POOLING AND SERVICING AGREEMENT

Pooling and Servicing Agreement

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STRUCTURED ASSET MORTGAGE INVESTMENTS II INC., | JPMORGAN CHASE BANK, | WELLS FARGO BANK, | EMC MORTGAGE CORPORATION

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Title: POOLING AND SERVICING AGREEMENT
Governing Law: New York Date: 7/13/2005

STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.,

DEPOSITOR,

JPMORGAN CHASE BANK, N.A.,

TRUSTEE,

WELLS FARGO BANK, NATIONAL ASSOCIATION,

MASTER SERVICER,

WELLS FARGO BANK, NATIONAL ASSOCIATION,

SECURITIES ADMINISTRATOR,

and

EMC MORTGAGE CORPORATION

POOLING AND SERVICING AGREEMENT

Dated as of June 1, 2005

Structured Asset Mortgage Investments II Trust 2005-AR3

Mortgage Pass-Through Certificates

Series 2005-AR3

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TABLE OF CONTENTS

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Page

ARTICLE I

Definitions

Section 1.01. Definitions...............................................................................2

Section 1.02. Calculation of LIBOR.....................................................................44

ARTICLE II

Conveyance of Mortgage Loans;

Original Issuance of Certificates

Section 2.01. Conveyance of Mortgage Loans to Trustee..................................................46

Section 2.02. Acceptance of Trust Fund by Trustee......................................................48

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

Subsequent Mortgage Purchase Agreement(s)................................................51

Section 2.04. Substitution of Mortgage Loans...........................................................52

Section 2.05. Issuance of Certificates.................................................................54

Section 2.06. Representations and Warranties Concerning the Depositor..................................54

Section 2.07. Conveyance of the Subsequent Mortgage Loans..............................................55

Section 2.08 Covenants of the Master Servicer and the EMC Servicer....................................59

ARTICLE III

Administration and Servicing of Mortgage Loans

Section 3.01. Master Servicer..........................................................................60

Section 3.02. REMIC-Related Covenants..................................................................61

Section 3.03. Monitoring of Servicers..................................................................61

Section 3.04. Fidelity Bond............................................................................62

Section 3.05. Power to Act; Procedures.................................................................62

Section 3.06. Due-on-Sale Clauses; Assumption Agreements...............................................63

Section 3.07. Release of Mortgage Files................................................................63

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

Trustee..................................................................................64

Section 3.09. Standard Hazard Insurance and Flood Insurance Policies...................................65

Section 3.10. Presentment of Claims and Collection of Proceeds.........................................66

Section 3.11. Maintenance of the Primary Mortgage Insurance Policies...................................66

Section 3.12. Trustee to Retain Possession of Certain Insurance Policies and Documents.................67

Section 3.13. Realization Upon Defaulted Mortgage Loans................................................67

Section 3.14. Compensation for the Servicers and the Master Servicer...................................67

Section 3.15. REO Property.............................................................................67

Section 3.16. Annual Officer's Certificate as to Compliance............................................68

Section 3.17. Annual Independent Accountant's Servicing Report.........................................69

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Section 3.18. Reports Filed with Securities and Exchange Commission....................................69

Section 3.19. EMC......................................................................................70

Section 3.20. UCC......................................................................................70

Section 3.21. Optional Purchase of Defaulted Mortgage Loans............................................70

ARTICLE IV

Accounts

Section 4.01. Protected Accounts.......................................................................72

Section 4.02. Distribution Account.....................................................................73

Section 4.03. Permitted Withdrawals and Transfers from the Distribution Account........................74

Section 4.04. Distribution of Group I Senior Carryover Shortfall Amount; Group I Senior

Carryover Shortfall Reserve Fund.........................................................76

Section 4.05. Distribution of Subordinate Carryover Shortfall Amount; Subordinate Carryover

Shortfall Reserve Fund...................................................................77

Section 4.06. Group I Senior Certificates Yield Maintenance Account and Group I Senior

Certificates Yield Maintenance Agreement.................................................79

Section 4.07. Class M and Class B Certificates Yield Maintenance Account and Class M and Class

B Certificates Yield Maintenance Agreement...............................................80

Section 4.08. Group I Pre-Funding Account and Group I Pre-Funding Reserve Account......................81

Section 4.09. Group I Interest Coverage Account........................................................83

Section 4.10. Group II Pre-Funding Account and Group II Pre-Funding Reserve Account....................84

Section 4.11. Group II Interest Coverage Account.......................................................86

Section 4.12. Group I Supplemental Fund................................................................87

ARTICLE V

Certificates

Section 5.01. Certificates.............................................................................89

Section 5.02. Registration of Transfer and Exchange of Certificates....................................99

Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.......................................103

Section 5.04. Persons Deemed Owners...................................................................103

Section 5.05. Transfer Restrictions on Residual Certificates..........................................103

Section 5.06. Restrictions on Transferability of Certificates.........................................104

Section 5.07. ERISA Restrictions......................................................................105

Section 5.08. Rule 144A Information...................................................................106

Section 5.09. Appointment of Paying Agent and Certificate Registrar...................................107

ARTICLE VI

Payments to Certificateholders

Section 6.01. Distributions on the Certificates.......................................................108

Section 6.02. Allocation of Losses and Subsequent Recoveries..........................................112

Section 6.03. Payments................................................................................115

Section 6.04. Statements to Certificateholders........................................................116

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Section 6.05. Monthly Advances........................................................................119

Section 6.06. Compensating Interest Payments..........................................................120

ARTICLE VII

The Master Servicer

Section 7.01. Liabilities of the Master Servicer......................................................121

Section 7.02. Merger or Consolidation of the Master Servicer..........................................121

Section 7.03. Indemnification of the Trustee, the Custodian and the Securities Administrator..........121

Section 7.04. Limitations on Liability of the Master Servicer and Others..............................122

Section 7.05. Master Servicer Not to Resign...........................................................123

Section 7.06. Successor Master Servicer...............................................................123

Section 7.07. Sale and Assignment of Master Servicing.................................................124

ARTICLE VIII

Default

Section 8.01. "Event of Default"......................................................................125

Section 8.02. Trustee to Act; Appointment of Successor................................................127

Section 8.03. Notification to Certificateholders......................................................127

Section 8.04. Waiver of Defaults......................................................................128

Section 8.05. List of Certificateholders..............................................................128

ARTICLE IX

Concerning the Trustee and the Securities Administrator

Section 9.01. Duties of Trustee.......................................................................129

Section 9.02. Certain Matters Affecting the Trustee and the Securities Administrator..................131

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

Loans...................................................................................133

Section 9.04. Trustee and Securities Administrator May Own Certificates...............................133

Section 9.05. Trustee's and Securities Administrator's Fees and Expenses..............................133

Section 9.06. Eligibility Requirements for Trustee, Paying Agent and Securities Administrator.........134

Section 9.07. Insurance...............................................................................134

Section 9.08. Resignation and Removal of the Trustee and Securities Administrator.....................134

Section 9.09. Successor Trustee, Paying Agent and Successor Securities Administrator..................136

Section 9.10. Merger or Consolidation of Trustee, Paying Agent or Securities Administrator............136

Section 9.11. Appointment of Co-Trustee or Separate Trustee...........................................137

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

Administration..........................................................................138

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

the Mortgage Loans......................................................................141

Section 10.02. Additional Termination Requirements.....................................................143

iii

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ARTICLE XI

Miscellaneous Provisions

Section 11.01. Intent of Parties.......................................................................145

Section 11.02. Amendment...............................................................................145

Section 11.03. Recordation of Agreement................................................................146

Section 11.04. Limitation on Rights of Certificateholders..............................................147

Section 11.05. Acts of Certificateholders..............................................................147

Section 11.06. GOVERNING LAW...........................................................................148

Section 11.07. Notices.................................................................................149

Section 11.08. Severability of Provisions..............................................................149

Section 11.09. Successors and Assigns..................................................................149

Section 11.10. Article and Section Headings............................................................149

Section 11.11. Counterparts............................................................................149

Section 11.12. Notice to Rating Agencies...............................................................149

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EXHIBITS

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

Exhibit A-2 - Form of Class M Certificates

Exhibit A-3 - Form of Class B Certificates

Exhibit A-4 - Form of Class R Certificates

Exhibit B - Initial 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 - EverHome Subservicing Agreement

Exhibit H-2 - HomeBanc Servicing Agreement

Exhibit H-3 - Wachovia Servicing Agreement

Exhibit H-4 - EMC Servicing Agreement

Exhibit I - Assignment Agreements

Exhibit J - Mortgage Loan Purchase Agreement

Exhibit K - Form of Trustee Limited Power of Attorney

Exhibit L - Form of Subsequent Transfer Instrument

SCHEDULES

Schedule A - Schedule of Strike Prices and Projected Principal Balances

(Group I Senior Certificates Yield Maintenance Agreement)

Schedule B - Schedule of Strike Prices and Projected Principal Balances

(Class M and Class B Certificates Yield Maintenance

Agreement)

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POOLING AND SERVICING AGREEMENT

Pooling and Servicing Agreement, dated as of June 1, 2005, among

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

depositor (the "Depositor"), JPMorgan Chase Bank, N.A., a banking association

organized under the laws of the United States of America, not in its individual

capacity but solely as trustee (the "Trustee"), Wells Fargo Bank, National

Association, as master servicer (in such capacity, the "Master Servicer") and as

securities administrator (in such capacity, the "Securities Administrator"), and

EMC Mortgage Corporation ("EMC").

PRELIMINARY STATEMENT

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

Mortgage Loans from EMC. 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 the related Subsequent Transfer Date, the Depositor will

acquire the related Subsequent Mortgage Loans from EMC. On the related

Subsequent Transfer Date, the Depositor will sell the related Subsequent

Mortgage Loans and certain other property to the Trust Fund.

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 interests" 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 Certificates will be designated

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

designated the "residual interests" 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 Certificates will be designated

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

designated the "residual interests" in such REMIC.

The aggregate Outstanding Principal Balance of the Group I Mortgage

Loans as of the Cut-off Date, after application of scheduled payments due

whether or not received, is approximately $438,953,411. The aggregate

Outstanding Principal Balance of the Group II Mortgage Loans as of the Cut-off

Date, after application of scheduled payments due whether or not received, is

approximately $144,057,581. The aggregate Outstanding Principal Balance of the

Mortgage Loans as of the Cut-off Date, after application of scheduled payments

due whether or not received, is approximately $583,010,992.

<PAGE>

In consideration of the mutual agreements herein contained, the

Depositor, the Master Servicer, the Securities Administrator, EMC and the

Trustee agree as follows:

ARTICLE I

Definitions

Section 1.01. 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,

as applicable, those customary mortgage master servicing practices of prudent

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 Distribution Account, the Group I Pre-Funding Account, the

Group I Pre-Funding Reserve Account, the Group I Interest Coverage Account, the

Group II Pre-Funding Account, the Group II Pre-Funding Reserve Account, the

Group II Interest Coverage Account, the Group I Senior Carryover Shortfall

Reserve Fund, the Group I Supplemental Fund, the Subordinate Carryover Shortfall

Reserve Fund and the related Protected Account, as the context may require.

Accrued Certificate Interest: For any Certificate (other than a

Residual Certificate) on any Distribution Date, the amount of interest accrued

during the related Interest Accrual Period at the applicable Pass-Through Rate

on the Current Principal Amount (or Notional Amount, with respect to the Class

I-X Certificates and the Class M-X Certificates) of such Certificate immediately

prior to such Distribution Date, less (i) in the case of a Senior Certificate

(other than a Residual Certificate), such Certificate's share of (a) any Net

Interest Shortfall from the Mortgage Loans in the related Loan Group, (b) any

interest shortfall on the Mortgage Loans in the related Loan Group resulting

from the application of the Relief Act or similar state law, (c) other than with

respect to the Class II-A-1 Certificates, any shortfalls resulting from Net

Deferred Interest on the related Mortgage Loans and (d) after the Cross-Over

Date, the interest portion of any Realized Losses on the related Mortgage Loans

in the related Loan Group to the extent allocated thereto in accordance with

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

Certificate's share of (a) any Net Interest Shortfall from the Mortgage Loans,

(b) any interest shortfall on the Mortgage Loans in the related Loan Group

resulting from the application of the Relief Act or similar state law, and (c)

shortfalls resulting from Net Deferred Interest on the related Mortgage Loans

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

to that Class of Certificates, to the extent allocated thereto in accordance

with Section 6.02(g). The Accrued Certificate Interest on the Class I-X

Certificates and the Class M-X Certificates on any Distribution Date will be

reduced by any amounts necessary to fund the Group I Senior Carryover Shortfall

Reserve Fund and the Subordinate Carryover Reserve Fund, respectively, on the

related Distribution Date with respect to the payment of any Group I Senior

Carryover Shortfall Amount and any Subordination Carryover Shortfall Amount, as

the case may be, and, until the date that the Group I Supplemental Fund is

terminated, the Accrued Certificate Interest on the Class I-X Certificates on

any Distribution

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Date will be reduced by any amounts necessary to replenish the

Group I Supplemental Fund on the related Distribution Date, in each such

instance in the manner and priority set forth herein. The applicable Senior

Percentage of Prepayment Interest Shortfalls and interest shortfalls resulting

from the application of the Relief Act or similar state law will be allocated

among the related Senior Certificates (other than the Residual Certificates) in

proportion to the amount of Accrued Certificate Interest that would have been

allocated thereto in the absence of such shortfalls. The applicable Subordinate

Percentage of Prepayment Interest Shortfalls and interest shortfalls resulting

from the application of the Relief Act and similar state law will be allocated

among the Subordinate Certificates in proportion to the amount of Accrued

Certificate Interest that would have been allocated thereto in the absence of

such shortfalls. The interest portion of Realized Losses for the Mortgage Loans

will be allocated sequentially, in the following order, to the Class B-6, Class

B-5, Class B-4, Class B-3, Class B-2, Class B-1, Class M-6, Class M-5, Class

M-4, Class M-3, Class M-2, Class M-1 and Class M-X Certificates and, following

the Cross-Over Date, (A) the interest portion of Realized Losses on the Group I

Mortgage Loans will be allocated on a pro rata basis to the Class I-A-1

Certificates, the Class I-A-2 Certificates, the Class I-A-3 Certificates and the

Class I-X Certificates, and (B) the interest portion of Realized Losses on the

Group II Mortgage Loans will be allocated to the Class II-A-1 Certificates.

Accrued Certificate Interest on the Certificates (other than the Class X

Certificates, the Class II-A-1 Certificates and the Residual Certificates) shall

be calculated on the basis of a 360-day year and the actual number of days

elapsed in the related Interest Accrual Period. Accrued Certificate Interest on

the Class X Certificates and the Class II-A-1 Certificates is calculated on the

basis of a 360-day year consisting of twelve 30 day months. The Residual

Certificates do not have a Pass-Through Rate and will not bear interest. No

Accrued Certificate Interest will be payable with respect to any Class or

Classes of Certificates that bear interest after the Distribution Date on which

the outstanding Current Principal Amount or Notional Amount of such Certificate

or Certificates has been reduced to zero.

Adjustable Rate Certificates: The Class I-A-1 Certificates, Class I-A-2

Certificates, Class I-A-3 Certificates, Class M-1 Certificates, Class M-2

Certificates, Class M-3 Certificates, Class M-4 Certificates, Class M-5

Certificates, Class M-6 Certificates, Class B-1 Certificates, Class B-2

Certificates, Class B-3 Certificates, Class B-4 Certificates, Class B-5

Certificates and Class B-6 Certificates.

Aegis: Aegis Mortgage Corporation and its successor in interest.

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.

Agreement: This Pooling and Servicing Agreement and all amendments

hereof and supplements hereto made in accordance with the terms herein.

Allocable Share: With respect to any Class of Subordinate Certificates

(other than the Class M-X Certificates):

<PAGE>

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

clauses (1) and (4) 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 of Certificates and the 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 (2), (3), (5) and (6) of the definition of Subordinate Optimal Principal

Amount, after giving effect to the reduction of the Current Principal Amount of

the principal component of the Class M-X Certificates on such Distribution Date,

(1) for any Distribution Date on which the Loss and

Delinquency Test has been satisfied, as to each Class of

Subordinate Certificates for which (x) the related 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 of Certificates and the denominator of which is the

aggregate Current Principal Amount of all such Classes of

Subordinate Certificates for which the related Class

Prepayment Distribution Trigger has been satisfied and (y) the

related 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 related Class

Prepayment Distribution Trigger was satisfied on such

Distribution Date is reduced to zero, any amounts distributed

pursuant to this clause (b)(1), to the extent of such Class's

remaining Allocable Share, shall be distributed to the Class

of Subordinate Certificates having the highest payment

priority and to the Subordinate Certificates which satisfy the

related Class Prepayment Distribution Trigger in reduction of

their respective Current Principal Amounts, in the order of

their payment priority; and

(2) for any Distribution Date on which the Loss and

Delinquency Test has not been satisfied, as to the Subordinate

Certificates, 0%; provided that if on a Distribution Date, any

remaining amounts distributed pursuant to this clause (b)(2)

shall be distributed to the Classes of Subordinate

Certificates which satisfy the related Class Prepayment

Distribution Trigger and to the Class of Subordinate

Certificates having the highest payment priority in reduction

of their respective Current Principal Amounts in the order of

their payment priority.

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

credit rating of AAA in the case of S&P and Aaa in the case of Moody's (or with

respect to investments in money market funds, a credit rating of "AAAm" or

"AAAm-G", in the case of S&P, and the highest rating given by Moody's for money

market funds, in the case of Moody's). For any short-term deposit or security, a

rating of A-l+ in the case of S&P and 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

<PAGE>

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: With respect to any Mortgage Loan originated in

connection with a refinancing, the appraised value of the related Mortgaged

Property based upon the appraisal made at the time of such refinancing or, with

respect to any other Mortgage Loan, the amount set forth as the appraised value

of the related 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 Assigned Loans (as defined therein) and the related Servicing

Agreements were assigned to the Trustee for the benefit of the

Certificateholders.

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

a Business Day, then the next succeeding Business Day.

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

Group I Available Funds and the Group II 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 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.

BancMortgage: BancMortgage, a division of National Bank of Commerce and

the successor entity to BancMortgage Financial Corporation, and its successor in

interest.

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 the Federal Reserve is closed or on

which banking institutions in New York City or in any of the jurisdictions 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.

Carryover Shortfall: A Group I Senior Carryover Shortfall or

Subordinate Carryover Shortfall, as applicable.

<PAGE>

Carryover Shortfall Amount: A Group I Senior Carryover Shortfall Amount

or a Subordinate Carryover Shortfall Amount, as applicable.

Carryover Shortfall Reserve Fund: The Group I Senior Carryover

Shortfall Reserve Fund or the Subordinate Carryover Shortfall Reserve Fund, as

applicable.

Century Lending: Century Mortgage Company doing business as Century

Lending and its successor in interest.

Certificate: Any mortgage pass-through certificate evidencing a

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

countersigned by the Certificate Registrar in substantially the forms annexed

hereto as Exhibits A-1, A-2, A-3 and A-4 with the blanks therein appropriately

completed.

Certificate Group: The Group I Senior Certificates and the Group II

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.

Certificate Registrar: The Securities Administrator or any successor

certificate registrar appointed hereunder.

Certificate Registrar Office: The office of the Certificate Registrar

located at Sixth Street and Marquette Avenue, Minneapolis, Minnesota 44579,

Attention: SAMI II Series 2005-AR3.

Certificateholder: A Holder of a Certificate.

Class: With respect to the Certificates, I-A-1, I-A-2, I-A-3, I-X,

II-A-1, M-X, M-1, M-2, M-3, M-4, M-5, M-6, R-I, R-II, R-III, B-1, B-2, B-3, B-4,

B-5 and B-6.

Class B Certificates: The Class B-1 Certificates, the Class B-2

Certificates, the Class B-3 Certificates, the Class B-4 Certificates, the Class

B-5 Certificates and the Class B-6 Certificates.

Class M and Class B Certificates Yield Maintenance Account: The account

to be established and maintained pursuant to the Class M and Class B

Certificates Yield Maintenance Agreement, which account will be an asset of the

Trust but not of any REMIC.

Class M and Class B Certificates Yield Maintenance Agreement: The

Interest Rate Corridor Letter Agreement, dated June 30, 2005, entered into by

the Yield Maintenance Provider and the Trustee on behalf of the Trust and

relating to the Class M and Class B Certificates.

Class M Certificates: The Class M-1 Certificates, the Class M-2

Certificates, the Class M-3 Certificates, the Class M-4 Certificates, the Class

M-5 Certificates and the Class M-6 Certificates.

<PAGE>

Class Prepayment Distribution Trigger: For a Class of Subordinate

Certificates (other than the principal component of the Class M-X 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 of Certificates and each

Class of Certificates subordinate thereto, if any, and the denominator of which

is the aggregate 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. If on any Distribution Date the Current Principal Amount of any

Class of Subordinate Certificates (other than the principal component of the

Class M-X Certificates) for which the related Class Prepayment Distribution

Trigger was satisfied on such Distribution Date is reduced to zero, any amounts

distributable to such Class of Certificates pursuant to clauses (2), (3), (5)

and (6) of the definition of "Subordinate Optimal Principal Amount," to the

extent of such Class' remaining Allocable Share, shall be distributed to the

remaining Class or Classes of Subordinate Certificates (other than the principal

component of the Class M-X Certificates) in reduction of their respective

Current Principal Amounts, sequentially, in the order of their payment priority.

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

Certificates.

Class R-I Certificate: Any one of the Class R-I Certificates executed

by the Trustee and authenticated by the Certificate Registrar substantially in

the form annexed hereto as Exhibit A-4 and evidencing an interest designated as

a "residual interest" in REMIC I for purposes of the REMIC Provisions.

Class R-II Certificate: Any one of the Class R-II Certificates executed

by the Trustee and authenticated by the Certificate Registrar substantially in

the form annexed hereto as Exhibit A-4 and evidencing an interest designated as

a "residual interest" in REMIC II for purposes of the REMIC Provisions.

Class R-III Certificate: Any one of the Class R-III Certificates

executed by the Trustee and authenticated by the Certificate Registrar

substantially in the form annexed hereto as Exhibit A-4 and evidencing an

interest designated as a "residual interest" in REMIC III for purposes of the

REMIC Provisions.

Class X Certificates: The Class I-X Certificates and the Class M-X

Certificates.

Closing Date: June 30, 2005.

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

Combined Loan-to-Value Ratio: The fraction, expressed as a percentage,

the numerator of which is the sum of the original principal balance of the

related Mortgage Loan at the date of origination and the principal balance of

the related secondary financing and the denominator of which is the lesser of

the selling price of the Mortgaged Property and its Appraised Value.

Commission: The United States Securities and Exchange Commission.

Compensating Interest Payment: As defined in Section 6.06.

<PAGE>

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 4 New York Plaza, 6th

Floor, New York, New York 10004, Attention: Worldwide Securities Services-Global

Debt, SAMI Series II 2005-AR3. With respect to the Certificate Registrar and the

presentment of Certificates for registration of transfer, exchange or final

payment, Wells Fargo Bank, National Association, Sixth Street and Marquette

Avenue, Minneapolis, Minnesota 55479, Attention: Corporate Trust, SAMI II Series

2005-AR3, and for all other purposes, P.O. Box 98, Columbia, Maryland 21046 (or

for overnight deliveries, 9062 Old Annapolis Road, Columbia, Maryland 21045),

Attention: Corporate Trust, SAMI II Series 2005-AR3.

Corresponding Certificate: With respect to (i) REMIC II Regular

Interest I-A-1, (ii) REMIC II Regular Interest I-A-2, (iii) REMIC II Regular

Interest I-A-3, (iv) REMIC II Regular Interest II-A-1, (v) REMIC II Regular

Interest M-1, (vi) REMIC II Regular Interest M-2, (vii) REMIC II Regular

Interest M-3, (viii) REMIC II Regular Interest M-4, (ix) REMIC II Regular

Interest M-5, (x) REMIC II Regular Interest M-6, (xi) REMIC II Regular Interest

B-1, (xii) REMIC II Regular Interest B-2, (xiii) REMIC II Regular Interest B-3,

(xiv) REMIC II Regular Interest B-4, (xv) REMIC II Regular Interest B-5, (xvi)

REMIC II Regular Interest B-6, and (xvii) REMIC II Regular Interest MT-R, (i)

the Class I-A-1 Certificates, (ii) the Class I-A-2 Certificates, (iii) the Class

I-A-3 Certificates, (iv) the Class II-A-1 Certificates, (v) the Class M-1

Certificates, (vi) the Class M-2 Certificates, (vii) the Class M-3 Certificates,

(viii) the Class M-4 Certificates, (ix) the Class M-5 Certificates, (x) the

Class M-6 Certificates, (xi) the Class B-1 Certificates, (xii) the Class B-2

Certificates, (xiii) the Class B-3 Certificates, (xiv) the Class B-4

Certificates, (xv) the Class B-5 Certificates, (xvi) the Class B-6 Certificates

and (xvii) the Class R-III Certificates, respectively. With respect to (i) REMIC

I Regular Interests 1A, 1B and ZZZ, (ii) REMIC I Regular Interest 2A, 2B and

ZZZ, and (iii) REMIC I Regular Interest ZZZ, (i) REMIC II Regular Interest A-1,

(ii) REMIC II Regular Interests A-2, and (iii) REMIC II Regular Interests B-1,

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

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

Current Principal Amount of the Subordinate Certificates has been reduced to

zero (after giving effect to all related distributions on such Distribution

Date).

Current Principal Amount: With respect to any Certificate as of any

Distribution Date, an amount equal to the initial principal amount of such

Certificate on the Closing Date (or, with respect to the Class X Certificates,

the initial principal amount of the principal component of such Certificate on

the Closing Date), plus, in the case of a Negative Amortization Certificate, the

amount of any Net Deferred Interest on the related Mortgage Loans allocated

thereto on such Distribution Date and on previous Distribution Dates, plus, in

the case of a Subordinate Certificate, any Subsequent Recoveries on the Mortgage

Loans added to the Current Principal Amount of such Certificate pursuant to

Section 6.02(h) hereof, as reduced by (i) all amounts allocable to principal

previously distributed with respect to such Certificate (or, with respect to the

Class X Certificates, all amounts allocable to principal previously distributed

with respect to the principal component of such Certificate), (ii) the principal

portion of all Realized Losses on the Mortgage Loans (other than Realized Losses

on the Mortgage Loans resulting from Debt Service Reductions) previously

allocated (as applicable) to such Certificate (or, with respect to the Class X

Certificates, previously allocated (as applicable) to the principal component of

such

<PAGE>

Certificate), taking account of its applicable 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, as

applicable, for previous Distribution Dates. With respect to any Class of

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, National Association, or any successor

custodian appointed pursuant to the provisions hereof and of the Custodial

Agreement.

Cut-off Date: June 1, 2005.

Cut-off Date Balance: $583,010,992.

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.

Deferred Interest: The amount of interest which is deferred and added

to the Outstanding Principal Balance of certain Group I Mortgage Loans due to

negative amortization with respect to such Group I Mortgage Loans, as described

in the Prospectus Supplement.

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 such Mortgage Loan secured by such

Mortgage Property, which valuation results from a proceeding initiated under the

Bankruptcy Code or any other similar state law or other proceeding.

Deposit Amount: The amount of $150.00 deposited by the Depositor on the

Closing Date into the Distribution Account.

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., and any successor thereto.

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

hereof.

<PAGE>

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.

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 any Distribution Date and 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 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, (v) any

Person with respect to which income on any Residual Certificate is attributable

to a foreign permanent establishment or fixed base, within the meaning of an

applicable income tax treaty, of such Person or any other Person, (vi) any

Person that does not satisfy the requirements of United States Treasury

Department Regulation Section 1.860E-1(c) with respect to a transfer of a

noneconomic residual interest, as defined therein, or (vii) any other Person so

designated by the Trustee and the Certificate Registrar 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 4.02, which shall be denominated "Wells Fargo

Bank, National Association, as Paying Agent, for the benefit of the registered

holders of Structured Asset Mortgage Investments II Trust 2005-AR3, Mortgage

Pass-Through Certificates, Series 2005-AR3 - Distribution Account," and which

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.

<PAGE>

DTC Custodian: The Securities Administrator, and 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. For purposes of

calculating the Net Rates of the Mortgage Loans for the first Distribution Date,

the second preceding Due Date with respect to the first Distribution Date will

be the Cut-off Date.

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

Loan, the period commencing on the second day of the month immediately preceding

the month in which such Distribution Date occurs and ending at the close of

business on the first day of the month in which such 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-1+ 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)(B)) 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 the Certificates then rated by the respective Rating

Agencies). Eligible Accounts may bear interest.

EMC: EMC Mortgage Corporation and its successor in interest.

EMC AAR: That certain Assignment, Assumption and Recognition Agreement,

made and entered into as of June 30, 2005, among EMC, the Trustee and the

Depositor.

EMC Mortgage Loans: The Mortgage Loans listed on the related Mortgage

Loan Schedule as being serviced by the EMC Servicer.

EMC Servicer: EMC, in its capacity as servicer hereunder, and its

successors and assigns.

<PAGE>

EMC Servicing Agreement: That certain Servicing Agreement, dated as of

June 30, 2005, by and between EMC and the Depositor, as attached hereto as

Exhibit H-4, as modified pursuant to the EMC AAR.

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 (formerly known as Alliance

Mortgage Company), and its successor in interest.

EverHome AAR: That certain Assignment, Assumption and Recognition

Agreement, made and entered into as of June 30, 2005, among EMC, the Trustee and

EverHome.

EverHome Subservicing Agreement: That certain Subservicing Agreement,

dated as of August 1, 2002, and attached hereto as Exhibit H-1, between EverHome

as servicer and EMC as owner, as modified pursuant to the EverHome AAR.

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 the sum of any Liquidation Proceeds with respect to a Liquidated Mortgage

Loan received in the calendar month in which such Mortgage Loan became a

Liquidated Mortgage Loan exceeds the sum of (i) the Scheduled Principal Balance

of such Liquidated Mortgage Loan plus (ii) accrued interest at the Mortgage

Interest Rate from the Due Date as to which interest was last paid or advanced

(and not reimbursed) to the related Certificateholders up to the Due Date

applicable to the Distribution Date immediately following the calendar month

during which such liquidation occurred plus (iii) related Liquidation Expenses.

Exchange Act: As defined in Section 3.18.

Fannie Mae: Fannie Mae (also known as Federal National Mortgage

Association) or any successor thereto.

FDIC: Federal Deposit Insurance Corporation or any successor thereto.

F&M: F&M Mortgage Company, Inc. and its successor in interest.

Final Certification: The certification substantially in the form of

Exhibit Three to the Custodial Agreement.

First Horizon: First Horizon Home Loan Corporation and its successor in

interest.

Fiscal Quarter: December 1 through the last day of February, March 1

through May 31, June 1 through August 31, or September 1 through 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 of Certificates the numerator of which is the Current Principal

Amount, or Notional Amount in the case of the Class X

<PAGE>

Certificates, of such Certificate and the denominator of which is the Current

Principal Amount, or Notional Amount in the case of the Class X Certificates, of

such Class of Certificates. 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%, (ii) each Class of Class X

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 respective Class

of Certificates and (iii) a Certificate of any other Class will be deemed to

equal 97.25% 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 1% upon the

retirement of each Class of Class X Certificates.

Freddie Mac: Freddie Mac (also known as 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).

GreenPoint: GreenPoint Mortgage Funding, Inc., and its successor in

interest.

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

in the related Mortgage Note and indicated on the related Mortgage Loan

Schedule, which percentage is added to the related Index on each Interest

Adjustment Date to determine (subject to rounding, the Minimum Lifetime Mortgage

Rate, the Maximum Lifetime Mortgage Rate and the Periodic Rate Cap) the Mortgage

Interest Rate from such Interest Adjustment Date until the next Interest

Adjustment Date.

Group I Available Funds and Group II 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 collections on the Mortgage Loans

(including the principal portion of Scheduled Payments, Principal Prepayments

and the principal amount of Net Liquidation Proceeds and Subsequent Recoveries

on the Mortgage Loans) and all previously undistributed payments on account of

interest collections on the Group I Initial Mortgage Loans and the Group II

Initial Mortgage Loans received after the Cut-off Date, and all previously

undistributed payments on account of interest received after the related

Subsequent Cut-off Date with respect to the related Group I Subsequent Mortgage

Loans and Group II Subsequent Mortgage Loans, as the case may be, and on or

prior to the related Determination Date, in each case from the Mortgage Loans in

the related Loan Group, (b) any Monthly Advances and Compensating Interest

Payments by a Servicer or the Master Servicer (or by the Trustee, as successor

master servicer) with respect to such Distribution Date, in each case, in

respect of the Mortgage Loans in the related Loan Group, (c) any other

miscellaneous amounts remitted by the Master Servicer or a Servicer pursuant to

the related Servicing Agreement, (d) any amounts deposited into the Distribution

Account from the Group I Supplemental Fund, the Group I Pre-Funding Reserve

Account, the Group II Pre-Funding Reserve Account, the Group I Interest Coverage

Account or the Group II Interest

<PAGE>

Coverage Account pursuant to this Agreement, and (e) any amount reimbursed by

the Master Servicer for such Distribution Date in connection with losses on

certain eligible investments, except:

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

with respect to the Group I Initial Mortgage Loans and the Group II

Initial Mortgage Loans, and all payments that were due on or before the

related Subsequent Cut-off Date with respect to the Group I Subsequent

Mortgage Loans and Group II Subsequent Mortgage Loans;

(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; and

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

Distribution Account, the Group I Pre-Funding Account, the Group I

Interest Coverage Account, the Group II Pre-Funding Account, the Group

II Interest Coverage Account, the Group I Senior Certificates Yield

Maintenance Account, the Class M and Class B Certificates Yield

Maintenance Account, the Group I Supplemental Fund, the Group I Senior

Carryover Shortfall Reserve Fund and the Subordinate Carryover

Shortfall Reserve Fund, and amounts permitted to be withdrawn (other

than as a distribution of principal, interest or Carryover Shortfall

Amounts on the related Certificates) from the Distribution Account, the

Group I Pre-Funding Account, the Group II Pre-Funding Account, the

Group I Interest Coverage Account, the Group II Interest Coverage

Account, the Group I Supplemental Fund, the Group I Senior Carryover

Shortfall Reserve Fund and the Subordinate Carryover Shortfall Reserve

Fund, and amounts to pay the Servicing Fees or to reimburse any

Servicer, the Securities Administrator, the Trustee, the Custodian or

the Master Servicer for fees and the related Loan Group's pro rata

share of reimbursable expenses as are due under the applicable

Servicing Agreement, this Agreement or the Custodial Agreement and that

have not been retained by or paid to such Servicer, the Trustee, the

Custodian or the Master Servicer.

Group I Initial Mortgage Loans: The Group I Mortgage Loans transferred

and assigned to the Trustee pursuant to Section 2.01 or Section 2.04 and held as

a part of the Trust Fund, as identified in the Mortgage Loan Schedule attached

hereto as Exhibit B, including a mortgage loan the property securing which has

become an REO Property.

Group I Interest Coverage Account: The account or sub-account

established and maintained pursuant to Section 4.09(a) and which shall be an

Eligible Account or a sub-account of an Eligible Account.

<PAGE>

Group I Interest Coverage Amount: The amount to be paid by the

Depositor to the Paying Agent for deposit in the Group I Interest Coverage

Account on the Closing Date pursuant to Section 4.09, which amount is

$467,321.56.

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

related Mortgage Loan Schedule.

Group I Pre-Funded Amount: The amount to be paid by the Depositor to

the Paying Agent for deposit in the Group I Pre-Funding Account on the Closing

Date, which amount is $52, 547,402.

Group I Pre-Funding Account: The account or sub-account established and

maintained pursuant to Section 4.08(a) and which shall be an Eligible Account or

a sub-account of an Eligible Account.

Group I Pre-Funding Reserve Account: The account or sub-account

established and maintained pursuant to Section 4.08(d) and which shall be an

Eligible Account or a sub-account of an Eligible Account.

Group I Senior Carryover Shortfall: With respect to the Class I-A-1

Certificates, the Class I-A-2 Certificates and the Class I-A-3 Certificates and

any Distribution Date for which the respective Pass-Through Rate for such

Certificates is equal to the weighted average of the Net Rates on the Group I

Mortgage Loans, the excess, if any, of (x) Accrued Certificate Interest on the

Class I-A-1 Certificates, the Class I-A-2 Certificates and the Class I-A-3

Certificates for such Distribution Date, using the lesser of a per annum vote of

plus the related Margin, as calculated for such Distribution Date, and (b)

10.50%, over (y) Accrued Certificate Interest on the Class I-A-1 Certificates,

the Class I-A-2 Certificates and the Class I-A-3 Certificates, as applicable,

for such Distribution Date at the weighted average of the Net Rates on the Group

I Mortgage Loans.

Group I Senior Carryover Shortfall Amount: With respect to the Class

I-A-1 Certificates, the Class I-A-2 Certificates and the Class I-A-3

Certificates and each Distribution Date, the sum of (a) the aggregate amount of

Group I Senior Carryover Shortfall for such Classes of Certificates on such

Distribution Date which is not covered on such Distribution Date by payments

made thereon from the Group I Senior Carryover Shortfall Reserve Fund, plus (b)

any Group I Senior Carryover Shortfall Amount for such Classes of Certificates

remaining unpaid from the preceding Distribution Date, plus (c) one month's

interest on the amount in clause (b) (based on the number of days in the

preceding Interest Accrual Period) at a per annum rate equal to the lesser of

(i) One-Month LIBOR plus the related Margin for such Distribution Date and (ii)

10.50%.

Group I Senior Carryover Shortfall Reserve Fund: An "outside reserve

fund" within the meaning of Treasury Regulation Section 1.860G-2(h), which is

not an asset of any REMIC, ownership of which is evidenced by the Class I-X

Certificates, and which is established and maintained pursuant to Section 4.04.

<PAGE>

Group I Senior Certificates: The Class I-A-1 Certificates, the Class

I-A-2 Certificates, the Class I-A-3 Certificates, the Class I-X Certificates,

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

Certificates.

Group I Senior Certificates Yield Maintenance Account: The account to

be established and maintained pursuant to the Group I Senior Certificates Yield

Maintenance Agreement, which account will be an asset of the Trust but not of

any REMIC.

Group I Senior Certificates Yield Maintenance Agreement: The Interest

Rate Corridor Letter Agreement, dated June 30, 2005, entered into by the Yield

Maintenance Provider and the Trustee on behalf of the Trust and relating to the

Class I-A-1 Certificates, the Class I-A-2 Certificates and the Class I-A-3

Certificates.

Group I Subsequent Mortgage Loans: The Group I Mortgage Loans which

will be acquired by the Trust during the Pre-Funding Period with amounts on

deposit in the Group I Pre-Funding Account, which Mortgage Loans will be held as

part of the Trust Fund.

Group I Supplemental Fund: An "outside reserve fund" within the meaning

of Treasury Regulation Section 1.860G-2(h), which is not an asset of any REMIC

and which is established and maintained pursuant to Section 4.12.

Group II Initial Mortgage Loans: The Group II Mortgage Loans

transferred and assigned to the Trustee pursuant to Section 2.01 or Section 2.04

and held as a part of the Trust Fund, as identified in the Mortgage Loan

Schedule attached hereto as Exhibit B, including a mortgage loan the property

securing which has become an REO Property.

Group II Interest Coverage Account: The account or sub-account

established and maintained pursuant to Section 4.11(a) and which shall be an

Eligible Account or a sub-account of an Eligible Account.

Group II Interest Coverage Amount: The amount to be paid by the

Depositor to the Paying Agent for deposit in the Group II Interest Coverage

Account on the Closing Date pursuant to Section 4.11, which amount is

$274,426.84.

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

related Mortgage Loan Schedule.

Group II Pre-Funded Amount: The amount to be paid by the Depositor to

the Paying Agent for deposit in the Group II Pre-Funding Account on the Closing

Date, which amount is $24,023,359.

Group II Pre-Funding Account: The account or sub-account established

and maintained pursuant to Section 4.10(a) and which shall be an Eligible

Account or a sub-account of an Eligible Account.

Group II Pre-Funding Reserve Account: The account or sub-account

established and maintained pursuant to Section 4.10(d) and which shall be an

Eligible Account or a sub-account of an Eligible Account.

<PAGE>

Group II Senior Certificates: The Class II-A-1 Certificates.

Group II Subsequent Mortgage Loans: The Group II Mortgage Loans which

will be acquired by the Trust during the Pre-Funding Period with amounts on

deposit in the Group II Pre-Funding Account, which Mortgage Loans will be held

as part of the Trust Fund.

Group I Senior Optimal Principal Amount and Group II Senior Optimal

Principal Amount: With respect to each Distribution Date and the Group I Senior

Certificates (other than the Residual Certificates) and the Group II Senior

Certificates, respectively, an amount equal to the sum, without duplication, of

the following (after giving effect to the application of such amounts (as

applicable to such Group I Senior Certificates only) to cover Deferred Interest

on the related Mortgage Loans, but in no event greater than the aggregate

Current Principal Amount of such Group I Senior Certificates immediately prior

to such Distribution Date):

(1) the applicable Senior Percentage of all scheduled

payments of principal allocated to the Scheduled Principal

Balance 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, if the Distribution Date occurs prior

to the Cross-over Date);

(2) 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;

(3) 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;

(4) the lesser of (a) the applicable Senior

Prepayment Percentage of the sum of (i) 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 (ii)) and all Subsequent Recoveries received

in respect of each Liquidated Mortgage Loan in the related

Loan Group during the related Due Period and (ii) 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 (i) 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 (ii)) and

all

<PAGE>

Subsequent Recoveries received in respect of each Liquidated

Mortgage Loan in the related Loan Group during the related Due

Period and (ii) the Scheduled Principal Balance of each such

Mortgage Loan in the related Loan Group that was 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

(5) 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 repurchased

by the Seller in connection with such Distribution Date and

(b) the excess, if any, of the Scheduled Principal Balance of

a Mortgage Loan in the related Loan Group that has been

replaced by the Seller with a Substitute Mortgage Loan

pursuant to the Agreement, the Mortgage Loan Purchase

Agreement or the related Subsequent Mortgage Loan Purchase

Agreement (as the case may be) in connection with such

Distribution Date over the Scheduled Principal Balance of such

Substitute Mortgage Loan.

Group I Senior Percentage: Initially, 91.20%. 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 (other than the Residual Certificates) (or, with respect to

the Class I-X Certificates, the Current Principal Amount of the principal

component of such Class of Certificates) immediately preceding such Distribution

Date by the sum of (i) the aggregate Scheduled Principal Balance of the Group I

Mortgage Loans as of the beginning of the related Due Period, and (ii) the

amount on deposit in the Group I Pre-Funding Account as of such Distribution

Date.

Group II Senior Percentage: Initially, 91.20%. 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 immediately preceding such Distribution Date by the

sum of (i) the aggregate Scheduled Principal Balance of the Group II Mortgage

Loans as of the beginning of the related Due Period and (ii) the amount on

deposit in the Group II Pre-Funding Account as of such Distribution Date.

Group I Senior Prepayment Percentage: The Senior Prepayment Percentage

for Group I Senior Certificates (other than the Residual Certificates) on any

Distribution Date occurring during the periods set forth below will be as

follows:

<TABLE>

<S> <C>

Period (dates inclusive) Group I Senior Prepayment Percentage

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

July 25, 2005 - June 25, 2015 100%

July 25, 2015 - June 25, 2016 Group I Senior Percentage plus 70% of the Group I

Subordinate Percentage

July 25, 2016 - June 25, 2017 Group I Senior Percentage plus 60% of the Group I

Subordinate Percentage

July 25, 2017 - June 25, 2018 Group I Senior Percentage plus 40% of the Group I

Subordinate Percentage

</TABLE>

<PAGE>

<TABLE>

<S> <C>

July 25, 2018 - June 25, 2019 Group I Senior Percentage plus 20% of the Group I

Subordinate Percentage

July 25, 2019 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 July 2015 and June 2016, (b) 35% of the Original Subordinate Principal

Balance if such Distribution Date occurs between and including July 2016 and

June 2017, (c) 40% of the Original Subordinate Principal Balance if such

Distribution Date occurs between and including July 2017 and June 2018, (d) 45%

of the Original Subordinate Principal Balance if such Distribution Date occurs

between and including July 2018 and June 2019, and (e) 50% of the Original

Subordinate Principal Balance if such Distribution Date occurs during or after

July 2019.

In addition, if on any Distribution Date after the Distribution Date

occurring in June 2008 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

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

purpose any such Mortgage Loans in foreclosure 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 sum 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 June 2008, 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 June 2008, 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, in each case, the Group I

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

Senior Percentage; provided, however, if on a Distribution Date prior to the

Distribution Date in June 2008 the current Subordinate Percentage is equal to or

greater than two times the initial Subordinate Percentage for the Group I Senior

Certificates 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 of which is the aggregate Current Principal Amount of

the Group I Senior Certificates (other than the Residual Certificates)

immediately preceding such Distribution Date, and the denominator of which is

the sum of (i) the aggregate Scheduled Principal Balance of the Group I Mortgage

Loans as of the beginning of the related Due Period and (ii) the amount on

deposit in the Group I Pre-Funding Account as of such Distribution Date, exceeds

such percentage as of the

<PAGE>

Cut-off Date, then the Senior Prepayment Percentage with respect to the Group I

Senior Certificates (other than the Residual Certificates) for such Distribution

Date will equal 100%.

Group II Senior Prepayment Percentage: The Senior Prepayment Percentage

for the Group II Senior Certificates on any Distribution Date occurring during

the periods set forth below will be as follows:

<TABLE>

<S> <C>

Period (dates inclusive) Group II Senior Prepayment Percentage

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

July 25, 2005 - June 25, 2015 100%

July 25, 2015 - June 25, 2016 Group II Senior Percentage plus 70% of the Group II

Subordinate Percentage

July 25, 2016 - June 25, 2017 Group II Senior Percentage plus 60% of the Group II

Subordinate Percentage

July 25, 2017 - June 25, 2018 Group II Senior Percentage plus 40% of the Group II

Subordinate Percentage

July 25, 2018 - June 25, 2019 Group II Senior Percentage plus 20% of the Group II

Subordinate Percentage

July 25, 2019 and thereafter Group II Senior Percentage

</TABLE>

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