U.S. Bank National

Association, as Trustee f/b/o holders of Structured Asset Mortgage Investments

II Inc., Bear Stearns ARM Trust, Mortgage Pass-Through Certificates, Series

2004-12 - Distribution Account." The Distribution Account shall be an Eligible

Account.

Distribution Account Deposit Date: The Business Day prior to each

Distribution Date.

Distribution Date: The 25th day of any month, beginning in the month

immediately following the month of the Closing Date, or, if such 25th day is not

a Business Day, the Business Day immediately following.

DTC Custodian: U.S. Bank National Association, or its successors in

interest as custodian for the Depository.

Due Date: With respect to each Mortgage Loan, the date in each month on

which its Scheduled Payment is due if such due date is the first day of a month

and otherwise is deemed to be the first day of the following month or such other

date specified in the related Servicing Agreement.

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Due Period: With respect to any Distribution Date and each Mortgage Loan,

the period commencing on the second day of the month preceding the month in

which the Distribution Date occurs and ending at the close of business on the

first day of the month in which the Distribution Date occurs.

Eligible Account: Any of (i) a segregated account maintained with a

federal or state chartered depository institution (A) the short-term obligations

of which are rated A-2 or better by S&P and P-1 by Moody's at the time of any

deposit therein or (B) insured by the FDIC (to the limits established by such

Corporation), the uninsured deposits in which account are otherwise secured such

that, as evidenced by an Opinion of Counsel (obtained by the Person requesting

that the account be held pursuant to this clause (i)) delivered to the Trustee

prior to the establishment of such account, the Certificateholders will have a

claim with respect to the funds in such account and a perfected first priority

security interest against any collateral (which shall be limited to Permitted

Investments, each of which shall mature not later than the Business Day

immediately preceding the Distribution Date next following the date of

investment in such collateral or the Distribution Date if such Permitted

Investment is an obligation of the institution that maintains the Distribution

Account) securing such funds that is superior to claims of any other depositors

or general creditors of the depository institution with which such account is

maintained, (ii) a segregated trust account or accounts maintained with a

federal or state chartered depository institution or trust company with trust

powers acting in its fiduciary capacity or (iii) a segregated account or

accounts of a depository institution acceptable to the Rating Agencies (as

evidenced in writing by the Rating Agencies that use of any such account as the

Distribution Account will not have an adverse effect on the then-current ratings

assigned to the Classes of Certificates then rated by the Rating Agencies).

Eligible Accounts may bear interest.

EMC: EMC Mortgage Corporation, or its successor in interest.

EMC Servicing Agreement: The Servicing Agreement, dated as of December 1,

2004, between the Seller and EMC, attached hereto as Exhibit H-5, as modified by

the related Assignment Agreement.

ERISA: The Employee Retirement Income Security Act of 1974, as amended.

Event of Default: An event of default described in Section 8.01.

EverHome: EverHome Mortgage Company, or its successor in interest.

EverHome Servicing Agreement: The Subservicing Agreement, dated as of

August 1, 2002, between the Seller and EverHome, attached hereto as Exhibit H-6,

as modified by the related Assignment Agreement.

Excess Liquidation Proceeds: To the extent that such amount is not

required by law to be paid to the related Mortgagor, the amount, if any, by

which Liquidation Proceeds with respect to a Liquidated Mortgage Loan exceed the

sum of (i) the Outstanding Principal Balance of such Mortgage Loan and accrued

but unpaid interest at the related Mortgage Interest Rate through the

<PAGE>

last day of the month in which the related Liquidation Date occurs, plus (ii)

related Liquidation Expenses.

Fannie Mae: Federal National Mortgage Association or any successor

thereto.

FDIC: Federal Deposit Insurance Corporation or any successor thereto.

Final Certification: The certification substantially in the form of

Exhibit Three to the Custodial Agreement.

Fiscal Quarter: December 1 to February 29 (or the last day in such month),

March 1 to May 31, June 1 to August 31, or September 1 to November 30, as

applicable.

Fractional Undivided Interest: With respect to any Class of Certificates,

the fractional undivided interest evidenced by any Certificate of such Class the

numerator of which is the Current Principal Amount, or the Notional Amount in

the case of the Interest Only Certificates, of such Certificate and the

denominator of which is the Current Principal Amount, or Notional Amount in the

case of the Interest Only Certificates, of such Class. With respect to the

Certificates in the aggregate, the fractional undivided interest evidenced by

(i) each class of Residual Certificates will be deemed to equal 0.25% multiplied

by the percentage interest of such Residual Certificate, (ii) the Interest Only

Certificates will be deemed to equal 1.0% multiplied by a fraction, the

numerator of which is the Notional Amount of such Certificate and the

denominator of which is the aggregate Notional Amount of such Class and (iii) a

Certificate of any other Class will be deemed to equal 95.25% multiplied by a

fraction, the numerator of which is the Current Principal Amount of such

Certificate and the denominator of which is the aggregate Current Principal

Amount of all the Certificates; provided however, the percentage in clause (iii)

above shall be increased by 4.0% upon the retirement of the Interest Only

Certificates.

Freddie Mac: Freddie Mac, formerly the Federal Home Loan Mortgage

Corporation, or any successor thereto.

Global Certificate: Any Private Certificate registered in the name of the

Depository or its nominee, beneficial interests in which are reflected on the

books of the Depository or on the books of a Person maintaining an account with

such Depository (directly or as an indirect participant in accordance with the

rules of such depository).

GMAC: GMAC Mortgage Corporation, or its successor in interest.

GMAC Servicing Agreement: The Servicing Agreement, dated as of November 1,

2004, between the Seller and GMAC, attached hereto as Exhibit H-7, as modified

by the Assignment Agreement.

Gross Margin: As to each Mortgage Loan, the fixed percentage set forth in

the related Mortgage Note and indicated on the Mortgage Loan Schedule which

percentage is added to the related Index on each Interest Adjustment Date to

determine (subject to rounding, the minimum

<PAGE>

and maximum Mortgage Interest Rate and the Periodic Rate Cap) the Mortgage

Interest Rate until the next Interest Adjustment Date.

Group I Available Funds, Group II Available Funds, Group III Available

Funds and Group IV Available Funds: With respect to any Distribution Date, an

amount equal to the aggregate of the following amounts with respect to the

Mortgage Loans in the related Loan Group: (a) all previously undistributed

payments on account of principal (including the principal portion of Scheduled

Payments, Principal Prepayments and the principal portion of Net Liquidation

Proceeds) and all previously undistributed payments on account of interest

received after the Cut-off Date and on or prior to the related Determination

Date, (b) any Monthly Advances and Compensating Interest Payments by the

Servicers or the Master Servicer with respect to such Distribution Date, (c) any

reimbursed amount in connection with losses on investments of deposits in an

account and (d) with regard to the Distribution Date in April 2005, the amount

remaining in the Pre-Funding Account at the end of the Pre-Funding Period,

except:

(i) all payments that were due on or before the Cut-off Date;

(ii) all Principal Prepayments and Liquidation Proceeds received

after the applicable Prepayment Period;

(iii) all payments, other than Principal Prepayments, that represent

early receipt of Scheduled Payments due on a date or dates subsequent to the

related Due Date;

(iv) amounts received on particular Mortgage Loans as late payments

of principal or interest and respecting which, and to the extent that, there are

any unreimbursed Monthly Advances;

(v) amounts representing Monthly Advances determined to be

Nonrecoverable Advances;

(vi) any investment earnings on amounts on deposit in the Master

Servicer Collection Account and the Distribution Account and amounts permitted

to be withdrawn from the Master Servicer Collection Account and the Distribution

Account pursuant to this Agreement;

(vii) amounts needed to pay the Servicing Fees or to reimburse any

Servicer or the Master Servicer for amounts due under the applicable Servicing

Agreement and the Agreement to the extent such amounts have not been retained

by, or paid previously to, such Servicer or the Master Servicer;

(viii) any fees payable under any lender-paid primary mortgage

insurance policy; and

(ix) any expenses or other amounts reimbursable to the Trustee, the

Securities Administrator and the Custodian pursuant to Section 7.04(c) or

Section 9.05.

<PAGE>

Group I Mortgage Loans: The Mortgage Loans identified as such on the

Mortgage Loan Schedule.

Group I Senior Certificates: The Class I-A-1, Class I-X-1, Class R-I,

Class R-II and Class R-III Certificates.

Group I Senior Optimal Principal Amount, Group II Senior Optimal Principal

Amount, Group III Senior Optimal Principal Amount and Group IV Senior Optimal

Principal Amount: With respect to each Distribution Date, an amount equal to the

sum, without duplication, of the following (but in no event greater than the

aggregate Current Principal Amount of the Group I, Group II, Group III or Group

IV Senior Certificates and Interest Only Certificates, as applicable,

immediately prior to such Distribution Date):

(i) the applicable Senior Percentage of the principal portion of all

Scheduled Payments due on each Outstanding Mortgage Loan in the related Loan

Group on the related Due Date as specified in the amortization schedule at the

time applicable thereto (after adjustments for previous Principal Prepayments

but before any adjustment to such amortization schedule by reason of any

bankruptcy or similar proceeding or any moratorium or similar waiver or grace

period);

(ii) the applicable Senior Prepayment Percentage of the Scheduled

Principal Balance of each Mortgage Loan in the related Loan Group which was the

subject of a Principal Prepayment in full received by the Master Servicer during

the related Prepayment Period;

(iii) the applicable Senior Prepayment Percentage of all Principal

Prepayments in part received by the Master Servicer during the related

Prepayment Period with respect to each Mortgage Loan in the related Loan Group;

(iv) the lesser of (a) the applicable Senior Prepayment Percentage

of the sum of (A) all Net Liquidation Proceeds allocable to principal received

in respect of each Mortgage Loan in the related Loan Group which became a

Liquidated Mortgage Loan during the related Prepayment Period (other than

Mortgage Loans described in the immediately following clause (B)) and all

Subsequent Recoveries received in respect of each Liquidated Mortgage Loan in

the related Loan Group during the related Due Period and (B) the Scheduled

Principal Balance of each such Mortgage Loan in the related Loan Group purchased

by an insurer from the Trustee during the related Prepayment Period pursuant to

the related Primary Mortgage Insurance Policy, if any, or otherwise; and (b) the

applicable Senior Percentage of the sum of (A) the Scheduled Principal Balance

of each Mortgage Loan in the related Loan Group which became a Liquidated

Mortgage Loan during the related Prepayment Period (other than the Mortgage

Loans described in the immediately following clause (B)) and (B) the Scheduled

Principal Balance of each such Mortgage Loan in the related Loan Group that was

purchased by an insurer from the Trust during the related Prepayment Period

pursuant to the related Primary Mortgage Insurance Policy, if any or otherwise;

and

(v) the applicable Senior Prepayment Percentage of the sum of (a)

the Scheduled Principal Balance of each Mortgage Loan in the related Loan Group

which was

<PAGE>

repurchased by the Seller in connection with such Distribution Date and (b) the

excess, if any, of the Scheduled Principal Balance of each Mortgage Loan in the

related Loan Group that has been replaced by the Seller with a Substitute

Mortgage Loan pursuant to the Mortgage Loan Purchase Agreement in connection

with such Distribution Date over the Scheduled Principal Balance of each such

Substitute Mortgage Loan.

Group I Senior Percentage: Initially, 93.70%. On any Distribution Date,

the lesser of (i) 100% and (ii) the percentage (carried to six places rounded

up) obtained by dividing the aggregate Current Principal Amount of the Group I

Senior Certificates immediately preceding such Distribution Date by the

aggregate Scheduled Principal Balance of the Group I Mortgage Loans as of the

beginning of the related Due Period.

Group I Senior Prepayment Percentage: On any Distribution Date occurring

during the periods set forth below, as follows:

<TABLE>

Period (dates inclusive) Group I Senior Prepayment Percentage

------------------------------------ -------------------------------------------------

<S> <C>

January 25, 2005 - December 25, 2011 100%

January 25, 2012 - December 25, 2012 Group I Senior Percentage plus 70% of the Group I

Subordinate Percentage

January 25, 2013 - December 25, 2013 Group I Senior Percentage plus 60% of the Group I

Subordinate Percentage

January 25, 2014 - December 25, 2014 Group I Senior Percentage plus 40% of the Group I

Subordinate Percentage

January 25, 2015 - December 25, 2015 Group I Senior Percentage plus 20% of the Group I

Subordinate Percentage

January 25, 2016 and thereafter Group I Senior Percentage

</TABLE>

In addition, no reduction of the Group I Senior Prepayment Percentage

shall occur on any Distribution Date unless, as of the last day of the month

preceding such Distribution Date, (A) the aggregate Scheduled Principal Balance

of the Mortgage Loans delinquent 60 days or more (including for this purpose any

such Mortgage Loans in foreclosure and Mortgage Loans with respect to which the

related Mortgaged Property has been acquired by the Trust), averaged over the

last six months, as a percentage of the sum of the aggregate Current Principal

Amount of the Subordinate Certificates does not exceed 50%; and (B) cumulative

Realized Losses on the Mortgage Loans do not exceed (a) 30% of the Original

Subordinate Principal Balance if such Distribution Date occurs between and

including January 2012 and December 2012, (b) 35% of the Original Subordinate

Principal Balance if such Distribution Date occurs between and including January

2013 and December 2013, (c) 40% of the Original Subordinate Principal Balance if

such Distribution Date occurs between and including January 2014 and December

2014, (d) 45% of the Original Subordinate Principal Balance if such Distribution

Date occurs between and including January 2015 and December 2015, and (e) 50% of

the Original Subordinate Principal Balance if such Distribution Date occurs

during or after January 2016.

<PAGE>

In addition, if on any Distribution Date the current weighted average of

the Subordinate Percentages is equal to or greater than two times the initial

weighted average of the Subordinate Percentages, and (a) the aggregate Scheduled

Principal Balance of the Mortgage Loans delinquent 60 days or more (including

for this purpose any such Mortgage Loans in foreclosure and bankruptcy and such

Mortgage Loans with respect to which the related Mortgaged Property has been

acquired by the Trust), averaged over the last six months, as a percentage of

the aggregate Current Principal Amount of the Subordinate Certificates does not

exceed 50% and (b)(i) on or prior to the Distribution Date in December 2007

cumulative Realized Losses on the Mortgage Loans as of the end of the related

Prepayment Period do not exceed 20% of the Original Subordinate Principal

Balance and (ii) after the Distribution Date in December 2007 cumulative

Realized Losses on the Mortgage Loans as of the end of the related Prepayment

Period do not exceed 30% of the Original Subordinate Principal Balance, then,

the Group I Senior Prepayment Percentage for such Distribution Date will equal

the Group I Senior Percentage; provided, however, if on such Distribution Date

the current weighted average of the Subordinate Percentages is equal to or

greater than two times the initial weighted average of the Subordinate

Percentages on or prior to the Distribution Date occurring in December 2007 and

the above delinquency and loss tests are met, then the Group I Senior Prepayment

Percentage for such Distribution Date will equal the Group I Senior Percentage

plus 50% of the Group I Subordinate Percentage.

Notwithstanding the foregoing, if on any Distribution Date, the

percentage, the numerator which is the aggregate Current Principal Amount of the

Senior Certificates immediately preceding such Distribution Date, and the

denominator of which is the Scheduled Principal Balance of the Mortgage Loans as

of the beginning of the related Due Period, exceeds such percentage as of the

Cut-off Date, then the Group I Senior Prepayment Percentage for such

Distribution Date will equal 100%. On the Distribution Date on which the Current

Principal Amounts of the Group I Senior Certificates are reduced to zero, the

Group I Senior Prepayment Percentage shall be the minimum percentage sufficient

to effect such reduction and thereafter shall be zero.

Group I Subordinate Percentage: On any Distribution Date, 100% minus the

Group I Senior Percentage.

Group I Subordinate Prepayment Percentage: With respect to the Group I

Mortgage Loans, on any Distribution Date, 100% minus the Group I Senior

Prepayment Percentage, except that on any Distribution Date after the Current

Principal Amounts of the Group I Senior Certificates have each been reduced to

zero, if (a) the weighted average of the Subordinate Percentages on such

Distribution Date equals or exceeds two times the initial weighted average of

the Subordinate Percentages and (b) the aggregate Scheduled Principal Balance of

the Mortgage Loans delinquent 60 days or more (including for this purpose any

such Mortgage Loans in foreclosure and Mortgage Loans with respect to which the

related Mortgaged Property has been acquired by the Trust), averaged over the

last six months, as a percentage of the sum of the aggregate Current Principal

Amount of the Subordinate Certificates does not exceed 100%, the Group I

Subordinate Prepayment Percentage will equal 100%. If the test set forth in the

preceding sentence is not satisfied on any Distribution Date after the Current

Principal Amount

<PAGE>

of the Group I Senior Certificates have each been reduced to zero, then the

Group I Subordinate Prepayment Percentage will equal zero for such Distribution

Date.

Group II Mortgage Loans: The Mortgage Loans identified as such on the

Mortgage Loan Schedule.

Group II Senior Certificates: The Class II-A-1, Class II-X-1, Class

II-A-2, Class II-X-2, Class II-A-3 and Class II-X-3 Certificates.

Group II Senior Percentage: Initially, 93.70%. On any Distribution Date,

the lesser of (i) 100% and (ii) the percentage (carried to six places rounded

up) obtained by dividing the aggregate Current Principal Amount of the Group II

Senior Certificates (other than the Interest Only Certificates) immediately

preceding such Distribution Date by the aggregate Scheduled Principal Balance of

the Group II Mortgage Loans as of the beginning of the related Due Period.

Group II Senior Prepayment Percentage: On any Distribution Date occurring

during the periods set forth below, as follows:

<TABLE>

Period (dates inclusive) Group II Senior Prepayment Percentage

------------------------------------ ---------------------------------------------------

<S> <C>

January 25, 2005 - December 25, 2011 100%

January 25, 2012 - December 25, 2012 Group II Senior Percentage plus 70% of the Group II

Subordinate Percentage

January 25, 2013 - December 25, 2013 Group II Senior Percentage plus 60% of the Group II

Subordinate Percentage

January 25, 2014 - December 25, 2014 Group II Senior Percentage plus 40% of the Group II

Subordinate Percentage

January 25, 2015 - December 25, 2015 Group II Senior Percentage plus 20% of the Group II

Subordinate Percentage

January 25, 2016 and thereafter Group II Senior Percentage

</TABLE>

In addition, no reduction of the Group II Senior Prepayment Percentage