10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1933
	For the fiscal year ended December 31, 2005
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from           to

Commission file number 0-14879

BAY VIEW CAPITAL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization) 94-3078031
(I.R.S. Employer
Identification No.)

1840 Gateway Drive
San Mateo, California
(Address of principal executive offices) 94404

(Zip Code)

Registrant’s telephone number, including area code: (650) 312-7300

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None

      Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.     YES o          NO þ

      Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.     YES o          NO þ

      Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such requirements for the past 90 days.     YES þ          NO o

      Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in a definitive proxy or information statement incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.     þ

      Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o          Accelerated filer þ          Non-accelerated filer o

      Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Act).     YES o          NO þ

      The aggregate market value of the voting stock held by non-affiliates of the registrant as of June 30, 2005 was $102,940,439, based upon the price at which the common equity was last sold on the New York Stock Exchange on such date. Registrant has submitted a 2005 CEO certification with no qualifications to the New York Stock Exchange pursuant to Rule 303A.12(a).

      There were 6,613,099 shares of Common Stock, $0.01 par value, outstanding as of February 28, 2006.

DOCUMENTS INCORPORATED BY REFERENCE

      Part III of Form 10-K — The responses to Items 10, 11, 12, 13 and 14 are incorporated by reference to Registrant’s proxy statement for its 2006 annual meeting of stockholders, or will be included in an amendment to this Annual Report on Form 10-K, to be filed not later than April 30, 2006 with the Securities and Exchange Commission.

FORM 10-K

PART I
Item 1.	Business	4
	General and Business Overview	4
	Liquidating Portfolio	6
	Competition	6
	Economic Conditions, Government Policies and Legislation	6
	Supervision and Regulation	6
	Employees	8
	Executive Officers of the Registrant	8
Item 1A.	Risk Factors	9
Item 1B.	Unresolved Staff Comments	17
Item 2.	Properties	17
Item 3.	Legal Proceedings	17
Item 4.	Submission of Matters to a Vote of Security Holders	17
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	18
Item 6.	Selected Financial Data	18
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 8.	Financial Statements and Supplementary Data	44
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	84
Item 9A.	Controls and Procedures	84
Item 9B.	Other Information	88
PART III
Item 10.	Directors and Executive Officers of the Registrant	88
Item 11.	Executive Compensation	88
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	88
Item 13.	Certain Relationships and Related Transactions	88
Item 14.	Principal Accounting Fees and Services	88
PART IV
Item 15.	Exhibits and Financial Statement Schedules	88
Signatures		93
EXHIBIT 10.1
EXHIBIT 10.2
EXHIBIT 10.3
EXHIBIT 10.4
EXHIBIT 11
EXHIBIT 12
EXHIBIT 14
EXHIBIT 21
EXHIBIT 23.1
EXHIBIT 23.2
EXHIBIT 31.1
EXHIBIT 31.2
EXHIBIT 32.1
EXHIBIT 32.2

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Forward-Looking Statements

      This Annual Report on Form 10-K of Bay View Capital Corporation (the “Company,” “we,” “us,” or “our”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by use of terms and phrases such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will,” and similar terms and phrases, including references to assumptions. These forward-looking statements are necessarily based on assumptions as of the date of this Annual Report on Form 10-K and involve risks and uncertainties. Accordingly, our actual results may differ materially from those that we currently anticipate.

      Throughout this Annual Report on Form 10-K, “BVCC” refers to Bay View Capital Corporation, “BVAC” refers to Bay View Acceptance Corporation, BVCC’s auto finance subsidiary, “GLB” refers to Great Lakes Bancorp, Inc., “GBSB” refers to Greater Buffalo Savings Bank, GLB’s savings bank subsidiary and “AFS” refers to AmeriCredit Financial Services, Inc., a subsidiary of AmeriCredit Corp.

      Some of the factors that may cause actual results or earnings to differ materially from those contemplated by the forward-looking statements include, but are not limited to, those discussed under “Risks Specifically Related to the Merger” beginning on page 9, as well as the following:

•  expected cost savings from the merger may not be realized within the expected time frame or at all;

•  revenues may be lower than expected following the merger;

•  the merger may not be approved by the requisite vote of GLB’s or BVCC’s stockholders;

•  the amendments to BVCC’s certificate of incorporation may not be approved by the requisite vote of BVCC’s stockholders;

•  the sale of BVAC may not be approved by the requisite vote of BVCC’s stockholders;

•  competitive pressure among financial services companies is intense;

•  general economic conditions may be less favorable than expected;

•  political conditions and related actions by the United States military abroad may adversely affect economic conditions as a whole;

•  changes in the interest rate environment may reduce interest margins and impact funding sources;

•  changes in market rates and prices may adversely impact the value of financial products and assets;

•  legislation or changes in the regulatory environment may adversely affect the businesses in which BVCC and GLB are engaged; and

•  litigation liabilities, including costs, expenses, settlements and judgments, may adversely affect either company or their businesses.

      Because these forward-looking statements are subject to assumptions and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements. You are cautioned not to place undue reliance on these statements, which speak only as of the date of this Annual Report on Form 10-K or the date of any document incorporated by reference in this Annual Report on Form 10-K.

      Except to the extent required by applicable law or regulation, BVCC undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date of this Annual Report on Form 10-K or to reflect the occurrence of unanticipated events.

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Part I

Item 1.      Business

General and Business Overview

      BVCC is a financial services company headquartered in San Mateo, California.

Background

      From 1996 to 1999, BVCC’s strategy was to transfer its wholly owned subsidiary, Bay View Bank (“BVB”) from a traditional thrift to a commercial bank. During this period, BVB nearly doubled in size, replaced a majority of its mortgage-based loans with higher-yielding consumer and commercial loans and leases, of which franchise loans represented $952.2 million at December 31, 1999, and transformed a significant portion of its deposits into lower-cost transaction accounts. This strategy proved unsuccessful, and, in 2000, BVCC reported a net loss of $326.2 million. This loss adversely affected BVCC and BVB’s regulatory capital levels and resulted in the imposition of regulatory agreements by the Federal Reserve Board on BVCC and by the Office of the Comptroller of the Currency (“OCC”) on BVB.

      In March 2001, in light of the critical financial condition and uncertain future of BVCC and BVB, BVCC retained new management, led by Robert B. Goldstein, Charles G. Cooper and John W. Rose, to develop and implement a strategic plan to restore BVCC and BVB’s financial stability. The principal elements of the strategic plan developed by BVCC’s new management were the sale of BVB’s higher risk assets, including the sale of its franchise loan servicing operations and franchise loans, and a renewed focus on BVB’s commercial and retail banking operations.

      Following the significant and successful turnaround actions undertaken and completed in 2001 under the strategic plan, BVCC began active consideration of various alternatives to maximize its value to its stockholders. Through this evaluation process, BVCC determined that greater stockholder value could be obtained by adopting a plan of dissolution and stockholder liquidity (the “Original Plan”) providing for the sale of selected assets of BVCC and BVB to various purchasers rather than an alternative approach such as selling BVB as a whole to a single purchaser, the payment of the liabilities of BVCC and BVB, the distribution of any remaining net proceeds to BVCC’s stockholders and the dissolution of BVCC and BVB. This conclusion was reached because the strategies of the prior management of BVB had resulted in a mismatch between the character of BVB’s assets and liabilities. As a result of the adoption of the Original Plan, BVCC adopted the liquidation basis of accounting effective September 30, 2002.

      BVCC thus pursued the separate sales of BVB’s significant operations. In August 2002, BVB sold approximately $1.0 billion of multi-family and commercial real estate loans to Washington Mutual Bank, F.A. In November 2002, BVB sold its retail banking assets of approximately $3.0 billion and approximately $373.0 million of single family residential mortgages, home equity loans and commercial loans to U.S. Bank National Association. Following these dispositions, BVCC’s remaining assets totaled approximately $1.0 billion and included BVAC, commercial loans and leases and other miscellaneous assets of BVB and deferred tax assets.

      On September 30, 2003, with the approval of the OCC, BVB transferred its remaining assets and liabilities to BVCC and dissolved. Following the dissolution of BVB, BVCC’s board of directors reconsidered the Original Plan and determined, in light of the lack of controlling precedent under Delaware General Corporation Law (“DGCL”) with respect to what constituted a “safe harbor” dissolution and because of BVCC’s inability to obtain value for its net operating loss carryforwards in a dissolution, to adopt an amended plan (the “Amended Plan”). Under the Amended Plan, BVCC continued to liquidate the assets and liabilities assumed from BVB, but the Amended Plan provided that BVCC, rather than dissolve, would seek to engage in business combination transactions that would maximize stockholder value. When BVCC adopted the Amended Plan, it discontinued the liquidation basis of accounting and, effective October 1, 2003, readopted the going concern basis of accounting.

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      Between December 30, 2003 and December 31, 2004, BVCC distributed $311.0 million of proceeds of its partial liquidation to its stockholders. By December 31, 2005, BVCC had substantially completed the liquidation of its assets other than BVAC and investments and restricted cash.

      On March 10, 2005, BVCC announced that it would not make a first quarter cash distribution to stockholders while its board of directors evaluated the strategic value of an acquisition and that BVCC would retain surplus cash for possible use in connection with a potential acquisition rather than distributing such surplus to stockholders. No cash distributions were made to stockholders during 2005. On October 28, 2005, BVCC filed a Current Report on Form 8-K reporting the execution of a definitive agreement to merge (the “Merger”) with Great Lakes Bancorp, Inc. of Buffalo, New York, with BVCC as the surviving corporation. On November 7, 2005, BVCC filed a Current Report on Form 8-K reporting the execution of a definitive agreement to sell BVAC (the “Sale”) to AmeriCredit Financial Services, Inc. in an all-cash transaction at a price approximating BVAC’s book value at the time of closing of the transaction. As a result of these developments, BVCC’s board of directors does not anticipate future distributions of the proceeds from its plan of partial liquidation to its stockholders. See Note 2 to the Consolidated Financial Statements, “Proposed Merger and Sale” at Part II, Item 8. “Financial Statements and Supplementary Data” for additional information regarding the Merger and Sale.

BVAC

      BVAC is a Southern California-based auto finance company engaged in the indirect financing of automobile purchases by individuals. Of the auto contracts BVAC purchased in 2005, 91% were originated by manufacturer-franchised dealerships and the remaining 9% were originated by independent dealerships; 40% were contracts on new vehicles and 60% were contracts on used vehicles. BVAC purchases auto contracts from approximately 7,000 automobile dealers in 32 states with limited recourse to the dealer.

      BVAC has historically positioned itself in the market as a premium priced lender for well-qualified borrowers seeking extended-term financing and/or higher advance rates than those generally offered by traditional lenders. This strategy has enabled BVAC to establish a loyal dealership network by satisfying a unique niche within the indirect auto finance market that large commercial banks and captive finance companies have not served well. Recently, BVAC has leveraged this established reputation with its dealers to broaden its array of auto financing programs available to prime credit quality borrowers.

      BVAC places a strong emphasis on borrower stability, credit quality and debt serviceability. With Fair, Isaac & Co., or “FICO,” credit scores that averaged 736 in 2005, BVAC’s borrower base is largely comprised of prime credit quality borrowers. BVAC currently offers financing terms to 96 months and typically finances an amount in excess of a dealer’s wholesale value of a vehicle. During 2005, the term to maturity on auto contracts purchased by BVAC averaged 79 months and the loan-to-value ratio averaged 120%. The average loan amount financed by BVAC was $23,800.

      Since the dissolution of BVB, BVAC has operated as an independent finance company, rather than a portfolio-lending unit of BVB. BVAC purchases auto contracts primarily for sale or securitization and services these auto contracts. BVAC has a $450.0 million revolving warehouse credit facility to fund its purchases of contracts, and periodically sells or securitizes a portion of its auto contracts in order to pay down the facility and maintain available borrowing capacity. BVAC retains the servicing obligation on the contracts that it sells or securitizes which provides BVAC with a source of fee income over the life of the contracts. At December 31, 2005, BVAC had $99.7 million outstanding under this credit facility and securitization notes payable of $521.6 million.

      BVAC’s headquarters and operations center are located in Covina, California. The operations center manages the underwriting of contracts and supports its dealer relationships. It also houses BVAC’s servicing and collections activities involving approximately 38,000 accounts representing $766 million of managed contracts as of December 31, 2005. In 2004, BVAC completed a geographical expansion that was initiated in late 2002, expanding into a total of 32 states from its established presence in 17 states, primarily in the West, Midwest and Florida. In 2003, BVAC entered seven Mid-Atlantic states including Maryland, New Jersey, North Carolina, Pennsylvania, South Carolina, Tennessee and Virginia. In 2004, BVAC entered eight

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additional states including Alabama, Connecticut, Delaware, Kansas, Kentucky, Massachusetts, New Hampshire and Oklahoma.

Liquidating Portfolio

      As of December 31, 2005, BVCC’s other principal activity was completing the liquidation of the assets BVCC assumed from BVB. During 2005, $16.7 million of these assets, primarily auto leases, other loans and real estate owned, were liquidated and $6.0 million of liabilities were discharged. At December 31, 2005, we had completed the disposition of our liquidating auto lease and other loan portfolios, which were $10.0 million and $902 thousand, respectively, at December 31, 2004.

Competition

      Automobile financing is provided by a number of competing entities, including captive finance affiliates of automobile manufacturers, commercial banks, independent finance companies, thrifts and credit unions. Many of BVAC’s competitors have greater financial resources and capitalization, greater access to existing and newly emerging capital markets, better economies of scale and more favorable cost of funds than BVAC does. The captive finance affiliates of the automobile manufacturers have historically offered varying amounts of below-market financing to automobile purchasers to increase automobile sales volume. A number of BVAC’s competitors also offer automobile purchasers and dealerships additional forms of financing, including auto leasing and dealer inventory floor plan financing, which BVAC does not provide. BVCC believes that BVAC competes primarily on the basis of the relative uniqueness of the extended term and over-advance features of its products. Accordingly, BVAC may not be able to compete successfully against these competitors.

Economic Conditions, Government Policies and Legislation

      During periods of economic slowdown, delinquencies and losses from defaults and repossessions may increase. Decreased demand for automobiles and, therefore, BVAC’s automobile financing volumes, may also occur during periods of economic slowdown. Decreased demand for automobiles may also depress values of used automobiles, which weakens the collateral values of BVAC’s auto contracts. Depressed values of used automobiles during periods of economic slowdown may reduce the value of repossessed vehicles and may require greater reserves and could result in greater losses for BVAC. Sustained periods of increased delinquencies and losses from defaults and repossessions could adversely affect BVAC’s financial position, results of operations and liquidity by limiting its ability to enter into future securitizations or sales of its auto contracts.

      BVAC’s profitability is also dependent on the interest rate spread it earns on auto contracts, the difference between the interest earned on its fixed-rate auto contracts and the rate it pays on its floating-rate borrowings and the price it receives for the fixed-rate contracts that are securitized or sold. BVAC monitors interest rates and utilizes derivative instruments to economically hedge interest rate volatility, however, market interest rates are highly sensitive to many factors that are beyond BVAC’s control, such as inflation, recession and unemployment and the impact of future changes in domestic and foreign economic conditions that BVAC cannot predict.

Supervision and Regulation

General

      BVCC, primarily because of its ownership of BVAC, is subject to regulation, supervision and licensing under various federal, state and local statutes, ordinances and regulations, including the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”), the Office of Foreign Assets Control and the USA Patriot Act. BVCC is

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required to comply with the laws of those states in which BVCC conducts operations. BVCC believes that it is in compliance in all material respects with these laws and regulations.

      Until BVB’s dissolution, the Company and BVB were subject to extensive regulation intended primarily for the protection of depositors and the federal deposit insurance fund and not for the benefit of our stockholders. Upon BVB’s dissolution, BVCC ceased to be a registered bank holding company and is no longer subject to such regulation. BVCC has filed an application to register as a bank holding company and, when the merger is effective, will resume its status as a regulated bank holding company. As a result, BVCC will become subject to a variety of laws and regulatory policies with which it is not currently obligated to comply.

Future Legislation

      Various legislation, including proposals to substantially change the financial institution regulatory system and to expand or contract the powers of banking institutions and bank holding companies, is from time to time introduced in the Congress. This legislation may change banking statutes and the operating environment of the combined bank and its affiliates in substantial and unpredictable ways. If enacted, such legislation could increase or decrease the cost of doing business, limit or expand permissible activities or affect the competitive balance among banks, savings associations, credit unions, and other financial institutions. BVCC cannot accurately predict whether any of this potential legislation will ultimately be enacted, and, if enacted, the ultimate effect that it, or implementing regulations, would have upon the financial condition or results of operations of the combined bank or any of its affiliates.

Fiscal and Monetary Policies

      BVCC is affected by various other governmental requirements and regulations, general economic conditions and the monetary policies of the federal government and the Federal Reserve Board. The monetary policies of the Federal Reserve Board influence to a significant extent the overall growth of loans, investments, deposits, interest rates charged on loans and interest rates paid on deposits. The nature and impact of future changes in monetary policies are often not predictable.

Consumer Protection Laws Affecting BVAC

      Numerous federal and state consumer protection laws and related regulations impose substantial requirements upon lenders and servicers involved in consumer finance, such as BVAC. These laws include the Truth-in-Lending Act, the Equal Credit Opportunity Act, the Federal Trade Commission Act, the Fair Credit Reporting Act, the Gramm-Leach-Bliley Act, the Magnuson-Moss Warranty Act, the Federal Reserve Board’s Regulations B and Z, states’ adaptations of the Uniform Consumer Credit Code and of the Uniform Commercial Code, state and federal privacy laws and state motor vehicle retail installment sales acts and other similar laws. These laws, among other things, require BVAC to provide certain disclosures to applicants, prohibit misleading advertising and protect against discriminatory financing or unfair credit and collection practices. The Truth-in-Lending Act and Regulation Z promulgated thereunder require disclosure of, among other things, the payment schedule, the finance charge, the amount financed, the total of payments and the annual percentage rate charged on each retail installment contract. The Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants (including retail installment contract obligors) on the basis of specific enumerated criteria. Creditors are also required to make certain disclosures regarding consumer rights and advise consumers whose credit applications are not approved. The holder in due course rules of the Federal Trade Commission provide for the preservation of the consumer’s claims and defenses when a consumer obligation is assigned to a holder. Some state laws impose finance charge ceilings and other restrictions on consumer transactions and require contract disclosures in addition to those required under federal law. These requirements impose specific statutory liabilities upon creditors who fail to comply with their provisions. In some cases these provisions, if violated, could affect BVAC’s ability to enforce the contracts it purchases.

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Employees

      At December 31, 2005, BVCC had a total of 101 employees on a full-time equivalent basis, consisting of both full-time and permanent part-time employees, as follows:

Bay View Acceptance Corporation	85
Bay View Capital Corporation	16
Total	101

      BVCC’s employees are not represented by any unions or covered by any collective bargaining agreements. We consider our relations with our employees to be satisfactory.

Executive Officers of the Registrant

      The following table sets forth certain information regarding our executive officers:

				Year
Name	Age		Position	Appointed
Charles G. Cooper		58	Director, President and Chief Executive Officer		2002
Prodyodth K. “PK” Chatterjee		57	Director, Executive Vice President and Director of Retail Operations, Bay View Capital Corporation and President and Chief Executive Officer, Bay View Acceptance Corporation		2004
John Okubo		52	Executive Vice President and Chief Financial Officer		2002
Sossy Soukiassian		42	Senior Vice President and General Auditor		2002

      The business experience of each of our executive officers is as follows:

      Mr. Cooper has served as a Director, President and Chief Executive Officer of Bay View Capital Corporation since October 2002. He joined us in May 2001, initially serving as Executive Vice President and Chief Credit Officer. Previously, he served as Executive Vice President and Chief Credit Officer at Lone Star Bank of Dallas. Prior to joining Lone Star Bank, he was Senior Vice President of Loan Administration at Compass Bank in Dallas from 1996 to 2000. Mr. Cooper has more than 30 years of experience in the banking industry, including 13 years experience as a bank examiner with the FDIC.

      Mr. Chatterjee has served as Executive Vice President and Director of Retail Operations of Bay View Capital Corporation and President and Chief Executive Officer of Bay View Acceptance Corporation since September 2004, and as a Director of Bay View Capital Corporation since May 2005. Prior to joining us, he served as Executive Vice President, Head of Consumer Lending, at AmSouth Bancorp from 1997 to 2002 and U.S. Bancorp from 1995 to 1997. Mr. Chatterjee has over 17 years of consumer lending experience and has served as a member of the Automobile Finance Committee of the Consumer Bankers Association for more than 10 years.

      Mr. Okubo, Executive Vice President, has served as our Chief Financial Officer since November 2002. Mr. Okubo joined us in 1996 and has held various financial management positions, including Treasurer from June 2001 and as Controller of the Bank from 1998 to 2001. Previously, he served as Executive Vice President and Chief Financial Officer of Home Federal Savings of San Francisco from 1993 to 1996.

      Ms. Soukiassian, Senior Vice President, was promoted to General Auditor in November 2002. Previously, she served as our Director of Corporate Projects from 1998 to 2002. Prior to joining us, she held management positions with KPMG Peat Marwick, LLP in Los Angeles from 1996 to 1998.

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      There is no family relationship among the above officers. All executive officers serve at the discretion of the board of directors.

Item 1A. Risk Factors

      In addition to the other information contained in this Annual Report on Form 10-K, you should carefully consider the following risk factors:

Risks Specifically Related to the Merger

GLB stockholders cannot be certain of the market value of the BVCC common stock that they will receive in the merger because the market price of BVCC common stock fluctuates.

      Upon completion of the merger, each share of GLB common stock will be converted into the right to receive 1.0873 shares of BVCC common stock. Any change in the price of BVCC common stock prior to the merger will affect the market value of the stock that a GLB stockholder will receive in the merger. Stock price changes may result from a variety of factors, including general market and economic conditions, changes in BVCC’s businesses, operations and prospects and regulatory considerations.

      The prices of BVCC common stock and GLB common stock at the closing of the merger may vary from their respective prices on the date the merger agreement was executed, on the date of this Annual Report on Form 10-K and on the date of GLB’s special meeting. As a result, the value represented by the exchange ratio will also vary. Because the date the merger will be completed will be later than the date of GLB’s special meeting, at the time of GLB’s special meeting GLB stockholders will not know what the market value of BVCC’s common stock will be upon completion of the merger.

The ability of each of GLB and BVCC to pursue alternatives to the merger is restricted by the merger agreement.

      The merger agreement contains provisions that, subject to limited exceptions, limit GLB’s and BVCC’s ability to discuss, facilitate or enter into agreements with third parties to acquire either BVCC or GLB. In general, if either of BVCC or GLB avails itself of those limited exceptions, it will be obligated to pay the other party a break-up fee of $3.4 million plus expenses. From GLB’s perspective, these provisions could discourage a potential competing acquiror that might have an interest in acquiring GLB from proposing or considering an acquisition of GLB even if that potential acquiror were prepared to pay a higher price to GLB stockholders than the price BVCC proposes to pay under the merger agreement. From BVCC’s perspective, these provisions could preclude BVCC from entering into a business combination transaction that could offer greater benefits to BVCC and its stockholders than the merger with GLB.

GLB’s stockholders do not have the right to vote on important BVCC matters even though they will become stockholders of BVCC if the merger is consummated.

      Because GLB’s stockholders will not be stockholders of BVCC for purposes of the BVCC special meeting, GLB’s stockholders do not have the right to vote on BVCC’s proposal to sell BVAC, BVCC’s proposal to amend its certificate of incorporation to establish transfer restrictions or BVCC’s proposal to ratify an amendment to BVCC’s by-laws. GLB stockholders should carefully review these proposals before they decide how to vote on the proposal to approve the merger of GLB and BVCC.

The amount of capital BVCC brings to the merged company could be substantially reduced from the amount of BVCC’s capital at December 31, 2005.

      As of December 31, 2005, BVCC had stockholders’ equity of $70.5 million. This amount will be reduced by BVCC’s remaining expenses of merging with GLB and selling BVAC, which BVCC currently estimates will be approximately $1.6 million. BVCC’s stockholders’ equity will also be adversely affected by the operating losses BVCC is incurring in connection with the completion of its plan of partial liquidation.

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Risks Related to Owning BVCC Common Stock

The combined company will be dependent on the ability of its subsidiaries to pay dividends in order to meet its obligations.

      The combined company will be a holding company and conduct almost all of its operations through its subsidiaries. The combined company will not have any significant assets other than the stock of its subsidiaries, deferred tax assets and the net proceeds from the sale of BVAC if the BVAC sale is consummated. Accordingly, the combined company will depend on the payment of dividends by its subsidiaries to meet its obligations. The combined company’s right to participate in any distribution of earnings or assets of its subsidiaries is subject to the prior claims of creditors of such subsidiaries. Under federal and state law, GBSB is limited in the amount of dividends it may pay to its parent without prior regulatory approval. Also, bank regulators have the authority to prohibit GBSB from paying dividends if the bank regulators determine that GBSB is in an unsafe or unsound condition or that the payment would be an unsafe and unsound banking practice.

Interest rate volatility could significantly harm the combined company’s business.

      The combined company’s results of operations will be affected by the monetary and fiscal policies of the federal government and the regulatory policies of governmental authorities. A significant component of the combined company’s earnings will consist of GBSB’s net interest income, which is the difference between its income from interest-earning assets, such as loans, and its expense of interest-bearing liabilities, such as deposits. A change in market interest rates could adversely affect GBSB’s earnings if market interest rates change such that the interest GBSB pays on deposits and borrowings increases faster than the interest it collects on loans and investments. Consequently, GBSB, along with other financial institutions generally, is sensitive to interest rate fluctuations.

The combined company’s results of operations will be significantly affected if its borrowers are unable to pay their loans.

      Lending money is an essential part of the banking business. However, borrowers do not always repay their loans. The risk of non-payment is affected by:

•  credit risks of a particular borrower;

•  changes in economic and industry conditions;

•  the duration of the loan; and

•  in the case of a collateralized loan, uncertainties as to the future value of the collateral.

      Generally, commercial/industrial, construction and commercial real estate loans present a greater risk of non-payment by a borrower than other types of loans. In addition, consumer loans typically have shorter terms and lower balances with higher yields compared to real estate mortgage loans, but generally carry higher risks of default. Consumer loan collections are dependent on the borrower’s continuing financial stability, and thus are more likely to be affected by adverse personal circumstances. Furthermore, the application of various federal and state laws, including bankruptcy and insolvency laws, may limit the amount that can be recovered on these loans.

The combined company’s financial condition and results of operations would be adversely affected if GBSB’s allowance for loan losses is not sufficient to absorb actual losses.

      There is no precise method of predicting loan losses. Excess loan losses could have a material adverse effect on GBSB’s financial condition and results of operations. GBSB attempts to maintain an appropriate

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allowance for loan losses to provide for estimated losses in its loan portfolio. GBSB periodically determines the amount of its allowance for loan losses based upon consideration of several factors, including:

•  a regular review of the quality, mix and size of the overall loan portfolio;

•  historical loan loss experience;

•  evaluation of non-performing loans;

•  assessment of economic conditions and their effects on GBSB’s existing portfolio; and

•  the amount and quality of collateral, including guarantees, securing loans.

The merged company’s financial condition may be adversely affected if GBSB is unable to attract sufficient deposits to fund its anticipated loan growth.

      GBSB funds its loan growth primarily through deposits. To the extent that GBSB is unable to attract and maintain sufficient levels of deposits to fund its loan growth, GBSB would be required to raise additional funds through public or private financings.

The combined company could experience significant difficulties and complications in connection with its growth and acquisition strategy.

      GLB has grown significantly over the last few years and, following the merger, may seek to continue to grow by acquiring financial institutions and branches as well as non-depository entities engaged in permissible activities for its financial institution subsidiaries. However, the market for acquisitions is highly competitive. The combined company may not be successful in identifying financial institution and branch acquisition candidates, integrating acquired institutions or preventing deposit erosion at acquired institutions or branches.

      As part of this acquisition strategy, the merged company may acquire additional banks and non-bank entities that it believes provide a strategic fit with its business. The merged company may not be successful with this strategy, and may not be able to manage this growth adequately and profitably. For example, acquiring any bank or non-bank entity will involve risks commonly associated with acquisitions, including:

•  potential exposure to unknown or contingent liabilities of banks and non-bank entities the merged company acquires;

•  exposure to potential asset quality issues of acquired banks and non-bank entities;

•  potential disruption to the merged company’s business;

•  potential diversion of the time and attention of the merged company’s management; and

•  the possible loss of key employees and customers of the banks and other businesses the merged company acquires.

      In addition to acquisitions, GBSB intends to strengthen its position in its current markets by undertaking additional de novo branch openings. Based on its experience, GBSB believes that it generally takes up to three years for new banking facilities to achieve operational profitability due to the impact of organizational and overhead expenses and the start-up phase of generating loans and deposits. To the extent that GBSB undertakes additional de novo branch openings, GBSB is likely to continue to experience the effects of higher operating expenses relative to operating income from the new banking facilities, which may have an adverse effect on GBSB’s net income, earnings per share, return on average stockholders’ equity and return on average assets.

      The combined company may encounter unforeseen expenses, as well as difficulties and complications in integrating expanded operations and new employees without disruption to its overall operations. Following each acquisition, the combined company will have to expend substantial resources to integrate the entities. The integration of non-banking entities often involves combining different industry cultures and business methodologies. The failure to integrate successfully the entities the combined company may acquire into its existing operations may adversely affect its results of operations and financial condition.

11

The combined company could be adversely affected by changes in the law, especially changes in the regulation of the banking industry.

      The combined company and its subsidiaries will operate in a highly regulated environment and will be subject to supervision and regulation by several governmental regulatory agencies, including the Federal Reserve Board, the Federal Deposit Insurance Corporation, which we sometimes refer to as the FDIC and the New York State Banking Department, which we sometimes refer to as the Banking Department in this Annual Report on Form 10-K. Regulations are generally intended to provide protection for depositors and customers rather than for investors. The combined company will be subject to changes in federal and state law, regulations, governmental policies, income tax laws and accounting principles. Changes in regulation could adversely affect the banking industry as a whole and could limit the combined company’s growth and the return to investors by restricting such activities as:

•  the payment of dividends;

•  mergers with or acquisitions of other institutions;

•  investments;

•  loans and interest rates;

•  the provision of securities, insurance or trust services; and

•  the types of non-deposit activities in which the combined company’s financial institution subsidiaries may engage.

      In addition, legislation or agency rulemaking may change present capital requirements, which could restrict the combined company’s activities and require the combined company to maintain additional capital.

The combined company’s results of operations could be adversely affected due to significant competition.

      The combined company may not be able to compete effectively in its markets, which could adversely affect its results of operations. The banking and financial service industry in GBSB’s market areas is highly competitive. The competitive environment is a result of:

•  changes in regulation;

•  prevailing economic conditions in the Greater Buffalo area;

•  changes in technology and product delivery systems;

•  declining population trends; and

•  the accelerated pace of consolidation among financial services providers.

      GBSB competes for loans, deposits and customers with various bank and non-bank financial service providers, many of which are larger in terms of total assets and capitalization, have greater access to the capital markets and offer a broader array of financial services than GBSB does. Competition with such institutions may cause GBSB to increase its deposit rates or decrease its interest rate spread on loans it originates.

The combined company’s anticipated future growth may require it to raise additional capital in the future, but that capital may not be available when it is needed.

      GLB and GBSB are, and the combined company will be, required by federal and state regulatory authorities to maintain adequate levels of capital to support GBSB’s operations. GLB and BVCC anticipate that the combined company’s current capital resources will satisfy its and GBSB’s capital requirements for the foreseeable future. The combined company may at some point, however, need to raise additional capital to support continued growth, both internally and through acquisitions.

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      The combined company’s ability to raise additional capital, if needed, will depend on conditions in the capital markets at that time, which are outside its control, and on its financial performance. If the combined company cannot raise additional capital when needed, its ability to expand its operations through internal growth and acquisitions could be materially impaired.

Adverse economic conditions in GBSB’s market areas may adversely impact its results of operations and financial condition.

      The majority of GBSB’s business is concentrated in western New York, which in recent years has been a slower growth market than many other areas of the United States. As a result, GBSB’s loan portfolio and results of operations may be adversely affected by factors that have a significant impact on the economic conditions in this market area. The local economies of this market area in recent years have been less robust than the economy of the nation as a whole and may not be subject to the same fluctuations as the national economy. Adverse economic conditions in GBSB’s market area, including the loss of certain significant employers, could reduce its growth rate, affect its borrowers’ ability to repay their loans and generally affect GBSB’s financial condition and results of operations. Furthermore, a downturn in real estate values in GBSB’s market area could cause many of its loans to become inadequately collateralized.

Certain provisions of BVCC’s certificate of incorporation and by-laws after the merger may discourage takeovers.

      BVCC’s certificate of incorporation and by-laws after the merger contain certain anti-takeover provisions that may discourage or may make more difficult or expensive a tender offer, change in control or a takeover attempt that is opposed by BVCC’s board of directors. In particular, the certificate of incorporation and by-laws of BVCC following the merger:

•  classify its board of directors into three classes, so that stockholders elect only one-third of its board of directors each year;

•  permit stockholders to remove directors only for cause;

•  do not permit stockholders to take action except at an annual or special meeting of stockholders;

•  require stockholders to give advance notice to nominate candidates for election to the board of directors or to make stockholder proposals at a stockholders’ meeting;

•  permit the board of directors to issue, without stockholder approval unless otherwise required by law, preferred stock with such terms as its board of directors may determine; and

•  prohibit the acquisition of 5% or more of BVCC’s common stock, without the prior approval of its board of directors.

      Section 203 of the DGCL generally provides that a publicly-held Delaware corporation, such as BVCC or GLB, that has not “opted out” of coverage by this section in the prescribed manner may not engage in any business combination with an interested stockholder for a period of three years following the date that the stockholders became an interested stockholder. BVCC has opted out of Section 203 and Section 203 is not applicable to BVCC. GLB has not opted out of Section 203 and Section 203 is applicable to GLB.

      These provisions of BVCC’s certificate of incorporation and by-laws after the merger and of Delaware law could discourage potential acquisition proposals and could delay or prevent a change in control, even though a majority of the merged company’s stockholders may consider such proposals desirable. Such provisions could also make it more difficult for third parties to remove and replace the members of the merged company’s board of directors. Moreover, these provisions could diminish the opportunities for stockholders to participate in certain tender offers, including tender offers at prices above then-current market price of the merged company’s common stock, and may also inhibit increases in the trading price of the merged company’s common stock that could result from takeover attempts.

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Loss of members of the combined company’s executive team could have a negative impact on its business.

      The combined company’s success is dependent, in part, on the continued service of its executive officers, including Barry M. Snyder, Chairman of the Board of GLB and Andrew W. Dorn, Jr., President and Chief Executive Officer of GLB. The loss of the services of any of these key persons could have a negative impact on the combined company’s business because of their skills, relationships in the banking community and years of industry experience, and the difficulty of promptly finding qualified successors.

If it should be ultimately determined that BVCC’s reserves for the contingent liabilities remaining from the dissolution of BVB are not adequate, it could have a material adverse effect on the combined company.

      As part of the solvent dissolution of BVB on September 30, 2003, BVCC assumed the assets and liabilities of BVB, including certain pending litigation and other contingent liabilities. BVCC has established reserves for those liabilities that have been sufficient to date. However, if BVCC’s remaining reserves were insufficient to discharge any future liabilities and contingent liabilities remaining from the dissolution of BVB, it could have a material adverse effect on the combined company.

Risks Relating to BVAC

The sale of BVAC may not occur notwithstanding the decision of BVCC’s board of directors that the sale of BVAC is in the best interests of BVCC and its stockholders.

      There are numerous conditions to the sale of BVAC, and BVCC and BVAC may not be able to satisfy these conditions. If this sale of BVAC does not occur, the merged company will continue to operate BVAC for at least the short-term future and will continue to be subject to the risks of BVAC’s business described in this section.

The purchase agreement limits BVCC’s and BVAC’s ability to pursue alternatives to the sale of BVAC.

      The purchase agreement contains provisions that, subject to limited exceptions, limit BVCC’s and BVAC’s ability to discuss, facilitate or enter into agreements with third parties to acquire BVAC. In general, if BVCC or BVAC avail themselves of these limited exceptions, BVCC will be obligated to pay AFS a break-up fee of $2.5 million, plus certain expenses. These provisions could discourage a potential competing acquirer that might have an interest in acquiring BVAC from proposing or considering the acquisition of BVAC even if that potential acquirer were prepared to pay a higher price to BVCC than the price AFS proposes to pay under the purchase agreement.

The purchase agreement restricts the activities in which BVAC may engage pending the merger.

      The purchase agreement contains provisions that, subject to limited exceptions, restrict the business activities BVAC may conduct until the sale of BVAC is completed or the purchase agreement is terminated. If BVAC were to breach any of these restrictions, it would provide AFS with the right to terminate the purchase agreement. In addition, these restrictions could prevent BVAC from engaging in business activities it might wish to pursue.

Certain indemnification obligations of BVCC under the purchase agreement survive indefinitely and are not limited in amount which could adversely affect the financial condition of the merged company.

      Although the purchase agreement, in general, limits the indemnification obligations of BVCC to $3.2 million and provides that BVCC would not be liable for breaches of its representations and warranties in the purchase agreement after 18 months have elapsed from the date of the BVAC sale, certain of BVCC’s indemnification obligations under the purchase agreement are not limited as to amount or time.

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BVAC’s business is dependent upon general economic conditions.

      BVAC’s business can be adversely affected during periods of economic slowdown, when delinquencies, defaults, repossessions and losses generally increase. These periods may also be accompanied by decreased consumer demand for automobiles, and declining values of loans securing outstanding loans. In addition, during an economic slowdown or a recession, BVAC’s servicing and collection cost could increase without a corresponding increase in income.

BVAC is also subject to litigation risks.

      BVAC is a consumer finance company and, as such, is subject to various consumer claims and litigation seeking damages and statutory penalties based upon the following:

•  usury laws;

•  inaccurate disclosures;

•  wrongful repossession;

•  violations of bankruptcy stay provisions;

•  certificate of title disputes;

•  fraud;

•  breach of contract; and

•  discriminatory treatment of credit applicants.

      Some litigation against BVAC could take the form of class action complaints by consumers. BVAC may also be named as a co-defendant in lawsuits brought primarily against automobile dealers. The damages and penalties claimed by consumers could be substantial, and could have a material and adverse financial effect on BVAC.

BVAC is subject to significant government regulation, violations of which could have a material adverse effect on BVAC.

      BVAC’s business is subject to significant government regulation, supervision and licensing under various federal, state and local laws governing, among other things:

•  licensing requirements;

•  record-keeping requirements;

•  payment of fees to certain states;

•  maximum interest rates that may be charged;

•  interest rates on loans to customers serving in the military;

•  debt collection practices;

•  disclosure to customers regarding financing terms;

•  the privacy of certain consumer information; and

•  collection of debt from loan customers who have filed bankruptcy.

      BVAC believes it maintains all material licenses and permits required for its current operations and that it is in substantial compliance with all material local, state and federal regulations. The failure of BVAC or of the automobile dealers who sell contracts to BVAC to maintain all requisite licenses, and to comply with applicable regulatory requirements, could allow consumers to assert rights of rescission and other remedies that could have a material adverse effect on BVAC.

15

Changes in law could adversely affect BVAC.

      Any changes in the laws, rules and regulations that govern the operation of BVAC’s business could result in higher costs of compliance and otherwise adversely affect BVAC’s financial condition.

BVAC is dependent upon its ability to effect securitizations periodically.

      BVAC typically finances the purchase of contracts from automobile dealers by draws against its warehouse line of credit. BVAC then periodically pools the contracts and sells interests in the pooled portfolio to a trust that sells asset-backed securities to investors. BVAC then uses the net proceeds of the sale to the securitization trust to repay amounts outstanding under the warehouse line of credit. BVAC’s financial condition would be materially and adversely affected if its warehouse lines of credit became unavailable or it was unable to continue similar transactions in the future. In addition, the purchase agreement limits the types of securitizations in which BVAC may engage prior to closing of its sale to AFS or the termination of the merger agreement.

BVAC operates in a competitive market place.

      The indirect automobile finance industry is extremely competitive. Consumer credit for automobile purchases is available through banks, credit unions, other consumer finance companies and captive finance companies owned by automobile manufacturers and retailers. Many of these competitors are larger than BVAC and have substantially greater financial resources than BVAC. Many of BVAC’s competitors provide financing on more favorable terms to automobile purchasers or dealers than BVAC does. Certain of BVAC’s competitors also offer financing to automobile dealers which BVAC does not provide. Providers of consumer credit for automobile purchases have traditionally competed on the basis of:

•  the maintenance of favorable relationships with automobile dealers;

•  interest rates charged;

•  the quality of credit accepted;

•  the flexibility of loan terms offered; and

•  the quality of service provided.

      BVAC may not be able to continue to compete effectively in this marketplace.

Risks Relating to Tax Matters

If the transfer restrictions are not effective in preventing an ownership change from occurring, the merged company’s ability to use BVCC’s net operating loss carryforwards could be severely limited.

      Although the transfer restrictions are valid under the DGCL, there is little judicial precedent regarding the enforcement of similar transfer restrictions. Thus, a transfer could occur that would violate the transfer restrictions, and the merged company may be unable to enforce the transfer restrictions. Even if a court were to enforce the transfer restrictions, the Internal Revenue Service, or IRS, could nevertheless disagree that the transfer restrictions provided a sufficient remedy with respect to an ownership change resulting from a prohibited transfer.

The transfer restrictions may delay or prevent takeover bids by third parties and may delay or frustrate attempts by stockholders to replace management.

      The transfer restrictions on the common stock of the merged company are complex and are designed to preserve the value of its net operating loss carryforwards for the benefit of its stockholders. Any person who seeks to acquire a significant interest in the merged company will be required to negotiate with its board of directors. The transfer restrictions may also make it more difficult to effect a business combination transaction that stockholders may perceive to be favorable because of the need to negotiate with the merged company’s board of directors. The transfer restrictions could also make it more difficult for stockholders to replace

16

current management because no single stockholder may cast votes for more than 5% of the merged company’s outstanding common stock.

The value of the net operating loss carryforwards is subject to challenge by the IRS.

      Based on the current federal corporate income tax rate of 34%, the net operating loss carryforwards could provide significant future tax savings to the merged company. However, the ability of the merged company to use these tax benefits will depend on a number of factors including:

•  the ability of the merged company to generate sufficient net income to utilize the net operating loss carryforwards;

•  the absence of a future ownership change of BVCC within the meaning of Section 382 of the Code;

•  the acceptance by the IRS of the positions taken on BVCC’s prior tax returns as to the amount and timing of its income and expenses; and

•  future changes in laws or regulations relating to the use of net operating loss carryforwards.

Item 1B. Unresolved Staff Comments

      No written comments made by the Securities and Exchange Commission staff regarding BVCC’s filings under the Exchange Act since July 1, 2005 remain unresolved.

Item 2. Properties

      At December 31, 2005, BVCC occupied two offices including its corporate headquarters office and had an additional two offices that it has vacated, and is subleasing, under operating lease agreements expiring at various dates through the year 2012. In most instances, these lease arrangements include options to renew or extend the lease at market rates. BVCC also owns leasehold improvements, furniture and equipment at our offices, all of which are used in its business activities.

Item 3. Legal Proceedings

      On August 29, 2003, Financial Security Assurance Inc. (“FSA”) filed a complaint against BVCC and BVB in the United States District Court for the Southern District of New York. The complaint, as amended, alleges breaches of representations and warranties or indemnity obligations with regard to a number of loans that served as collateral for two securitizations involving BVCC and/or a former subsidiary of BVB, Bay View Franchise Mortgage Acceptance Company, that were effected in 1998 and 2000. FSA guaranteed certain payments in connection with these securitizations. BVCC vigorously denies any liability to FSA and has asserted numerous defenses to each of FSA’s claims. BVCC has also filed counterclaims against FSA.

      BVCC is also a party to various other legal actions arising in the normal course of our business.

      After consultation with counsel, BVCC does not currently expect that the resolution of these legal actions will have a material adverse effect on its consolidated financial condition, results of operations or cash flows.

      During our fiscal year ended December 31, 2005, no tax shelter penalties were assessed against us by the Internal Revenue Service.

Item 4. Submission of Matters to a Vote of Security Holders

      There were no matters submitted to a vote of security holders, through the solicitation of proxies or otherwise, during the three months ended December 31, 2005.

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Part II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

      BVCC’s common stock is traded on the New York Stock Exchange under the stock symbol “BVC.” At December 31, 2005, 6,613,099 shares of BVCC’s common stock were outstanding, and held by 1,335 stockholders of record. During 2004, we distributed $7.25 per share in cash to our common stockholders — $2.50 per share on June 30, 2004, $2.50 per share on September 30, 2004 and $2.25 per share on December 31, 2004. The effect of these distributions is reflected in the following tables that set forth quarterly closing stock price activity for 2005 and 2004 as adjusted to reflect a 1-for-10 stock split effected on June 30, 2004:

	2005
	First		Second		Third		Fourth
	Quarter		Quarter		Quarter		Quarter
Stock price — high	$	17.38	$	16.24	$	15.95	$	18.00
Stock price — low	$	15.58	$	15.27	$	15.32	$	15.30

	2004
	First		Second		Third		Fourth
	Quarter		Quarter		Quarter		Quarter
Stock price — high	$	24.00	$	22.40	$	19.75	$	18.00
Stock price — low	$	21.30	$	20.00	$	16.15	$	15.31

      BVCC did not repurchase any equity securities during the three months ended December 31, 2005.

Item 6. Selected Financial Data

	At December 31,
	2005		2004		2003		2002		2001
							Liquidation		Going Concern
Selected Balance Sheet Information(1)	Going Concern Basis						Basis		Basis
	(Dollars in thousands)
Total assets	$	714,761	$	427,519	$	364,118	$	875,545	$	4,014,105
Retained interests in securitizations available-for-sale and other investment securities		20,107		22,636		28,836		38,137		98,980
Mortgage-backed securities		—		—		5,893		32,516		278,891
Loans and leases held-for-investment, net		633,621		252,863		—		—		2,326,787
Loans and leases held-for-sale		—		75,923		177,948		311,014		40,608
Investment in operating lease assets, net		—		10,041		66,657		191,005		339,349
Intangible assets		1,846		1,846		1,846		—		123,573
Deposits		—		—		—		224,189		3,234,927
Borrowings		621,295		300,650		179,060		61,969		287,168
Capital Securities(2)		—		—		—		90,000		90,000
Net assets in liquidation		—		—		—		410,064		—
Stockholders’ equity		70,515		104,193		155,932		—		336,187

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							For the Three			For the Nine			For the Three			For the Nine
	For the Year			For the Year			Months			Months			Months			Months			For the Year
	Ended			Ended			Ended			Ended			Ended			Ended			Ended
Selected Results of Operations	December 31,			December 31,			December 31,			September 30,			December 31,			September 30,			December 31,
Information(1)	2005			2004			2003			2003			2002			2002			2001
	Going Concern Basis									Liquidation Basis						Going Concern Basis
	(Dollars in thousands, except per share amounts)
Interest income	$	40,253		$	22,609		$	4,936		$	17,951		$	17,247		$	145,239		$	302,745
Interest expense		(22,617	)		(8,845	)		(3,612	)		(8,411	)		(10,001	)		(60,068	)		(180,497	)
Net interest income		17,636			13,764			1,324			9,540			7,246			85,171			122,248
Provision for credit losses		(7,947	)		(1,612	)		—			—			—			(10,700	)		(71,890	)
Leasing income		4,800			12,941			6,907			32,578			14,639			56,188			92,305
Gain (loss) on sales of assets and liabilities, net		(1,247	)		(1,887	)		842			787			81			18,625			(10,547	)
Other income, net		3,449			5,985			2,586			3,722			3,600			16,752			25,411
General and administrative expenses		(27,395	)		(25,211	)		(5,747	)		(26,338	)		(17,697	)		(106,101	)		(155,287	)
Restructuring charges		—			—			—			—			—			—			(6,935	)
Revaluation of franchise-related assets		—			—			—			—			—			—			(70,146	)
Leasing expense		(739	)		(9,163	)		(5,938	)		(24,421	)		(10,854	)		(43,984	)		(86,120	)
Real estate operations, net		(485	)		(1,255	)		(831	)		(463	)		(397	)		(1,222	)		(5,021	)
Amortization of intangible assets		—			—			—			—			—			(993	)		(11,280	)
Income (loss) before income tax expense (benefit)		(11,928	)		(6,438	)		(857	)		(4,595	)		(3,382	)		13,736			(177,262	)
Adjustment for liquidation basis accounting		—			—			—			(5,995	)		(2,761	)		266,510			—
Income tax (expense) benefit		(22,522	)		2,526			184			6,252			4,886			(181,792	)		85,866
Dividends on Capital Securities(3)		—			—			—			—			(2,742	)		(7,873	)		(9,774	)
Cumulative effect of change in accounting principle		—			—			—			—			—			(18,920	)		—
Net income (loss) and changes in net assets in liquidation	$	(34,450	)	$	(3,912	)	$	(673	)	$	(4,338	)	$	(3,999	)	$	71,661		$	(101,170	)
Earnings (loss) per diluted share(4)	$	(5.22	)	$	(0.59	)	$	(0.10	)		N/A			N/A		$	11.35		$	(19.89	)
Cash distributions per share(4)	$	—		$	7.25		$	40.00		$	—		$	—		$	—		$	—

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	At and For the Year Ended December 31,
	2005			2004			2003			2002			2001
													Going
										Liquidation			Concern
Selected Other Information(1)	Going Concern Basis									Basis			Basis
				(Dollars in thousands, except per share
				amounts)
Net interest margin		3.21	%		4.41	%		2.71	%		N/A			3.18	%
Book value per share(4)	$	10.66		$	15.80		$	23.71			N/A		$	53.72
Nonperforming assets	$	1,667		$	4,742		$	7,133		$	27,268		$	89,817
Ratio of nonperforming assets to total assets		0.23	%		1.12	%		1.96	%		3.11	%		2.24	%

(1)	The financial statements for the periods from September 30, 2002 through September 30, 2003 have been prepared using liquidation basis accounting.
(2)	Effective December 31, 2003, BVCC adopted FASB Financial Interpretation No. 46, “Consolidation of Variable Interest Entities, as revised,” and, accordingly, deconsolidated Bay View Capital I. As a result, as of December 31, 2003, the 9.76% Capital Securities of Bay View Capital I are no longer reflected on the Company’s Consolidated Statement of Financial Condition while BVCC’s underlying 9.76% Junior Subordinated Deferrable Interest Debentures, which were acquired by Bay View Capital I, are reflected as borrowings of BVCC.
(3)	Effective July 1, 2003, BVCC adopted Statement of Financial Accounting Standards (“SFAS”) No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity.” Year-to-date dividend expense on the Capital Securities is now reflected in interest on borrowings. SFAS No. 150 does not allow for prior year restatements.
(4)	Adjusted to retroactively reflect a 1-for-10 reverse stock split effective June 30, 2004.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

INDEX

Strategic Overview			22
	Liquidation of Bay View Bank		22
	Auto Finance		22
	Critical Accounting Policies		23
Accounting Changes and Recent Accounting Pronouncements			27
Results of Operations			28
	Going Concern Basis		28
		Results of Operations — Years ended December 31, 2005 and 2004	28
		Results of Operations — Three Months ended December 31, 2003	32
	Liquidation Basis		34
		Changes in Net Assets in Liquidation — Nine Months ended September 30, 2003	34
Balance Sheet Analysis			35
	Restricted Cash		35
	Retained Interests in Securitizations		35
	Auto Contracts and Other Loans Receivable		36
	Borrowings		38
Liquidity and Capital Resources			39
Contractual Obligations			40
Stock Repurchase Program			41
Impact of Inflation and Changing Prices			41

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Strategic Overview

      Bay View Capital Corporation (the “Company,” “we,” “us” or “our”) is a financial services company headquartered in San Mateo, California, whose primary subsidiary, Bay View Acceptance Corporation (“BVAC”), is an automobile finance company engaged in indirect purchases of retail automobile installment contracts originated by manufacturer-franchised and independent dealers in connection with the sale of new and used automobiles. BVAC generates revenue through its investment in auto contracts, and the subsequent securitization or sale and servicing of these auto contracts.

Liquidation of Bay View Bank

      On October 3, 2002, we adopted a Plan of Dissolution and Stockholder Liquidity (the “Original Plan”). The Original Plan contemplated that we, under applicable provisions of the Delaware General Corporation Law, would dispose of all of our assets, including all of the assets of Bay View Bank, N.A. (“BVB”); pay all of our debts and liabilities and make reasonable provision for any contingent liabilities; distribute the remaining proceeds from our asset sales to our stockholders; and dissolve. As a result of the adoption of the Original Plan, we adopted liquidation basis accounting effective September 30, 2002.

      During the fourth quarter of 2003, our Board amended the Original Plan to become a plan of partial liquidation (the “Amended Plan”) under which we are completing the liquidation of the assets and the satisfaction of the liabilities of BVB remaining after BVB’s September 30, 2003 dissolution, distributed a major portion of the proceeds to our stockholders through a series of cash distributions, and continue to operate BVAC. When we adopted the Amended Plan, we discontinued our use of liquidation basis accounting and re-adopted going concern basis accounting effective October 1, 2003. With BVB’s dissolution on September 30, 2003, its remaining assets and liabilities were transferred to us, as BVB’s sole stockholder, and we ceased to be a bank holding company and, along with our subsidiaries, were no longer subject to supervision, examination and regulation by the Board of Governors of the Federal Reserve System (the “FRB”), the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation.

      Among the factors considered by our Board in deciding to engage in a partial liquidation rather than a complete liquidation were:

•  Adverse market conditions in the auto finance sector, which caused our Board to conclude that the near-term sale of BVAC to a third party, or distribution of the stock of BVAC to our stockholders, as contemplated by the Original Plan, would not be the best method of maximizing stockholder value;

•  The opportunity to obtain greater corporate and financial flexibility than we would have if we were operating as a dissolving corporation; and

•  A determination that our remaining tax net operating loss carryforwards could be more fully utilized by continuing to operate BVAC beyond the third quarter of 2005.

      In accordance with the Amended Plan, we redeemed $63.5 million of our 9.76% Cumulative Capital Securities (the “Capital Securities”) on December 31, 2003, and redeemed the remaining $22.0 million of these Capital Securities on June 30, 2004 and, between December 31, 2003 and December 31, 2004, distributed $311.0 million in cash to our stockholders, or $47.25 per share after the adjustments to reflect the retroactive effect of the 1-for-10 reverse stock split of our common stock effective June 30, 2004.

      At December 31, 2005, we had assets of $714.8 million, liabilities of $644.3 million and stockholders’ equity of $70.5 million.

Auto Finance

      BVAC is a Southern California-based auto finance company engaged in the indirect financing of automobile purchases by individuals. Of the auto contracts BVAC purchased in 2005, 91% were originated by manufacturer-franchised dealerships and the remaining 9% were originated by independent dealerships; 40% were contracts on new vehicles and 60% were contracts on used vehicles. BVAC purchases auto contracts from approximately 7,000 automobile dealers in 32 states with limited recourse to the dealer.

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      BVAC has historically positioned itself in the market as a premium priced lender for well-qualified borrowers seeking extended-term financing and/or higher advance rates than those generally offered by traditional lenders. This strategy has enabled BVAC to establish a loyal dealership network by satisfying a unique niche within the indirect auto finance market that large commercial banks and captive finance companies have not served well. BVAC has leveraged this established reputation with its dealers to broaden its array of auto financing programs available to prime credit quality borrowers.

      BVAC places a strong emphasis on borrower stability, credit quality and debt serviceability. With Fair, Isaac & Co., or “FICO,” credit scores that averaged 736 in 2005, BVAC’s borrower base is largely comprised of prime credit quality borrowers. BVAC currently offers financing terms to 96 months and typically finances an amount in excess of a dealer’s wholesale value of a vehicle. During 2005, the term to maturity on auto contracts purchased by BVAC averaged 79 months and the loan-to-value ratio averaged 120%. The average loan amount financed by BVAC in 2005 was $23,800.

      Since the liquidation of BVB, BVAC has operated as an independent finance company, rather than a portfolio-lending unit of BVB, purchasing auto contracts primarily for sale or securitization and servicing these auto contracts. BVAC utilizes a revolving warehouse credit facility to fund its purchases of contracts, and periodically sells or securitizes a portion of its auto contracts in order to pay down the facility and maintain available borrowing capacity. At December 31, 2005, BVAC had $99.7 million outstanding under this credit facility. BVAC retains the servicing obligation on the contracts that it sells or securitizes which provides us with a source of fee income over the life of the contracts.

      BVAC’s headquarters and operations center are located in Covina, California. The operations center manages the underwriting of contracts and supports its dealer relationships. It also houses BVAC’s servicing and collections activities involving more than 38,000 accounts representing $765.5 million of managed contracts as of December 31, 2005. In 2004, BVAC completed a geographical expansion that was initiated in late 2002, expanding into a total of 32 states from its established presence in 17 states, primarily in the West, Midwest and Florida. In 2003, BVAC entered seven Mid-Atlantic states including Maryland, New Jersey, North Carolina, Pennsylvania, South Carolina, Tennessee and Virginia. In 2004, BVAC entered eight additional states including Alabama, Connecticut, Delaware, Kansas, Kentucky, Massachusetts, New Hampshire and Oklahoma.

Critical Accounting Policies

      We have identified the most critical accounting policies upon which our financial status depends. We determined the critical policies by considering accounting principles that involve the most complex or subjective decisions or assessments. We have identified our most critical accounting policies to be those related to our securitization transactions and retained interests in securitizations, allowance for credit losses, income taxes and derivative instruments.

Going Concern vs. Liquidation Basis Accounting

      For the period September 30, 2002 through September 30, 2003, we used liquidation basis accounting under which assets were carried at estimated net realizable values and all estimated future liabilities associated with carrying out the Original Plan were accrued. Future revenues and expenses of an operating nature were recognized in income and expense when realized.

      With our adoption of the Amended Plan, we discontinued our use of liquidation basis accounting and re-adopted going concern basis accounting, and reestablished our stockholders’ equity effective October 1, 2003. In connection with our re-adoption of going concern basis accounting, we recognized $0.7 million of pre-tax expense and $1.1 million of additions to stockholders’ equity, and recorded the following adjustments:

•  Goodwill: Reestablished the $1.8 million of goodwill related to our acquisition of BVAC’s predecessor entity, CTL, Inc., that existed prior to our adoption of liquidation basis accounting;

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•  Premium on investment in BVAC: Reversed $10.0 million of premium over the book value of BVAC, which was recorded as deferred gain under liquidation basis accounting, and restored the historical cost basis in our equity investment in BVAC;

•  Auto contracts: Reversed unrealized gains that were recorded under liquidation basis accounting and restored the lower of cost or market valuation;

•  Mortgage-backed securities: Restored fair value accounting for these available-for-sale securities;

•  Accrued liabilities: Reversed $1.7 million of accruals related to certain severance and occupancy costs that were recorded under liquidation basis accounting and adopted Statement of Financial Accounting Standards (“SFAS”) No. 146, “Accounting for Costs Associated with Disposal Activities”; and

•  Stockholders’ equity: Restored stockholders’ equity as of October 1, 2003.

      See Note 3 to the Consolidated Financial Statements, “Summary of Significant Accounting Policies — Liquidation Basis,” at Item 8. “Financial Statements and Supplementary Data” for further discussion of the significant accounting policies that were applicable, under liquidation basis accounting, during the period September 30, 2002 through September 30, 2003.

Securitization Transactions and Retained Interests in Securitizations

      BVAC purchases auto contracts with the intention of repackaging them as securitizations. All such securitizations have involved the identification of specific auto contracts, the sale of those contracts (and the associated rights) to a special purpose subsidiary of BVAC, and issuance of asset-backed securities to fund the transactions. Depending upon the structure of the securitization, the transaction may be accounted for as a sale or as a secured financing.

      Prior to 2005, BVCC structured these transactions as sales in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.” For transactions structured as sales, the sold auto contracts were removed from BVCC’s consolidated statements of financial condition, the asset-backed securities did not appear as debt of BVCC and BVCC recognized a gain on the sale of the auto contracts to the trusts. Gains or losses on the securitizations and/or sales of loans are recorded in earnings at the time of the transaction when control over the loans is surrendered and consideration other than beneficial interests in the loans is received. The gain or loss represents the difference between the sum of sale proceeds, net of transaction costs and cash deposited into a securitization trust account, in order to enhance the credit rating of the asset-backed securities, and the sum of BVCC’s net carrying value of the auto contracts and the present value of future excess cash flow anticipated to be distributed to BVCC by the trust over the life of the asset-backed securities. The present value of the anticipated future excess cash flow is an asset which is referred to as a “retained interest” in the securitization.

      These estimated future cash flows, which are comprised of interest income received on the auto contracts less interest paid to investors in the asset-backed securities, credit losses, servicing fees and trust expenses, are initially retained by the trust to build the trust cash account to pre-designated levels and provide further credit enhancement. Once the pre-designated levels of cash are attained, the trust distributes the excess cash flow to BVAC. In recording the gain on sale and the retained interest, BVCC has made assumptions in calculating the present value of the future excess cash flow anticipated to be distributed to BVAC by the trust over the life of the asset-backed securities.

      BVAC designates retained interests as available-for-sale and carries them at fair value. Unrealized gains and losses on retained interests that are deemed to be temporary are reported in other comprehensive income or loss, net of tax. For retained interests that have experienced a decline in fair value below their amortized cost basis and for which the decline in fair value has been determined to be other-than-temporary, the cost basis of the retained interest is written down to fair value as the new cost basis and the writedown is charged to earnings. BVCC recorded other-than-temporary impairment charges related to retained interests in securitiza-

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tions of $222 thousand in 2005. There were no impairment charges related to retained interests in securitizations during 2004 and 2003.

      BVCC’s retained interests are subordinate to investor interests in the related asset-backed securities and their value is subject to credit and prepayment risks in the pool of underlying auto contracts. BVCC is not aware of an active secondary market for its retained interests and, accordingly, estimates the fair value of its retained interests by calculating the present value of the future excess cash flow anticipated to be received, using management’s best estimates of key valuation assumptions, including credit losses, prepayment speeds and discount rates commensurate with the underlying risks in the anticipated future cash flow. Changes in these assumptions due to differing actual experience or market conditions could affect the value of our retained interests.

      The following table sets forth the significant assumptions used in the valuation of BVCC’s retained interests as of December 31, 2005:

Weighted-average discount rate	10.0%
Range of projected annual credit losses, net	1.45% - 1.65%
Range of projected cumulative credit losses	2.31% - 2.44%
Prepayment speed	1.35 - 1.50 ABS

      Changes in the above assumptions due to differing actual experience or market conditions could affect the value of our retained interests.

      During 2005, BVAC completed three auto contract securitizations. Under the terms of these transactions, BVAC retained certain rights that resulted in its maintaining control over the transferred receivables and, in accordance with provisions of SFAS No. 140, BVCC has accounted for these transactions as secured financings. For securitizations treated as secured financings, the auto contracts are retained on the consolidated statement of financial condition and the securities issued to finance the contracts are recorded as securitization notes payable. BVCC records interest income on the securitized contracts and interest expense on the notes issued through the securitized transactions, and records as expense a provision for credit losses on the auto contracts receivable. See Note 10 to the Consolidated Financial Statements, “Securitization Notes Payable,” at Item 8. “Financial Statements and Supplementary Data” for additional information on the related auto receivable-backed notes.

Allowance for Credit Losses

      The allowance for credit losses on auto contracts held-for-investment is established through a provision charged to expense and maintained at a level that BVCC believes is sufficient to cover estimated probable losses in this loan portfolio. BVCC considers BVAC’s portfolio of auto contracts receivable to be comprised of relatively small balance, homogeneous receivables and, accordingly, determines its allowance for credit losses in accordance with SFAS No. 5, “Accounting for Contingencies.” The allowance for credit losses is evaluated and adjusted on a quarterly basis.

      In determining the level of the allowance for credit losses, BVCC evaluates BVAC’s auto contracts held-for-investment using two methodologies. The first methodology is based upon an analysis of BVAC’s historical loss experience using a “vintage” analysis of its past purchases of auto contracts from which BVAC predicts probable losses that are inherent in its portfolio of auto contracts held-for-investment. Under this method, BVAC’s historical credit loss experience is stratified by quarter and correlated with the related auto contracts that have been similarly stratified by the number of quarters that have elapsed since date of purchase. This credit loss data is derived from “static pool” information that has been internally collected on the historical loss experience of BVAC’s portfolio of managed auto contracts. BVAC defines managed auto contracts as the sum of its warehouse inventory of auto contracts receivable plus auto contracts that have been securitized and/or sold with servicing retained by BVAC. BVCC also uses a second method for evaluating the sufficiency of the allowance for credit losses. This second method, a “roll rate” analysis, projects the migration of quarter-end auto contracts held-for-investment from current payment status through 30-, 60- and 90-day delinquent status to charge-off and correlates this projection with loss reserve factors.

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      These methodologies incorporate quantitative as well as qualitative factors, including historical loss experience changes in underwriting practices, changes in the credit quality of contracts and an assessment of economic conditions.

Income Taxes

      BVCC files consolidated federal income tax returns in which its taxable income or loss is combined with that of its subsidiaries. Consolidated, combined and separate company state tax returns are filed in certain states, as applicable, including California. Each subsidiary’s share of income tax expense (benefit) is based on the amount that would be payable (receivable) if separate returns were filed.

      BVCC’s income tax provisions are based upon income taxes payable for the current period as well as current period changes in deferred income taxes. Deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory income tax rates applicable to future years to differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities. The effect on deferred income taxes for a change in tax rates is recognized through the provision for income taxes during the period of enactment. BVCC measures deferred tax assets using the enacted tax rate expected to apply to carryforwards and temporary differences in the periods they are expected to reverse. Under SFAS No. 109, a valuation allowance must be recognized on deferred tax assets if, based upon the weight of available evidence, it is more likely than not that some or all of the assets may not be realized.

      At December 31, 2005 and 2004, BVCC had recorded estimates of contingent tax liabilities of $4.4 million and $4.2 million, respectively. If and when these current tax liabilities are ultimately paid, there could be a significant impact on the cash flows or liquidity of BVCC.

Derivative Instruments

      BVCC uses derivative instruments to reduce its exposure to interest rate risk embedded in BVAC’s fixed-rate auto contracts which are funded by floating-rate financing. Rising interest rates reduce the net interest spread produced by BVAC’s auto contracts, a primary component of BVCC’s profitability, as well as the economic value of BVAC’s inventory of auto contracts. Additionally, under the terms of its warehouse credit facility, the indenture trustee maintains derivative instruments to provide interest rate risk protection to BVAC’s lenders. BVCC accounts for these derivative instruments in accordance with SFAS No. 133, “Accounting for Derivatives and Hedging Activities.”

      SFAS No. 133 establishes accounting and reporting standards for derivative instruments and requires that derivative instruments (including certain derivative instruments embedded in other contracts) be recorded in the statement of financial condition as either an asset or liability measured at its fair value. SFAS No. 133 further dictates that the accounting treatment for gains or losses from changes in the derivative instrument’s fair value is contingent on whether the derivative instrument qualifies as a hedge under the standard. Derivative instruments must qualify and be designated as hedges upon their inception and must be effective in substantially reducing the risk arising from the asset or liability identified as exposing BVCC to risk throughout the hedge period in order to receive hedge accounting treatment. To qualify as hedges, among other things, derivative instruments must be linked to specific assets or liabilities or pools of similar assets or liabilities. If the derivative instrument does not qualify as a hedge, the gains or losses are reported in the consolidated statement of operations when they occur. If the derivative instrument qualifies and is designated as a hedge under the standard, depending on the type of risk being hedged, the gains and losses are either reported in the consolidated statement of operations, offsetting the fair value change in the hedged item, or reported as accumulated other comprehensive income in the equity section of the consolidated statement of financial condition. If a hedged asset or liability is sold or paid off before maturity of the hedging derivative, the derivative is closed out or settled, and any net settlement amount upon the close-out or termination of the derivative is recognized in earnings. The standard requires that an entity formally document, designate and assess the effectiveness of transactions that receive hedge accounting.

      BVCC’s derivative instruments outstanding at December 31, 2005 and 2004 were comprised of interest rate swap contracts and interest rate caps. The interest rate swap contracts are used to reduce our exposure to

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interest rate risk. The interest rate caps are required under the terms of BVAC’s warehouse credit facility and maintained by the indenture trustee, as discussed above. In accordance with SFAS No. 133, these derivative instruments are accounted for as assets or liabilities and recorded at fair value. Because these derivatives were not formally designated as hedges, which is required to use hedge accounting, changes in fair values are charged or credited to earnings.

      Prior to its re-adoption of going concern basis accounting, BVCC accounted for changes in the market value of derivative instruments using liquidation basis accounting. Changes in the market value of these derivative instruments were reflected in BVCC’s consolidated statements of changes in net assets in liquidation under pre-tax loss from operations, while offsetting changes in the market value of underlying auto contracts were included in changes in estimated values of assets and liabilities. Refer to Item 7A. “Quantitative and Qualitative Disclosures About Market Risk — Asset/ Liability Management” for further comments about BVCC’s use of derivative instruments.

Accounting Changes and Recent Accounting Pronouncements

      In December 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 123R, “Share-Based Payments,” which revised SFAS No. 123 and superseded APB No. 25. SFAS No. 123R requires that the cost of employee services received in exchange for an award of equity instruments, such as stock options or restricted stock, be measured based on the fair value of the award on the grant date and recognized in the statement of income over the vesting period of the award. Securities and Exchange Commission (“SEC”) registrants were originally required to adopt SFAS No. 123R’s provisions at the beginning of their first interim period after June 15, 2005. In March 2005, the SEC issued Staff Accounting Bulletin (“SAB”) No. 107 to provide its view on the valuation of share-based payment arrangement for public companies. In April 2005, the SEC announced that registrants could delay adoption of SFAS No. 123R until the first fiscal year beginning after September 2005. During 2005, the FASB issued FASB Staff Position (“FSP”) FAS 123R-1, FSP FAS 123R-2 and FSP FAS 123-3 which amend the guidance in SFAS No. 123R for freestanding financial instruments issued in exchange for employee services, practical accommodation to the application of grant date and transition election related to the tax effects of share-based payment awards, respectively. BVCC will adopt the standard as required beginning January 1, 2006 using the modified prospective method of adoption. Under the modified prospective method, the requirements of SFAS No. 123R are applied to all new share-based awards granted after December 31, 2005, and compensation cost for unvested awards outstanding at December 31, 2005 is recognized over the remaining vesting period based upon the grant-date fair value of the award. BVCC estimates that the adoption of SFAS No. 123R will result in approximately $200 thousand of additional expense for the year ending December 31, 2006, assuming no new option grants. The estimated additional expense is based on unamortized expense relating to current outstanding options granted prior to our implementation of SFAS No. 123R that are expected to vest subsequent to December 31, 2005.

      In May 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections,” a replacement of APB No. 20, “Accounting Changes” and SFAS No. 3, “Reporting Accounting Changes in Interim Financial Statements.” APB No. 20 previously required that most voluntary changes in accounting principle be recognized by including in net income of the period of the change the cumulative effect of changing to the new accounting principle. SFAS No. 154 requires retrospective application to prior period’s financial statements of changes in accounting principle. Retrospective application is defined as the application of a different accounting principle to prior accounting periods as if that principle had always been used, or as the adjustment of previously issued financial statements to reflect a change in reporting entity. SFAS No. 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. BVCC does not expect the adoption of SFAS No. 154 to have a material impact on our financial condition, results of operations or cash flows.

      In November 2005, the FASB issued FSP FAS 115-1 and FAS 124-1, “The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments.” This staff position reflects the latest changes to the FASB Emerging Issues Task Force (“EITF”) 03-01, which we adopted in December 2003.

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EITF 03-01 included certain disclosures regarding quantitative and qualitative disclosures for investment securities accounted for under SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities,” that are impaired at the balance sheet date, but an other-than-temporary impairment has not been recognized. FSP FAS 115-1 and FAS 124-1 codifies the guidance set forth in EITF Topic D-44 and clarifies that an investor should recognize an impairment no later than when the impairment is considered other-than-temporary, even if a decision to sell has not been made. The guidance in this FSP should be applied to reporting periods beginning after December 15, 2005. BVCC has determined that FSP FAS 115-1 and FAS 124-1 will not have a material impact on our financial condition, results of operations or cash flows.

      In December 2005, the FASB issued FSP SOP 94-6-1, “Terms of Loan Products That May Give Rise to a Concentration of Credit Risk.” This staff position focuses on disclosures for loan products whose terms may give rise to a concentration of credit risk. The guidance relative to concentration of credit risk is effective for interim and annual periods ending after December 19, 2005. An entity should provide the disclosures required by SFAS No. 107, “Disclosures about Fair Value of Financial Statements,” for loan products that are determined to represent a concentration of credit risk in accordance with FSP SOP 94-6-1. BVCC has determined that FSP SOP 94-6-1 will not have a material impact on our financial condition, results of operations or cash flows.

Results of Operations

      From September 30, 2002 through September 30, 2003, we reported our results under liquidation basis accounting under which we reported the value of, and the changes in, net assets available for distribution to stockholders (“net assets in liquidation”) instead of results from continuing operations. As discussed above, we discontinued the use of liquidation basis accounting and re-adopted going concern basis accounting effective October 1, 2003. Accordingly, our financial statements as of December 31, 2005 and 2004 and for the years ended December 31, 2005 and 2004 and the three months ended December 31, 2003 have been prepared under going concern basis accounting while reporting periods from January 1, 2003 through September 30, 2003 have been prepared under liquidation basis accounting. The following discussion of our results of operations for reporting periods for which our financial statements have been prepared under going concern basis accounting are presented independently from the discussion of our results of operations for which our financial statements have been prepared under liquidation basis accounting.

      Under liquidation basis accounting, the Consolidated Statement of Operations and Comprehensive Loss was replaced with the Consolidated Statement of Changes in Net Assets in Liquidation. As a result, we are providing, in Item 8. “Financial Statements and Supplementary Data.”

•  Consolidated Statements of Financial Condition as of December 31, 2005 and 2004,

•  Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2005 and 2004 and the three months ended December 31, 2003, and

•  Consolidated Statements of Changes in Net Assets in Liquidation for the nine months ended September 30, 2003.

Going Concern Basis

Results of Operations — Years ended December 31, 2005 and 2004

      Our consolidated net loss for the year ended December 31, 2005 was $34.5 million, or $5.22 per diluted share, compared to a net loss of $3.9 million, or $0.59 per diluted share, for the year ended December 31, 2004.

      As discussed in additional detail under “Income Taxes,” we recorded a charge to earnings of $25.3 million in the fourth quarter of 2005 to establish a full valuation allowance on our net deferred tax assets of $46.8 million at December 31, 2005.

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      Results for the year ended December 31, 2005 included record loan production by BVAC and increased net interest income. However, leasing income declined due to the continued runoff of our liquidating auto lease portfolio and general and administrative expense increased due primarily to higher legal and professional fees, including costs related to merger and sale activities and increased liquidation expense. Our provision for credit losses increased to $7.9 million for the year ended December 31, 2005 from $1.6 million for the year ended December 31, 2004 primarily to support our growing portfolio of auto contracts held-for-investment.

Net Interest Income and Net Interest Margin

      Net interest income represents the difference between interest income earned on auto contracts receivable and other interest-earning assets and interest expense paid on borrowings and other funding sources, and is our principal source of revenue. Net interest rate spread is the difference between the average yield on our interest-earning assets and the average rate on our interest-bearing liabilities. Net interest margin represents net interest income expressed as a percentage of average interest-earning assets.

      Net interest income, net interest margin and average interest-earning assets at December 31, 2005 were $17.6 million, 3.21% and $553.0 million, respectively. Net interest income, net interest margin and average interest-earning assets for the year ended December 31, 2004 were $13.8 million, 4.41% and $312.4 million, respectively.

      The increase in net interest income for the year ended December 31, 2005 compared to the same period in 2004 was attributable to an increase in average interest-earning assets due to the record volume of loan purchases. In addition, net interest income for the year ended December 31, 2005 reflected the elimination of interest expense from the $22.0 million of 9.76% Cumulative Capital Securities that were redeemed in mid-2004. Although net interest income expanded, net interest margin decreased as short-term, floating-rate funding costs on BVAC’s warehouse credit facility rose more rapidly than intermediate-term yields on purchased auto contracts. At December 31, 2005, the spread between the yields on one-month and three-year U.S. Treasury securities narrowed to 36 basis points from 136 basis points at December 31, 2004. For the year ended December 31, 2004, our net interest margin was enhanced by significant cash flow from monetization of our liquidating auto lease portfolio. This monetization reduced our need to borrow in order to fund purchases of auto contracts, reducing related interest expense.

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      The following table sets forth average outstanding balances of assets and liabilities, interest income and expense, and average yields on our interest-earning assets and the average cost of our borrowings for the years ended December 31, 2005 and 2004:

		Average Balances, Yields and Rates
		For the Year Ended December 31, 2005								For the Year Ended December 31, 2004
		Average					Average			Average				Average
		Balance		Interest			Yield/Rate			Balance		Interest		Yield/Rate
		(Dollars in thousands)
Assets
Interest-earning assets:
	Restricted cash and other short-term investments	$	36,102	$	1,756			4.80	%	$	33,640	$	516		1.53	%
	Retained interests in securitizations		21,225		1,948			9.18			26,622		2,345		8.81
	Mortgage-backed and other securities		—		—			—			742		48		6.47
	Auto installment contracts and other loans receivable		223,920		17,913			8.01			251,380		19,700		7.83
	Securitized auto installment contracts		271,751		18,636			6.85			—		—		—
Total interest-earning assets			552,998		40,253			7.27	%		312,384		22,609		7.23	%
Other assets			51,271								81,554
Total assets		$	604,269							$	393,938
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
	Warehouse credit facility and other borrowings	$	223,126		10,242			4.53	%	$	215,775		5,647		2.58	%
	Interest rate swap (income) expense		—		(62	)		—			—		1,995		—
	Warehouse credit facility, other borrowings and swaps		223,126		10,180			4.50			215,775		7,642		3.50
	Junior Subordinated Deferrable Interest Debentures		—		—			—			12,256		1,203		9.77
	Securitization notes payable		260,273		12,437			4.79			—		—		—
Total interest-bearing liabilities			483,399		22,617			4.65	%		228,031		8,845		3.84	%
Other liabilities			17,061								35,629
Total liabilities			500,460								263,660
Stockholders’ equity			103,809								130,278
Total liabilities and stockholders’ equity		$	604,269							$	393,938
Net interest income/net interest rate spread				$	17,636			2.62	%			$	13,764		3.39	%
Net interest-earning assets		$	69,599							$	84,353
Net interest margin								3.21	%						4.41	%

Provision for Credit Losses

      An allowance for credit losses on our auto contracts held-for-investment is established through the provision for credit losses. At December 31, 2005 and 2004, BVAC had $633.6 million and $252.9 million, respectively, of auto contracts designated as held-for-investment. Our provision for credit losses totaled

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$7.9 million and $1.6 million, respectively, for the years ended December 31, 2005 and 2004. The increases in provision expense and related increases in allowance for credit losses reflected both the continued growth and seasoning of our portfolio of auto contracts. In addition, a change in the federal bankruptcy laws, which made it more difficult for debtors to have debts discharged under Chapter 7 filings, produced an increase in bankruptcy filings prior to the change in law and increased BVAC’s bankruptcy-related loan losses in the fourth quarter of 2005. See “Balance Sheet Analysis — Allowance for Credit Losses” for related information on BVAC’s allowance for credit losses on auto contracts held-for-investment.

Noninterest Income

      Noninterest income was $7.0 million for the year ended December 31, 2005, compared to $17.0 million for the year ended December 31, 2004. The decrease in noninterest income for 2005 was largely due to decreased leasing and loan servicing income. The decrease in leasing income was a direct result of the runoff of our auto lease portfolio, offset, in part, by favorable experience on the disposition of vehicles coming off lease during 2005. We ceased purchasing auto leases in June 2000, and the portfolio was fully liquidated at December 31, 2005. For the years ended December 31, 2005 and 2004, we liquidated $10.0 million and $56.6 million of auto leases, respectively.

      As discussed in additional detail in Item 7A. “Quantitative and Qualitative Disclosures About Market Risk — Asset/ Liability Management,” we employ derivative instruments primarily to protect the value of BVAC’s fixed-rate auto contracts from rising interest rates. Our strategy is to protect the economic value of these auto contracts rather than the accounting values. We account for changes in the market value of our derivative instruments as prescribed by SFAS No. 133. Our derivative instruments are not treated as designated hedge instruments under SFAS No. 133 and are, accordingly, carried at fair value, with changes in such fair value charged or credited to earnings. Our use of fair value accounting for our derivative instruments has resulted in certain fluctuations in noninterest income. During 2005 and 2004, we recorded $1.2 million and $1.4 million, respectively, of net gains on our derivative instruments, reflecting the increase in intermediate-term rates that occurred during this period. Future changes in interest rates could continue to produce fluctuations in the fair value of our derivatives and, therefore, the level of our noninterest income.

Noninterest Expense

      Noninterest expense was $28.6 million for the year ended December 31, 2005 compared to $35.6 million for the year ended December 31, 2004. For 2005, our noninterest expense included $27.4 million of general and administrative expense, $0.7 million of leasing expense and $0.5 million of real estate owned expense. For 2004, noninterest expense included $25.2 million of general and administrative expense, $9.2 million of leasing expense and $1.2 million of real estate owned expense.

      The following table sets forth the ratio of our general and administrative expenses to average managed assets, including auto-related securitized assets, for the periods indicated:

	For the Year Ended
	December 31,			December 31,
	2005			2004
	(Dollars in thousands)
General and administrative expenses	$	27,395		$	25,211
Average managed assets, including auto-related securitized assets	$	792,560		$	709,735
General and administrative expense to average managed assets, including auto-related securitized assets		3.46	%		3.55	%

      The increase in general and administrative expense for the year ended December 31, 2005, compared to the same period in 2004, was primarily due to additional liquidation expense and higher professional and legal services expense in 2005, including costs attributable to the proposed merger with GLB and sale of BVAC to AFS. These increases in expense were partially offset by higher capitalized fees and costs directly related to higher loan production volume, lower compensation and benefits due to planned attrition and decreased occupancy and equipment expense.

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      Liquidation of the last of our auto lease portfolio was completed in the fourth quarter of 2005. Throughout 2005 and 2004, our leasing expense declined in line with the runoff of the balance of the remaining portfolio. Because our auto leases were accounted for as operating leases, the corresponding leased vehicles were capitalized and depreciated to their estimated residual values over their lease terms. This depreciation expense is included in leasing expense, along with the amortization of capitalized initial direct lease costs and lease impairment charges.

Income Taxes

      We recorded income tax expense of $22.5 million and income tax benefit of $2.5 million for the years ended December 31, 2005 and 2004, respectively. As a result of our consolidated pre-tax loss of $11.9 million for the year ended December 31, 2005 and in accordance with the provisions of SFAS No. 109, “Accounting for Income Taxes,” we concluded that net deferred tax assets of $46.8 million should be fully reserved at December 31, 2005. With $21.5 million of previously established valuation allowance, we recorded a charge to earnings of $25.3 million in the fourth quarter of 2005 to establish a full valuation allowance on our net deferred tax assets at December 31, 2005. Under SFAS No. 109, a valuation allowance must be recognized on deferred tax assets if, based upon the weight of available evidence, it is more likely than not that some or all of the assets may not be realized. The realization of deferred tax assets is dependent on the generation of future taxable income and, given our history of recent losses, management made a judgment that a full valuation allowance was prudent at this time.

      In reaching this conclusion, we did not take into consideration the future taxable income that may arise from the previously announced pending sale of BVAC to AFS and the pending merger with GLB. The establishment of the full valuation allowance does not affect our net operating loss carryforwards, which totaled $143.4 million at December 31, 2005, and remain available to offset future taxable income. Upon consummation of the merger, the carrying value of the deferred tax assets will be reevaluated as part of purchase accounting based on estimates of the future taxable income of the combined company.

      The effective tax rate used in computing income taxes for the years ended December 31, 2005 and 2004 was (188.8)% and 39.2%, respectively. Our 2005 tax rate differed from the 34% federal statutory rate due to the establishment of the full valuation allowance on net deferred tax assets, the effect of state income and franchise taxes, and nondeductible merger-related expenses. Our 2004 effective tax rate differed from the 35% federal statutory rate due primarily to the effect of state income and franchise taxes.

Results of Operations — Three Months ended December 31, 2003

      Our net loss for the three months ended December 31, 2003, including net adjustments required to readopt going concern basis accounting effective October 1, 2003, totaled $0.7 million, or $0.10 per diluted share, and consisted of income from ongoing operations of BVAC totaling $0.8 million offset by a net loss of $1.5 million from our liquidating activities.

      As discussed under “Critical Accounting Policies — Going Concern vs. Liquidation Basis Accounting,” in connection with our re-adoption of going concern basis accounting, we recognized $0.7 million of pre-tax expense and $1.1 million of additions to stockholders’ equity in the three months ended December 31, 2003.

Net Interest Income

      For the three months ended December 31, 2003, interest income was $4.9 million and the average yield on interest-earning assets was 4.56% while interest expense on our borrowings was $3.6 million and the average cost of borrowings, largely comprised of interest on our 9.76% Junior Subordinated Deferrable Interest Debentures (the “Junior Debentures”), was 11.20%. The negative interest rate spread for the quarter, the difference between the yield on interest-earning assets and the cost of our borrowings, was attributable to large balances of cash and cash equivalents which were accumulated in the quarter in order to distribute $263.2 million, or $40.00 per share in cash, to common stockholders on December 30, 2003 and redeem $63.5 million of the Capital Securities issued by Bay View Capital I on December 31, 2003. Money market yields earned on the cash and cash equivalent balances caused a significant decline in the overall yield of interest-earning assets in the quarter ended December 31, 2003.

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      Implementation of SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity” resulted in the reclassification of our Capital Securities from their prior classification as a “mezzanine” item to liabilities as of December 31, 2003. Accordingly, dividend expense on the Capital Securities, totaling $2.1 million and $8.8 million for the three and twelve months ended December 31, 2003, respectively, has been included in interest expense on borrowings.

      The following table sets forth average yields on our interest-earning assets and average rates on our interest-bearing liabilities for the period indicated. These average yields and rates are derived by dividing interest income by the average balances of interest-earning assets and by dividing interest expense by the average balances of interest-bearing liabilities for the period indicated. Average balances of interest-earning assets and interest-bearing liabilities were calculated by averaging the relevant month-end amounts for the period.

		Average Balances, Yields and Rates
		For the Three Months Ended
		December 31, 2003
		Average				Average
		Balance		Interest		Yield/Rate
		(Dollars in thousands)
Assets
Interest-earning assets:
	Auto installment contracts and other loans receivable	$	175,621	$	3,757		8.48	%
	Investments(1)		242,863		1,013		1.65
	Mortgage-backed securities(1)		11,105		166		5.95
Total interest-earning assets			429,589		4,936		4.56	%
Other assets			29,740
Total assets		$	459,329
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
	Borrowings(2)	$	128,781		3,612		11.20	%
Total interest-bearing liabilities			128,781		3,612		11.20	%
Other liabilities			47,550
Total liabilities			176,331
Stockholders’ equity			282,998
Total liabilities and stockholders’ equity		$	459,329
Net interest income/net interest spread				$	1,324		(6.64	)%
Net interest-earning assets		$	300,808
Net interest margin(3)							1.71	%

(1)	Average balances and yields for securities and other investments classified as available-for-sale are based on historical amortized cost.
(2)	Interest expense for borrowings includes expenses related to our Capital Securities.
(3)	Annualized net interest income divided by average interest-earning assets.

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Noninterest Income and Expense

      For the three months ended December 31, 2003, noninterest income was $10.3 million and included leasing income of $6.9 million, loan servicing and other fee income of $1.3 million, gains related to recoveries of mark-to-market adjustments on franchise loans of $0.9 million and other income of $1.2 million. Noninterest expense was $12.5 million and included leasing expenses of $5.9 million and operating expenses of $6.6 million.

Leasing Expense

      Leasing expense was $5.9 million for the three months ended December 31, 2003. At December 31, 2003, approximately 109 of the 5,341 vehicles in our auto lease portfolio, or 2%, were considered impaired under SFAS No. 144. If the market values of the individual vehicles declined by $250, an additional 7% of the leases would have been deemed to be impaired and, therefore, potentially subject to an impairment charge.

Income Taxes

      We recorded a tax benefit of $0.2 million for the three months ended December 31, 2003. Our effective tax rate of 55.7% differed from the federal statutory rate due primarily to nondeductible compensation and reduced levels of state income and franchise taxes.

Liquidation Basis

Changes in Net Assets in Liquidation — Nine Months ended September 30, 2003

      Our net assets in liquidation totaled $409.8 million, or $63.60 in net assets in liquidation per outstanding diluted share, at September 30, 2003 compared to $410.1 million, or $64.30 in net assets in liquidation per outstanding diluted share, at December 31, 2002.

      The change in net assets in liquidation for the first nine months of 2003 included a pre-tax operating loss of $4.6 million and $6.0 million of charges for assets in liquidation partially offset by $6.3 million of income tax benefits and $4.1 million of other changes in net assets in liquidation, primarily proceeds from stock options and warrants exercised during the first nine months of 2003.

      The net charges for changes in estimated values of assets and liabilities during the first nine months of 2003 consisted primarily of $8.5 million of additional mark-to-market writedowns on the auto lease portfolio. This writedown was partially offset by a $1.3 million gain associated with the financing secured by our auto lease cash flows resulting from favorable experience with the underlying cash flows, and a $1.0 million reduction of an accrual related to the settlement of litigation that was negotiated during the first quarter of 2003.

      Implementation of SFAS No. 150 resulted in the reclassification of our Capital Securities from their prior classification as a “mezzanine” item to liabilities. Consequently, the dividend expense on the Capital Securities, totaling $6.7 million during the nine-month period ended September 30, 2003, has been included in interest expense on borrowings.

      Leasing expenses were $24.4 million for the first nine months of 2003. At September 30, 2003, approximately 4,275 of the 6,665 vehicles in our auto lease portfolio, or 64%, were considered impaired under SFAS No. 144. If the market values of the individual vehicles declined by $250, an additional 7% of the leases would have been deemed to be impaired and, therefore, potentially subject to an impairment charge.

      We recorded a tax benefit of $6.3 million for the first nine months of 2003, which was recorded at an effective tax rate of 59.0%. The 2003 effective tax rate differed from the federal statutory rate primarily due to reduced levels of state income and franchise taxes.

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Balance Sheet Analysis

      Our total assets were $714.8 million at December 31, 2005 compared to $427.5 million at December 31, 2004. This increase in total assets was attributable to asset growth by BVAC, which was offset, in part, by further liquidation of the remaining assets of BVB. During the year, BVAC’s purchases of auto contracts produced $305.7 million of growth in our auto contracts receivable, net of repayments and loan sales. These purchases were largely funded by additional borrowings on our warehouse credit facility and securitization notes payable resulting from securitizations treated as secured financings. During 2005, the liquidation of the remaining BVB assets included the monetization of $10.0 million of auto leases, $2.8 million of real estate owned and $902 thousand of other loans receivable.

Restricted Cash

      Our restricted cash balances were $35.1 million and $26.8 million at December 31, 2005 and 2004, respectively. Restricted cash attributable to BVAC’s auto finance business includes cash collateral provided to counterparties to BVAC’s hedging contracts to meet margin requirements, cash collateral provided to cure potential borrowing base deficiencies on BVAC’s warehouse credit facility, cash collateral provided in connection with credit enhancement of securitization notes payable and cash payments received from our customers that are in-transit to trust accounts for BVAC’s auto securitization trusts. The remaining assets from BVB’s liquidation also include restricted cash that has been pledged to secure a letter of credit, cash collateral pledged in connection with financing secured by our auto lease portfolio contractual cash flow as well as cash collateral pledged in connection with the Company’s servicing of a multi-family loan pool and other contractual obligations.

      The $8.3 million increase in restricted cash from December 31, 2004 to December 31, 2005 was due primarily to a $14.5 million increase in cash on deposit provided as credit enhancement for BVAC’s auto receivable-backed notes payable issued in 2005 partially offset by a $3.2 million decrease in cash on deposit for interest rate swap contracts used to protect the market value of BVAC’s warehouse inventory of auto contracts and the net interest income produced by its warehouse inventory and a $2.2 million decrease in cash collateral pledged for our auto lease portfolio structured financing due to the full liquidation of the auto lease portfolio in 2005.

Retained Interests in Securitizations

      The following table provides information on the balances of BVAC’s retained interests in its outstanding securitizations of auto contracts as of the dates indicated:

		At December 31,
		2005		2004
		(Dollars in thousands)
Transaction:
	2002-LJ-1	$	14,028	$	15,622
	2003-LJ-1		6,079		7,014
Total retained interests in securitizations		$	20,107	$	22,636

      During 2003 and 2002, we securitized and sold auto contracts of $193.3 million and $453.2 million, respectively. We retained interests in these securitizations with initial balances of $9.5 million and $23.2 million for 2003 and 2002, respectively. At December 31, 2005 and 2004, our retained interests in securitizations were classified as available-for-sale and reported at fair value. Unrealized gains of $151 thousand and unrealized losses of $279 thousand in these retained interests were included in our stockholders’ equity, net of tax at December 31, 2005 and 2004, respectively.

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Auto Contracts and Other Loans Receivable

      The following table sets forth the composition of our auto contracts and other loans receivable as of the dates indicated:

				At December 31,
				2005						2004
							% of						% of
				Amount			Total			Amount			Total
				(Dollars in thousands)
Auto installment contracts and other loans receivable(1):
	Auto installment contracts held-for-sale			$	—			—	%	$	73,462			22.3	%
		Premiums, discounts, and deferred fees and costs, net			—			—			1,559			0.5
	Auto installment contracts held-for-sale, net				—			—			75,021			22.8
	Other loans held-for-sale:(2)
			Franchise loans		—			—			583			0.2
			Asset-based loans		—			—			319			0.1
		Total other loans held-for-sale(2)			—			—			902			0.3
	Auto installment contracts and other loans held-for-sale, net(2)				—			—	%		75,923			23.1	%
	Auto installment contracts held-for-investment				105,120			16.6	%		247,219			75.2	%
	Securitized auto installment contracts held-for-investment				520,387			82.1			—			—
	Premiums, discounts, and deferred fees and costs, net				14,393			2.3			7,152			2.2
	Allowance for credit losses				(6,279	)		(1.0	)		(1,508	)		(0.5	)
	Auto installment contracts held-for-investment, net				633,621			100.0	%		252,863			76.9	%
Auto installment contracts and other loans receivable, net(1)(2)				$	633,621			100.0	%	$	328,786			100.0	%

(1)	Auto contracts do not include auto-related operating lease assets.
(2)	Includes allowances for mark-to-market valuation reserves of $1.2 million at December 31, 2004.

      The increase in loans receivable from December 31, 2004 to December 31, 2005 was attributable to BVAC’s increased purchases of auto contracts partially offset by loan sales and repayments during 2005.

      During 2005, we sold $6.5 million of loans, consisting entirely of auto contracts receivable. During 2004, we sold $33.4 million of loans, consisting of $24.8 million of auto loans, $3.8 million of franchise loans and $4.8 million of business loans. Gains of $31 thousand and $344 thousand were realized on these sales in 2005 and 2004, respectively. With the exception of BVAC’s purchases of auto contracts, we ceased all other loan production activities during the fourth quarter of 2002.

Auto Contracts Receivable

      At December 31, 2005, BVAC’s entire $633.6 million portfolio of auto contracts receivable was designated as held-for-investment. $106.8 million of BVAC’s auto contracts were designated as held-for-investment in anticipation of securitizing such contracts in early 2006 in an asset-backed transaction that is to be structured as a secured financing. The remaining $526.8 million of auto contracts held-for-investment represented auto contracts securitized during 2005; these transactions were accounted for as secured financings according to SFAS 140. At December 31, 2004, $252.9 million of BVAC’s auto contracts receivable were designated as held-for-investment in anticipation of securitizing such contracts in an asset-

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backed bond offering that was structured as a financing transaction. The remaining $75.0 million of BVAC’s warehouse inventory of auto contracts were designated as held-for-sale at December 31, 2004 and carried at the lower of cost or fair value. Prior to the second quarter of 2004, our entire warehouse inventory of auto contracts receivable had been designated as held-for-sale.

      During 2005, BVAC purchased $512.5 million of auto contracts compared to $295.3 million during 2004, a 73.6% increase, year-over-year. We attribute this increase to the success of our efforts to broaden BVAC’s market for good credit quality customers and its focus on expanding its purchases of high quality loans.

      BVAC’s unit purchase volume for 2005 totaled 21,515 contracts compared to 10,043 contracts in 2004. The weighted-average contract rate and weighted-average FICO score for the 2005 and 2004 purchases was 8.87% and 736 compared to 7.98% and 739, respectively. At December 31, 2005, BVAC was servicing 38,000 contracts representing $765.5 million of managed loans compared to 28,300 contracts representing $570.9 million of managed loans at December 31, 2004.

      During 2005 and 2004, BVAC sold $6.5 million and $24.8 million of auto contracts receivable, respectively, on a “whole loan” basis with servicing retained. Repayments of auto contracts totaled $201.8 million and $110.5 million during 2005 and 2004, respectively.

Credit Quality

      We define nonaccrual auto contracts receivable as contracts which are 90 days or more delinquent as to principal and interest payments unless the principal and interest are well-secured and in the process of collection. We charge off auto contracts receivable and reverse related accrued interest receivable when the contracts become 120 days delinquent. We may also designate contracts which are less than 90 days delinquent as nonaccrual when the full collection of principal and/or interest is doubtful. We recognize interest income on nonaccrual contracts on a cash basis.

      Auto contracts receivable delinquent 30+ days or more were $3.3 million, or 0.52% of gross auto contracts receivable, at December 31, 2005 compared to $1.3 million, or 0.41% of gross auto contracts receivable at December 31, 2004. As a percentage of managed contracts, 30+ day delinquencies were 0.63% of outstanding contracts at both December 31, 2005 and December 31, 2004.

      Net charge-offs, defined as gross charge-offs less recoveries, as a percentage of auto contracts receivable increased to a rate of 0.80% for the year ended December 31, 2005 compared to 0.50% for the year ended December 31, 2004. The increase in the net charge-off rate from 2004 reflects the increasing loss rates that we associate with the aging or “seasoning” of our auto contracts through their midlife which is typically followed by a gradual decrease in loss rates through the remaining life of the contracts.

      As a percentage of managed contracts, which is defined as the total auto contracts serviced by BVAC, net charge-offs decreased slightly to a rate of 1.06% for the year ended December 31, 2005 from a rate of 1.15% for the same period in 2004. This change in the rate of net charge-offs was primarily attributable to our increased production volumes in 2005 which reduced the composite seasoning of our managed loan portfolio and, therefore, decreased overall net charge-off experience.

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Allowance for Credit Losses

      The following table sets forth the activity in the allowance for credit losses on auto contracts held-for-investment as of and for the periods indicated:

	At and For the Year
	Ended December 31,
	2005			2004
	(Dollars in thousands)
Balance at beginning of period	$	1,508		$	—
Charge-offs		(3,875	)		(222	)
Recoveries		699			118
Net charge-offs		(3,176	)		(104	)
Provision for losses on loans and leases		7,947			1,612
Balance at end of period	$	6,279		$	1,508

      At December 31, 2005, our allowance for credit losses represented 1.00% of outstanding auto contracts held-for-investment, compared to 0.61% at December 31, 2004. The level of the allowance at the respective year ends reflected the underlying level of net charge-offs that we estimated to be embedded in our auto contracts held-for-investment. The increase in the allowance was reflective of the impact of the seasoning of our auto contracts held-for-investment, as discussed above. Refer to “Critical Accounting Policies — Allowance for Credit Losses” for additional comments on our related accounting policies.

Other Loans and Real Estate Owned

      At December 31, 2005, we had completed the disposition of our liquidating loan portfolio and no longer had an investment in other loans. At December 31, 2004, we had $902 thousand of other loans, comprised of franchise loans and asset-based loans; these other loans were nonaccruing. At December 31, 2005, we also had $0.6 million of real estate owned compared to $3.4 million at December 31, 2004. The decrease was due to $2.2 million in sales, a $0.5 million writedown of franchise-related property and a $0.2 million insurance recovery for a property in Mississippi damaged during Hurricane Katrina.

Borrowings

      Our borrowings are comprised primarily of a revolving warehouse credit facility and auto receivable-backed securitization notes payable. At December 31, 2005, our borrowings totaled $621.3 million including $99.7 million on our warehouse credit facility and $521.6 million of securitization notes payable. Balances at December 31, 2004 included $298.8 million outstanding on our warehouse credit facility and $1.9 million of other borrowings. The following table sets forth our outstanding borrowings as of the dates indicated:

	At December 31,
	2005		2004
	(Dollars in thousands)
Warehouse credit facility	$	99,727	$	298,755
Securitization notes payable		521,568		—
Other borrowings		—		1,895
Total	$	621,295	$	300,650

      Warehouse credit facility — During the second quarter of 2005, BVAC secured a $450.0 million floating-rate, revolving warehouse credit facility to replace a maturing $350.0 million facility originally obtained in 2004. The facility is jointly provided by two lenders (the “Note Purchasers”). The facility is for a term of 364 days and matures on June 19, 2006. The interest rate on the facility is indexed to asset-backed commercial paper rates or LIBOR. BVAC draws on the facility to purchase and finance its existing inventory of auto contracts. Substantially all auto contracts retained by BVAC are pledged as collateral for the credit facility.

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Under the terms of the facility, BVAC draws on the facility by transferring auto contracts to a special purpose entity, a statutory trust, which issues notes to the Note Purchasers. BVAC periodically securitizes or sells auto contracts in order to pay down the line of credit and maintain borrowing capacity.

      Under the terms of the indenture, the trust enters into out-of-the-money, interest rate cap contracts, containing terms and conditions required by the Note Purchasers, to provide protection to the Note Purchasers from interest rate risk embedded in the fixed-rate auto contracts that have been transferred to the trust. BVAC incurs the cost of these interest rate caps. The notional balance of the amortizing caps is maintained by the trust to coincide with the outstanding balance of the underlying auto contracts. The interest rate caps are not designated as hedges for accounting purposes and, accordingly, changes in the fair value of the interest rate caps are recognized in earnings and recorded as unrealized gains or losses. The fair value of the interest rate caps is included in other assets. At December 31, 2005 and 2004, the interest rate caps had a fair value of $0.4 million and $0.7 million, respectively. For the years ended December 31, 2005 and 2004, we recognized $0.4 million and $0.7 million, respectively, of unrealized losses based on a decline in the value of the interest rate caps.

      At December 31, 2005, $99.7 million was outstanding under this facility with an all-in cost of 5.10%. These borrowings were secured by $102.9 million of auto contracts and cash in trust accounts. The facility contains various performance triggers and default covenants requiring that BVAC maintain certain cumulative credit loss, delinquency and other financial ratios. As of December 31, 2005, all such financial and performance ratios were within required levels.

      Securitization notes payable — In February 2005, BVAC transferred $232.1 million of auto contract receivables to a special purpose entity, Bay View 2005-LJ-1 Owner Trust, and issued a corresponding amount of auto receivable-backed notes. In July 2005, BVAC transferred $185.6 million of auto contract receivables to Bay View 2005-LJ-2 Owner Trust and issued $180.9 million of auto receivable-backed notes. In December 2005, BVAC transferred $220.1 million of auto contract receivables to Bay View 2005-3 Owner Trust and issued $214.6 million of auto receivable-backed notes. Under the terms of these notes, BVAC retained certain rights that resulted in its maintaining control over the transferred receivables and, in accordance with provisions of SFAS No. 140, we have accounted for these transactions as secured financings. For securitizations treated as secured financings, the contracts are retained on the consolidated statement of financial condition and the securities issued to finance the contracts are recorded as securitization notes payable. We record interest income on the securitized contracts and interest expense on the notes issued through the securitized transactions. See Note 10 to the Consolidated Financial Statements, “Securitization Notes Payable,” at Item 8. “Financial Statements and Supplementary Data” for additional information on the related auto receivable-backed notes.

      Other borrowings — On December 31, 2001, we completed a financing secured by the contractual cash flows from our liquidating auto operating lease portfolio. The transaction was recorded as a secured financing and resulted in an increase in other borrowings of $136.5 million at an initial imputed interest rate of 5.25%. With no new purchases of auto leases since June 2000, the outstanding balance of this borrowing has declined sharply since its inception. As of December 31, 2005, the balance of this financing was fully repaid. At December 31, 2004, the balance was $1.9 million.

Liquidity and Capital Resources

      BVAC’s $450.0 million revolving warehouse credit facility allows us to purchase and warehouse auto contracts. Our ability to securitize or sell auto contracts on a whole loan basis allows us to periodically pay down the warehouse facility in order to maintain available borrowing capacity to fund future purchases of auto contracts. Repayments from warehoused auto contracts also provide liquidity. During 2005, liquidation of the assets of BVB remaining from its September 30, 2003 dissolution, primarily the auto lease portfolio, also provided liquidity; however, the liquidation of these assets was largely completed in 2005 and they are a limited source of liquidity in 2006 and beyond.

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      At December 31, 2005, we had $8.9 million of cash and $350.3 million of available borrowing capacity on our revolving warehouse credit facility, of which $11.6 million was immediately available based upon BVAC-owned auto contracts eligible for pledging.

      On February 17, 2005, we issued $232.1 million of auto receivable-backed notes payable through Bay View 2005-LJ-1 Owner Trust, on July 28, 2005, we issued $180.9 million of auto receivable-backed notes payable through Bay View 2005-LJ-2 Owner Trust and on December 6, 2005 we issued $214.6 million of auto receivable-backed notes payable through Bay View 2005-3 Owner Trust. Proceeds from the issuance of each of the notes were used to repay our revolving warehouse credit facility. The notes contain a call provision that grants the Company the option of calling the notes at any time after the aggregate balance of the receivables has been reduced to 15% of the original pool of receivables. These notes, which are “sequential pay” notes with repayment provisions linked to repayments of the underlying pools of auto contracts, have maturities extending to February 2014. We anticipate that prepayments will reduce the effective life of the notes. Refer to Item 7A. “Quantitative and Qualitative Disclosures About Market Risk” for additional information on expected maturities.

      Between December 30, 2003 and December 31, 2004, we distributed $311.0 million in cash to our stockholders, or $47.25 per share after the adjustment to reflect the retroactive effect of the 1-for-10 reverse stock split of our common stock effective June 30, 2004. We did not make any cash distributions to stockholders in 2005. Refer to “General and Business Overview — Background” at Part I, Item 1. “Business” for additional comments about cash distributions.

      Stockholders’ equity totaled $70.5 million and $104.2 million at December 31, 2005 and 2004, respectively.

      On October 28, 2005, we reported the execution of a definitive agreement to merge with GLB, with us as the surviving corporation. GLB is the holding company for GBSB, a savings bank that was founded in November 1999 and, as of September 30, 2005, reported assets of $771 million. GBSB operates 9 full service branches and currently has 4 additional branches under construction in Western New York. Under the terms of the merger agreement, GLB stockholders will receive a fixed ratio of 1.0873 shares of our common stock for each share of GLB common stock. Based on the closing price of our common stock at the execution date, the transaction was valued at approximately $67.1 million.

      After completion of the merger, our stockholders will own approximately 60% of our then outstanding shares. The merger is expected to close in the second quarter of 2006, subject to receipt of government regulatory approvals and stockholder approvals. We do not expect the merger to adversely impact our net operating loss carryforwards.

      On November 7, 2005, we reported the execution of a definitive agreement to sell BVAC to AFS in an all-cash transaction for a price approximating the book value of BVAC at the time of closing. The sale of BVAC is expected to close in the second quarter of 2006, subject to the receipt of government regulatory approvals and approval by our stockholders.

Contractual Obligations

      Our obligations and commitments to make future payments under contracts include $99.7 million on BVAC’s warehouse credit facility, $14.7 million of payments under various operating lease agreements and BVAC’s issuance of $521.6 million of auto receivable-backed notes payable issued through affiliates, Bay View 2005-LJ-1, 2005-LJ-2 and 2005-3 Owners Trusts. Refer to “Balance Sheet Analysis — Borrowings” for comments about the warehouse credit facility and the other borrowings, and “Liquidity and Capital Resources” for comments on the issuance of the $521.6 million of auto receivable-backed notes payable.

      At December 31, 2005, we occupied two offices, including our corporate headquarters office, and had an additional two offices that have been vacated, and are subleased under operating lease agreements expiring at various dates through the year 2012. In most instances, these lease arrangements include options to renew or extend the lease at market rates.

40

      Our contractual obligations for future payments are set forth in the following table:

	Payments Due by Period
			Less than						More than
	Total		1 Year		1-3 Years		3-5 Years		5 Years
	(Dollars in thousands)
Warehouse credit facility	$	99,727	$	99,727	$	—	$	—	$	—
Operating leases(1)		14,721		2,606		5,069		3,925		3,121
Bay View 2005-LJ-1, 2005-LJ-2, and 2005-3 auto receivable-backed notes		521,568		14,719		84,277		239,200		183,372
Total	$	636,016	$	117,052	$	89,346	$	243,125	$	186,493

(1)  These payments do not reflect $4.2 million in sublease rental income from existing sublease rental arrangements through the year 2011. Included in the table above are lease payments of $13.7 million related to the Company’s liquidating activities.

Stock Repurchase Program

      In August 1998, our board of directors authorized the repurchase of up to $50.0 million in shares of our common stock; however we have not repurchased shares of our common stock since 1999. At December 31, 2005, we had approximately $17.6 million in remaining authorization available for future share repurchases.

Impact of Inflation and Changing Prices

      Our consolidated financial statements presented herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), which generally requires the measurement of financial position and operating results in terms of historical dollars, without considering changes in the relative purchasing power of money over time. Due to the fact that most assets and liabilities of a consumer finance company are monetary in nature, interest rates have a more significant impact on a consumer finance company’s performance than do general levels of inflation. Interest rates do not necessarily move in the same direction or magnitude as the prices of goods and services.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Asset/ Liability Management

      Interest rate risk, the fluctuation of market interest rates, impacts the value of our fixed-rate auto contracts. It also impacts the net interest income component of our earnings because BVAC funds the purchase of fixed-rate auto contracts with its warehouse credit facility, which is a floating-rate facility. The rate on the warehouse facility, a revolving purchase facility, is tied to LIBOR as well as commercial paper rates and subject to frequent adjustments.

Fixed-rate Auto Contracts

      BVAC purchases fixed-rate auto contracts primarily for sale or securitization. Investors in these securitization or whole loan sale transactions require a yield that is commensurate with prevailing market interest rates. The prices offered by investors in these transactions reflect prevailing market interest rates at the time of these transactions, which creates interest rate risk for us during the period BVAC warehouses, or owns, these fixed-rate auto contracts. Accordingly, our earnings are affected by changes in prevailing market interest rates. Rising market interest rates generally reduce the value of BVAC’s fixed-rate auto contracts.

41

Net Interest Income

      BVAC funds purchases of fixed-rate auto contracts with its floating-rate warehouse credit facility. While we own these contracts, we earn net interest income, which is defined as the amount by which interest income earned on the contracts exceeds the interest paid on BVAC’s warehouse credit facility. Changes in prevailing market interest rates produce corresponding changes in the cost of BVAC’s floating-rate warehouse credit facility, thereby creating interest rate risk. Rising market interest rates increase the interest expense we incur on BVAC’s warehouse credit facility, thereby reducing the net interest income we earn.

      To protect us from interest rate risk, BVAC may use various derivative financial instruments, including interest rate swap contracts, to protect the market value of BVAC’s warehouse inventory of auto contracts and the related net interest income. The market value of BVAC’s derivatives is generally inversely correlated to the market value of its warehouse inventory. Changes in prevailing market interest rates will generally produce offsetting changes in market values. We may enter into these derivatives as BVAC purchases auto contracts and the agreements may be closed out at the time the underlying auto contracts are securitized or sold.

      At December 31, 2005, we had outstanding swap contracts with a total notional amount of $50.0 million under which we pay a fixed interest rate of 3.64% and receive a floating interest rate of 4.30%. These contracts mature from May 2007 to May 2008. At December 31, 2005, the fair value of our swap contracts was $1.0 million and was included in other assets. We estimate that an increase in market interest rates of 100 and 200 basis points would have resulted in an approximate unrealized gain of $0.8 million and $1.5 million, respectively; while a decrease in interest rates of 100 and 200 basis points would have resulted in an approximate unrealized loss of $0.8 million and $1.6 million, respectively.

Warehouse Credit Facility

      Auto contracts pledged to secure borrowings under BVAC’s warehouse credit facility bear fixed interest rates while amounts borrowed under BVAC’s warehouse credit facility bear a floating interest rate. To provide the Note Purchasers in the warehouse credit facility with protection from interest rate risk embedded in the fixed-rate auto contracts that have been transferred to the trust, the trust enters into out-of-the-money interest rate cap contracts, containing the terms and conditions required by the Note Purchasers. At December 31, 2005, the interest rate caps had a notional amount of $226.6 million with cap strike rates ranging from 5.50% to 6.25%. At December 31, 2005, the fair value of the interest rate caps was $0.4 million.

      Derivative financial instruments involve, to varying degrees, elements of credit risk. Credit risk is defined as the possibility of sustaining a loss because a counterparty to a financial instrument failed to perform in accordance with the terms of the contract. Refer to “Critical Accounting Policies — Derivatives” at Item 7. “Managements Discussion and Analysis of Financial Condition and Results of Operations” for comments about the accounting for our derivatives.

42

      The following table provides information, as of December 31, 2005, about the Company’s derivative and other financial instruments that are sensitive to changes in interest rates. For market risk sensitive assets and liabilities with contractual maturities, the table presents cash flows and related weighted-average interest rates attributable to contractual maturities as well as prepayments estimated at historical levels. For interest rate swap contracts, the table presents notional amounts and weighted-average interest rates by contractual maturity date.

Years Ending December 31,		2006			2007			2008			2009			2010			Thereafter			Fair Value
		(Dollars in thousands)
Assets:
Retained interests in securitizations available-for-sale
	Principal amounts	$	14,334		$	5,773		$	—		$	—		$	—		$	—		$	20,107
	Weighted-average yield		8.48	%		9.50	%		0.00	%		0.00	%		0.00	%		0.00	%
Auto installment contracts held-for-investment, net
	Principal amounts	$	197,251		$	175,203		$	155,624		$	105,543		$	—		$	—		$	635,131
	Weighted-average yield		7.43	%		7.44	%		7.48	%		7.48	%		0.00	%		0.00	%
Liabilities:
Warehouse credit facility
	Principal amounts	$	99,727		$	—		$	—		$	—		$	—		$	—		$	99,727
	Weighted-average interest rate		4.92	%		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Securitization notes payable
	Principal amounts	$	162,923		$	145,905		$	129,485		$	83,255		$	—		$	—		$	518,270
	Weighted-average interest rate		4.34	%		4.50	%		4.64	%		6.08	%		0.00	%		0.00	%
Interest Rate Derivatives:(1)
Interest rate swaps
	Notional amounts	$	50,000		$	15,000		$	—		$	—		$	—		$	—		$	997
	Average rate paid		3.64	%		3.79	%		0.00	%		0.00	%		0.00	%		0.00	%
	Average rate received		4.30	%		4.26	%		0.00	%		0.00	%		0.00	%		0.00	%

(1)  Excludes interest rate cap contracts acquired in connection with BVAC’s warehouse credit facility for the benefit of the Note Purchasers.

43

Item 8. Financial Statements and Supplementary Data

Bay View Capital Corporation and Subsidiaries

Consolidated Statements of Financial Condition

		December 31,			December 31,
		2005			2004
		(Dollars in thousands)
ASSETS
Cash and cash equivalents		$	8,898		$	4,447
Restricted cash			35,138			26,845
Retained interests in securitizations available-for-sale			20,107			22,636
Auto installment contracts and loans held-for-sale:
	Auto installment contracts		—			75,021
	Other loans		—			902
Auto installment contracts held-for-investment, net of allowance for credit losses of $0.7 million at December 31, 2005 and $1.5 million at December 31, 2004			106,822			252,863
Securitized auto installment contracts held-for-investment, net of allowance for credit losses of $5.6 million at December 31, 2005			526,799			—
Investment in operating lease assets, net			—			10,041
Real estate owned, net			552			3,379
Premises and equipment, net			536			733
Repossessed vehicles			542			439
Deferred income taxes, net			—			21,168
Goodwill			1,846			1,846
Other assets			13,521			7,199
Total assets		$	714,761		$	427,519
LIABILITIES AND STOCKHOLDERS’ EQUITY
Borrowings:
	Warehouse credit facility	$	99,727		$	298,755
	Securitization notes payable		521,568			—
	Other borrowings		—			1,895
Current income taxes, net			4,048			4,191
Other liabilities			11,133			9,629
Liquidation reserve			7,770			8,856
Total liabilities			644,246			323,326
Stockholders’ equity:
	Common stock ($.01 par value); authorized, 80,000,000 shares; issued, 2005 — 6,614,516 shares; 2004 — 6,597,303 shares; outstanding, 2005 — 6,613,099 shares; 2004 — 6,593,860 shares		66			66
	Additional paid-in capital		109,585			109,578
	Accumulated deficit		(39,035	)		(4,585	)
	Treasury stock, at cost; 2005 — 1,417 shares; 2004 — 3,443 shares		(252	)		(587	)
	Accumulated other comprehensive gain (loss)		151			(279	)
Total stockholders’ equity			70,515			104,193
Total liabilities and stockholders’ equity		$	714,761		$	427,519

See notes to consolidated financial statements.

44

Bay View Capital Corporation and Subsidiaries

Consolidated Statements of Operations and Comprehensive Loss

		For the Year			For the Year			For the Three
		Ended			Ended			Months Ended
		December 31, 2005			December 31, 2004			December 31, 2003
		(In thousands, except per share amounts)
Interest income:
	Interest on auto installment contracts and other loans	$	36,549		$	19,700		$	3,757
	Interest on retained interests in securitizations and other investments		3,704			2,878			1,013
	Interest on mortgage-backed securities		—			31			166
			40,253			22,609			4,936
Interest expense:
	Interest on warehouse credit facility and other short-term borrowings		10,167			7,488			742
	Interest on securitization notes payable		12,437			—			—
	Other interest expense		13			1,357			2,870
			22,617			8,845			3,612
Net interest income			17,636			13,764			1,324
Provision for credit losses			7,947			1,612			—
Net interest income after provision for credit losses			9,689			12,152			1,324
Noninterest income:
	Leasing income		4,800			12,941			6,907
	Loan servicing income		1,759			3,143			1,132
	Loan fees		907			1,117			213
	Gain (loss) on derivative instruments, net		1,219			1,432			(176	)
	Gain (loss) on auto installment contracts and other loans held-for-sale and retained interests in securitizations, net		(2,291	)		(2,844	)		919
	Other, net		608			1,250			1,340
			7,002			17,039			10,335
Noninterest expense:
	General and administrative:
	Compensation and employee benefits		10,323			12,063			2,286
	Occupancy and equipment		1,595			2,445			739
	Professional and legal services		11,538			5,666			1,200
	Data processing		1,082			1,170			291
	Postage, telephone and travel		1,547			1,840			502
	Other, net		1,310			2,027			729
			27,395			25,211			5,747
	Leasing expense		739			9,163			5,938
	Real estate owned, net		485			1,255			831
			28,619			35,629			12,516
Loss before income tax expense (benefit)			(11,928	)		(6,438	)		(857	)
Income tax expense (benefit)			22,522			(2,526	)		(184	)
Net loss		$	(34,450	)	$	(3,912	)	$	(673	)
Basic loss per share		$	(5.22	)	$	(0.59	)	$	(0.10	)
Diluted loss per share		$	(5.22	)	$	(0.59	)	$	(0.10	)
Weighted-average basic shares outstanding			6,596			6,585			6,419
Weighted-average diluted shares outstanding			6,596			6,585			6,419
Net loss		$	(34,450	)	$	(3,912	)	$	(673	)
Other comprehensive income (loss) net of tax:
	Change in unrealized gain (loss) on securities available-for-sale, net of tax expense (benefit) of $282, ($144) and ($35) for the years ended December 31, 2005 and 2004 and the three-month period ended December 31, 2003, respectively		430			(225	)		(54	)
Comprehensive loss		$	(34,020	)	$	(4,137	)	$	(727	)

See notes to consolidated financial statements.

45

Bay View Capital Corporation and Subsidiaries

Consolidated Statement of Changes in Net Assets in Liquidation

	For the Nine Months
	Ended September 30,
	2003
	(Dollars in thousands)
Net assets in liquidation at beginning of period	$	410,064
Pre-tax loss from operations		(4,595	)
Changes in estimated values of assets and liabilities		(5,995	)
Income tax benefit		6,252
Net loss from operations		(4,338	)
Other changes in net assets in liquidation		4,088
Net assets in liquidation at end of period	$	409,814

See notes to consolidated financial statements.

46

Bay View Capital Corporation and Subsidiaries

Consolidated Statements of Stockholders’ Equity

															Accumulated
						Additional									Other			Total
	Number of		Common			Paid-In			Accumulated			Treasury			Comprehensive			Stockholders’
	Shares Issued		Stock			Capital			Deficit			Stock			Gain (Loss)			Equity
	(Amounts in thousands)
Balance at October 1, 2003		6,377		638			146,727			—			(701	)		—			146,664
Adjustment related to re-adoption of going concern basis accounting		—		—			1,095			—			—			—			1,095
Exercise of stock options, including tax benefits		197		20			8,714			—			—			—			8,734
Exercise of stock warrants		4		—			166			—			—			—			166
Distribution of restricted shares		1		—			(114	)		—			114			—			—
Net loss		—		—			—			(673	)		—			—			(673	)
Unrealized loss on retained interests in securitizations and other securities available-for-sale, net of tax		—		—			—			—			—			(54	)		(54	)
Balance at December 31, 2003		6,579		658			156,588			(673	)		(587	)		(54	)		155,932
Exercise of stock warrants		10		—			26			—			—			—			26
Distribution of director’s stock-in-lieu of cash plan shares		8		1			181			—			—			—			182
Reclassification of common stock par value to additional paid-in-capital due to reverse stock split		—		(593	)		593			—			—			—			—
Redemption of fractional shares		—		—			(12	)		—			—			—			(12	)
Cash distributions		—		—			(47,798	)		—			—			—			(47,798	)
Net loss		—		—			—			(3,912	)		—			—			(3,912	)
Unrealized loss on retained interests in securitizations and other securities available-for-sale, net of tax		—		—			—			—			—			(225	)		(225	)
Balance at December 31, 2004		6,597		66			109,578			(4,585	)		(587	)		(279	)		104,193
Distribution of director’s retirement plan shares(1)		—		—			(335	)		—			335			—			—
Exercise of stock options		17		—			244			—			—			—			244
Exercise of stock warrants		1		—			(1	)		—			—			—			(1	)
Stock-based compensation expense — stock options		—		—			99			—			—			—			99
Net loss		—		—			—			(34,450	)		—			—			(34,450	)
Unrealized gain on retained interests in securitizations and other securities available-for-sale, net of tax		—		—			—			—			—			430			430
Balance at December 31, 2005		6,615	$	66		$	109,585		$	(39,035	)	$	(252	)	$	151		$	70,515

(1)  Reflects distribution of the Company’s common stock to retired participants in a retirement plan for non-employee members of its Board of Directors, which was frozen in 1996, eliminating future obligations for the Company. Such shares were repurchased in the market and held in treasury by the plan trustee.

See notes to consolidated financial statements.

47

Bay View Capital Corporation and Subsidiaries

Consolidated Statements of Cash Flows

		For the Year Ended December 31,
		2005			2004			2003
		(Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss and certain changes in net assets in liquidation		$	(34,450	)	$	(3,912	)	$	(5,011	)
Adjustments to reconcile net loss and certain changes in net assets in liquidation to net cash provided by (used in) operating activities:
	Net increase in auto installment contracts and other loans held-for-sale resulting from purchases, net of repayments		(276,513	)		(39,372	)		(204,478	)
	Proceeds from securitizations and/or sales of auto installment contracts and loans held-for-sale		6,493			33,823			340,808
	Provision for credit losses		7,947			1,612			—
	Depreciation and amortization of premises and equipment		354			294			539
	Depreciation and amortization of investment in operating lease assets		817			8,821			28,487
	Accretion of retained interests in securitizations		(1,959	)		(2,345	)		(2,822	)
	Amortization of premium and accretion of discount, net		4,929			582			(6,568	)
	Provision for deferred income taxes		20,886			(5,043	)		109
	(Gain) loss on auto installment contracts and other loans held-for-sale and retained interests in securitizations, net		2,291			2,844			(842	)
	Change in fair value of derivative instruments		(1,219	)		(1,432	)		1,624
	(Increase) decrease in restricted cash		(8,293	)		5,395			(16,699	)
	(Increase) decrease in other assets		(4,819	)		5,985			8,390
	Increase (decrease) in other liabilities		1,245			(5,731	)		(25,859	)
	Decrease in reserve for estimated costs during the period of liquidation		(1,086	)		(2,770	)		(28,485	)
	Adjustment for liquidation basis of accounting		—			—			5,995
	Adjustment to readopt going concern basis of accounting		—			—			1,095
	Other, net		(2,636	)		7,074			1,571
Net cash provided by (used in) operating activities			(286,013	)		5,825			97,854
CASH FLOWS FROM INVESTING ACTIVITIES
Net increase in auto installment contracts and other loans held-for-investment resulting from purchases, net of repayments			(47,535	)		(151,304	)		—
Decrease in investment in operating lease assets			9,303			47,453			85,475
Purchases of investment securities			—			—			(9,485	)
Proceeds from principal repayments on mortgage-backed securities			—			590			13,236
Proceeds from principal payments on retained interests in securitizations and other investment securities			4,963			7,876			14,314
Proceeds from sales of mortgage-backed securities available-for-sale			—			5,632			12,523
Proceeds from sales of investment securities available-for-sale			—			—			2,735
Proceeds from retained interests in securitizations			—			—			4,380
Proceeds from sales of real estate owned			2,375			690			2,702
Additions to premises and equipment, net			(157	)		(650	)		(152	)
Decrease in investment in stock of the Federal Home Loan Bank of San Francisco			—			—			16,075
Decrease in investment in stock of the Federal Reserve Bank			—			—			13,659
Net cash provided by (used in) investing activities			(31,051	)		(89,713	)		155,462

See notes to consolidated financial statements.

48

Bay View Capital Corporation and Subsidiaries

Consolidated Statements of Cash Flows — (continued)

		For the Year Ended December 31,
		2005			2004			2003
		(Dollars in thousands)
CASH FLOWS FROM FINANCING ACTIVITIES
Net decrease in deposits			—			—			(224,189	)
Proceeds from warehouse credit facility			756,764			275,484			160,054
Repayment of warehouse credit facility			(955,792	)		(114,950	)		(21,833	)
Proceeds from issuance of securitization notes payable			638,858			—			—
Repayment of securitization notes payable			(116,663	)		—			—
Net decrease in other borrowings			(1,895	)		(14,160	)		(44,614	)
Redemption of Junior Subordinated Deferrable Interest Debentures			—			(22,000	)		(68,000	)
Proceeds from issuance of common stock			243			196			12,225
Cash distributions paid to common stockholders			—			(47,798	)		(263,150	)
Net cash provided by (used in) financing activities			321,515			76,772			(449,507	)
Net increase (decrease) in cash and cash equivalents			4,451			(7,116	)		(196,191	)
Cash and cash equivalents at beginning of year			4,447			11,563			207,754
Cash and cash equivalents at end of year		$	8,898		$	4,447		$	11,563
Cash paid during the year for:
	Interest	$	22,951		$	8,552		$	13,013
	Income taxes	$	1,778		$	449		$	13,534
Supplemental non-cash investing and financing activities:
	Auto installment contracts transferred from held-for-sale to held-for-investment	$	344,312		$	103,067		$	—
	Auto installment contracts securitized and transferred to securities available-for-sale	$	—		$	—		$	9,485
	Loans transferred to real estate owned	$	—		$	—		$	6,970
	Non-cash stock-based compensation expense	$	99		$	—		$	—

See notes to the consolidated financial statements.

49

Bay View Capital Corporation and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2005

Note 1. Basis of Presentation

      Bay View Capital Corporation (the “Company,” “we,” “us” or “our”) is a financial services company headquartered in San Mateo, California.

      The accompanying consolidated financial statements include the accounts of the Company, a Delaware corporation, and our wholly owned subsidiaries: Bay View Acceptance Corporation (“BVAC”), a Nevada corporation, along with its subsidiaries, Bay View Receivables Corporation, a Delaware corporation, Bay View Transaction Corporation, a Delaware corporation, Bay View Deposit Corporation, a Delaware corporation and Bay View Warehouse Corporation, a Delaware corporation; and the Company’s subsidiaries, Bay View Securitization Corporation, a Delaware corporation; Bay View Capital I, a Delaware business trust; FMAC 2000-A Holding Company, a California corporation; FMAC Franchise Receivables Corporation, a California corporation; Bay View Commercial Finance Group, a California corporation; MoneyCare, Inc., a California corporation; Bay View Auxiliary Corporation, a California corporation and Bay View Bank, N.A. (“BVB”), a national bank that was dissolved effective September 30, 2003. All significant intercompany accounts and transactions have been eliminated.

      The consolidated financial statements as of December 31, 2005 and 2004, for the years ended December 31, 2005 and 2004 and for the three months ended December 31, 2003 have been prepared on a going concern basis in conformity with generally accepted accounting principles in the United States of America (“GAAP”). The consolidated financial statements for the nine months ended September 30, 2003 have been prepared under liquidation basis accounting in accordance with GAAP.

      On June 30, 2004, the Company effected a 1-for-10 reverse stock split of its issued and outstanding shares of its common stock and, as a result, the number of issued shares was reduced from 65,910,689 shares prior to the reverse stock split to 6,590,461 shares following the reverse stock split, including an adjustment for fractional shares. The Company’s issued common stock totaled 6,614,516 shares at December 31, 2005. The reverse stock split did not impact the par value of the common stock, which remains at $0.01 per share. Accordingly, the aggregate value of the issued common stock on the Company’s consolidated statements of financial condition was reduced by reclassifying the cumulative par value of the eliminated shares of common stock to additional paid-in capital. All shares outstanding and per share amounts are presented on a post-reverse stock split basis for all periods reported.

Plan of Dissolution and Stockholder Liquidity

      On October 3, 2002, the Company held a special meeting of its stockholders to vote on the Company’s proposed plan of dissolution and stockholder liquidity (“the Original Plan”) and the sale of BVB’s retail banking assets to U.S. Bank. Both of these proposals were approved by a majority of the common stockholders. As a result of these approvals and the close of the U.S. Bank transaction on November 1, 2002, the Company adopted liquidation basis accounting effective September 30, 2002 in accordance with GAAP. Accordingly, assets were valued at their estimated net realizable values and liabilities included accruals for estimated costs associated with carrying out the Original Plan. In accordance with liquidation basis accounting, our stockholders’ equity was transferred to net assets in liquidation.

      The Original Plan outlined the steps necessary to liquidate the Company, including the sale of BVB’s retail banking assets to U.S. Bank. Following the sale, the remaining assets of the Company were to be sold in an orderly manner and the liabilities and expenses were to be paid, including the outstanding debt of both the Company and BVB and the Capital Securities issued by Bay View Capital I. Once these transactions were completed, the Company would distribute the net proceeds of the asset sales to its stockholders.

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      On November 1, 2002, the Company completed the U.S. Bank transaction. After receiving the required regulatory approvals, the Company paid the accrued distributions and interest of $24.5 million on the Capital Securities on December 31, 2002.

      The Company recorded an additional $6.0 million and $2.8 million of net pre-tax adjustments related to mark-to-market valuation of its assets and liabilities for the first nine months of 2003 and the quarter ended December 31, 2002, respectively. The valuation adjustments were primarily due to decreases in the market value of the auto lease and the loan portfolios.

     Plan of Partial Liquidation

      Because of changing market conditions in the auto finance sector, we believed that the near-term sale or distribution of the stock of BVAC to stockholders was no longer the best method of achieving maximum stockholder value. Accordingly, during the fourth quarter of 2003, the Company’s board of directors amended the Original Plan and converted it to a plan of partial liquidation (the “Amended Plan”) under which the Company will complete the liquidation of the assets and satisfaction of the liabilities it assumed from BVB after BVB’s September 30, 2003 dissolution, distribute the proceeds to its stockholders through a series of cash distributions, and continue to operate BVAC on an ongoing basis.

      The decision to engage in a partial liquidation and continue to operate BVAC on an ongoing basis warranted the termination of our use of the liquidation basis of accounting. Effective October 1, 2003, the Company discontinued the use of the liquidation basis of accounting and re-adopted the going concern basis of accounting. Accordingly, the Company reestablished its stockholders’ equity effective October 1, 2003. For the period from September 30, 2002 through September 30, 2003, the Company used the liquidation basis of accounting.

      In connection with its re-adoption of the going concern basis of accounting, we recognized $0.7 million of pre-tax expense and $1.1 million of additions to stockholders’ equity, recording the following adjustments —

      • Goodwill: Reestablished the $1.8 million of goodwill that existed prior to our adoption of the liquidation basis of accounting; this goodwill related to our acquisition of BVAC’s predecessor entity, California Thrift & Loan;

      • Premium on investment in BVAC: Reversed $10.0 million of premium over the book value of BVAC, which was recorded as deferred gain under the liquidation basis of accounting, restoring the historical cost basis in our equity investment in BVAC;

      • Installment contracts: Reversed unrealized gains which were recorded under the liquidation basis of accounting and restored the lower of cost or market valuation;

      • Mortgage-backed securities: Restored available-for-sale accounting according to Statement of Financial Accounting Standards (“SFAS”) No. 115, “Accounting for Certain Investments in Debt and Equity Securities.”

      • Accrued liabilities: Reversed $1.7 million of accruals related to certain severance and occupancy costs which were recorded under the liquidation basis of accounting ; and

      • Stockholders’ equity: Restored stockholders’ equity as of October 1, 2003.

      In accordance with the Amended Plan, the Company made an initial cash distribution of $263.2 million, or $40.00 per share, to its stockholders on December 30, 2003. The Company also paid cash distributions of $2.50 per share on June 30, 2004, $2.50 per share on September 30, 2004 and $2.25 per share on December 31, 2004 for a total of $47.8 million.

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Note 2. Proposed Merger and Sale

Definitive Agreement to Merge with GLB

      On October 28, 2005, the Company reported the execution of a definitive agreement to merge with Great Lakes Bancorp, Inc. (“GLB”), with the Company as the surviving corporation. Great Lakes is the holding company for Greater Buffalo Savings Bank (“GBSB”) which was founded in November 1999 and, as of September 30, 2005, reported assets of $771 million. As of September 30, 2005, GBSB operated 9 full service branches and had 4 additional branches under construction in Western New York. Under the terms of the merger agreement, GLB stockholders will receive a fixed ratio of 1.0873 shares of the Company’s common stock for each share of GLB common stock. Based on the closing price of the Company’s common stock at the execution date, the transaction was valued at approximately $67.1 million.

      After completion of the merger, the Company’s stockholders will own approximately 60% of its then outstanding shares. The merger is expected to close in the second quarter of 2006, subject to receipt of government regulatory approvals and stockholder approvals. The merged businesses will operate under the name of Great Lakes Bancorp, Inc., but will maintain the Company’s listing on the New York Stock Exchange. Three members of the Company’s senior executive team will be joining the board of directors of GLB, which will have 15 members upon the merger. The Company does not expect the merger to adversely impact its net operating loss carryforwards for tax purposes. During the year ended December 31, 2005, the Company incurred $1.1 million of legal and investment banking fees and other direct costs relating to the proposed merger with GLB.

Definitive Agreement to Sell BVAC to AFS

      On November 7, 2005, the Company reported the execution of a definitive agreement to sell BVAC to AmeriCredit Financial Services, Inc. (“AFS”), a subsidiary of AmeriCredit Corp., in an all-cash transaction for a price approximating the book value of BVAC at the time of closing. The sale of BVAC is expected to close in the second quarter of 2006, subject to the receipt of government regulatory approvals and approval by the stockholders of the Company. During the year ended December 31, 2005, the Company incurred $1.2 million of legal and investment banking fees and other direct costs relating to the proposed sale of BVAC.

Note 3. Summary of Significant Accounting Policies

Going Concern Basis

      The Company’s reported financial position as of December 31, 2005 and 2004 and its results of operations for the years ended December 31, 2005 and 2004 and the three-month period ended December 31, 2003 have been prepared on a going concern basis. The following is a description of the significant accounting policies applicable to these financial statements.

Nature of Operations

      The Company is a financial services provider whose primary subsidiary, BVAC, specializes in the purchase, securitization and servicing of fixed-rate consumer automobile contracts. The Company has only one reportable segment.

Use of Estimates

      The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues

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and expenses during the reporting period. Actual results could differ from those estimates. Material estimates particularly susceptible to possible changes in the near term relate to the determination of the allowance for credit losses, retained interests in securitizations and deferred tax assets.

Cash and Cash Equivalents

      Cash and cash equivalents consist of cash and highly liquid financial instruments with maturities of 90 days or less at the time of purchase. These financial instruments are readily convertible into cash and are so near their maturity that they present insignificant risk of changes in value.

      Generally, the Company’s banking depositories either pay interest on deposits or apply an imputed interest credit to deposit balances which is used as an offset to charges for banking services rendered. The Company has no compensating balance arrangements with banks.

Restricted Cash

      Restricted cash attributable to BVAC’s auto finance business includes cash collateral provided to counterparties to BVAC’s hedging contracts to meet margin requirements, cash collateral provided to cure potential borrowing base deficiencies on BVAC’s warehouse credit facility, cash collateral provided in connection with credit enhancement of securitization notes payable and cash payments received from our customers that are in-transit to trust accounts for BVAC’s auto securitization trusts. The remaining assets from BVB’s liquidation also include restricted cash that has been pledged to secure a letter of credit, cash collateral pledged in connection with financing secured by the Company’s auto lease portfolio contractual cash flow and cash collateral pledged in connection with the Company’s servicing of a multi-family loan pool and other contractual obligations.

Securities

      Securities are identified as either available-for-sale or held-to-maturity at purchase and accounted for accordingly. Net unrealized gains and losses on securities available-for-sale are excluded from earnings and reported, net of applicable income taxes, as a separate component of stockholders’ equity. Unrealized losses on securities are recognized and charged against earnings when it is determined that an other-than-temporary decline in value has occurred.

Loans Receivable

      The Company continues to purchase auto contracts through BVAC but ceased all other loan production activities during the fourth quarter of 2002.

      Auto Contracts Receivable

      Auto contracts purchased by the Company are designated as either held-for-sale or held-for-investment.

      Auto contracts held-for-sale are classified as such because the Company does not intend to hold these contracts to maturity. Auto contracts designated as held-for-sale are recorded at cost, including premiums paid to dealers and deferred fees and costs, and are subsequently carried at the lower of cost or estimated fair value. Estimated fair value for these contracts is determined on an aggregate basis using prices for similar contracts in the secondary whole loan or securitization markets. Net unrealized losses, if any, are recognized through a valuation allowance and charged against earnings. When a contract held-for-sale is either charged off or paid off, related dealer premiums and deferred fees and costs are written off against noninterest income.

      All other auto contracts receivable, including the underlying collateral for securitizations accounted for as financings, are designated as held-for-investment and are recorded at cost, including premiums paid to dealers

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and deferred fees and costs. Dealer premiums and deferred fees and costs are capitalized at the time a loan is granted. The Company recognizes these dealer premiums and deferred fees and costs as yield adjustments over the life of the related contracts using the effective interest method. When a contract is charged off, sold or paid off, unamortized dealer premiums and deferred fees and costs are charged against earnings.

      Auto contracts transferred from the held-for-sale portfolio to the held-for-investment portfolio are recorded at the lower of cost or estimated fair value upon transfer.

      Nonperforming auto contracts are defined as contracts which are 90 days or more delinquent as to principal and interest payments unless the principal and interest are well-secured and in the process of collection. The Company charges off auto contracts receivable and reverses related accrued interest receivable when the contracts become 120 days delinquent. The Company may also designate contracts which are less than 90 days delinquent as nonperforming when the full collection of principal and/or interest is doubtful. The Company generally recognizes interest income on impaired contracts on a cash basis when received.

      Other Loans Receivable

      Prior to September 30, 2002, the Company originated or purchased various types of residential and commercial loans. Pursuant to adoption of the Amended Plan, these loans were considered part of our liquidating asset portfolio and were classified as held-for-sale and were carried at the lower of cost or market on an aggregate basis for each loan type. Market value for these loans was based on prices for similar loans in the secondary whole loan or securitization markets or estimates of proceeds to be obtained through a workout and payoff. Generally, interest accruals on loans 90 days or more past due were discontinued. Interest income on nonaccrual loans was generally recognized on a cash basis when received.

      A loan was considered impaired when, based on current information and events, it was probable that the Company would not collect all amounts due according to the contractual terms of the loan agreement. The Company considered nonperforming loans to be impaired loans. Nonperforming loans were defined as loans 90 days or more delinquent as to principal and interest payments unless the principal and interest were well-secured and in the process of collection. The Company also designated loans less than 90 days delinquent as nonperforming when the full collection of principal and/or interest was doubtful. Impaired loans were measured based upon the present value of expected future cash flows discounted at the loan’s effective interest rate or, as a practical equivalent, at the loan’s observable market price or the fair value of the collateral if the loan was collateral dependent. Impaired real estate-based loans were generally measured based on the fair value of the collateral because they were collateral dependent. The Company generally recognized interest income on impaired loans on a cash basis when received.

Securitization Transactions and Retained Interests in Securitizations

      BVAC purchases auto contracts with the intention of repackaging them as securitizations. All such securitizations have involved the identification of specific auto contracts, the sale of those contracts (and the associated rights) to a special purpose subsidiary of BVAC, and issuance of asset-backed securities to fund the transactions. Depending upon the structure of the securitization, the transaction may be properly accounted for as a sale or as a secured financing.

      Prior to 2005, the Company structured these transactions as sales in accordance with SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.” For transactions structured as sales, the sold auto contracts were removed from the Company’s consolidated statements of financial condition, the asset-backed securities did not appear as debt of the Company and the Company recognized a gain on the sale of the auto contracts to the trusts. Gains or losses on the securitizations and/or sales of loans are recorded in earnings at the time of the transaction when control over the loans is surrendered and consideration other than beneficial interests in the loans is received. The gain or loss represents the difference between the sum of sale proceeds, net of transaction costs and cash deposited

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into a securitization trust account in order to enhance the credit rating of the asset-backed securities, and the sum of the Company’s net carrying value of the auto contracts and the present value of future excess cash flow anticipated to be distributed to the Company by the trust over the life of the asset-backed securities. The present value of the anticipated future excess cash flow is an asset which is referred to as a “retained interest” in the securitization.

      These estimated future cash flows, which are comprised of interest income received on the auto contracts less interest paid to investors in the asset-backed securities, credit losses, servicing fees and trust expenses, are initially retained by the trust to build the trust cash account to pre-designated levels and provide further credit enhancement. Once the pre-designated levels of cash are attained, the trust distributes the excess cash flow to BVAC. In recording the gain on sale and the retained interest, the Company has made assumptions in calculating the present value of the future excess cash flow anticipated to be distributed to the Company by the trust over the life of the asset-backed securities.

      The Company designates retained interests as available-for-sale and carries them at fair value. Retained interests are subordinate to investor interests in the related asset-backed securities and their value is subject to credit and prepayment risks in the pool of underlying auto contracts. The Company is not aware of an active secondary market for its retained interests and, accordingly, estimates the fair value of the retained interests by calculating the present value of the future excess cash flow anticipated to be received, using management’s best estimates of key valuation assumptions including credit losses, prepayment speeds and discount rates commensurate with the underlying risks in the anticipated future cash flow. Changes in these assumptions due to differing actual experience or market conditions could affect the value of the Company’s retained interests.

      Unrealized gains and losses on retained interests that are deemed to be temporary are reported in other comprehensive income or loss, net of tax. For retained interests that have experienced a decline in fair value below their amortized cost basis and for which the decline in fair value has been determined to be other-than-temporary, the cost basis of the retained interest is written down to fair value as the new cost basis and the write-down is charged to earnings. The Company recorded other-than-temporary impairment charges related to retained interests of $222 thousand in 2005. There were no impairment charges related to retained interests during 2004 and 2003.

      The following table sets forth the significant assumptions used in the valuation of the Company’s retained interests as of December 31, 2005:

Weighted-average discount rate	10.0%
Range of projected annual credit losses, net	1.45% - 1.65%
Range of projected cumulative credit losses	2.31% - 2.44%
Prepayment speed	1.35 - 1.50 ABS

      Changes in the above assumptions due to differing actual experience or market conditions could affect the value of the Company’s retained interests.

      During 2005, BVAC completed three auto contract securitizations. Under the terms of these transactions, BVAC retained certain rights that resulted in its maintaining control over the transferred receivables and, in accordance with provisions of SFAS No. 140, the Company has accounted for these transactions as secured financings. For securitizations treated as secured financings, the auto contracts are retained on the consolidated statement of financial condition and the securities issued to finance the contracts are recorded as securitization notes payable. The Company records interest income on the securitized contracts and interest expense on the notes issued through the securitized transactions, and records as expense a provision for credit losses on the auto contracts receivable. See Note 10. “Securitization Notes Payable” for additional information on the related auto receivable-backed notes.

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Allowance for Credit Losses

      The allowance for credit losses on auto contracts held-for-investment is established through a provision charged to expense and maintained at a level that the Company believes is sufficient to cover estimated probable losses in this loan portfolio. The Company considers BVAC’s portfolio of auto contracts receivable to be comprised of relatively small balance, homogeneous receivables and, accordingly, determines its allowance for credit losses in accordance with SFAS No. 5, “Accounting for Contingencies.” The allowance for credit losses is evaluated and adjusted on a quarterly basis.

      In determining the level of the allowance for credit losses, the Company evaluates BVAC’s auto contracts held-for-investment using two methodologies. The first methodology is based upon an analysis of BVAC’s historical loss experience using a “vintage” analysis of its past purchases of auto contracts from which BVAC predicts probable losses that are inherent in its portfolio of auto contracts held-for-investment. Under this method, BVAC’s historical credit loss experience is stratified by quarter and correlated with the related auto contracts that have been similarly stratified by the number of quarters that have elapsed since date of purchase. This credit loss data is derived from “static pool” information that has been internally collected on the historical loss experience of BVAC’s portfolio of managed auto contracts. BVAC defines managed auto contracts as the sum of its warehouse inventory of auto contracts receivable plus auto contracts that have been securitized and/or sold with servicing retained by BVAC. The Company also uses a second method for evaluating the sufficiency of the allowance for credit losses. This second method, a “roll rate” analysis, projects the migration of quarter-end auto contracts held-for-investment from current payment status through 30-, 60- and 90-day delinquent status to charge-off and correlates this projection with loss reserve factors.

      These methodologies incorporate quantitative as well as qualitative factors, including historical loss experience, changes in underwriting practices, changes in the credit quality of contracts and an assessment of economic conditions.

Investment in Operating Lease Assets

      The Company purchased and/or originated auto leases characterized as operating leases from March 1998 through June 2000. The asset was recorded as a fixed asset and depreciated on a straight-line basis over the lease term to its estimated residual value. This depreciation and other related expenses, including the amortization of initial direct costs that were deferred and amortized over the lease term, were classified as noninterest expense. Lease payments received were recorded as noninterest income. The Company’s auto lease portfolio was completely liquidated at December 31, 2005. Lease asset balances were $37.3 million at December 31, 2004. Accumulated depreciation and amortization related to the lease assets totaled $27.3 million at December 31, 2004.

      The Company performed a quarterly impairment analysis of its auto lease portfolio in accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” which the Company adopted effective January 1, 2002. There was no financial statement impact upon adoption of SFAS No. 144. A lease was considered impaired if its gross future undiscounted cash flows were less than the net book value of the lease. The net book value of the lease was defined as the original capitalized cost of the automobile, including initial direct capitalized costs, less the cumulative amount of depreciation recorded against the automobile and the cumulative amount of amortization of the initial direct capitalized costs recorded since the inception of the lease less any impairment charges recorded-to-date on that lease.

      In determining gross future undiscounted cash flows, the Company contracted with Automotive Lease Guide, commonly referred to as ALG, to provide estimates of the residual value of the underlying vehicles at the end of their lease terms assuming that the vehicles were in average condition. The Company then estimated the probability that (i.) the automobiles would be purchased by the lessee prior to the end of the lease term, (ii.) the automobile would be purchased by the lessee at the end of the lease term, either at a

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discount or at the full contractual residual amount or (iii.) the automobile would be returned at the end of the lease term. These probabilities were estimated using a number of factors, including the Company’s experience-to-date and industry experience.

      Using the projected ALG residual values, the Company’s experience-to-date relative to the projected ALG residual values (for example, for vehicle classes where actual amounts realized were less than what ALG had projected, the Company reduced the projected ALG residual values to equal the Company’s experience-to-date), and the probabilities that each of the three disposition scenarios discussed above would occur, the Company determined a probability-weighted gross future undiscounted cash flow for each auto lease. For those leases where the gross future undiscounted cash flows were less than net book value, the lease was considered impaired.

      For those leases considered impaired, the Company then estimated the fair value of the lease. The fair value was determined by calculating the present value of the future estimated cash flows again assuming the probabilities of each of the three disposition scenarios. The present value was calculated using current market rates, which the Company estimated as the original contract lease rate. An impairment charge was then recorded for the difference between the carrying value and the estimated fair value. The Company’s auto lease portfolio was completely liquidated at December 31, 2005. There were no impairment charges recorded for the years ended December 31, 2005 and 2004. The Company recorded impairment charges of $8.5 million for the year ended December 31, 2003. At December 31, 2004, no vehicles in the Company’s auto lease portfolio were considered impaired under SFAS No. 144. At December 31, 2004, the Company had an allowance of $6.1 million for impairment and additional monthly depreciation charges, net of losses, against its auto lease portfolio.

Real Estate Owned

      Real estate owned is comprised of property acquired through foreclosure and is recorded at the lower of cost (i.e., net loan value) or fair value less estimated costs to sell as of the date of foreclosure. The difference upon foreclosure, if any, is charged to earnings for adverse changes in the fair value of the property. Revenues and other expenses associated with real estate owned are realized and reported as a component of noninterest expense when incurred.

Premises and Equipment

      Premises and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are computed on a straight-line basis over the estimated useful lives for each of the various asset categories. These useful lives range from two to ten years.

Intangible Assets

      Goodwill and other intangible assets were written off as of September 30, 2002 with the adoption of liquidation basis accounting. As a result of the Company’s re-adoption of going concern basis accounting as of October 1, 2003, goodwill of $1.8 million was reestablished in BVAC related to the acquisition of California Thrift & Loan in 1996. As required by the provisions of SFAS No. 142, “Goodwill and Other Intangible Assets,” which the Company adopted as of January 1, 2002, this goodwill is tested for impairment annually.

Income Taxes

      The Company files consolidated federal income tax returns in which its taxable income or loss is combined with that of its subsidiaries. Consolidated, combined and separate company state tax returns are filed in certain states, as applicable, including California. Each subsidiary’s share of income tax expense (benefit) is based on the amount that would be payable (receivable) if separate returns were filed.

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      The Company’s income tax provisions are based upon income taxes payable for the current period as well as current period changes in deferred income taxes. Deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory income tax rates applicable to future years to differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities. The effect on deferred income taxes for a change in tax rates is recognized through the provision for income taxes during the period of enactment. The Company measures deferred tax assets using the enacted tax rate expected to apply to carryforwards and temporary differences in the periods they are expected to reverse. Under SFAS No. 109, a valuation allowance must be recognized on deferred tax assets if, based upon the weight of available evidence, it is more likely than not that some or all of the assets may not be realized.

Derivative Instruments

      The Company uses derivative instruments to reduce its exposure to interest rate risk embedded in its fixed-rate auto contracts which are funded by floating-rate financing. Rising interest rates reduce the net interest spread produced by auto contracts, a primary component of the Company’s profitability, as well as the economic value of its inventory of auto contracts. Additionally, under the terms of the warehouse credit facility, the indenture trustee maintains derivative instruments to provide interest rate risk protection to BVAC’s lenders. The Company accounts for these derivative instruments in accordance with SFAS No. 133, “Accounting for Derivatives and Hedging Activities.”

      SFAS No. 133 establishes accounting and reporting standards for derivative instruments and requires that derivative instruments (including certain derivative instruments embedded in other contracts) be recorded in the statement of financial condition as either an asset or liability measured at its fair value. SFAS No. 133 further dictates that the accounting treatment for gains or losses from changes in the derivative instrument’s fair value is contingent on whether the derivative instrument qualifies as a hedge under the standard. Derivative instruments must qualify and be designated as hedges upon their inception and must be effective in substantially reducing the risk arising from the asset or liability identified as exposing the Company to risk throughout the hedge period in order to receive hedge accounting treatment. To qualify as hedges, among other things, derivative instruments must be linked to specific assets or liabilities or pools of similar assets or liabilities. If the derivative instrument does not qualify as a hedge, the gains or losses are reported in the consolidated statement of operations when they occur. If the derivative instrument qualifies and is designated as a hedge under the standard, depending on the type of risk being hedged, the gains and losses are either reported in the consolidated statement of operations, offsetting the fair value change in the hedged item, or reported as accumulated other comprehensive income or loss in the equity section of the consolidated statement of financial condition. If a hedged asset or liability is sold or paid off before maturity of the hedging derivative, the derivative is closed out or settled, and any net settlement amount upon the close-out or termination of the derivative is recognized in earnings. The standard requires that an entity formally document, designate and assess the effectiveness of transactions that receive hedge accounting.

      The Company’s derivative instruments outstanding at December 31, 2005 were comprised of interest rate swap contracts and interest rate caps. The interest rate swap contracts are used to reduce the Company’s exposure to interest rate risk. The interest rate caps are required under the terms of BVAC’s warehouse credit facility and maintained by the indenture trustee, as discussed above. In accordance with SFAS No. 133, these derivative instruments are accounted for as assets or liabilities and recorded at fair value. Because these derivatives were not formally designated as hedges, a requirement for using hedge accounting, changes in fair values are charged or credited to earnings.

      In using derivative instruments, the Company is exposed to potential losses (credit risk) in the event of nonperformance by the counterparties to the agreements. The Company manages the credit risk associated with derivative instruments by adhering to a strict counterparty selection process and by establishing maximum exposure limits with individual counterparties.

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Stock-Based Compensation

      SFAS No. 123, “Accounting for Stock-Based Compensation,” established financial accounting and reporting standards for stock-based compensation plans, including employee stock purchase plans, stock options and restricted stock. SFAS No. 123 encouraged all entities to adopt a fair value method of accounting for stock-based compensation plans, whereby compensation cost is measured at the grant date based upon the fair value of the award and is realized as an expense over the service or vesting period. However, SFAS No. 123 also allowed an entity to continue to measure compensation cost for these plans using the intrinsic value method of accounting prescribed by Accounting Principles Board Opinion (“APB”) No. 25, “Accounting for Stock Issued to Employees.”

      SFAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure,” amended SFAS No. 123 and provided alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. It also amended required disclosures about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The Company adopted the disclosure requirements of SFAS No. 148 as of December 31, 2002.

      The Company accounts for its stock-based awards to employees and directors using the intrinsic value method of accounting in accordance with APB No. 25. Under the intrinsic value method, compensation cost is generally the excess, if any, of the quoted market price of the stock at the grant or other measurement date over the exercise price. The exercise price of certain stock-based awards was modified during 2004 and 2005 as a direct result of cash distributions to stockholders. Under Financial Accounting Standards Board (“FASB”) Interpretation (“FIN”) No. 44, “Accounting for Certain Transactions Involving Stock Compensation,” the modified awards are accounted for as variable. Under variable accounting, total compensation cost is the sum of the intrinsic value to the award (if any) at the original measurement date and the intrinsic value of the modified award that exceeds the lesser of the intrinsic value of the original award at the original measurement date or immediately prior to the modification. Compensation cost is recognized over the vesting period and is adjusted for increases or decreases in the intrinsic value of the modified option.

      Compensation expense recorded under APB No. 25 and FIN No. 44 was $99 thousand for the year ended December 31, 2005. There was no compensation expense recorded under APB No. 25 or FIN No. 44 for the year ended December 31, 2004 and the three-month period ended December 31, 2003. The weighted-average fair value of options granted to employees and directors was $11.99 in 2004. These options were granted at 100% of the market price of the Company’s common stock on the grant date. Modifications to the exercise price of these awards subsequent to the grant date resulted in an adjusted fair value of $12.63 per share. The increase in fair value per share is based upon measurement of the fair value of the stock options immediately before and after the option repricing. There were no options granted during 2005 or 2003. Had compensation expense related to the Company’s stock option awards to employees and directors been determined under the

59

Bay View Capital Corporation and Subsidiaries

Notes to Consolidated Financial Statements — (Continued)

fair value method prescribed under SFAS No. 123, the Company’s net loss and loss per share would have been the pro forma amounts set forth in the table below for the periods indicated:

								For the Three
								Months Ended
		For the Year Ended			For the Year Ended			December 31,
		December 31, 2005			December 31, 2004			2003
		(Dollars in thousands, except per share amounts)
Net loss as reported in Consolidated Statements of Operations and Comprehensive Loss		$	(34,450	)	$	(3,912	)	$	(673	)
Stock-based employee compensation included in net loss as reported			99			—			—
Stock-based employee compensation expense determined under fair value method, net of tax			(189	)		(37	)		—
Pro forma net loss, after stock-based employee compensation expense		$	(34,540	)	$	(3,949	)	$	(673	)
Net loss per share — basic:
	As reported	$	(5.22	)	$	(0.59	)	$	(0.10	)
	Pro forma	$	(5.24	)	$	(0.60	)	$	(0.10	)
Net loss per share — diluted:
	As reported	$	(5.22	)	$	(0.59	)	$	(0.10	)
	Pro forma	$	(5.24	)	$	(0.60	)	$	(0.10	)

      The fair value of options granted was estimated as of the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:

	For the Year
	Ended
	December 31,
	2004
Dividend yield		—	%
Expected volatility of our common stock		85	%
Expected risk-free interest rate(1)		3.25	%
Expected life of options in years		3.59

(1)  The expected risk-free interest rate was calculated using a term commensurate with the expected life of the options.

Accounting Changes and Recent Accounting Pronouncements

      In December 2004, the FASB issued SFAS No. 123R “Share-Based Payment,” which revised SFAS No. 123 and superseded APB No. 25. SFAS No. 123R requires that the cost of employee services received in exchange for an award of equity instruments, such as stock options or restricted stock, be measured based on the fair value of the award on the grant date and recognized in the statement of income over the vesting period of the award. Securities and Exchange Commission (“SEC”) registrants were originally required to adopt SFAS No. 123R’s provisions at the beginning of their first interim period after June 15, 2005. In March 2005, the SEC issued Staff Accounting Bulletin (“SAB”) No. 107 to provide its view on the valuation of share-based payment arrangement for public companies. In April 2005, the SEC announced that registrants could delay adoption of SFAS No. 123R until the first fiscal year beginning after September 2005.

60

Bay View Capital Corporation and Subsidiaries

Notes to Consolidated Financial Statements — (Continued)

During 2005, the FASB issued FASB Staff Position (“FSP”) FAS 123R-1, FSP FAS 123R-2 and FSP FAS 123-3 which amended the guidance in SFAS No. 123R for freestanding financial instruments issued in exchange for employee services, practical accommodation to the application of grant date and transition election related to the tax effects of share-based payment awards, respectively. The Company will adopt the standard as required beginning January 1, 2006 using the modified prospective method of adoption. Under the modified prospective method, the requirements of SFAS No. 123R are applied to all new share-based awards granted after December 31, 2005, and compensation cost for unvested awards outstanding at December 31, 2005 is recognized over the remaining vesting period based upon the grant-date fair value of the award. The Company estimates that the adoption of SFAS 123R will result in approximately $200 thousand of additional expense for the year ending December 31, 2006, assuming no new option grants. The estimated additional expense is based on unamortized expense relating to current outstanding options granted prior to the Company’s implementation of SFAS No. 123R that are expected to vest subsequent to December 31, 2005.

      In May 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections,” a replacement of APB No. 20, “Accounting Changes” and SFAS No. 3, “Reporting Accounting Changes in Interim Financial Statements.” APB No. 20 previously required that most voluntary changes in accounting principle be recognized by including in net income of the period of the change the cumulative effect of changing to the new accounting principle. SFAS No. 154 requires retrospective application to prior period’s financial statements of changes in accounting principle. Retrospective application is defined as the application of a different accounting principle to prior accounting periods as if that principle had always been used, or as the adjustment of previously issued financial statements to reflect a change in reporting entity. SFAS No. 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The Company does not expect the adoption of SFAS No. 154 to have a material impact on its financial condition, results of operations or cash flows.

      In November 2005, the FASB issued FSP FAS 115-1 and FAS 124-1, “The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments.” This staff position reflects the latest changes to the FASB Emerging Issues Task Force (“EITF”) 03-01, which the Company adopted in December 2003. EITF 03-01 included certain disclosures regarding quantitative and qualitative disclosures for investment securities accounted for under SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities,” that are impaired at the balance sheet date, but an other-than-temporary impairment has not been recognized. FSP FAS 115-1 and FAS 124-1 codifies the guidance set forth in EITF Topic D-44 and clarifies that an investor should recognize an impairment no later than when the impairment is considered other than temporary, even if a decision to sell has not been made. The guidance in this FSP should be applied to reporting periods beginning after December 15, 2005. The Company has determined that FSP FAS 115-1 and FAS 124-1 will not have a material impact on its financial condition, results of operations or cash flows.

      In December 2005, the FASB issued FSP SOP 94-6-1, “Terms of Loan Products That May Give Rise to a Concentration of Credit Risk.” This staff position focuses on disclosures for loan products whose terms may give rise to a concentration of credit risk. The guidance relative to concentration of credit risk is effective for interim and annual periods ending after December 19, 2005. An entity should provide the disclosures required by SFAS No. 107, “Disclosures about Fair Value of Financial Statements,” for loan products that are determined to represent a concentration of credit risk in accordance with FSP SOP 94-6-1. The Company has determined that FSP SOP 94-6-1 will not have a material impact on its financial condition, results of operations or cash flows.

Reclassifications

      Certain reclassifications have been made to prior year balances in order to conform to the current year presentation.

61

Bay View Capital Corporation and Subsidiaries

Notes to Consolidated Financial Statements — (Continued)

Liquidation Basis

      The following is a description of the significant accounting policies applicable to the Company’s valuation of assets and liabilities under liquidation basis accounting for the nine-month period ended September 30, 2003. Only those policies that are different from the going concern basis of accounting are included.

Use of Estimates

      The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities as reported in the consolidated statement of net assets (liquidation basis) and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates particularly susceptible to possible changes in the near term relate to the determination of the mark-to-market adjustments on loans and leases, investment in operating lease assets and deferred tax assets.

Securities

      All securities were classified as available-for-sale and reported at net realizable value. Valuations were determined from published information or quotes by registered securities brokers. Securities for which quotes were not readily available were valued based on the present value of estimated future cash flows. Adjustments to net realizable value, if any, were recorded on a quarterly basis in earnings through the adjustment for liquidation basis. Interest on securities continued to be accrued as income to the extent considered collectible.

Loans and Leases

      All loans and leases were classified as held-for-sale and reported at net realizable value. Net realizable value for these loans and leases was based on existing external bids from sales contracts or letters of intent or prices for similar loans and leases in the secondary whole loan or securitization markets or estimates of proceeds to be obtained through a workout and payoff. Declines in net realizable value, if any, were recorded on a quarterly basis as a charge through the adjustment for liquidation basis. Accounting policies for interest income and loan fee recognition, classification and accounting treatment of impaired loans were unchanged from going concern basis accounting.

Allowance for Loan and Lease Losses

      Under liquidation basis accounting, loans were designated as held-for-sale and carried at the lower of cost or net realizable value. Upon adoption of liquidation basis accounting effective September 30, 2002, the balance of the existing allowance for loan and lease losses was reallocated to individual loans and leases and groups of homogeneous loans as a mark-to-market allowance on such loans; a separate allowance for credit losses was not maintained.

Real Estate Owned

      Real estate owned was recorded at net realizable value as of the date of foreclosure. The difference upon foreclosure between book value and net realizable value, if any, was expensed to adjustment for liquidation basis accounting. Adjustments to net realizable value, if any, were recorded on a quarterly basis as a charge through the adjustment for liquidation basis accounting. Revenues and other expenses associated with real estate owned were recognized and reported as a component of noninterest expense when incurred.

62

Bay View Capital Corporation and Subsidiaries

Notes to Consolidated Financial Statements — (Continued)

Premises and Equipment

      Premises and equipment were stated at cost less accumulated depreciation and amortization. This was considered to approximate net realizable value in accordance with liquidation basis accounting. Depreciation and amortization were computed on a straight-line basis over the estimated useful lives for each of the various asset categories. These useful lives ranged from two to ten years.

Intangible Assets

      Goodwill and other intangible assets were written off as of September 30, 2002 with the adoption of liquidation basis accounting. The goodwill and core deposit intangibles associated with the deposits sold to U.S. Bank were realized in anticipation of the close of that transaction. The goodwill related to the Company’s commercial business units, including asset-based lending, factored receivables and commercial leasing, was written off as current estimated fair values of those businesses were below book value based on bids from interested buyers of the businesses.

Reserve for Estimated Costs during the Period of Liquidation

      The reserve for estimated costs during the period of liquidation includes severance payments and costs related to facility closures, investment banking and other professional fees and estimated litigation expense and settlements. These expense accruals were reviewed for adequacy on a quarterly basis. Changes to the accruals, if necessary, were charged to earnings as changes in estimated values of assets and liabilities.

Note 4. Loss Per Share

      For the nine months ended September 30, 2003, the Company reported its results using liquidation basis accounting, under which earnings (loss) per share information is not presented. Accordingly, the loss per share information set forth below is for reporting periods where the Company used going concern basis accounting to report its results of operations.

      Basic earnings (loss) per share is calculated by dividing net earnings or loss for the period by the weighted-average common shares outstanding for that period; there is no adjustment to the number of outstanding shares for potential dilutive instruments, such as stock options and warrants. Diluted earnings (loss) per share takes into account the potential dilutive impact of such instruments and uses the average share price for the period in determining the number of incremental shares to add to the weighted-average number of shares outstanding. For the years ended December 31, 2005 and 2004 and the three months ended December 31, 2003, there were potential average common shares of 71,872, 88,797 and 248,120, respectively, related to shares issuable upon the exercise of options and warrants that could potentially dilute basic earnings per share in the future that were not included in the computation of diluted loss per share because to do so would have been anti-dilutive for the respective periods.

63

Bay View Capital Corporation and Subsidiaries

Notes to Consolidated Financial Statements — (Continued)

      The following table illustrates the calculation of basic and diluted loss per share for the periods indicated:

							For the Three
	For the Year Ended						Months Ended
							December 31,
	December 31, 2005			December 31, 2004			2003
	(In thousands, except per share amounts)
Net loss	$	(34,450	)	$	(3,912	)	$	(673	)
Weighted-average basic shares outstanding		6,596			6,585			6,419
Add: Dilutive potential common shares		—			—			—
Weighted-average diluted shares outstanding		6,596			6,585			6,419
Basic loss per share	$	(5.22	)	$	(0.59	)	$	(0.10	)
Diluted loss per share	$	(5.22	)	$	(0.59	)	$	(0.10	)

Note 5. Retained Interests in Securitizations

      Retained interests in securitizations were classified as available-for-sale at December 31, 2005 and 2004. The Company did not maintain a trading portfolio during 2005 and 2004.

      The Company securitized and sold $193.3 million and $453.2 million of auto installment contracts during 2003 and 2002, respectively; these transactions were structured as sales in accordance with SFAS No. 140. The Company retained interests in these securitizations with initial balances of $9.5 million and $23.2 million for 2003 and 2002, respectively. The following tables set forth the activity in the Company’s retained interests in securitizations for the periods indicated:

	For the Year Ended December 31, 2005
	Beginning		Cash					Realized			Change in		Ending
	Balance		Received			Accretion		Gain (Loss)			Unrealized Gain		Balance
	(Dollars in thousands)
2002-LJ-1	$	15,622	$	(3,543	)	$	1,417	$	—		$	532	$	14,028
2003-LJ-1		7,014		(1,421	)		528		(222	)		180		6,079
Totals	$	22,636	$	(4,964	)	$	1,945	$	(222	)	$	712	$	20,107

	For the Year Ended December 31, 2004
	Beginning		Cash					Realized		Change in			Ending
	Balance		Received			Accretion		Gain (Loss)		Unrealized Loss			Balance
	(Dollars in thousands)
2002-LJ-1	$	18,744	$	(4,536	)	$	1,563	$	—	$	(149	)	$	15,622
2003-LJ-1		9,846		(3,340	)		782		—		(274	)		7,014
Totals	$	28,590	$	(7,876	)	$	2,345	$	—	$	(423	)	$	22,636

64

Bay View Capital Corporation and Subsidiaries

Notes to Consolidated Financial Statements — (Continued)

      Retained interest values are subject to credit, prepayment and interest rate risks on the underlying auto contracts. The following table illustrates the significant assumptions utilized in the valuation of retained interests as of the dates indicated:

	At December 31,
	2005	2004
Weighted-average discount rate	10.0%	10.0% - 12.0%
Range of projected annual credit losses	1.45% - 1.65%	1.40% - 1.53%
Range of projected cumulative credit losses	2.31% - 2.44%	2.04% - 2.37%
Prepayment speed	1.35 - 1.50 ABS	1.60 ABS

      At December 31, 2005, the fair value of the Bay View 2002-LJ-1 and 2003-LJ-1 retained interests as a result of immediate 10% and 20% adverse changes in significant assumptions would have decreased as follows:

	At December 31, 2005
	(Dollars in thousands)
Carrying amount/fair value of retained interests	$	20,107
Decrease in fair value from 10% adverse change in discount rate		151
Decrease in fair value from 20% adverse change in discount rate		301
Decrease in fair value from 10% adverse change in projected credit losses		141
Decrease in fair value from 20% adverse change in projected credit losses		282

Note 6. Auto Installment Contracts and Other Loans Receivable

      The following table sets forth the Company’s portfolio of auto installment contracts and other loans receivable as of the dates indicated:

			At December 31,
			2005			2004
			(Dollars in thousands)
Auto installment contracts and other loans receivable:
	Auto installment contracts held-for-sale		$	—		$	73,462
		Premiums, discounts and deferred fees and costs, net		—			1,559
	Auto installment contracts held-for-sale, net			—			75,021
	Other loans held-for-sale:
		Franchise loans		—			583
		Asset-based loans		—			319
	Total other loans held-for-sale			—			902
Auto installment contracts and other loans held-for-sale, net				—			75,923
	Auto installment contracts held-for-investment			105,120			247,219
	Securitized auto installment contracts held-for-investment			520,387			—
		Premiums, discounts and deferred fees and costs, net		14,393			7,152
		Allowance for credit losses		(6,279	)		(1,508	)
	Auto installment contracts held-for-investment, net			633,621			252,863
Auto installment contracts and other loans receivable, net			$	633,621		$	328,786

65

Bay View Capital Corporation and Subsidiaries

Notes to Consolidated Financial Statements — (Continued)

      For the years ended December 31, 2005 and 2004, the Company purchased auto contracts totaling $512.5 million and $295.3 million, respectively.

      During 2005, the Company completed the sale of $6.5 million of loans and received an additional $202.2 million of loan repayments. These loan sales and repayments, totaling $208.7 million, were comprised primarily of auto contracts receivable. During 2004, the Company completed the sale of $33.5 million of loans and received an additional $112.8 million of loan repayments. These loan sales and repayments, totaling $146.3 million, were comprised of $135.4 million of auto contracts, $5.5 million of franchise loans, $4.8 million of business loans and $0.6 million of asset-based loans. Gains of $31 thousand and $344 thousand were realized on loan sales in 2005 and 2004, respectively.

      During 2005, the Company transferred $637.8 million of auto contracts receivable to special purpose entities and issued $627.6 million of auto receivable-backed notes. Under the terms of these notes, BVAC retained certain rights that resulted in its maintaining control over the transferred receivables and, in accordance with provisions of SFAS No. 140, the Company has accounted for these transactions as secured financings.

      There were no loan securitizations during 2004. The Company securitized and sold approximately $193.3 million of auto contracts during 2003. A gain of $0.8 million was recognized on the 2003 securitization. The Company retained servicing responsibilities and subordinated interests in this securitization. The Company’s retained interests are subordinate to investors’ interests. However, investors and the securitization trusts have no recourse to the Company’s other assets for failure of debtors to pay when due.

      The Company serviced auto contracts that it securitized and/or sold of $140.0 million at December 31, 2005, $250.2 million at December 31, 2004 and $405.1 million at December 31, 2003.

      Total impaired loans, consisting of nonaccrual auto contracts and other loans receivable, were $573 thousand, $1.0 million and $7.1 million at December 31, 2005, 2004 and 2003, respectively. Interest on nonaccrual auto contracts and other loans that was not recorded in income was $97 thousand for the year ended December 31, 2005, $342 thousand for 2004 and $1.6 million for 2003. Cash interest that the Company recognized on these nonaccrual auto contracts and other loans was not significant in 2005, 2004 or 2003. The average investment in impaired auto contracts and other loans was $452 thousand for the year ended December 31, 2005, $1.3 million for 2004 and $11.0 million for 2003. At December 31, 2005, the Company had no commitments to lend additional funds to these borrowers.

66

Bay View Capital Corporation and Subsidiaries

Notes to Consolidated Financial Statements — (Continued)

      The following table sets forth information on delinquent loans (loans delinquent 60 days or more) and net charge-offs in the Company’s managed loan portfolio of auto contracts, franchise and other loans serviced by the Company:

					Principal Amount
					of Loans
					Delinquent 60 Days				Net Charge-Offs
	Loans Receivable				or More
									For the Year Ended
	At December 31,								December 31,
	2005		2004		2005		2004		2005		2004
	(Dollars in thousands)
Auto installment contracts(1)(2)	$	773,635	$	578,069	$	2,472	$	1,108	$	7,268	$	6,404
Franchise loans		—		583		—		583		—		338
Other loans		—		319		—		319		—		52
Total managed loans		773,635		578,971	$	2,472	$	2,010	$	7,268	$	6,794
Less:
Securitized and sold loans		140,014		250,185
Loans receivable	$	633,621	$	328,786

(1)	Includes off-balance sheet amounts associated with securitized auto contracts sold with servicing retained.
(2)	Includes $3.3 million and $0.8 million of net charge-offs from off-balance sheet auto contracts and auto contracts held-for-sale, respectively, for 2005; includes $5.2 million and $1.1 million of net charge-offs from off-balance sheet auto contracts and auto contracts held-for-sale, respectively, for 2004.

      The following table sets forth the activity in the allowance for credit losses on auto contracts held-for-investment as of and for the periods indicated:

	At and For the Year
	Ended December 31,
	2005			2004
	(Dollars in thousands)
Balance at beginning of period	$	1,508		$	—
Charge-offs		(3,875	)		(222	)
Recoveries		699			118
Net charge-offs		(3,176	)		(104	)
Provision for credit losses		7,947			1,612
Balance at end of period	$	6,279		$	1,508

      Effective September 30, 2002, the Company adopted liquidation basis accounting under which its loans and leases were carried at their net realizable value. Accordingly, the balance of the allowance for credit losses was reallocated as mark-to-market adjustments to individual loans and leases and groups of homogeneous loans in liquidation. In October 2003, the Company re-adopted going concern basis accounting. From October 2003 to May 2004, the Company’s auto contracts were classified as held-for-sale and were carried at the lower of cost or market.

67

Bay View Capital Corporation and Subsidiaries

Notes to Consolidated Financial Statements — (Continued)

      Beginning in June 2004, the Company designated a portion of its auto contracts as held-for-investment. Accordingly, the Company established an allowance for credit losses on auto contracts held-for-investment.

Note 7. Premises and Equipment

      The following table sets forth premises and equipment as of the dates indicated:

	At December 31,
	2005			2004
	(Dollars in thousands)
Leasehold improvements	$	756		$	647
Furniture and equipment		4,496			4,323
		5,252			4,970
Less:
Accumulated depreciation and amortization		(4,716	)		(4,237	)
Premises and equipment, net	$	536		$	733

      Depreciation and amortization expense related to premises and equipment totaled $0.4 million, $0.3 million and $0.5 million for the years ended December 31, 2005, 2004 and 2003, respectively.

Note 8. Goodwill and Other Intangible Assets

      Upon re-adoption of going concern basis accounting, the Company reestablished goodwill of $1.8 million in BVAC related to its acquisition of California Thrift & Loan in 1996.

      As of January 1, 2002, the Company adopted SFAS No. 142, “Goodwill and Other Intangible Assets,” which requires that certain goodwill and intangible assets with indefinite useful lives be tested for impairment at least annually rather than amortized, and ceased the amortization of existing goodwill.

      At December 31, 2005, 2004 and 2003, management determined that there was no impairment of goodwill.

Note 9. Borrowings

      During the second quarter of 2005, BVAC secured a $450.0 million floating-rate, revolving warehouse credit facility to replace a maturing $350.0 million facility originally obtained in 2004. The facility is jointly provided by two lenders (the “Note Purchasers”). The facility is for a term of 364 days and matures on June 19, 2006. The interest rate on the facility is indexed to asset-backed commercial paper rates and/or LIBOR. BVAC draws on the facility to purchase and finance its existing inventory of auto contracts. Substantially all auto contracts retained by BVAC are pledged as collateral for the credit facility. Under the terms of the facility, BVAC draws on the facility by transferring auto contracts to a special purpose entity, a statutory trust, which issues notes to the Note Purchasers. BVAC periodically securitizes or sells auto contracts in order to pay down the line of credit and maintain borrowing capacity.

      At December 31, 2005, $99.7 million was outstanding under this facility with an all-in cost of 5.10%. These borrowings were secured by $102.9 million of auto contracts held-for-investment and cash in trust accounts. At December 31, 2004, $298.8 million was outstanding on the Company’s $350.0 million warehouse line that matured on December 31, 2004, with an all-in cost of 3.34%. These borrowings were secured by $314.5 million of auto contracts. BVAC’s warehouse credit facilities contain various performance triggers and default covenants requiring that BVAC maintain certain cumulative credit loss, delinquency and other

68

Bay View Capital Corporation and Subsidiaries

Notes to Consolidated Financial Statements — (Continued)

financial ratios. As of December 31, 2005 and 2004, all such financial and performance ratios were within required levels.

      On December 31, 2001, the Company completed a structured financing of its auto lease cash flows and recorded $136.5 million in other borrowings. The Company ceased its purchases of auto leases in June 2000 and the contractual auto lease cash flows concluded in December 2005. The transaction was treated as a sale for tax purposes, allowing the Company to capture expiring net operating loss carryforwards and partially reverse the related valuation allowance on deferred tax assets. At December 31, 2004, the balance of the borrowing was $1.9 million. The effective cost of the borrowing for 2004 was 2.00%.

      During 2003, the Company adopted FIN No. 46, “Consolidation of Variable Interest Entities,” and accordingly, deconsolidated Bay View Capital I. As a result, the 9.76% Capital Securities of Bay View Capital I were no longer reflected on the Company’s consolidated statement of financial condition while the underlying 9.76% Junior Subordinated Deferrable Interest Debentures (the “Junior Debentures”), which were acquired by Bay View Capital I, were reflected as borrowings. On June 30, 2004, the Company redeemed the remaining $22.0 million of Junior Debentures and recovered its $2.8 million equity investment in Bay View Capital I through a settlement of its liability with the Trustee. See Note 11. “Capital Securities” for further discussion.

Note 10. Securitization Notes Payable

      On February 17, 2005, BVAC issued $232.1 million of auto receivable-backed notes payable through Bay View 2005-LJ-1 Owner Trust, a special purpose entity. The issue was comprised of five classes of notes, Classes A-1 through A-4, and Class I which is an interest only security. The notes have final maturities ranging between February 27, 2006 and May 25, 2012. The notes are insured as to the timely payment of principal and interest and they contain a call provision that grants BVAC the option of calling the notes at any time after the aggregate balance of receivables has been reduced to 15% of the original pool of receivables. Proceeds from the issuance of the notes were used to repay $217.8 million of borrowings on BVAC’s revolving warehouse credit facility.

      On July 28, 2005, BVAC issued $180.9 million of auto receivable-backed notes payable through Bay View 2005-LJ-2 Owner Trust, a special purpose entity. The issue, a senior/ subordinate structure, was comprised of four AAA-rated fixed-rate note classes and three subordinate classes rated down to BBB. Principal is paid out sequentially to the notes. In this transaction, credit support to all classes is provided by excess spread, a reserve account and subordination in the form of an unrated certificate. The notes have final maturities ranging between July 28, 2006 and February 25, 2014 and contain a call provision that grants BVAC the option of calling the notes at any time after the aggregate balance of the receivables has been reduced to 15% of the original pool of receivables. Proceeds from the issuance of the notes were used to repay $180.0 million of borrowings on BVAC’s revolving warehouse credit facility.

      On December 6, 2005, BVAC issued $214.6 million of auto receivable-backed notes payable through Bay View 2005-3 Owner Trust, a special purpose entity. The issue, a senior/ subordinate structure, was comprised of four AAA-rated fixed-rate note classes and three subordinate classes rated down to BBB. Principal is paid out sequentially to the notes. In this transaction, credit support to all classes is provided by excess spread, a reserve account and subordination in the form of an unrated certificate. The notes have final maturities ranging between November 27, 2006 and June 25, 2014 and contain a call provision that grants BVAC the option of calling the notes at any time after the aggregate balance of the receivables has been reduced to 15% of the original pool of receivables. Proceeds from the issuance of the notes were used to repay $213.5 million of borrowings on BVAC’s revolving warehouse credit facility.

      Interest payments are due monthly, in arrears. Interest expense on all securitization notes payable totaled $12.4 million for the year ended December 31, 2005.

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      The stated maturities of our securitization notes payable and their weighted-average interest rates at December 31, 2005 were as follows:

	At December 31, 2005
			Weighted-Average
	Amount		Interest Rate
	(Dollars in thousands)
2006	$	14,719		4.22	%
2007		98		7.09
2008		84,179		3.98
2009		73,500		4.86
2010		165,700		4.36
Thereafter		183,372		5.16
	$	521,568		4.65	%

Note 11. Capital Securities

      On December 21, 1998, the Company issued $90.0 million in Capital Securities through Bay View Capital I (the “Trust”). The Capital Securities paid quarterly cumulative cash distributions at an annual rate of 9.76% of the liquidation value of $25 per share. The Capital Securities represented undivided beneficial interests in the Trust. The Company owned all of the issued and outstanding common securities of the Trust. Proceeds from the offering and from the issuance of common securities were invested by the Trust in the Company’s 9.76% Junior Debentures due December 31, 2028 with an aggregate principal amount of $92.8 million. The primary asset of the Trust was the Junior Debentures. The Company fully and unconditionally guaranteed the obligations of the Trust with respect to the Capital Securities to the extent provided in the Guarantee Agreement. Proceeds were used to repay the Company’s $50.0 million Senior Debentures and the balance for general corporate purposes. The all-in cost of the Capital Securities was 9.95%. Prior to the dissolution of the BVB, the Capital Securities had the added benefit of qualifying as Tier 1 capital for regulatory capital purposes.

      During the third quarter of 2003, the Company completed an offer of optional redemption of the Capital Securities at a price of $25 per Capital Security plus accrued and unpaid distributions through the date of redemption. Holders of the Capital Securities elected to redeem 184,903 shares, or approximately 5.14% of the outstanding Capital Securities, under the offer that expired on September 8, 2003. An additional $63.5 million, or approximately 74%, of the outstanding Capital Securities was redeemed on December 31, 2003. These redemptions reduced the outstanding Capital Securities from $90.0 million at December 31, 2002 to $22.0 million at December 31, 2003. On June 30, 2004, the Company redeemed the remaining $22.0 million of the outstanding Capital Securities.

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Note 12. Income Taxes

      The following table sets forth the Company’s consolidated income tax expense (benefit) for the periods indicated:

	For the Year Ended
	December 31, 2005
	Federal		State		Total
	(Dollars in thousands)
Current provision	$	1,276	$	360	$	1,636
Deferred provision		20,886		—		20,886
Total income tax expense	$	22,162	$	360	$	22,522

	For the Year Ended
	December 31, 2004
	(Dollars in thousands)
Current provision	$	—		$	2,517	$	2,517
Deferred provision		(5,828	)		785		(5,043	)
Total income tax expense (benefit)	$	(5,828	)	$	3,302	$	(2,526	)

	For the Year Ended
	December 31, 2003
	(Dollars in thousands)
Current provision	$	566		$	(7,111	)	$	(6,545	)
Deferred provision		(1,483	)		1,592			109
Total income tax benefit	$	(917	)	$	(5,519	)	$	(6,436	)

      The Company recorded income tax expense of $22.5 million for the year ended December 31, 2005 compared to an income tax benefit of $2.5 million and $6.4 million for the years ended December 31, 2004 and 2003, respectively. As a result of the Company’s consolidated pre-tax loss of $11.9 million for the year ended December 31, 2005 and in accordance with the provisions of SFAS No. 109, “Accounting for Income Taxes,” the Company concluded that net deferred tax assets of $46.8 million should be fully reserved at December 31, 2005. With $21.5 million of previously established valuation allowance, the Company recorded a charge to earnings of $25.3 million in the fourth quarter of 2005 to establish a full valuation allowance on its net deferred tax assets at December 31, 2005. Under SFAS No. 109, a valuation allowance must be recognized on deferred tax assets if, based upon the weight of available evidence, it is more likely than not that some or all of the asset may not be realized. The realization of deferred tax assets is dependent on the generation of future taxable income and, given the Company’s history of recent losses, management made a judgment that a full valuation allowance was prudent at this time.

      In reaching this conclusion, the Company did not take into consideration the future taxable income that may arise from the previously announced pending sale of BVAC to AFS and the pending merger with GLB. The Company’s establishment of the full valuation allowance does not affect its net operating loss carryforwards, which totaled $143.4 million at December 31, 2005, and remain available to offset future taxable income. Upon consummation of the merger, the carrying value of the deferred tax assets will be reevaluated as part of purchase accounting based on estimates of the future taxable income of the combined company.

      The effective tax rate used in computing income taxes was (188.8)% for the year ended December 31, 2005 compared to 39.2% for 2004 and 56.2% for 2003. The Company’s 2005 tax rate differed from the 34%

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federal statutory rate due to the establishment of the full valuation allowance on net deferred tax assets, the effect of state income and franchise taxes, and nondeductible merger-related expenses. The Company’s 2004 and 2003 effective tax rates differed from the 35% federal statutory rate due primarily to the effect of state income and franchise taxes.

      The following table sets forth the reconciliation between the federal statutory income tax rate and the effective income tax rate for the periods indicated. The table reflects the inclusion of dividends on Capital Securities in the determination of income (loss) before income tax expense (benefit):

	For the Year Ended
	December 31,
	2005			2004			2003
Federal statutory income tax rate		34.0	%		35.0	%		35.0	%
State income tax, net of federal tax benefit		4.2			4.2			39.2
Decrease in tax rates on net deferred tax assets		(8.2	)		—			—
Nondeductible merger costs		(3.4	)		—			—
Increase in valuation allowance		(211.8	)		—			—
Increase in contingent tax		(2.2	)		—			—
Nondeductible compensation		—			—			(16.3	)
Other, net		(1.4	)		—			(1.7	)
Effective income tax rate		(188.8	)%		39.2	%		56.2	%

      At December 31, 2005 and 2004, the Company had recorded estimates of contingent tax liabilities of $4.4 million and $4.2 million, respectively. If and when these contingent tax liabilities are ultimately paid, it could have a significant impact on cash flows or liquidity of the Company.

      Stockholders’ equity was charged a tax associated with certain adjustments recorded to convert from liquidation basis accounting to going concern basis accounting of $0.6 million for the year ended December 31, 2003.

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      The following table sets forth the components of net deferred tax assets as of the dates indicated:

		At December 31,
		2005		2004
		(Dollars in thousands)
Deferred tax assets:
	Net operating loss carryforwards	$	53,611	$	48,808
	Alternative minimum tax credit carryforwards		5,193		3,916
	Other accrued expenses not deducted for tax purposes		4,438		4,277
	Provision for credit losses		2,405		1,065
	Auto lease receivable financing		—		743
	Mark-to-market adjustments, net		—		504
	Other		28		1,259
Gross deferred tax assets			65,675		60,572
Valuation allowance			46,762		21,495
Deferred tax assets, net of valuation allowance			18,913		39,077
Deferred tax liabilities:
	Securitizations		15,008		14,486
	Mark-to-market adjustments, net		3,797		—
	Tax depreciation in excess of book depreciation		83		3,398
	Real estate partnership investments		25		25
Gross deferred tax liabilities			18,913		17,909
Net deferred tax assets		$	—	$	21,168

      The valuation allowance on deferred tax assets was $46.8 million and $21.5 million as of December 31, 2005 and 2004, respectively. In the determination of deferred tax assets, net of the valuation allowance, the Company considered the projected future net income available to absorb the realization of deferred tax assets.

      At December 31, 2005, the federal net operating loss carryforwards were $143.4 million, of which $65.8 million will expire in 2020, $69.5 million will expire in 2023 and $8.1 million will expire in 2025. The Company has federal alternative minimum tax credits of $5.2 million. These credits can be carried forward indefinitely to reduce future regular tax.

      At December 31, 2005, the California net operating loss carryforwards were $63.5 million, of which $42.6 million will expire in 2012, $16.9 million will expire in 2013 and $4.0 million will expire in 2025.

Note 13. Liquidation Reserve

      The liquidation reserve represents a liability for estimated severance costs, costs related to facilities closures, estimated litigation settlements and related legal expense and other costs associated with the completion of remaining liquidating activities set forth in the Company’s Amended Plan. The liquidation reserve is accounted for in accordance with SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities,” which became effective for exit or disposal activities that were initiated after December 31, 2003, and superseded EITF No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (Including Certain Costs Incurred in a Restructuring).” In accordance with SFAS No. 146, the Company continues to apply certain provisions of EITF 94-3 to its accounting for the liquidation reserve because the Company’s liquidation plan was initiated prior to the initial application date.

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      At December 31, 2005, the remaining balance of the liquidation reserve was $7.8 million and included accruals for severance, facilities, and litigation and other costs of $0.6 million, $5.0 million and $2.2 million, respectively. The following table sets forth balances and activity in the liquidation reserve as of and for the periods indicated:

								Litigation/
		Severance(1)			Facilities(2)			Other(3)			Total
		(Dollars in thousands)
Balance at December 31, 2003		$	2,014		$	6,379		$	3,233		$	11,626
	Accruals (reversals)		613			485			(1,313	)		(215	)
	Payments		(1,313	)		(861	)		(381	)		(2,555	)
Balance at December 31, 2004			1,314			6,003			1,539			8,856
	Accruals (reversals)		66			(177	)		747			636
	Payments		(775	)		(881	)		(66	)		(1,722	)
Balance at December 31, 2005		$	605		$	4,945		$	2,220		$	7,770

(1)	For the year ended December 31, 2005, accruals included increased severance expense due to employees’ length of service. For the year ended December 31, 2004, accruals represented the cost of additional reductions-in-force which increased severance obligations.
(2)	For the year ended December 31, 2005, reversals were attributable to postponement of a planned move of the Company’s headquarters during 2005. For the year ended December 31, 2004, accruals represented additional abandonment cost attributable to projected delays in subleasing vacated space.
(3)	For the year ended December 31, 2005, accruals were attributable to estimated costs related to litigation. For the year ended December 31, 2004, reversals primarily reflect a reduction of accrued litigation attributable to settlements.

Note 14. Stock Options

      As of December 31, 2005, the Company had five employee stock option plans and three non-employee director stock option plans. The employee stock option plans were as follows: the “Amended and Restated 1986 Stock Option and Incentive Plan,” the “Amended and Restated 1995 Stock Option and Incentive Plan (the “1995 Plan”),” the “1998-2000 Performance Stock Plan (the “2001 Plan”),” the “1999 FMAC Stock Option, Deferred Stock and Restricted Stock Plan,” and the “2001 Stock Option and Incentive Plan,” which authorize the issuance of 175,943, 250,000, 40,000, 27,058 and 320,000 shares of common stock, respectively. The non-employee director stock option plans were as follows: the “Amended and Restated 1989 Non-Employee Director Stock Option and Incentive Plan,” the “1998 Non-Employee Director Stock Option and Incentive Plan,” and the “2001 Non-Employee Director Stock Option Plan,” which authorize the issuance of up to 55,000, 20,000, and 50,000 shares of common stock, respectively.

      Excluding options for 347,700 shares granted in 2001 that were issued with exercise prices below the then current market value, the exercise price for the purchase of shares subject to a stock option at the date of grant generally may not be less than 100% of the market value of the shares covered by the option on that date. Options generally vest over periods ranging from 6 months to 3 years and expire over periods ranging from 6 years to 13 years. The Company’s stock options generally cancel automatically 90 days after termination of employment.

      All of the stock option plans define a change in control as including a sale of all or substantially all of the Company’s assets, and all of the stock option plans provide for the automatic acceleration of the exercisability of stock options in the event of a change in control with the exception of the 2001 Plan. The 2001 Plan

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Notes to Consolidated Financial Statements — (Continued)

provides for the acceleration of the exercisability of stock options in such circumstances as the stock option committee of the board of directors determines to be appropriate. On August 6, 2002, the stock option committee determined that the consummation of the sale of BVB’s retail banking assets constituted a change in control for purposes of the 2001 Plan and recommended to the Board of Directors the acceleration of the exercisability of the stock options under the 2001 Plan in order that all option holders would be treated equally. On October 3, 2002, the board of directors authorized such acceleration as of that date. Subsequently, the stock option plans were treated as variable plans based on APB No. 25 and FIN No. 44.

      During 2004, 50,000 shares were granted under the 1995 Plan at an exercise price of 100% of the market value of the shares on the grant date. Subsequent to the grant date, the original exercise price was modified to reflect cash distributions the Company made to its stockholders under the Amended Plan as required by the stock option agreements. Accordingly, these stock options were subject to variable accounting based on APB No. 25 and FIN No. 44.

      The following table sets forth the stock options available for grant as of December 31, 2005:

	Employee			Non-Employee
	Stock Option			Director Stock
	and Incentive			Option and
	Plans			Incentive Plans			Total
Shares reserved for issuance		813,001			125,000			938,001
Granted		(973,989	)		(113,700	)		(1,087,689	)
Forfeited		420,203			39,700			459,903
Expired		(210,624	)		(28,800	)		(239,424	)
Total available for grant		48,591			22,200			70,791

      At December 31, 2005, the Company had outstanding options under the plans with expiration dates ranging from the year 2006 through 2014, as set forth in the following table:

	Number of			Exercise Price		Weighted-Average
	Option Shares			Range		Exercise Price
Outstanding at January 1, 2003		520,110		$	45.90-344.10	$	88.00
Granted		—			—		—
Exercised		(330,783	)		45.90-54.10		46.40
Forfeited		(102,597	)		54.10-316.30		152.80
Outstanding at December 31, 2003		86,730			68.40-344.10		169.10
Granted(1)		50,000			16.87		16.87
Exercised		—			—		—
Forfeited		(52,630	)		70.75-344.06		177.46
Outstanding at December 31, 2004		84,100			16.87-326.88		73.47
Granted		—			—		—
Exercised(2)		(16,668	)		14.62		14.62
Forfeited		(18,900	)		68.40-316.88		142.56
Outstanding at December 31, 2005(2)		48,532		$	14.62-326.88	$	64.47
Exercisable at December 31, 2003		86,730		$	68.40-344.10	$	169.10
Exercisable at December 31, 2004		34,100		$	68.40-326.88	$	156.47
Exercisable at December 31, 2005		15,200		$	68.40-326.88	$	173.77

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(1)	On October 28, 2004, 50,000 stock options granted during 2004 were repriced from $19.37 to $16.87 to reflect the September 30, 2004 cash distribution of $2.50 per share as required by the option agreements.
(2)	On January 27, 2005, 50,000 stock options granted during 2004 were repriced from $16.87 to $14.62 to reflect the December 31, 2004 cash distribution of $2.25 per share as required by the option agreements. On December 28, 2005, 16,668 stock options, representing the vested portion of the grant, were exercised.

      The following table sets forth information about stock options outstanding at December 31, 2005:

	Outstanding
							Exercisable
			Weighted-
	Number of		Average				Number of		Weighted-
	Options		Remaining		Weighted-Average		Options		Average
Range of Exercise Prices	Outstanding		Life (in years)		Exercise Price		Exercisable		Exercise Price
$ 14.62-14.62		33,332		3.68	$	14.62		—	$	—
68.40-99.69		5,250		6.12		77.14		5,250		77.14
134.69-179.38		3,150		2.11		149.00		3,150		149.00
185.00-185.00		800		3.08		185.00		800		185.00
188.13-188.13		250		3.49		188.13		250		188.13
188.75-188.75		600		0.81		188.75		600		188.75
255.00-255.00		2,300		1.08		255.00		2,300		255.00
299.06-299.06		2,000		2.08		299.06		2,000		299.06
316.25-316.25		350		2.41		316.25		350		316.25
326.88-326.88		500		2.15		326.88		500		326.88
$14.62-326.88		48,532		3.59	$	64.47		15,200	$	173.77

SFAS No. 123 Pro Forma Disclosure

      The Company adopted SFAS No. 123 effective January 1, 1996, but continued to account for employee and director stock-based compensation plans under the intrinsic value method prescribed by APB No. 25 through December 31, 2005. SFAS No. 123 requires that stock-based compensation to parties other than employees and directors be accounted for under the fair value method. Compensation cost totaling $99 thousand was recognized for stock option awards for employees and directors for the year ended December 31, 2005. No compensation expense was recorded in 2004 or 2003. The weighted-average fair value of options granted to employees and directors in 2004 was $11.99. These options were granted at 100% of the market price of the Company’s common stock on the grant date. Modifications to the exercise price of these awards subsequent to the grant date resulted in an adjusted fair value of $12.63 per share. The increase in fair value per share is based upon measurement of the fair value of the stock options immediately before and after the option repricing. There were no options granted during 2005 or 2003. See Note 3. “Summary of Significant Accounting Policies” for a pro forma calculation of loss and loss per share had compensation cost related to the Company’s stock option awards been determined under the fair value method.

Note 15. Employee Benefit Plans

      As of December 31, 2005, 1,417 shares of the Company’s common stock were held in treasury under the Company’s non-qualified defined benefit retirement plan for non-employee members of its board of directors. These shares were previously repurchased in the open market at a cost of $0.3 million to be distributed to certain non-employee members of the Company’s board of directors.

      As of December 31, 2005, the Company had $0.1 million included in other liabilities for the remaining benefits owed to certain current and retired executive officers pursuant to a terminated non-qualified

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supplemental retirement plan for executive officers and $0.6 million in other liabilities for postretirement health care benefits owed to certain retired employees, officers and directors pursuant to a terminated retiree health plan.

      The Company has a 401(k) thrift plan under which an employee with three or more months of service may contribute from 2% to 15% of base salary to the plan. The amount of base salary deferred is not subject to federal or state income taxes at the time of deferral. After one year of service, the Company will match an employee’s contribution up to 100% of the first 6% of the employee’s base salary, depending on the employee’s length of service. The Company’s contribution was $274 thousand, $329 thousand and $429 thousand for the years ended December 31, 2005, 2004 and 2003, respectively.

Note 16. Derivative Instruments

      The Company uses derivatives to modify interest rate characteristics of certain assets or liabilities to hedge its exposure to interest rate fluctuations, reducing the effects these fluctuations might have on associated cash flows or values. Derivative financial instruments involve, to varying degrees, elements of credit risk. Credit risk is defined as the possibility of sustaining a loss because counterparties to the financial instrument fail to perform in accordance with the terms of the contract.

      In accordance with the provisions of SFAS No. 133, the Company’s derivative instruments are being carried at fair value, with changes in such fair value charged or credited to earnings. Prior to the Company’s re-adoption of going concern basis accounting, it accounted for changes in the market value of derivative instruments using liquidation basis accounting. Accordingly, changes in the fair value of these derivative instruments were reflected in the consolidated statements of net assets in liquidation under pre-tax loss from operations, while offsetting changes in the market value of underlying auto contracts were included in changes in estimated values of assets and liabilities.

      The Company was a party to “fixed-for-floating” interest rate swaps with notional principal amounts of $50.0 million and $145.0 million at December 31, 2005 and 2004, respectively. The interest rate swaps mature at various dates between May 2007 and May 2008. During 2005, the Company paid a weighted-average fixed interest rate of 3.22% and received a weighted-average floating interest rate of 3.25%. During 2004, the Company paid a weighted-average fixed interest rate of 2.51% and received a weighted-average floating interest rate of 1.46%. Interest rate swaps decreased interest expense by $62 thousand for the year ended December 31, 2005 and increased interest expense by $1.8 million for the year ended December 31, 2004. The fair value of the interest rate swaps was $1.0 million and $0.4 million at December 31, 2005 and 2004, respectively. To record its interest rate swaps at their fair value, as required by SFAS No. 133, the Company recognized gains of $1.6 million and $2.1 million during 2005 and 2004, respectively. The fair value of the interest rate swaps is included in other assets.

      As discussed in Note 9. “Borrowings,” BVAC draws on its warehouse credit facility by transferring auto contracts to a special purpose entity, a statutory trust, which issues notes to the Note Purchasers. Under the terms of the facility, the trust enters into out-of-the-money interest rate cap contracts, containing terms and conditions required by the Note Purchasers, to provide protection to the Note Purchasers from interest rate risk embedded in the fixed-rate auto contracts that have been transferred to the trust. BVAC incurs the cost of these interest rate caps. The notional amount of these interest rate caps was $226.6 million and $281.3 million at December 31, 2005 and 2004, respectively. The contracts mature between May 2008 and October 2010; the strike rates on the contracts, which are indexed to one-month LIBOR, range between 5.50% and 6.25%. The fair value of the interest rate caps was $0.4 million and $0.7 million at December 31, 2005 and 2004, respectively. The Company recognized $0.4 million and $0.7 million of unrealized losses on interest rate caps for 2005 and 2004, respectively. The fair value of the interest rate caps is included in other assets.

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Note 17. Commitments and Contingencies

Premises

      At December 31, 2005, the Company occupied two offices, including its corporate headquarters office, and was a party to lease agreements for two former Bay View Franchise Mortgage Acceptance Company offices, both of which were subleased at December 31, 2005. These premises are leased under operating lease agreements expiring at various dates through the year 2012. In most instances, these lease arrangements include options to renew or extend the lease at market rates.

      Future minimum payments under noncancellable lease obligations are summarized below. These payments have not been reduced to reflect approximately $4.2 million in cumulative sublease rental income from existing sublease rental arrangements through the year 2011.

	Operating Lease
	Payments
	(Dollars in thousands)
2006	$	2,606
2007		2,649
2008		2,420
2009		1,931
2010		1,994
Thereafter		3,121
	$	14,721

      Included in the table above are future minimum lease payments of $13.7 million related to the Company’s liquidating activities. At December 31, 2005, the Company had accrued $4.9 million for future rent payments and related operating expenses, net of estimated sublease income, as facilities costs as described in Note 13. “Liquidation Reserve.” Excluding costs related to liquidating activities, rental expense was $1.1 million for the year ended December 31, 2005, $1.2 million for 2004 and $1.2 million for 2003. Excluding liquidating activities, there was no sublease rental income for the year ended December 31, 2005, $18 thousand for 2004 and $186 thousand for 2003.

Loans and Standby Letter of Credit

      At December 31, 2005 and 2004, the Company had contingent liabilities of $14.4 million and $14.5 million, respectively, related to a standby letter of credit that BVB had provided on bonds issued by a community housing development in Northern California. This letter of credit has been secured by a cash deposit of a corresponding amount which is included in restricted cash. The Company had no outstanding lending commitments at December 31, 2005 and 2004. There were no outstanding recourse and subordination contingencies at December 31, 2005 and 2004.

Litigation

      On August 29, 2003, Financial Security Assurance Inc. (“FSA”) filed a complaint against the Company and BVB in the United States District Court for the Southern District of New York. The complaint, as amended, alleges breaches of representations and warranties or indemnity obligations with regard to a number of loans that served as collateral for two securitizations involving the Company and/or a former subsidiary, Bay View Franchise Mortgage Acceptance Company, that were effected in 1998 and 2000. FSA guaranteed certain payments in connection with these securitizations. The Company vigorously denies any liability to

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Bay View Capital Corporation and Subsidiaries

Notes to Consolidated Financial Statements — (Continued)

FSA and has asserted numerous defenses to each of FSA’s claims. The Company has also filed counterclaims against FSA.

      The Company is a party to various other legal actions arising in the normal course of business.

      After consultation with counsel, the Company does not currently expect that the resolution of these legal actions will have a material adverse effect on the Company’s consolidated financial condition, results of operations or cash flows.

Note 18. Estimated Fair Value of Financial Instruments

      The following disclosure of the estimated fair value of financial instruments is made in accordance with the requirements of SFAS No. 107, “Disclosures about Fair Value of Financial Instruments.” Fair value estimates, methods and assumptions, set forth below for the Company’s financial instruments, are made solely to comply with the requirements of SFAS No. 107 and should be read in conjunction with the Company’s consolidated financial statements and related notes.

      The Company has determined the estimated fair value amounts by using market information and valuation methodologies that it considers appropriate. However, considerable judgment is required to interpret market data to develop the estimates of fair value. Accordingly, the estimates presented below are not necessarily indicative of the amounts the Company could realize or has realized in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. For all of these reasons, the aggregation of the fair values presented does not represent, and should not be construed to represent, their underlying value.

      The following methods and assumptions have been used to estimate the fair value of each class of financial instrument for which it was practicable to estimate the value:

      Cash, cash equivalent and restricted cash: This category includes cash and deposits due from depository institutions and money market funds. The cash equivalents were readily convertible to known amounts of cash or are so near their maturity that they present insignificant risk of changes in value. For these short-term financial instruments, the carrying amount approximated fair value.

      Retained interests in securitizations: The fair value of retained interests in securitizations was estimated by discounting future cash flows using a discount rate commensurate with the risks involved.

      Auto installment contracts and other loans receivable: The fair value of auto contracts and other loans was based on prices for similar loans in the secondary whole loan or securitization markets with similar credit terms and remaining maturities. Prepayment estimates were based on historical experience for similar loans.

      Warehouse credit facility and other borrowings: These borrowings, which include BVAC’s floating-rate warehouse credit facility at December 31, 2005 and 2004 and a structured financing of the Company’s auto lease cash flows as of December 31, 2004, mature within one year of the reported balance sheet date. For such borrowings, the carrying amount approximated fair value.

      Securitization notes payable: The fair value of securitization notes payable was based on quoted market prices for the individual notes.

      Interest rate swaps: The fair value of interest rate swaps is the estimated amount that the Company would receive or pay to terminate the swap agreements at the reporting date, taking into account current interest rates and the current creditworthiness of the swap counterparties.

79

Bay View Capital Corporation and Subsidiaries

Notes to Consolidated Financial Statements — (Continued)

      Interest rate caps: The fair value of interest rate caps is the estimated amount that the Company would receive or pay to terminate the cap agreements at the reporting date, taking into account current interest rates and the current creditworthiness of the cap counterparties.

      Limitations: The fair value estimates presented below were based on pertinent information available to the Company as of December 31, 2005 and 2004. Although the Company is not aware of any factors that would significantly affect the estimated fair value amounts, these amounts have not been comprehensively revalued for purposes of these financial statements since those dates and, therefore, current estimates of fair value may differ significantly from the amounts presented below.

      The following table sets forth the estimated fair values of the Company’s financial instruments as of the dates indicated:

		At December 31,
		2005				2004
		Carrying		Estimated		Carrying		Estimated
		Amount		Fair Value		Amount		Fair Value
		(Dollars in thousands)
Financial assets:
	Cash, cash equivalents and restricted cash	$	44,036	$	44,036	$	31,292	$	31,292
	Retained interests in securitizations		20,107		20,107		22,636		22,636
	Auto installment contracts and other loans receivable		633,621		635,131		328,786		329,207
Financial liabilities:
	Warehouse credit facility and other borrowings		99,727		99,727		300,650		300,650
	Securitization notes payable		521,568		518,270		—		—
Interest rate swaps			997		997		398		398
Interest rate caps			433		433		698		698

Note 19. Selected Quarterly Results of Operations (Unaudited)

	For the Year Ended December 31, 2005
	First			Second			Third			Fourth
	Quarter			Quarter			Quarter			Quarter
	(Dollars in thousands, except per share amounts)
Interest income	$	7,071		$	9,120		$	11,285		$	12,777
Net interest income		3,393			4,014			4,957			5,272
Provision for credit losses		837			1,793			1,257			4,060
Loss before income taxes		(491	)		(2,493	)		(2,165	)		(6,779	)
Net loss		(334	)		(1,546	)		(1,364	)		(31,206	)
Basic loss per share(1)	$	(0.05	)	$	(0.23	)	$	(0.21	)	$	(4.73	)
Diluted loss per share(1)	$	(0.05	)	$	(0.23	)	$	(0.21	)	$	(4.73	)

80

Bay View Capital Corporation and Subsidiaries

Notes to Consolidated Financial Statements — (Continued)

	For the Year Ended December 31, 2004
	First			Second			Third			Fourth
	Quarter			Quarter			Quarter			Quarter
	(Dollars in thousands, except per share amounts)
Interest income	$	4,912		$	5,212		$	5,960		$	6,525
Net interest income		2,970			3,049			3,813			3,932
Provision for credit losses		—			521			331			760
Loss before income taxes		(1,483	)		(291	)		(2,662	)		(2,002	)
Net loss		(901	)		(177	)		(1,618	)		(1,216	)
Basic loss per share(1)	$	(0.14	)	$	(0.03	)	$	(0.25	)	$	(0.18	)
Diluted loss per share(1)	$	(0.14	)	$	(0.03	)	$	(0.25	)	$	(0.18	)

(1)  Loss per share is computed independently for each of the quarters presented. Therefore, the sum of the quarterly loss per share amounts may not equal the annual amount. This is caused by rounding and the averaging effect of the number of share equivalents outstanding throughout the year, which changes with the market price of the common stock.

      The increase in net loss for the fourth quarter of 2005, compared with previous quarters in 2005, was due primarily to a charge to earnings of $25.3 million in the fourth quarter of 2005 to establish a full valuation allowance on net deferred tax assets of $46.8 million at December 31, 2005. Other factors that contributed to the increased net loss included increased provision for credit losses to increase BVAC’s allowance for credit losses in response to growth in auto contracts held-for-investment and increased loan charge-offs attributed to a change in the federal bankruptcy laws during the fourth quarter of 2005. Results for the fourth quarter of 2005 also included increased professional and legal fees, including costs related to proposed merger and sale transactions.

Note 20. Subsequent Events

      On January 30, 2006, the Federal Reserve Bank of New York approved the Company’s application to become a bank holding company through its proposed merger with GLB, which is headquartered in Buffalo, New York. On March 2, 2006, the New York State Banking Board approved the proposed merger. Upon consummation of the merger, GBSB will become a wholly owned subsidiary of the Company.

81

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of
Bay View Capital Corporation

      We have audited the accompanying consolidated statements of financial condition of Bay View Capital Corporation and subsidiaries as of December 31, 2005 and 2004, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

      We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

      In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Bay View Capital Corporation and subsidiaries at December 31, 2005 and 2004, and the consolidated results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

      We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Bay View Capital Corporation and subsidiaries’ internal control over financial reporting as of December 31, 2005, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 21, 2006 expressed an unqualified opinion on management’s assessment and an unqualified opinion on internal control effectiveness.

/s/ Grant Thornton LLP

San Francisco, California

March 21, 2006

82

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

Bay View Capital Corporation and Subsidiaries:

      We have audited the accompanying consolidated statements of operations and comprehensive loss and of stockholders’ equity for the period from October 1, 2003 to December 31, 2003, the consolidated statement of changes in net assets in liquidation for the period from January 1, 2003 to September 30, 2003, and the consolidated statement of cash flows for the year ended December 31, 2003 of Bay View Capital Corporation and Subsidiaries (the “Company”). Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

      We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

      As discussed in Note 1 to the consolidated financial statements, the Board of Directors of the Company approved a change of the plan of liquidation on October 23, 2003. As a result, the Company changed its basis of accounting from the liquidation basis to the going concern basis effective October 1, 2003.

      In our opinion, such consolidated financial statements present fairly, in all material respects, (1) the results of the operations for the period from October 1, 2003 to December 31, 2003 of Bay View Capital Corporation and subsidiaries, (2) the changes in their net assets in liquidation for the period from January 1, 2003 to September 30, 2003, and (3) their cash flows for the year ended December 31, 2003, in conformity with accounting principles generally accepted in the United States of America.

/s/ Deloitte & Touche LLP

San Francisco, California

March 12, 2004

83

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

      Not applicable.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

      Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of December 31, 2005. Our disclosure controls and procedures are designed to ensure that information we are required to disclose in the reports we file under the Exchange Act is recorded, processed, summarized and reported on a timely basis in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and without material misstatement.

      Based on such evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of December 31, 2005, our disclosure controls and procedures were effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in the reports we file under the Exchange Act and our disclosure controls and procedures were also effective to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, to allow timely decisions regarding required disclosures.

Management’s Report on Internal Control Over Financial Reporting

      Our management is responsible for establishing and maintaining adequate internal control over our financial reporting as that term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

      Our internal control over financial reporting is a process designed under the supervision of our Chief Executive Officer and our Chief Financial Officer to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external reporting purposes in accordance with GAAP.

      Under the supervision of and with the participation of our Chief Executive Officer and our Chief Financial Officer, our management has conducted a review, evaluation and assessment of the effectiveness of our internal control over financial reporting as of December 31, 2005, using the criteria set forth for effective internal control over financial reporting as described in “Internal Control — Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In accordance with Section 404 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”), our management makes the following assertions:

•  Management has implemented a process to monitor and assess both the design and operating effectiveness of our internal control over financial reporting.

•  Because of its inherent limitations, a system of internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness as to future financial reporting periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

      As of December 31, 2005, management, including our Chief Executive Officer and our Chief Financial Officer, concluded that our internal control over financial reporting was effective.

84

      Grant Thornton LLP, an independent registered public accounting firm, audited the effectiveness of our internal control over financial reporting as of December 31, 2005 based on criteria established by COSO. The report of Grant Thornton LLP dated March 21, 2006 is included below.

Limitations on the Effectiveness of Controls

      Our management, including our Chief Executive Officer and our Chief Financial Officer, does not expect that our disclosure controls and internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple errors or mistakes. In addition, controls can be circumvented by the individual acts of some persons, by the collusion of two or more persons or by management’s override of the controls. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives and our Chief Executive Officer and our Chief Financial Officer have concluded that our controls and procedures are effective at that reasonable assurance level.

Changes in Internal Control Over Financial Reporting

      During the quarter ended December 31, 2005, our management, including our Chief Executive Officer and our Chief Financial Officer, concluded that the two remaining material weaknesses in our internal controls over financial reporting, which we initially reported as of December 31, 2004, have been remediated. There were no other changes in our internal controls over financial reporting identified in connection with the evaluation of such controls that occurred during our most recent fiscal quarter that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting. A material weakness is a control deficiency, or a combination of control deficiencies, that results in a more than remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.

      A description of the two changes in our internal controls remediated during the quarter ended December 31, 2005 is as follows:

•  Insufficient Qualified Accounting Personnel — Prior to the quarter ended December 31, 2005, our management, including our Chief Executive Officer and our Chief Financial Officer, had concluded that we had insufficient qualified accounting personnel to identify and resolve complex accounting issues on a timely basis and a lack of appropriate resources resulting in insufficient supervision and review of our financial reporting process. We subsequently retained a qualified independent advisory firm to provide guidance relating to the application of complex accounting principles and retained additional senior accounting personnel to provide sufficient supervision and review of our financial reporting process. Management, including our Chief Executive Officer and our Chief Financial Officer, has concluded that these actions have remediated that material weakness.

•  Third-Party Service Organizations — Prior to the quarter ended December 31, 2005, we were unable to assess the effectiveness of the internal controls of one of Bay View Acceptance Corporation (“BVAC”)’s third-party service organizations. The third-party organization’s processes are an integral part of BVAC’s auto installment loan process, which is part of our internal control over financial reporting. During the quarter ended December 31, 2005, we received a SAS 70 Type II report from this third party service organization. Management, including our Chief Executive Officer and our Chief Financial Officer, has concluded that this action has remediated that material weakness.

85

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

ON MANAGEMENT’S ASSESSMENT OF THE EFFECTIVENESS OF INTERNAL CONTROL

OVER FINANCIAL REPORTING AND THE EFFECTIVENESS

OF INTERNAL CONTROL OVER FINANCIAL REPORTING

To the Shareholders and Board of Directors of
Bay View Capital Corporation and Subsidiaries

      We have audited management’s assessment, included in the accompanying “Management’s Report on Internal Control Over Financial Reporting”, that Bay View Capital Corporation and subsidiaries (the “Company”) maintained effective internal control over financial reporting as of December 31, 2005, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit.

      We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

      A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the consolidated financial statements.

      Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

      In our opinion, management’s assessment that the Company maintained effective internal control over financial reporting as of December 31, 2005, is fairly stated, in all material respects, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2005, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

      We do not express an opinion or any other form of assurance on management’s statements included in this Item 9A, Controls and Procedures, other than those statements included under Management’s Report on Internal Control Over Financial Reporting.

86

      We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated statements of financial condition of Bay View Capital Corporation and subsidiaries as of December 31, 2005 and 2004, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for the years then ended and our report dated March 21, 2006 expressed an unqualified opinion on those consolidated financial statements.

/s/ Grant Thornton LLP

San Francisco, California

March 21, 2006

87

Item 9B. Other Information

      None.

Part III

Item 10. Directors and Executive Officers of the Registrant

      Information concerning our executive officers, our directors and compliance with the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) by our directors, executive officers and beneficial owners of 10% or greater of our equity securities is incorporated by reference to our proxy statement relating to our 2006 annual meeting of stockholders, or will be included in an amendment to this Annual Report on Form 10-K, that will be filed with the SEC not later than April 30, 2006. The compensation report and performance graph to be included in the proxy statement pursuant to items 402(k) and 402(l) of Regulation S-K are specifically not incorporated by reference.

      We have adopted a Code of Ethical Conduct that applies to our directors, executive officers, employees and others acting on our behalf, including our principal executive officer, principal financial and accounting officer, and any other person performing similar functions. A copy of the Code of Ethical Conduct is filed in this Report as Exhibit 14.

Item 11. Executive Compensation

      Information concerning executive compensation is incorporated by reference to our proxy statement relating to our 2006 annual meeting of stockholders, or will be included in an amendment to this Annual Report on Form 10-K, that will be filed with the SEC not later than April 30, 2006.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

      Information concerning security ownership of certain beneficial owners and management and the Equity Compensation Plans table are incorporated by reference to our proxy statement relating to our 2006 annual meeting of stockholders, or will be included in an amendment to this Annual Report on Form 10-K, that will be filed with the SEC not later than April 30, 2006.

Item 13. Certain Relationships and Related Transactions

      Information concerning certain relationships and related transactions is incorporated by reference to our proxy statement relating to our 2006 annual meeting of stockholders, or will be included in an amendment to this Annual Report on Form 10-K, that will be filed with the SEC not later than April 30, 2006.

Item 14. Principal Accountant Fees and Services

      Information concerning principal accounting fees and services is incorporated by reference to our proxy statement relating to our 2006 annual meeting of stockholders, or will be included in an amendment to this Annual Report on Form 10-K, that will be filed with the SEC not later than April 30, 2006.

Part IV

Item 15. Exhibits and Financial Statement Schedules

      (a) (1) and (2):

      Our Financial Statements and Supplementary Data contained in Item 8 are filed as part of this report. All financial statement schedules have been omitted as the required information is not applicable or has been included in our financial statements and related notes.

88

      (a) (3):

      Exhibits are listed in the table below.

Regulation			Reference to Prior
S-K			Filing or Exhibit
Exhibit			Number Attached
Number		Document	Hereto
	2	Plan of acquisition, reorganization, arrangement, liquidation or succession:
		Agreement and Plan of Merger by and between Bay View Capital Corporation and Great Lakes Bancorp, Inc. dated as of October 26, 2005	2a
	3	Articles of Incorporation	3a
		Bylaws	3b
	4	Instruments defining the rights of security holders, including indentures:
		Articles of Incorporation	3a
		Bylaws	3b
		Specimen of common stock certificate	4a
	9	Voting trust agreement	None
	10	Material contracts:
		First Supplemental Indenture between Bay View 2005-LJ-1 Owner Trust, Issuer and Deutsche Bank Trust Company Americas, Indenture Trustee dated as of June 3, 2005, to the Indenture dated as of February 1, 2005	10.1
		Amended and Restated Indenture by and between Bay View 2005 Warehouse Trust, Issuer and JPMorgan Chase Bank, N.A., Indenture Trustee dated as of November 11, 2005	10.2
		Amended and Restated Note Purchase Agreement among Bay View Acceptance Corporation, the Contributor, Bay View 2005 Warehouse Trust, the Issuer, Falcon Asset Securitization Corporation and Fairway Finance Company, LLC, the Initial Purchasers, JPMorgan Chase Bank, N.A. and Harris Nesbitt Corp., the Lender Group Agents, JPMorgan Chase Bank, N.A. and Bank of Montreal, the Financial Institutions and JPMorgan Chase Bank, N.A., the Administrative Agent dated as of November 11, 2005	10.3
		Amended and Restated Sales and Servicing Agreement by and among Bay View 2005 Warehouse Trust, as Issuer, Bay View Warehouse Corporation, as Depositor, Bay View Acceptance Corporation, as Servicer and as Contributor and JPMorgan Chase Bank, N.A. as Indenture Trustee and Systems & Services Technologies, Inc., as Backup Servicer dated as of November 11, 2005	10.4
		Form of Voting Agreement by and among certain directors and officers of Great Lakes Bancorp, Inc. and Bay View Capital Corporation dated as of October 26, 2005	10a
		Stock Purchase Agreement among AmeriCredit Financial Services, Inc., Bay View Capital Corporation and Bay View Acceptance Corporation dated as of November 7, 2005	10b
		Amended and Restated Agreement between Bay View Warehouse Corporation, as Depositor and Wilmington Trust Company, as Owner Trustee dated as of June 20, 2005	10c
		Contribution Agreement by and between Bay View Acceptance Corporation, as Contributor and Bay View 2005 Warehouse Trust, as Depositor dated as of June 20, 2005	10c

89

Regulation			Reference to Prior
S-K			Filing or Exhibit
Exhibit			Number Attached
Number		Document	Hereto
		Custodian Agreement among Bay View Acceptance Corporation, as Custodian, Bay View 2005 Warehouse Trust, as Issuer and JPMorgan Chase Bank, N.A., as Indenture Trustee dated as of June 20, 2005	10c
		Indenture by and between Bay View 2005 Warehouse Trust, as Issuer and JPMorgan Chase Bank, N.A., as Indenture Trustee dated as of June 20, 2005	10c
		Note Purchase Agreement among Bay View Acceptance Corporation, the Contributor, Bay View 2005 Warehouse Trust, the Issuer, Falcon Asset Securitization Corporation and Fairway Finance Company, LLC, the Initial Purchasers, JPMorgan Chase Bank, N.A. and Harris Nesbit Corp., the Lender Group Agents, JPMorgan Chase Bank, N.A. and Bank of Montreal, the Financial Institutions and JPMorgan Chase Bank, N.A., the Administrative Agent dated as of June 20, 2005	10c
		Sale and Servicing Agreement by and among Bay View 2005 Warehouse Trust, as Issuer, Bay View Warehouse Corporation, as Depositor, Bay View Acceptance Corporation, as Servicer and Contributor and JPMorgan Chase Bank, N.A., as Indenture Trustee and Systems & Services Technologies, Inc., as Backup Servicer dated as of June 20, 2005	10c
		Employment Contract with P.K. Chatterjee	10d
		Supplemental Executive Retirement Plan	10e
		Senior Management Incentive Plan	10e
		Senior Management Long-Term Incentive Plan	10e
		Amended and Restated 1986 Stock Option and Incentive Plan	10f
		Amendment No. One to the 1986 Stock Option and Incentive Plan	10g
		Amendment No. One to the Amended and Restated 1995 Stock Option and Incentive Plan	10g
		Amendment No. Two to the Amended and Restated 1995 Stock Option and Incentive Plan	10g
		Amended and Restated 1989 Non-Employee Director Stock Option Plan	10h
		Deferred Compensation Plan	10i
		Amended and Restated 1995 Stock Option and Incentive Plan	10j
		1998  — 2000 Stock Performance Plan	10k
		1998 Non-Employee Director Stock Option and Incentive Plan	10k
		Supplemental Phantom Stock Unit Plan	10l
		2001 Equity Incentive Plan for Employees	10m
		2001 Non-Employee Director Stock Option Plan	10n
		Amendment No. One to the Stock in Lieu of Cash Compensation Plan for Non-Employee Directors	10o
		Amendment No. Three to the Amended Outside Directors Retirement Plan	10o
	11	Statement re computation of per share earnings	11
	12	Statements re computation of ratios	12
	13	Annual Report to security holders	Not required
	14	Code of Ethical Conduct	14

90

Regulation			Reference to Prior
S-K			Filing or Exhibit
Exhibit			Number Attached
Number		Document	Hereto
	16	Letter re change in certifying accountant	Not required
	18	Letter re change in accounting principles	None
	21	Subsidiaries of the Registrant	21
	22	Published report regarding matters submitted to vote of security holders	None
	23	Consent of Grant Thornton LLP	23.1
		Consent of Deloitte & Touche LLP	23.2
	24	Power of attorney	Not required
	31	Certification of Chief Executive Officer pursuant to Rules 13a-14 and 15d-14, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002	31.1
	31	Certification of Chief Financial Officer pursuant to Rules 13a-14 and 15d-14, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002	31.2
	32	Certification of Chief Executive Officer pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002	32.1
	32	Certification of Chief Financial Officer pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002	32.2
	99	Additional Exhibits	None

(References to Prior Filings)

2a	Filed as exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed October 28, 2005 (File No. 001-14879)
3a	Filed as exhibit 3 to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004, as amended on Form 10-Q/A on May 10, 2005 (File No. 001-14879)
3b	Filed as exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed February 1, 2006 (File No. 001-14879)
4a	Filed as exhibit 4.1 to the Registrant’s Annual Report on Form 10-K filed March 24, 2000 for the year ended December 31, 1999 (File No. 001-14879)
10a	Filed as exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed October 28, 2005 (File No. 001-14879)
10b	Filed as exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed November 9, 2005 (File No. 001-14879)
10c	Filed as exhibits 10.1 to 10.6, respectively, to the Registrant’s Quarterly Report on Form 10-Q filed August 5, 2005 for the quarter ended June 30, 2005 (File No. 001-14879)
10d	Filed as exhibit 10.a to the Registrant’s Quarterly Report on Form 10-Q filed November 9, 2004 for the quarter ended September 30, 2004 (File No. 001-14879)
10e	Filed as exhibits 10.6 to 10.8, respectively, to the Registrant’s Annual Report on Form 10-K filed March 30, 1993 for the year ended December 31, 1992 (File No. 000-17901)
10f	Filed as exhibit 4 to the Registrant’s Registration Statement on Form S-8 filed August 11, 1995 (File No. 33-95724)
10g	Filed as exhibits 10 to 10.2, respectively, to the Registrant’s Quarterly Report on Form 10-Q filed November 12, 1999 for the quarterly period ended September 30, 1999 (File No. 001-14879)
10h	Filed as exhibit 4.4 to the Registrant’s Registration Statement on Form S-8 filed July 26, 1991 (File No. 33-41924)

91

10i	Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1996, as amended on Form 10-K/ A on June 27, 1997 (File No. 000-17901)
10j	Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1996, as amended on Form 10-K/ A on June 27, 1997 (File No. 000-17901)
10k	Filed as an appendix to the Registrant’s Definitive Proxy Statement on Schedule 14-A filed April 20, 1998 (File No. 000-17901)
10l	Filed as exhibit 10.4 to the Registrant’s Annual Report on Form 10-K filed on March 24, 2000 for the year ended December 31, 1999 (File No. 001-14879)
10m	Filed as exhibit 10 to the Registrant’s Registration Statement on Form S-8 filed September 27, 2001 (File No. 333-70372)
10n	Filed as exhibit 10 to the Registrant’s Registration Statement on Form S-8 filed September 27, 2001 (File No. 333-70362)
10o	Filed as exhibits 10.1 and 10.2, respectively, to the Registrant’s Annual Report on Form 10-K filed March 19, 2003 for the year ended December 31, 2002 (File No. 001-14879)

      All of such previously filed documents are hereby incorporated herein by reference in accordance with Item 601 of Regulation S-K.

92

Signatures

      Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BAY VIEW CAPITAL CORPORATION

By:  /s/ John Okubo

John Okubo

Executive Vice President and

Chief Financial Officer

(Principal Financial and Accounting Officer)

Date: March 21, 2006

      Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

By: /s/ Robert B. Goldstein Robert B. Goldstein Chairman of the Board	By: /s/ Charles G. Cooper Charles G. Cooper, Director President and Chief Executive Officer (Principal Executive Officer)
Date: March 21, 2006	Date: March 21, 2006
By: /s/ Prodyodth K. Chatterjee Prodyodth K. Chatterjee, Director Executive Vice President and Director of Retail Operations	By: /s/ Joel E. Hyman Joel E. Hyman Director
Date: March 21, 2006	Date: March 21, 2006
By: /s/ Frederick W. Dreher Frederick W. Dreher Director	By: /s/ Daniel W. Porter Daniel W. Porter Director
Date: March 21, 2006	Date: March 21, 2006
By: /s/ Roger K. Easley Roger K. Easley Director	By: /s/ John W. Rose John W. Rose Director
Date: March 21, 2006	Date: March 21, 2006
By: /s/ Thomas M. Foster Thomas M. Foster Director
Date: March 21, 2006

93 EX-10.1 2 f16969exv10w1.htm EXHIBIT 10.1

Exhibit 10.1

BAY VIEW 2005-LJ-1 OWNER TRUST

Issuer

and

DEUTSCHE BANK TRUST COMPANY AMERICAS

Indenture Trustee

FIRST SUPPLEMENTAL INDENTURE

Dated as of June 3, 2005

to the

INDENTURE

Dated as of February 1, 2005

     FIRST SUPPLEMENTAL INDENTURE, dated as of June 3, 2005, among BAY VIEW 2005-LJ-1 OWNER TRUST, a statutory trust organized and existing under the laws of the State of Delaware (the “Issuer”) and DEUTSCHE BANK TRUST COMPANY AMERICAS, a New York banking corporation, as indenture trustee (the “Indenture Trustee”).

RECITALS

     The Issuer has heretofore duly executed and delivered to the Indenture Trustee an Indenture, dated as of February 1, 2005 (the “Indenture”), providing for the issuance of the Notes. All capitalized terms used in this First Supplemental Indenture and not defined herein shall have the meaning assigned to them in the Indenture.

     Section 10.01(a)(v) of the Indenture provides that, without the consent of the Holders of any Notes, but with the consent of the Insurer (so long as the Insurer is the Controlling Party) and with prior notice to each Rating Agency, the Issuer and the Indenture Trustee, when authorized by an Issuer Order, may enter into one or more supplemental indentures to correct or supplement provisions of the Indenture that may be inconsistent with any other provision in any of the Basic Documents.

     The changes to the Indenture contemplated by this First Supplemental Indenture will correct or supplement a provision in the Indenture that may be inconsistent with certain provisions of the Insurance Agreement and/or the Policy, and the Insurance Agreement and the Policy are each a Basic Document.

     All things necessary to make this First Supplemental Indenture a valid agreement of the Issuer, and a valid supplement to the Indenture, have been done.

     Now, Therefore, for and in consideration of the premises, it is mutually agreed as follows:

     1. Section 1.01(a) of the Indenture is hereby amended by adding a new definition of “Deficiency Amount” in the appropriate alphabetical order thereto, which definition shall read in its entirety as follows:

     “Deficiency Amount” shall have the meaning assigned to such term in the Policy.

     2. Section 9.03(a) of the Indenture is hereby amended by deleting clause “(a)” thereof in its entirety, and replacing the following in lieu thereof:

“(a) In the event that the Indenture Trustee has delivered a Deficiency Notice with respect to any Determination Date, the Indenture Trustee shall determine on the Determination Date for the related Draw Date the Deficiency Amount for the related Payment Date. In making such determination the Indenture Trustee may conclusively rely on the information provided in the Servicer’s Certificate. If the Deficiency Amount for such Payment Date is greater than zero, the Trustee shall furnish to the Insurer no later than 12:00 noon New York City time on the Determination Date, and in no event later than the Draw Date, a completed Notice

1

of Claim in the amount of the Deficiency Amount (such amount being hereinafter referred to as the “Policy Claim Amount”). Amounts paid by the Insurer under the Policy shall be deposited by the Indenture Trustee into the Collection Account for payment to Noteholders on the related Payment Date (or promptly following payment by the Insurer on a later date as set forth in the Policy) solely in accordance with the terms of the Policy.”

     This First Supplemental Indenture shall be construed in accordance with and governed by the substantive laws of the State of New York (including New York General Obligations Laws §§ 5-1401 and 5-1402, but otherwise without regard to conflict of law provisions thereof) applicable to agreements made and to be performed therein.

     This First Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

2

     IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this Indenture to be duly executed as of the day and year first above written.

Bay View 2005-LJ-1 Owner Trust,
	as Issuer
By:	Wilmington Trust Company,
	not in its individual
	capacity, but solely as Owner Trustee
By:
Name:
Title:
Deutsche Bank Trust Company Americas,
not in its individual capacity, but solely as
Indenture Trustee
By:
Name:
Title:

Consented and Agreed to:

MBIA Insurance Corporation
as the Insurer

By:

Name:

Title:

EX-10.1

exv10w1

EX-10.2

Exhibit 10.2

EXECUTION COPY

Bay View 2005 Warehouse Trust

Issuer

and

JPMorgan Chase Bank, N.A.

Indenture Trustee

Amended and Restated Indenture

Dated as of November 11, 2005

$450,000,000

Bay View 2005 Warehouse Trust

Automobile Receivables-Backed Notes, Series 2005-1

Table of Contents

		Page
Article I
	Definitions		2
	Section 1.01. General Definitions		2
	Section 1.02. Calculations		27
Article II
	The Notes; Reconveyance		27
	Section 2.01. General		27
	Section 2.02. Forms of Notes		28
	Section 2.03. Payment of Principal and Interest		28
	Section 2.04. Payments to Noteholders		29
	Section 2.05. Execution, Authentication, Delivery and Dating		29
	Section 2.06. Registration, Registration of Transfer and Exchange		30
	Section 2.07. Transfer and Exchange		31
	Section 2.08. Mutilated, Destroyed, Lost or Stolen Notes		32
	Section 2.09. Persons Deemed Noteholders		33
	Section 2.10. Cancellation of Notes		33
	Section 2.11. Conditions to Closing		33
	Section 2.12. Funding Events		35
	Section 2.13. Fundings		37
	Section 2.14. Fundings by Noteholders		38
	Section 2.15. Access to List of Noteholders’ Names and Addresses		38
Article III
	Covenants; Collateral; Representations; Warranties		38
	Section 3.01. Performance of Obligations		38

i

Table of Contents
(continued)

		Page
	Section 3.02. Negative Covenants		39
	Section 3.03. Money for Note Payments		40
	Section 3.04. Restriction of Issuer Activities		42
	Section 3.05. Protection of Trust Estate		43
	Section 3.06. Opinions as to Trust Estate		44
	Section 3.07. Statement as to Compliance		45
	Section 3.08. Limitations on Lien		45
	Section 3.09. Recording		45
	Section 3.10. Agreements Not to Institute Bankruptcy Proceedings; Additional Covenants		46
	Section 3.11. Providing of Notice		48
	Section 3.12. Representations and Warranties of the Issuer		49
	Section 3.13. Representations and Warranties of the Indenture Trustee		52
	Section 3.14. Performance of Obligation		53
	Section 3.15. Hedge Agreement Provisions		54
Article IV
	Administration and Servicing of Receivables		55
	Section 4.01. Sale and Servicing Agreement		55
Article V
	Accounts, Collections, Payments of Interest and Principal, Releases, Spread Account, and Statements to Noteholders		56
	Section 5.01. Accounts		56
	Section 5.02. Collection Account and Spread Account		59
	Section 5.03. Distribution of Funds in the Collection Account		60
	Section 5.04. Note Payments		61

ii

Table of Contents
(continued)

		Page
	Section 5.05. Statements to Noteholders; Tax Returns		63
	Section 5.06. Reports by Indenture Trustee		63
	Section 5.07. Final Balances		63
Article VI
	Repayment of Notes		64
	Section 6.01. Optional Repayment		64
	Section 6.02. Repayment Payments		65
	Section 6.03. Cancellation of Notes		65
	Section 6.04. Release of Collateral		65
Article VII
	The Indenture Trustee		66
	Section 7.01. Duties of Indenture Trustee		66
	Section 7.02. Notice of Termination Event, Default, Servicer Event of Default or Event of Default		68
	Section 7.03. Rights of Indenture Trustee		69
	Section 7.04. Not Responsible for Recitals, Issuance of Notes or Application of Moneys as Directed		69
	Section 7.05. May Hold Notes		69
	Section 7.06. Money Held in Trust		70
	Section 7.07. Compensation and Reimbursement		70
	Section 7.08. Eligibility; Disqualification		71
	Section 7.09. Indenture Trustee’s Capital and Surplus		71
	Section 7.10. Resignation and Removal; Appointment of Successor		72
	Section 7.11. Acceptance of Appointment by Successor		72

iii

Table of Contents
(continued)

		Page
	Section 7.12. Merger, Conversion, Consolidation or Succession to Business of Indenture Trustee		73
	Section 7.13. Co-trustees and Separate Indenture Trustees		73
	Section 7.14. Books and Records		75
	Section 7.15. Control		75
	Section 7.16. Suits for Enforcement		75
Article VIII
	Event of Default		75
	Section 8.01. Events of Default		75
	Section 8.02. Actions of Indenture Trustee		77
	Section 8.03. Indenture Trustee May File Proofs of Claim		77
	Section 8.04. Indenture Trustee May Enforce Claim Without Possession of Notes		78
	Section 8.05. Knowledge of Indenture Trustee		78
	Section 8.06. Limitation on Suits		78
	Section 8.07. Unconditional Right of Noteholders to Receive Principal and Interest		79
	Section 8.08. Restoration of Rights and Remedies		79
	Section 8.09. Rights and Remedies Cumulative		79
	Section 8.10. Delay or Omission; Not Waiver		79
	Section 8.11. Control by Noteholders		80
	Section 8.12. Waiver of Certain Events by Less than All Noteholders		80
	Section 8.13. Undertaking for Costs		80
	Section 8.14. Waiver of Stay or Extension Laws		81
	Section 8.15. Sale of Trust Estate		81

iv

Table of Contents
(continued)

		Page
	Section 8.16. Action on Notes		82
Article IX
	Supplemental Indentures		82
	Section 9.01. Supplemental Indentures Without Noteholder Approval		82
	Section 9.02. Supplemental Indentures with Consent of Noteholders		83
	Section 9.03. Execution of Amendments and Supplemental Indentures		84
	Section 9.04. Effect of Amendments and Supplemental Indentures		84
	Section 9.05. Reference in Notes to Amendments and Supplemental Indentures		84
	Section 9.06. Indenture Trustee to Act on Instructions		84
Article X
	Miscellaneous		85
	Section 10.01. Compliance Certificates and Opinions; Furnishing of Information		85
	Section 10.02. Form of Documents Delivered to Indenture Trustee		85
	Section 10.03. Acts of Noteholders		86
	Section 10.04. Notices, Etc		87
	Section 10.05. Notices and Reports to Noteholders; Waiver of Notices		88
	Section 10.06. Rules by Indenture Trustee		89
	Section 10.07. Issuer Obligation		89
	Section 10.08. Enforcement of Benefits		89
	Section 10.09. Effect of Headings and Table of Contents		89
	Section 10.10. Successors and Assigns		90
	Section 10.11. Separability		90
	Section 10.12. Benefits of Indenture		90
	Section 10.13. Legal Holidays		90

v

Table of Contents
(continued)

		Page
	Section 10.14. Governing Law		90
	Section 10.15. Counterparts		90
	Section 10.16. Recording of Indenture		90
	Section 10.17. Further Assurances		91
	Section 10.18. No Bankruptcy Petition Against the Issuer		91
	Section 10.19. Limitation of Liability		91
	Section 10.20. Limitation on Recourse		91
	Section 10.21. Confidentiality		91
	Section 10.22. Amendment and Restatement		91
Article XI
	Termination		92
	Section 11.01. Termination of Indenture		92

Schedule I	—	Schedule of Initial Receivables
Exhibit A	—	Form of Funding Certificate	A-1
Exhibit B	—	[Reserved]	B-1
Exhibit C	—	Form of Notice of Funding	C-1
Exhibit D	—	Form of Note	D-1
Exhibit E	—	Form of Transferee Letter	E-1

vi

          This Amended and Restated Indenture (as amended or supplemented from time to time, the “Indenture”) is dated and made as of November 11, 2005 (the “Effective Date”) between Bay View 2005 Warehouse Trust, a statutory trust organized under the laws of the State of Delaware, as issuer (the “Issuer”), and JPMorgan Chase Bank, N.A., a national banking association, as trustee (the “Indenture Trustee”).

Preliminary Statement

          WHEREAS, the Issuer and the Indenture Trustee entered into the Indenture, dated as of June 20, 2005 (the “Prior Agreement”); and

          WHEREAS, this Agreement is an amendment and restatement of the Prior Agreement; and

          WHEREAS, the Prior Agreement duly authorized the execution and delivery of the Issuer’s Automobile Receivables-Backed Notes, Series 2005-1 (hereinafter called the “Notes”). All covenants and agreements made by the Issuer herein are for the benefit and security of the Noteholders. The Issuer is entering into this Indenture, and the Indenture Trustee is accepting the trusts created hereby, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged.

Granting Clause

          The Issuer hereby Grants to the Indenture Trustee, for the benefit of the Noteholders, the Agent and the Financial Institutions, as their interests may appear, all of the rights, title, interest and benefits of the Issuer in and to (a) the Receivables identified on the Schedule of Receivables acquired by the Issuer on the Closing Date and on each Funding Date and all moneys received thereon on or after the applicable Cutoff Date; (b) the security interest of the Issuer in the Financed Vehicles Granted by the Obligors pursuant to such Receivables and any accessions thereto, and other interests of the Issuer in the Financed Vehicles and accessions, including, without limitation, the related Certificates of Title; (c) any service warranties and service contracts and any physical damage, credit life, risk default, disability, gap or other insurance policies covering the Financed Vehicles or the related Obligors and any refunds in connection therewith relating to Receivables (including, without limitation, State tax refunds) and any proceeds from liquidation of the Receivables or Financed Vehicles received after the related Cutoff Date; (d) all property (including the right to receive future Recoveries) that shall secure a Receivable; (e) the rights that relate to a Receivable under each Dealer Agreement and the rights under the Contribution Agreement, the Sale and Servicing Agreement, the Custodian Agreement, each Contributor Assignment and each Depositor Assignment, including, but not limited to, any recourse against any Dealer, the Contributor or the Depositor and any rights or benefits of the Issuer under the Sale and Servicing Agreement and the Custodian Agreement; (f) rebates or refunds of premiums and other amounts relating to insurance policies and other items financed under the Receivables or otherwise covering an Obligor or a Financed Vehicle; (g) amounts from time to time deposited in the Collection Account and the Spread Account and investments thereof; (h) the original retail installment contracts and security agreements and any amendments

thereof evidencing the Receivables; (i) all documentation in the Custodian File and other documents maintained by the Contributor according to its customary procedures with respect to the Receivables, Financed Vehicles, Accounts or Obligors; (j) each Hedge Agreement entered into by the Issuer pursuant to the terms of Section 3.15 hereof and all payments made to the Issuer or the Servicer by the Hedge Counterparty pursuant to any Hedge Agreement; and (k) the proceeds of any and all of the foregoing, including all proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or other property whether now existing or hereinafter arising.

          Such Grants are made in trust, to secure payments of amounts due with respect to the Notes ratably and without prejudice, priority or distinction between the Notes, and to secure (i) the payment of all amounts on the Notes as such amounts become due in accordance with their terms, (ii) the payment of all other sums payable in accordance with the provisions of this Indenture, and (iii) compliance with the provisions of this Indenture, all as provided in this Indenture.

          The Indenture Trustee acknowledges such Grants, accepts the trusts hereunder in accordance with the provisions of this Indenture, and agrees to perform the duties herein required pursuant to the terms and provisions of this Indenture and subject to the conditions hereof.

          PROVIDED, HOWEVER, that if there shall well and truly be paid the principal of the Notes and the interest due or to become due on the Notes, at the times and in the manner mentioned in the Notes, according to the true intent and meaning thereof, and payments shall be made into the Collection Account as required under this Indenture and the Issuer shall well and truly keep, perform and observe all the covenants and conditions pursuant to the terms of this Indenture to be kept, performed and observed by the Issuer, and the Issuer shall pay or cause to be paid to the Indenture Trustee and all of its agents for the registration, authentication, transfer or exchange of Notes all sums of money due or to become due to it or them in accordance with the terms and provisions hereof, then this Indenture and the rights hereby Granted shall cease, terminate and be void; otherwise, except as provided in Article XI hereof, this Indenture shall be and remain in full force and effect.

Article I

Definitions

     Section 1.01. General Definitions. Except as otherwise specified or as the context may otherwise require, the following terms have the respective meanings set forth below for all purposes of this Indenture, and the definitions of such terms are applicable to the singular as well as to the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms. Capitalized terms not defined herein shall have the meanings ascribed to such terms as set forth in the Sale and Servicing Agreement or, if not defined therein, in the Contribution Agreement.

          “ABS Speed” means, at any time, the assumed rate of prepayments on the Receivables based upon the “Absolute Prepayment Model” applied in accordance with the then current market standards.

2

          “Account Property” means the Accounts and all proceeds of the Accounts, including, without limitation, all amounts and investments held from time to time in any Account (whether in the form of deposit accounts, book-entry securities, uncertificated securities, security entitlements (as defined in Section 8-102(a)(17) of the UCC as enacted in the State of New York), financial assets (as defined in Section 8-102(a)(9) of the UCC), or any other investment property (as defined in Section 9-102(a)(49) of the UCC).

          “Accounts” means, collectively, the Collection Account and the Spread Account.

          “Acknowledgement” means that certain receipt of Indenture Trustee, dated as of the Closing Date, with respect to the Initial Receivables and any such receipt with respect to Subsequent Receivables.

          “Act” has the meaning specified in Section 10.03 hereof.

          “Additional Note Principal Balance” has the meaning set forth in Section 2.13(a).

          “Adjusted LIBOR Rate” shall have the meaning ascribed thereto in the Note Purchase Agreement.

          “Administrative Agent” shall have the meaning ascribed thereto in the Note Purchase Agreement.

          “Affiliate” means, with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person. For the purposes of this definition, a Person shall be deemed to “control” another Person if the controlling Person owns 5% or more of any class of voting securities of the controlled Person or possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of stock, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

          “Agent” means the Lender Group Agents and the Administrative Agent.

          “Aggregate Receivable Balance” means, (i) with respect to the Closing Date, the aggregate Receivable Balance of the Receivables as of the Initial Cutoff Date, (ii) with respect to any Funding Date, the aggregate Receivable Balance of the related Subsequent Receivables as of the related Cutoff Date plus the aggregate Receivable Balance of all other Receivables as of such Funding Date and (iii) with respect to any other date of determination, the aggregate Receivable Balance on such date of determination of all Receivables owned by the Issuer and Granted to the Indenture Trustee as of such date of determination.

          “Amount Financed” means, with respect to a Receivable the amount advanced under the Receivable toward the purchase price of the related Financed Vehicle and any related costs, including but not limited to, service warranties and service contracts, and physical damage, credit life, risk default, disability or gap insurance covering the Financed Vehicle.

3

          “Annual Percentage Rate” or “APR” means, with respect to a Receivable, the annual rate of finance charges stated in the retail installment contract and security agreement evidencing such Receivable.

          “Applicable Margin” means one percent (1.00%).

          “Authorized Officer” means, with respect to the Issuer, any officer of the Owner Trustee or agent acting pursuant to a power of attorney of the Issuer, and with respect to any other Person, the Chairman, Co-Chairman or Vice Chairman of the Board of Directors, the President, any Vice President, or the Treasurer of such Person.

          “Average Default Ratio” means, with respect to any Determination Date, the arithmetic average of the Default Ratios for each of the three (3) Collection Periods immediately preceding such Determination Date; provided however, that (a) for the Determination Date occurring in July 2005, the “Average Default Ratio” shall be the Default Ratio for the Collection Period immediately preceding such Determination Date, and (b) for the Determination Date occurring in August 2005, the “Average Default Ratio” shall be the arithmetic average of the Default Ratios for each of the two (2) Collection Periods immediately preceding such Determination Date.

          “Average Delinquency Ratio” means, with respect to any Determination Date, the arithmetic average of the Delinquency Ratios for each of the three (3) Collection Periods immediately preceding such Determination Date; provided however, that (a) for the Determination Date occurring in July 2005, the “Average Delinquency Ratio” shall be the Delinquency Ratio for the Collection Period immediately preceding such Determination Date, and (b) for the Determination Date occurring in August 2005, the “Average Delinquency Ratio” shall be the arithmetic average of the Delinquency Ratios for each of the two (2) Collection Periods immediately preceding such Determination Date.

          “Backup Servicer” means Systems & Services Technologies, Inc. and any successor Backup Servicer under the Sale and Servicing Agreement.

          “Bank of Montreal” means Bank of Montreal, a Canadian chartered bank acting through its Chicago Branch.

          “Bank Rate” means a per annum rate equal to LIBOR or the Prime Rate, as determined in accordance with Section 2.04 of the Note Purchase Agreement.

          “Base Rate” means a per annum rate equal to the greater of (A) JP Morgan Chase Bank, N.A.’s Prime Rate less two percent (2.00%) and (B) the sum of the Federal Funds Rate plus one-half percent (0.50%).

          “Bay View Acceptance” means Bay View Acceptance Corporation, a Nevada corporation.

          “Bay View Capital” means Bay View Capital Corporation, a Delaware corporation.

          “Benefit Plan” has the meaning specified in Section 2.07(b).

4

          “Breakage Costs” means the cost, if any, of terminating or adjusting any Hedge Transaction or Hedge Transactions, as the case may be, incurred in conjunction with the early repayment of Notes.

          “Broken Funding Costs” means with respect to the early repayment of any Note, any loss (including loss of profit), cost or expense incurred by the applicable Noteholder (as reasonably determined by the Agent) as a result of such repayment, such compensation to be an amount equal to the Note Interest that would have accrued on the amount so repaid from the date of such repayment to the date of the scheduled repayment, net of any income received by the Noteholder over such time period from investing the amount of such early repayment.

          “Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banking or federal institutions in New York, New York, San Francisco, California, Wilmington, Delaware, or in the city in which the Corporate Trust Office of the Indenture Trustee is located are authorized or obligated by law or executive order to be closed.

          “Calculation Date” means, with respect to a Payment Date or a Repayment Date, the last Business Day of the calendar month immediately preceding the month of such Payment Date or Repayment Date.

          “Certificate of Title” means, with regard to each Financed Vehicle (i) the original certificate of title relating thereto, or copies of correspondence and application made in accordance with applicable law to the appropriate State title registration agency, and all enclosures thereto, for issuance of its original certificate of title or (ii) if the appropriate State title registration agency issues a letter or other form of evidence of lien in lieu of a certificate of title, the original lien entry letter or form or copies of correspondence and application made in accordance with applicable law to such State title registration agency, and all enclosures thereto, for issuance of the original lien entry letter or form.

          “Certificate of Trust” means the certificate of trust of the Issuer substantially in the form of Exhibit B to the Issuer Trust Agreement.

          “Certification” shall have the meaning ascribed thereto in the Custodian Agreement.

          “Change of Control” means any event, transaction or occurrence as a result of which (a) Bay View Capital ceases to own and control, directly or indirectly through a wholly-owned subsidiary, all of the economic and voting rights associated with ownership of more than fifty-one percent (51%) of all classes of the outstanding capital stock of Bay View Acceptance on a fully diluted basis, (b) Bay View Acceptance ceases to own and control all of the economic and voting rights associated with all of the outstanding capital stock of the Depositor or (c) the Depositor ceases to own and control all of the beneficial interests in the Issuer.

          “Closing Date” means June 20, 2005.

          “Code” means the Internal Revenue Code of 1986, as amended, including any successor or amendatory statutes and U.S. Department of the Treasury regulations promulgated thereunder.

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          “Collateral Test Amount” means, as of any Funding Date or Determination Date the difference between (a) the Receivables Advance Amount and (b) the Note Principal Balance as of such date.

          “Collection Account” means the segregated trust account with that name established with and in the name of the Indenture Trustee pursuant to Section 5.01 hereof.

          “Collection Period” means, with respect to a Payment Date or a Calculation Date immediately preceding any Payment Date, the period beginning on the first day of the calendar month immediately preceding such Payment Date and ending on the last day of such calendar month (each such calendar month and portion thereof being referred to as the “related” Collection Period with respect to a Payment Date or Calculation Date); provided, that the initial Collection Period shall begin on the Initial Cutoff Date and shall end on June 30, 2005.

          “Collections” means all payments received with respect to the Receivables and other items of the Trust Estate, including, without limitation, Scheduled Obligor Payments, Repurchase Prices and Recoveries. “Collections” shall not include Supplemental Servicing Fees.

          “Commercial Paper” means promissory notes of any Noteholder issued by such Noteholder in the commercial paper market.

          “Commitment Expiry Date” has the meaning ascribed thereto in the Note Purchase Agreement.

          “Contribution Agreement” means the Contribution Agreement, dated as of the date hereof, between the Contributor and the Depositor relating to the transfer of Receivables by the Contributor to the Depositor, as amended, modified or otherwise supplemented from time to time in accordance with the terms thereof.

          “Contributor” means Bay View Acceptance and its successors.

          “Contributor Financing Statement” means a UCC-1 financing statement naming the Depositor as the secured party and the Contributor as the debtor.

          “Corporate Trust Office” means the office of the Indenture Trustee at which its corporate trust business shall be administered, which office at the date of this Indenture shall be 600 Travis St., 9^th Floor, Houston, TX 77002, Attention: Structured Finance — Bay View 2005, or such other address as shall be designated by the Indenture Trustee in a written notice to the Issuer, the Servicer, the Owner Trustee, the Noteholders and the Agent.

          “CP Rate” shall have the meaning ascribed thereto in the Note Purchase Agreement.

          “Cram Down Loss” means, with respect to any Receivable (other than a Defaulted Receivable) as to which any court in any bankruptcy, insolvency or other similar proceeding issues an order reducing the principal amount to be paid on such Receivable or otherwise modifies any payment terms with respect thereto, an amount equal to (i) the amount of the principal reduction ordered by such court or (ii) the difference between the principal balance of such Receivable at the time of such court order and the net present value (using a discount rate

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which is the higher of the APR of such Receivable or the rate of interest specified by such court order) of the then remaining Scheduled Obligor Payments as modified or restructured. A Cram Down Loss will be deemed to have occurred on the date of issuance of such court’s order.

          “Current Peak Aggregate Receivables Balance” means the highest Aggregate Receivables Balance of all Eligible Receivables that occurred since the most recent Repayment Date associated with a term securitization, whole loan sale, or combination thereof.

          “Current Peak Note Percentage Reserve Amount” means, as of any Funding Date, an amount equal to the product of (i) Current Peak Aggregate Receivables Balance times (ii) 1 minus the Note Percentage.

          “Custodian” means Bay View Acceptance, in its capacity as custodian of the Custodian Files pursuant to the Custodian Agreement, and its permitted successors and assigns.

          “Custodian Agreement” means that certain Custodian Agreement, dated as of the date hereof, among the Custodian, the Indenture Trustee and the Issuer as the same may be amended, modified or otherwise supplemented from time to time in accordance with the terms thereof.

          “Cutoff Date” means, with respect to the Closing Date, the Initial Cutoff Date, and with respect to a Funding Date, the related Subsequent Cutoff Date.

          “Dealer” means an automobile dealer which sold a Financed Vehicle to an Obligor and through which the respective Receivable was originated by the Contributor, which Receivable was assigned by such Dealer to the Contributor pursuant to the related Dealer Agreement and is being assigned by the Contributor to the Depositor pursuant to the Contribution Agreement, and assigned to the Issuer by the Depositor pursuant to the Sale and Servicing Agreement and Granted by the Issuer to the Indenture Trustee hereunder.

          “Dealer Agreement” means an agreement between a Dealer and the Contributor regarding the terms and conditions of the acquisition by the Contributor from such Dealer of Receivables, which agreement includes (a) certain representations, warranties and covenants of such Dealer with respect to the Receivables sold by such Dealer and (b) the agreement of such Dealer to repurchase any Receivable with respect to which one or more of such representations and warranties has been breached.

          “Default” means any event which results, or which with the giving of notice or the lapse of time or both would result, in an Event of Default or a Servicer Event of Default.

          “Default Rate” means a per annum rate equal to Base Rate plus four percent (4.00%) .

          “Default Ratio” means, with respect to any Collection Period, a fraction, expressed as a percentage, equal to (i) the product of (a) 12 times (b) the excess of the aggregate of the Receivable Balances of all Receivables that become Defaulted Receivables during such Collection Period over Recoveries collected during such Collection Period, divided by (ii) the Aggregate Receivable Balance as of the first day of such Collection Period.

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          “Defaulted Receivable” means any Receivable with respect to which any of the following shall have occurred: (i) the related Financed Vehicle shall have been repossessed and 60 days or more shall have elapsed since repossession, (ii) 10% or more of any Scheduled Obligor Payment remains unpaid for 120 or more days from the date on which it is due and payable, (iii) the Servicer has determined in good faith in accordance with its Collection Policy that eventual payment in full of the Receivable is unlikely, or (iv) the Servicer has “charged off” the Receivable in accordance with its Collection Policy.

          “Deficiency Claim Amount” means, with respect to any Determination Date, the amount, if any, by which the amount of the Monthly Available Funds (other than amounts to be transferred to the Collection Account from the Spread Account pursuant to Section 5.03(a)) is less than the sum of the amounts payable on the related Payment Date pursuant to priorities First through Sixteenth in Section 5.03(b) hereof.

          “Delinquency Ratio” means, with respect to any Collection Period, a fraction, expressed as a percentage, (a) the numerator of which is equal to the aggregate of the Receivable Balances of all Receivables (other than a Defaulted Receivable) as to which 10% or more of any Scheduled Obligor Payment remains unpaid for thirty (30) days or more from the date on which it is due and payable at the end of such Collection Period, and (b) the denominator of which is equal to the Aggregate Receivable Balance as of the end of such Collection Period.

          “Delinquent Receivable” means any Receivable (other than a Defaulted Receivable) as to which 10% or more of any Scheduled Obligor Payment remains unpaid for sixty (60) days or more from the date on which it is due and payable.

          “Delivery” when used with respect to Account Property means:

     (1)(a) with respect to bankers’ acceptances, commercial paper, negotiable certificates of deposit and other obligations that constitute “instruments” within the meaning of Section 9-102(a)(47) of the UCC, transfer thereof:

     (i) by physical delivery to the Indenture Trustee, indorsed to, or registered in the name of, the Indenture Trustee or its nominee or indorsed in blank;

     (ii) by the Indenture Trustee continuously maintaining possession of such instrument; and

     (iii) by the Indenture Trustee continuously indicating by book-entry that such instrument is credited to the related Account;

     (b) with respect to a “certificated security” (as defined in Section 8-102(a)(4) of the UCC), transfer thereof:

     (i) by physical delivery of such certificated security to the Indenture Trustee, provided that if the certificated security is in registered form, it shall be indorsed to, or registered in the name of, the Indenture Trustee or indorsed in blank;

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     (ii) by the Indenture Trustee continuously maintaining possession of such certificated security; and

     (iii) by the Indenture Trustee continuously indicating by book-entry that such certificated security is credited to the related Account;

     (c) with respect to any security issued by the U.S. Treasury, the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association that is a book-entry security held through the Federal Reserve System pursuant to Federal book entry regulations, the following procedures, all in accordance with applicable law, including applicable federal regulations and Articles 8 and 9 of the UCC, transfer thereof:

     (i) by (x) book-entry registration of such property to an appropriate book-entry account maintained with a Federal Reserve Bank by a securities intermediary which is also a “depositary” pursuant to applicable federal regulations and issuance by such securities intermediary of a deposit advice or other written confirmation of such book-entry registration to the Indenture Trustee of the purchase by the securities intermediary on behalf of the Indenture Trustee of such book-entry security; the making by such securities intermediary of entries in its books and records identifying such book-entry security held through the Federal Reserve System pursuant to Federal book-entry regulations as belonging to the Indenture Trustee and continuously indicating that such securities intermediary holds such book-entry security solely as agent for the Indenture Trustee or (y) continuous book-entry registration of such property to a book-entry account maintained by the Indenture Trustee with a Federal Reserve Bank; and

     (ii) by the Indenture Trustee continuously indicating by book-entry that property is credited to the related Account;

     (d) with respect to any asset in the Accounts that is an “uncertificated security” (as defined in Section 8-102(a)(18) of the UCC) and that is not governed by clause (c) above or clause (e) below:

     (i) transfer thereof:

     (A) by registration to the Indenture Trustee as the registered owner thereof, on the books and records of the issuer thereof; or

     (B) by another Person (not a securities intermediary) who either becomes the registered owner of the uncertificated security on behalf of the Indenture Trustee, or having become the registered owner, acknowledges that it holds for the Indenture Trustee; or

     (ii) the issuer thereof has agreed that it will comply with instructions originated by the Indenture Trustee with respect to such uncertificated security without further consent of the registered owner thereof; or

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     (e) in the case of each security in the custody of or maintained on the books of a clearing corporation (as defined in Section 8-102(a)(5)) or its nominee, by causing:

     (i) the relevant clearing corporation to credit such security to a securities account of the Indenture Trustee at such clearing corporation; and

     (ii) the Indenture Trustee to continuously indicate by book-entry that such security is credited to the related Account;

     (f) with respect to a “security entitlement” (as defined in Section 8-102(a)(17) of the UCC) to be transferred to or for the benefit of the Indenture Trustee and not governed by clauses (c) or (e) above: if a securities intermediary (A) indicates by book entry that the underlying “financial asset” (as defined in Section 8-102(a)(9) of the UCC) has been credited to be the Indenture Trustee’s “securities account” (as defined in Section 8-501(a) of the UCC), (B) receives a financial asset from the Indenture Trustee or acquires the underlying financial asset for the Indenture Trustee, and in either case, accepts it for credit to the Indenture Trustee’s securities account or (C) becomes obligated under other law, regulation or rule to credit the underlying financial asset to the Indenture Trustee’s securities account, the making by the securities intermediary of entries on its books and records continuously identifying such security entitlement as belonging to the Indenture Trustee; and continuously indicating by book-entry that such securities entitlement is credited to the Indenture Trustee’s securities account; and by the Indenture Trustee continuously indicating by book-entry that such security entitlement (or all rights and property of the Indenture Trustee representing such securities entitlement) is credited to the related Account; and/or

     (2) In the case of any such asset, such additional or alternative procedures as are now or may hereafter become appropriate to effect the complete transfer of ownership of, or control over, any such assets in the Accounts to the Indenture Trustee free and clear of any adverse claims, consistent with changes in applicable law or regulations or the interpretation thereof.

          In each case of delivery contemplated herein, the Indenture Trustee shall make appropriate notations on its records, and shall cause the same to be made on the records of its nominees, indicating that securities are held in trust pursuant to and as provided in this Indenture.

          “Delivery Date” has the meaning specified in Section 2.12(a)(i) hereof.

          “Depositor” means Bay View Warehouse Corporation, a Delaware corporation, and its successors.

          “Depositor Financing Statement” means a UCC-1 financing statement naming the Issuer as the secured party and the Depositor as the debtor.

          “Eligible Account” means either (a) a segregated account or accounts maintained with an Eligible Institution or (b) a segregated trust account or accounts maintained with the trust department of a federal or State chartered depository institution acceptable to the Agent, having capital and surplus of not less than $100,000,000, acting in its fiduciary capacity.

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          “Eligible Hedge Counterparty” means a Hedge Counterparty which (a) has a long-term unsecured debt rating of not less than “AA-” by S&P and “Aa3” by Moody’s (“Long-term Rating Requirement”), (b) has a short-term unsecured debt rating of not less than “A-1+” by S&P or “P1” by Moody’s (the “Short-term Rating Requirement”) and (c) in a Hedge Agreement (i) consents to the assignment of the Issuer’s rights under the Hedge Agreement to the Indenture Trustee for the ratable benefit of the Noteholders and (ii) agrees that in the event that S&P and Moody’s reduces its long-term unsecured debt rating below the Long-term Rating Requirement or its short-term unsecured debt rating below the Short-term Rating Requirement, it shall (x) transfer its rights and obligations under each Hedge Transaction to another entity that meets the requirements of clauses (a), (b) and (c) hereof and has entered into a Hedge Agreement with the Issuer on or prior to the date of such transfer or (y) put in place appropriate mark-to-market collateral arrangements which will be based on the 1994 ISDA Credit Support Annex (New York law version) and which will relate to collateral in the form of USD cash or securities or both in support of its obligations under the applicable Hedge Agreement that will result in the total negation of the effect of such ratings downgrade.

          “Eligible Institution” means an institution whose deposits are insured by the Federal Deposit Insurance Corporation, the unsecured and uncollateralized long-term debt obligations of which institution shall be rated “A+” or higher by S&P and “Aa2” or higher by Moody’s and the short-term debt obligations of which have the highest short term rating by each of the Rating Agencies, and which is (i) a federal savings and loan association duly organized, validly existing and in good standing under the federal banking laws, (ii) an institution duly organized, validly existing and in good standing under the applicable banking laws of any State, (iii) a national banking association duly organized, validly existing and in good standing under the federal banking laws or (iv) a subsidiary of a bank holding company.

          “Eligible Investments” means any one or more of the following obligations or securities:

     (a) (i) direct interest-bearing obligations of, and interest-bearing obligations guaranteed as to payment of principal and interest by, the United States or any agency or instrumentality of the United States the obligations of which are backed by the full faith and credit of the United States; and (ii) direct interest-bearing obligations of, and interest-bearing obligations guaranteed as to payment of principal and interest by, the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, but only if, at the time of investment, such obligations are assigned the highest credit rating by each Rating Agency;

     (b) demand and time deposits in, certificates of deposit of, or bankers acceptances issued by, any depository institution or trust company (including the Indenture Trustee or any Affiliate of the Indenture Trustee, acting in their respective commercial capacities) incorporated under the laws of the United States of America or any State thereof and subject to supervision and examination by federal or State banking authorities, the commercial paper or other short-term debt obligations of such depository institution or trust company (or, in the case of a depository institution which is the principal subsidiary of a holding company, the commercial paper or other short-term debt obligations of such holding company) having a rating of no less than “A-1” by Standard & Poor’s and “P-1” by Moody’s;

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     (c) securities bearing interest or sold at a discount issued by any corporation incorporated under the laws of the United States of America or any State thereof which have a rating of no less than “A-1+” by Standard & Poor’s and “P-1” by Moody’s;

     (d) commercial paper (including both non-interest bearing discount obligations and interest-bearing obligations payable on demand or on a specified date not more than one year after the closing date thereof) having the highest commercial paper rating from Standard & Poor’s and Moody’s;

     (e) money market mutual funds registered under the 1940 Act which invest only in other Eligible Investments, having a rating, at the time of such investment, of no less than “Aaa” by Moody’s and “AAAm” by Standard & Poor’s.

The Indenture Trustee may purchase from or sell to itself or an Affiliate, as principal or agent, the Eligible Investments listed above. All Eligible Investments in an Account shall be made in the name of the Indenture Trustee for the benefit of the Noteholders.

          “Eligible Receivable” means a Receivable meeting all of the requirements specified in Section 3.02(a) of the Contribution Agreement and Section 3.02(a) of the Sale and Servicing Agreement.

          “ERISA” has the meaning specified in Section 2.07(b) hereof.

          “Event of Default” has the meaning specified in Section 8.01 hereof.

          “Excess Spread” means, with respect to any Determination Date, the weighted average APR of the Receivables as of the last day of the prior Collection Period less the sum of (a) the weighted average of the Note Interest Rates for all Outstanding Notes for such Collection Period, (b) the Program Fee Rate, (c) the Servicing Fee Rate, (d) the Default Ratio for the related Collection Period and (e) the rate at which the Indenture Trustee Fee is calculated.

          “Excess Spread Trigger Event” means with respect to any Determination Date, the Three Month Average Excess Spread with respect to such Determination Date is less than 2.0% per annum.

          “Excess Spread Trigger Period” means a period commencing upon the occurrence of an Excess Spread Trigger Event and continuing until the first Determination Date thereafter on which the Three Month Average Excess Spread on such Determination Date and on each of the two preceding Determination Dates exceeds 2.00% per annum.

          “Excess Spread Trigger Period Percentage” means as of any Determination Date during an Excess Spread Trigger Period, the product of (a) the greatest amount by which 2.00% per annum exceeded the Three Month Average Excess Spread (rounded to the nearest hundredth of one percent) on such Determination Date or any preceding Determination Date during such Excess Spread Trigger Period and (b) 1.5.

          “Exchange Act” means the Securities Exchange Act of 1934, as amended.

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          “Falcon Lender Group” means Falcon Asset Securitization Corporation and JPMorgan Chase Bank, N.A.

          “Fairway Lender Group” means Fairway Finance Company, LLC and Bank of Montreal.

          “Federal Funds Rate” means for any period, a fluctuating interest rate per annum for each day during such period equal to (a) the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the preceding Business Day) by the Federal Reserve Bank of New York in the Composite Closing Quotations for U.S. Government Securities; or (b) if such rate is not so published for any day which is a Business Day, the average of the quotations at approximately 10:30 a.m. (Chicago time) for such day on such transactions received by the Agent from three federal funds brokers of recognized standing selected by it.

          “Fee Letter” means a collective reference to that certain Fee Letter, dated as of the Closing Date, from the Agent and acknowledged and agreed to by the Issuer, as the same may be amended, modified or supplemented from time to time in accordance with the terms thereof.

          “Financed Vehicle” means a new or used automobile, van, light-duty truck, sport utility vehicle or recreational vehicle, together with all accessions thereto, securing an Obligor’s indebtedness under the respective Receivable.

          “Financial Institutions” means the liquidity banks party to the Liquidity Agreement as “Assignees”.

          “Financing Statements” means, collectively, the Contributor Financing Statement, the Depositor Financing Statement and the Issuer Financing Statement.

          “Funding Certificate” means an Officer’s Certificate relating to a Subsequent Transfer substantially in the form of Exhibit A hereto.

          “Funding Date” means each Business Day on which Subsequent Receivables are assigned by the Contributor to the Depositor and by the Depositor to the Issuer or each Business Day on which requests to fund the Pre-Funding Account are honored; provided, that there may be no more than two (2) Funding Dates in any calendar week. For the avoidance of doubt, the Funding Date with respect to any Receivables that are Pre-Funded Receivables will not occur until the Formal Transfer Requirements are satisfied, as indicated on the Weekly Servicer Report.

          “Funding Documents” has the meaning specified in Section 3.14(f) hereof.

          “Funding Period” means the period from the Closing Date until the earliest to occur of (i) 30 days’ written notice by the Issuer to the Servicer, the Agent and the Indenture Trustee that such Person is directing the end of the Funding Period, (ii) the day on which a Default, an Event of Default or a Termination Event occurs, and (iii) the Commitment Expiry Date under the Note Purchase Agreement.

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          “Grant” means to pledge, create and grant a security interest in and with regard to property. A Grant of a Receivable or of any other instrument shall include all rights, powers and options (but none of the obligations) of the granting party thereunder, including without limitation the immediate and continuing right to claim for, collect, receive and give receipts for principal and interest payments in respect of such collateral and all other moneys payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring proceedings in the name of the granting party or otherwise, and generally to do and receive anything which the granting party is or may be entitled to do or receive thereunder or with respect thereto.

          “Hedge Agreement” means any financial futures contract, option, forward contract, warrant, swap, swaption, collar, floor, cap or other agreement, instrument and derivative and other transactions of a similar nature (whether currency linked, rate linked, index linked, insurance risk linked, credit risk linked or otherwise) entered into by the Issuer and approved in writing by the Agent, including, without limitation cash deposits to cover the cost of entering into additional hedge agreements.

          “Hedge Counterparty” means any entity that is an interest rate swap dealer that is either a Noteholder or an Affiliate of a Noteholder, or has been approved in writing by the Noteholders and the Required Financial Institutions.

          “Hedge Transaction” means each financial futures contract, option, forward contract, warrant, swap, swaption, collar, floor, cap or other transaction between the Issuer and a Hedge Counterparty that is governed by a Hedge Agreement.

          “Holder” means a Noteholder.

          “Increased Costs” has the meaning specified in Section 3.14(f) hereof.

          “Incremental Trigger Amount” means, with respect to any Determination Date, that portion, if any, of the Requisite Amount due solely to (a) in the case of the first Determination Date in an Excess Spread Trigger Period, the existence of an Excess Spread Trigger Period Percentage, or (b) with respect to any other Determination Date, an increase in the Excess Spread Trigger Period Percentage since the previous Determination Date.

          “Indenture” or “this Indenture” means this Indenture dated as of the date hereof, as supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof. All references in this Indenture to designated “Articles,” “Sections,” “Subsections” and other subdivisions are to the designated Articles, Sections, Subsections and other subdivisions of this Indenture. The words “herein,” “hereof,” “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section, Subsection or other subdivision.

          “Indenture Trustee” means JPMorgan Chase Bank, N.A., until a successor Person shall have become the Indenture Trustee pursuant to the applicable provisions of this Indenture, and thereafter “Indenture Trustee” means such successor Person.

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          “Indenture Trustee Fee” means the fee payable to the Indenture Trustee for services rendered, determined pursuant to the Indenture Trustee Fee Agreement.

          “Indenture Trustee Fee Agreement” means fee agreement dated as of the date hereof between the Indenture Trustee and Bay View Acceptance setting forth the fees payable to the Indenture Trustee.

          “Independent Directors” has the meaning set forth in the certificate of incorporation of the Depositor.

          “Independent Public Accountants” means any of (a) Grant Thornton LLP, (b) Deloitte & Touche, (c) PricewaterhouseCoopers, LLP, (d) Ernst & Young LLP, (e) KPMG Peat Marwick LLP, (f) any successor to any of the foregoing or (g) any other firm approved by the Majority Holders; provided, that such firm is independent with respect to the Servicer within the meaning of the Securities Act.

          “Interest Rate Hedge Cap Strike Price” means with respect to a Hedge Agreement which is an interest rate cap agreement, the strike price set forth in such Hedge Agreement.

          “Initial Cutoff Date” means the close of business on June 20, 2005.

          “Initial Funding Date” means June 20, 2005.

          “Initial Purchasers” means each of Falcon Asset Securitization Corporation (“Falcon”) and Fairway Finance Company, LLC (“Fairway”), and their successors and assigns.

          “Initial Receivables” means the Receivables acquired by the Issuer and granted to the Indenture Trustee on the Closing Date.

          “Insurance Proceeds” means, with respect to a Financed Vehicle and the related Receivable, any amount received during the related Collection Period pursuant to any risk default policy, physical damage policy, gap policy or any insurance maintained by the Obligor pursuant to the related Receivable, all of which amounts shall be deposited to the Collection Account.

          “Interest Rate Period” means the period determined in accordance with Section 2.05(b) of the Note Purchase Agreement.

          “Issuer” means Bay View 2005 Warehouse Trust, a Delaware statutory trust, and its successors and assigns.

          “Issuer Financing Statement” means a UCC-1 financing statement naming the Indenture Trustee as the secured party and the Issuer as the debtor.

          “Issuer Order” means a written order or request signed in the name of the Issuer by an Authorized Officer and delivered to the Indenture Trustee.

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          “Issuer Secured Obligations” means all amounts and obligations which the Issuer may at any time owe to or on behalf of the Indenture Trustee for the benefit of the Noteholders and the Agent under this Indenture or the Notes.

          “Issuer Trust Agreement” means the Amended and Restated Trust Agreement of the Issuer dated as of the date hereof between the Depositor and the Owner Trustee, as the same may be amended, modified or supplemented from time to time in accordance with the terms thereof.

          “JPMorgan Chase Bank, N.A.” means JPMorgan Chase Bank, N.A., a national banking association, not in its individual capacity, and its successors.

          “Lender Group” means the Falcon Lender Group or the Fairway Lender Group.

          “Lender Group Agent” means, with respect to the Lender Group, JPMorgan Chase Bank, N.A., not in its individual capacity but as agent for the Fairway Lender Group, and with respect to the Falcon Lender Group, Harris Nesbitt Corp., as administrator for Fairway Finance Company, LLC, not individually but as agent for the Falcon Lending Group.

          “LIBOR” means, with respect to any Interest Rate Period, the London interbank offered rate for United States dollar deposits determined by the Indenture Trustee pursuant to Section 2.03(d).

          “LIBOR Determination Date” means, for any Note for which the Note Interest Rate is LIBOR, the second Business Day prior to the commencement of each Interest Rate Period.

          “Lien” means any security interest, lien, charge, pledge, preference, equity or encumbrance of any kind including tax and mechanics’ liens and any other liens that attach by operation of law.

          “Liquidity Agreement” has the meaning ascribed thereto in the Note Purchase Agreement.

          “Liquidity Commitment” means, for each Financial Institution, the commitment of such Financial Institution to purchase an interest in the Notes.

          “Liquidity Funding Rate” means the greater of (A) the sum of (i) the Adjusted LIBOR Rate and (ii) the Applicable Margin and (B) the Base Rate.

          “Local Bank” means a financial institution acceptable to the Agent holding one or more collection accounts into which the Servicer deposits Collections from Obligors. The parties agree that Union Bank of California shall be an acceptable Local Bank.

          “Local Bank Account” has the meaning set forth in the Sale and Servicing Agreement.

          “Long-term Rating Requirement” has the meaning specified in the definition of Eligible Hedge Counterparty.

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          “Majority Holders” means the Initial Purchasers (Falcon and Fairway must both consent), and other Noteholders, collectively, holding in the aggregate more than fifty percent (50%) of the Note Principal Balance.

          “Maturity Date” means the Payment Date occurring in the 97^th month following the final Funding Date.

          “Maximum Outstanding Note Amount” means $450,000,000

          “Monthly Available Funds” means, with respect to the immediately preceding Collection Period, (a) Collections, (b) earnings on Eligible Investments on deposit in the Collection Account and the Spread Account, (c) payments remitted to the Issuer or the Servicer by the Hedge Counterparty under any Hedge Agreement, (d) Servicer Advances, (e) amounts transferred to the Collection Account from the Spread Account pursuant to Section 5.03(a) and (f) payments remitted to the Indenture Trustee by the Depositor to prevent the occurrence of certain Termination Events.

          “Moody’s” means Moody’s Investors Service, Inc. or its successor.

          “1940 Act” means the Investment Company Act of 1940, as amended.

          “Nonconforming Receivable” means a Receivable with respect to which it is determined by the Indenture Trustee (acting at the direction of the Agent) or the Servicer, at any time, that the Contributor, the Depositor or the Issuer breached one or more of the applicable representations or warranties regarding eligibility of such Receivable contained in the Contribution Agreement or the Sale and Servicing Agreement, respectively, at the time of (i) the assignment by the Contributor to the Depositor under the Contribution Agreement or (ii) the assignment by the Depositor to the Issuer pursuant to the Sale and Servicing Agreement or (iii) the Grant by the Issuer to the Indenture Trustee under this Indenture.

          “Note” or “Notes” means each Automobile Receivables-Backed Note, Series 2005-1, issued in accordance with the provisions of this Indenture.

          “Note Interest” means, with respect to any Note,

     (a) with respect to the initial Payment Date following the Initial Funding Date, the product of (x) 1/360 of the Note Interest Rate applicable to such Note in effect from time to time times (y) the actual number of days from and including the Initial Funding Date through the day immediately preceding such Payment Date times (z) the average daily outstanding Note Principal Balance of such Note for the period from and including the Initial Funding Date through the date immediately preceding such Payment Date, and

     (b) with respect to any subsequent Payment Date, the sum of (i) the product of (x) 1/360 of the Note Interest Rate applicable to such Note in effect from time to time times (y) the actual number of days from and including the previous Payment Date through the day immediately preceding such subsequent Payment Date times (z) the average daily outstanding Note Principal Balance of such Note for the period from and

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including the immediately preceding Payment Date (after giving effect to all payments of principal of the Notes on such immediately preceding Payment Date) through the date immediately preceding such subsequent Payment Date plus (ii) the Overdue Interest on such Note, if any.

          “Note Interest Rate”: means, with respect to any Note:

     (a) to the extent the Noteholder thereof funded or maintained its interest in the applicable Notes through the issuance of Commercial Paper, a rate equal to the CP Rate,

     (b) to the extent the Noteholder thereof funded or maintained its interest in the applicable Notes through a funding under a Liquidity Agreement, a rate equal to the Liquidity Funding Rate, as determined in accordance with Section 2.04 of the Note Purchase Agreement, or

     (c) otherwise, a per annum rate equal to the Bank Rate;

     provided, however, that in the event of Default, the Default Rate shall apply.

          “Note Percentage” means 97%.

          “Note Principal Balance” means, with respect to a specific Note or class of Notes, as of any date of determination, the original principal balance of such Note(s), as increased by any Additional Note Principal Balances previously allocated to such Note(s) pursuant to Section 2.13(a), and as reduced by all amounts previously paid on such Note(s) in reduction of the principal balance of such Note(s) which have not been returned to the Issuer or to any other Person for any reason. Unless specified to refer to a specific Note or class of Notes, “Note Principal Balance” as used herein and in the Transaction Documents shall mean the aggregate of the Note Principal Balances of all Notes Outstanding.

          “Note Purchase Agreement” means that certain Note Purchase Agreement dated as of June 20, 2005, among the Issuer, the Contributor, the Initial Purchasers and Financial Institutions (as defined therein) party thereto and JP Morgan Chase Bank, N.A., as agent for the Initial Purchasers and Financial Institutions, as amended, modified or supplemented from time to time in accordance with the terms thereof.

          “Note Register” and “Note Registrar” have the meanings specified in Section 2.06.

          “Noteholder” means the Person in whose name a Note is registered in the Note Register.

          “Notice of Funding” means a notice in the form of Exhibit C hereto.

          “Obligor” means, with respect to a Receivable, the purchaser or co-purchasers of the associated Financed Vehicle and any other Person who owes payments under such Receivable whether as maker, co-maker, guarantor or otherwise.

          “Officer’s Certificate” means a certificate signed by an Authorized Officer.

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          “Opinion of Counsel” means a written opinion of counsel who may, except as otherwise expressly provided in this Indenture, be outside counsel for the Issuer or the Indenture Trustee and who shall be reasonably satisfactory to the Indenture Trustee and the Agent, which shall comply with any applicable requirements of Section 10.02 and which shall be in form and substance satisfactory to the Indenture Trustee and the Agent.

          “Outstanding” means with respect to all Notes as of any date of determination, all such Notes theretofore authenticated and delivered under this Indenture except:

     (a) Notes theretofore canceled by the Note Registrar or delivered to the Note Registrar for cancellation;

     (b) Notes or portions thereof for whose payment money in the necessary amount in repayment thereof has been theretofore deposited with the Indenture Trustee in trust for the Holders of such Notes and for which there is no further commitment by the Noteholder to make additional advances under the Note Purchase Agreement;

     (c) Notes in exchange for or in lieu of which other Notes have been authenticated and delivered pursuant to this Indenture; and

     (d) Notes alleged to have been destroyed, lost or stolen for which replacement Notes have been issued as provided for in Section 2.08 unless proof satisfactory to the Indenture Trustee is presented that any such Notes are held by a protected purchaser (as such term is used in Article 8 of the UCC);

provided, however, that in determining whether the Noteholders of the requisite percentage of the principal balance of the Notes have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Notes owned by the Contributor, the Depositor, the Issuer or any Affiliate thereof shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Indenture Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent, or waiver, only Notes which the Indenture Trustee actually knows to be so owned shall be so disregarded. Notes so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Indenture Trustee, in its sole discretion, the pledgee’s right so to act with respect to such Notes and that the pledgee is not the Contributor, the Depositor, the Issuer or any Affiliate thereof.

          “Overdue Interest” means, with respect to any Payment Date and any Note, the difference, if any, between (a) the amount of Note Interest due on the prior Payment Date with respect to such Note and (b) the amount of Note Interest (from whatever source) actually paid to the Noteholder thereof on the prior Payment Date, plus (to the extent permitted by law) interest on any such shortfall on the prior Payment Date at the Note Interest Rate from and including the prior Payment Date through the day immediately preceding the Payment Date of such calculation.

          “Ownership Interest” means, with respect to any Note, any ownership interest in such Note, including any interest in such Note as the Noteholder thereof and any other interest therein, whether direct or indirect, legal or beneficial.

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          “Owner Trustee” means Wilmington Trust Company, not in its individual capacity, but solely as Owner Trustee of the Issuer, until a successor Person shall have become the Owner Trustee pursuant to the applicable provisions of the Issuer Trust Agreement, and thereafter “Owner Trustee” means such successor Person.

          “Paying Agent” means the Indenture Trustee and any other party appointed as paying agent pursuant to Section 3.03 hereof.

          “Payment Date” means the 20^th day of each month during which any of the Notes remain Outstanding, beginning in July, 2005 (provided, if any such date is not a Business Day, then the Payment Date shall be the next succeeding Business Day).

          “Perfection UCCs” means, with respect to each Receivable and the property related thereto, (a) the date-stamped original of the filed Contributor Financing Statement covering such Receivable and the related Contributed Assets and (b) the date-stamped original of the filed Depositor Financing Statement covering such Receivable and the related Deposited Assets and (c) the date-stamped original of the filed Issuer Financing Statement covering the Trust Estate and (d) the date-stamped original of the filed Termination Statements releasing the liens held by creditors of the Contributor and any other Person (other than as expressly contemplated by the Transaction Documents) covering such Receivable and the related Contributed Assets, or, in the case of (d) above, a copy of search results performed and certified by a national search company indicating that such Termination Statements have been filed in the UCC filing offices of the States in which the Financing Statements being terminated were originally filed.

          “Permitted Lien” means any tax, mechanics’ or other similar Lien arising from the failure of an Obligor to make a payment with respect to the Financed Vehicle related to such Obligor’s Receivable.

          “Person” means any individual, corporation, partnership, joint venture, association, limited liability company, limited liability partnership, joint stock company, trust (including any beneficiary thereof), unincorporated organization or government or any agency or political subdivision thereof.

          “Pool” means a pool of Eligible Receivables funded or to be funded on a Funding Date.

          “Predecessor Notes” means, with respect to any particular Note, every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for the purpose of this definition, any Note authenticated and delivered under Section 2.08 in lieu of a lost, destroyed or stolen Note shall be deemed to evidence the same debt as the lost, destroyed or stolen Note.

          “Pre-Funding Account” means the segregated trust account with that name established with and in the name of the Indenture Trustee pursuant to Section 5.01 hereof.

          “Prime Rate” means a rate per annum equal to the prime rate of interest announced from time to time by (a) JPMorgan Chase Bank, N.A. or its parent, with respect to any Note held by the Initial Purchasers , JPMorgan Chase Bank, N.A., Bank of Montreal or any assignee of any, or (b) Bank of Montreal or its parent, with respect to any Note held by Bank of Montreal or any

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assignee thereof, as applicable (which is not necessarily the lowest rate charged to any customer by either JPMorgan Chase Bank, N.A. or Bank of Montreal, as applicable), changing when and as such prime rate changes.

          “Principal Payment Amount” means, with respect to the Notes and any Payment Date until the principal balance of the Notes is reduced to zero, an amount equal to the positive difference, if any, of (a) the Note Principal Balance of the Notes Outstanding as of such day before giving effect to any payments thereon minus (b) the Receivables Advance Amount.

          “Principal Reduction Amount” means, with respect to any Payment Date, the sum, without duplication, of: (a) the principal portion of all Scheduled Obligor Payments collected during the related Collection Period with respect to each Receivable, (b) the principal portion of all prepayments received during the related Collection Period, (c) the Receivable Balance of each Receivable that became a Repurchased Receivable under an obligation that arose during the related Collection Period, (d) to the extent not included in the foregoing, the amount of any Cram Down Losses which occurred during the related Collection Period and (e) the Receivable Balance of all Receivables that became Defaulted Receivables during the related Collection Period.

          “Proceeding” means any suit in equity, action at law or other judicial or administrative proceeding.

          “Program Fee” means the Program Fee as defined and set forth in the Fee Letter.

          “Program Fee Rate” means the Program Fee Rate as defined and set forth in the Fee Letter.

          “Rating Agency” means each of Moody’s and Standard & Poor’s.

          “Receivable” means the obligation of an Obligor, as evidenced by a retail installment contract and security agreement substantially in the form of Exhibit B to the Contribution Agreement, or such other forms as may be added by amendment or supplement to the Contribution Agreement and approved by the Agent, which obligation is (i) transferred from the Contributor to the Depositor pursuant to the Contribution Agreement, (ii) transferred from the Depositor to the Issuer pursuant to the Sale and Servicing Agreement and (iii) pledged to the Indenture Trustee pursuant to the Indenture.

          “Receivable Balance” or “Receivables Balance” means for any Receivable as of any date of determination, the Amount Financed minus the sum, without duplication, of (i) the Principal Reduction Amount with respect to such Receivable on or prior to such day and (ii) any refunded portion of service warranties and service contracts, or of State tax refunds or of physical damage, credit life or disability or gap insurance premiums included in the Amount Financed to the extent actually deposited to the Collection Account; provided that the Receivable Balance of any Receivable that has become a Repurchased Receivable, or has become subject to repurchase pursuant to Section 3.03 of the Sale and Servicing Agreement, shall be zero.

          “Receivables Advance Amount” means, as of any Funding Date, an amount equal to the sum of (a) the difference between (i) the aggregate Receivables Balance of all Eligible

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Receivables (excluding Pre-Funded Receivables) after taking into account the pledge of Subsequent Receivables on such Funding Date and (ii) the Current Peak Note Percentage Reserve Amount plus (b) the Pre-Funded Collateral plus (c) cash in the Collection Account (excluding any amounts necessary to pay amounts required to be paid pursuant to clause First through Tenth of Section 5.03 (b) hereof on the next Payment Date, to the extent such amounts are identified on or before the Funding Date.)

          “Record Date” means, with respect to a Payment Date or a Repayment Date, the last day of the calendar month immediately preceding the month of such Payment Date or Repayment Date.

          “Recoveries” means those funds collected on a Defaulted Receivable from the Obligor or otherwise, including Insurance Proceeds and all State tax refunds, but excluding the Repurchase Price actually deposited in the Collection Account.

          “Repayment Date” has the meaning set forth in Section 6.01(a).

          “Repurchase Price” means the Receivable Balance of a Receivable (without giving effect to any previous reduction in the Receivable Balance as a result of such Receivable becoming a Defaulted Receivable) on the date of repurchase plus accrued and unpaid interest, if any, to the last day of the month of repurchase, calculated at the APR provided for in the retail installment contract evidencing such Receivable.

          “Repurchased Receivable” means a Receivable released from the Lien hereof pursuant to Section 6.04 hereof and, if applicable, transferred to the Depositor pursuant to the Sale and Servicing Agreement and to the Contributor pursuant to the Contribution Agreement.

          “Required Financial Institutions” means, at any time, Financial Institutions with Liquidity Commitments in excess of 50% of the aggregate Liquidity Commitments at such time.

          “Requisite Amount” means:

     (a) at any time during an Excess Spread Trigger Period, an amount equal to the lesser of (i) the Note Principal Balance at such time and (ii) the greater of (A) $1,000,000 and (B) the Current Peak Aggregate Receivables Balance at such time times the lesser of (x) 2.0% and (y) 1.25% plus the Excess Spread Trigger Period Percentage determined as of the most recent Determination Date; and

     (b) at any other time, an amount equal to the lesser of (i) the Note Principal Balance at such time and (ii) the greater of (A) $1,000,000 and (B) the Current Peak Aggregate Receivables Balance at such time times 1.25%.

          “Responsible Officer” means when used with respect to the Indenture Trustee, any officer of the Indenture Trustee assigned by the Indenture Trustee to administer its corporate trust affairs relating to the Issuer. When used with respect to any other Person that is not an individual, the President, any Vice-President or Assistant Vice-President or the Controller of such Person, or any other officer or employee having similar functions.

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          “Sale and Servicing Agreement” means that certain Sale and Servicing Agreement dated as of the date hereof among the Issuer, the Depositor, the Indenture Trustee, the Backup Servicer, the Contributor and the Servicer, relating to the servicing of the Receivables, as the same may be amended, modified or otherwise supplemented from time to time in accordance with the terms thereof.

          “Schedule of Receivables” means, as the context may require, (i) the schedule of Initial Receivables or Subsequent Receivables, as the case may be, assigned to the Depositor by the Contributor, assigned by the Depositor to the Issuer and Granted to the Indenture Trustee by the Issuer on the Closing Date or a Funding Date, as applicable, which schedule is attached hereto as Schedule I with respect to the Initial Receivables and to a Contributor Assignment and a Depositor Assignment for any Subsequent Receivables, as such schedule may be amended from time to time (in accordance with the terms of the Transaction Documents), or (ii) collectively, the schedules of all Receivables assigned to the Depositor by the Contributor, assigned by the Depositor to the Issuer and Granted to the Indenture Trustee by the Issuer as of the date of determination, as such schedules may be amended from time to time (in accordance with the terms of the Transaction Documents).

          “Scheduled Obligor Payment” means, with respect to a Receivable, the fixed payment required to be made by the applicable Obligor during each Collection Period; provided, however, that “Scheduled Obligor Payment” does not include late fees or prepayment charges allowed by applicable law.

          “Securities Act” means the Securities Act of 1933, as amended.

          “Servicer” means Bay View Acceptance as the servicer of the Receivables or any other Eligible Servicer acting as servicer pursuant to the Sale and Servicing Agreement. Unless the context otherwise requires, “Servicer” also refers to any successor Servicer appointed pursuant to the Sale and Servicing Agreement.

          “Servicer Advances” has the meaning specified in Section 7.01(g) of the Sale and Servicing Agreement.

          “Servicer Event of Default” has the meaning specified in Section 10.01 of the Sale and Servicing Agreement.

          “Servicing Fee Rate” has the meaning specified in the Sale and Servicing Agreement.

          “Short-term Rating Requirement” has the meaning specified in the definition of Eligible Hedge Counterparty.

          “Spread Account” means the segregated trust account by that name established with and in the name of the Indenture Trustee pursuant to Section 5.01 hereof.

          “Spread Account Deficiency” means, with respect to any applicable date, that the balance on deposit in immediately available funds in the Spread Account is less than the Requisite Amount for such date.

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          “Standard &Poor’s” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., or its successor.

          “State” means any one or more of the states comprising the United States and the District of Columbia.

          “Subsequent Cutoff Date” means, with respect to any Funding Date, the close of business two (2) Business Days prior to such Funding Date.

          “Subsequent Receivable” means a Receivable acquired by the Issuer on any given Funding Date.

          “Subsequent Transfer” means the transfer of Subsequent Receivables from the Contributor to the Depositor and the simultaneous assignment by the Depositor to the Issuer on a Funding Date.

          “Supermajority Holders” means the Initial Purchasers (Falcon and Fairway must both consent), and other Noteholders, collectively, holding in the aggregate more than sixty-six and two-third percent (66 2/3%) of the Note Principal Balance.

          “Supplemental Servicing Fees” means any and all (i) late fees, (ii) extension fees, (iii) non-sufficient funds charges and (iv) any and all other administrative fees or similar charges allowed by applicable law with respect to any Receivable.

          “Tangible Net Worth” means, with respect to Bay View Acceptance and its subsidiaries on a consolidated basis, the sum of total shareholders’ equity (as calculated in accordance with generally accepted accounting principles) plus loan loss reserves.

          “Termination Date” means the date on which the Indenture Trustee shall have received payment and performance of all Issuer Secured Obligations.

          “Termination Event” means the occurrence of any one or more of the following events:

     (a) (i) any Event of Default hereunder or (ii) any “Event of Default” under and as defined in any sale and servicing agreement, pooling and servicing agreement, indenture or any similar agreement (including, without limitation, each of the Transaction Documents) with respect to any revolving or term asset-backed transaction to which Bay View Acceptance or any Affiliate of Bay View Acceptance is a party, unless such “Event of Default” has been permanently cured or permanently waived with respect to the particular circumstances leading to such “Event of Default”, in each case, on terms that do not materially change the terms of the agreement under which such “Event of Default” arose;

     (b) with respect to any Determination Date, the Excess Spread with respect to such Determination Date is less than 1.5% per annum;

     (c) the Average Delinquency Ratio equals or exceeds 1.35% on a Determination Date;

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     (d) the Average Default Ratio equals or exceeds 1.60% on a Determination Date;

     (e) a Spread Account Deficiency exists; provided, that (i) if such Spread Account Deficiency exists solely as a result of the existence of an Incremental Trigger Amount, a Termination Event under this subparagraph (e) shall not occur with respect thereto unless there is a Spread Account Deficiency (other than one resulting from the existence of a new Incremental Trigger Amount) on the second Payment Date following the Determination Date on which such Incremental Trigger Amount arose, and (ii) if a transfer from the Spread Account to the Collection Account has been made on a Transfer Date pursuant to Section 5.03(a), a Termination Event under this subparagraph (e) cannot occur unless and until a Spread Account Deficiency exists on or after the second Payment Date following such Transfer Date;

     (f) Tangible Net Worth is at any time less than $35,000,000;

     (g) the failure of Bay View Acceptance to have paid-in capital of $50 million or greater;

     (h) the failure of Bay View Acceptance to maintain monthly “Minimum Liquidity” (available cash and borrowing capacity for working capital purposes) of $5 million or greater;

     (i) any of the Issuer, the Servicer, the Contributor, the Custodian or the Depositor shall have (i) filed a petition or commenced any case or proceeding under any provision or chapter of the United States Bankruptcy Code or any other similar federal or State law relating to insolvency, bankruptcy, rehabilitation, liquidation or reorganization, (ii) made a general assignment for the benefit of its creditors, or (iii) had an order for relief entered against it under the United States Bankruptcy Code or any other similar federal or State law relating to insolvency, bankruptcy, rehabilitation, liquidation or reorganization which is final and nonappealable; or (c) a court of competent jurisdiction, or other competent regulatory authority shall have entered an order, judgment or decree (i) appointing a custodian, trustee, agent or receiver for the Issuer, the Servicer, the Contributor, the Custodian or the Depositor or for all or any material portion of any of their property or (ii) authorizing the taking of possession by a custodian, trustee, agent or receiver of the Issuer, the Servicer, the Contributor, the Custodian or the Depositor (or the taking of possession of all or any material portion of the property of the Issuer, the Servicer, the Contributor, the Custodian or the Depositor);

     (j) any of the Issuer, the Servicer, the Contributor, the Custodian or the Depositor becomes an “investment company” within the meaning of the Investment Company Act or 1940, as amended;

     (k) any of the Issuer, the Servicer, the Contributor or any Affiliate of the Contributor, the Custodian or the Depositor, with respect to any outstanding credit agreement (other than with respect to the facility contemplated by the Transaction Documents) representing a commitment or outstanding indebtedness in excess of

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$1,000,000 defaults in any payment of principal or interest or defaults in any other respect, the effect of which is to cause or permit the holders of indebtedness pursuant to any such agreement to cause the acceleration of such indebtedness (in each case, after giving effect to all applicable cure periods in any such credit agreement);

     (l) the filing of any actions or proceedings against Bay View Acceptance (or any subsidiary of Bay View Acceptance) that (a) are not dismissed within 90 days; and (b) either (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to have a material adverse effect on the business, operations or financial condition of the Depositor, the Servicer, the Custodian or the Issuer, or (ii) involves any of the Transaction Documents and the transaction contemplated thereby, or (iii) involves any material portion of the Receivables;

     (m) any final rulings or judgments against Bay View Acceptance (or any subsidiary of Bay View Acceptance) for damages in excess of $5,000,000 in the aggregate (which is not fully covered by insurance) that is not discharged or stayed within 30 days or any final rulings or judgments against or settlements by the Issuer for any damages whatsoever;

     (n) the occurrence of a Servicer Event of Default;

     (o) the Indenture Trustee shall, for any reason, fail to have a valid and perfected first priority security interest in (i) the Receivables (the aggregate outstanding balance of which is in excess of $100,000) and (ii) except to the extent of Permitted Liens, other items included in the Trust Estate and the proceeds thereof;

     (p) the Issuer or the Depositor shall merge or consolidate in whole or in part, or sell all or substantially all of its assets, except (i) as permitted in the Transaction Documents, or (ii) with the prior written consent of the Majority Holders;

     (q) if the Collateral Test Amount is less than zero (0) on any Funding Date or Determination Date, the failure of the Depositor to deposit cash into the Collection Account or to transfer additional Receivables to the Issuer (which are then Granted to the Indenture Trustee) within ten (10) Business Days such that the Collateral Test Amount is not less than zero (0);

     (r) any Hedge Counterparty ceases to be an Eligible Hedge Counterparty and has not been replaced with an Eligible Hedge Counterparty within ten (10) Business Days;

     (s) the absence of a Hedge Transaction, when applicable;

     (t) the Commitment Expiry Date has not been extended;

     (u) any failure by Bay View Acceptance Corporation to pay any material indebtedness in excess of Five Million Dollars ($5,000,000) when due or the occurrence of any other event of default under any agreement related to such indebtedness;

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     (v) the Issuer fails to comply with the provisions of Section 3.15 hereof at any time; or

     (w) a Change of Control.

          “Termination Statement” has the meaning set forth in Section 2.11(h) hereof.

          “Three Month Average Excess Spread” means, with respect to any Determination Date, the average of the Excess Spreads on such Determination Date and the two preceding Determination Dates.

          “Transaction Documents” means, collectively, the Certificate of Trust, this Indenture, the Sale and Servicing Agreement, the Contribution Agreement, the Note Purchase Agreement, each Note, each Contributor Assignment, each Depositor Assignment, each Funding Certificate, the Custodian Agreement, the Issuer Trust Agreement and the Fee Letter.

          “Transfer Date” means the Business Day immediately preceding each Payment Date.

          “Transferee Letter” has the meaning set forth in Section 2.07(a) hereof.

          “Trust Estate” means the property and rights Granted to the Indenture Trustee pursuant to the Granting Clause of this Indenture for the benefit of Noteholders.

          “UCC” means the Uniform Commercial Code as adopted in the State of New York, and in any other State having jurisdiction over the assignment, transfer, pledge of the Receivables and the Contributed Assets from the Contributor to the Depositor or of the Receivables and the Deposited Assets from the Depositor to the Issuer or of the Trust Estate from the Issuer to the Indenture Trustee.

          “Unused Fee” means the Unused Fee as defined and set forth in the Fee Letter.

          “Vice President” means, with respect to the Contributor, the Depositor, the Servicer or the Indenture Trustee, any vice president, whether or not designated by a number or a word or words added before or after the title “vice president.”

     Section 1.02. Calculations. Calculations required to be made pursuant to this Indenture shall be made on the basis of information or accountings as to payments on each Note furnished by the Servicer. Except to the extent they are incorrect on their face, such information or accountings may be conclusively relied upon in making such calculations, but to the extent that it is later determined that any such information or accountings are incorrect, appropriate corrections or adjustments will be made.

Article II

The Notes; Reconveyance

     Section 2.01. General.

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          (a) All payments of principal and interest with respect to the Notes shall be made only from the Trust Estate on the terms and conditions specified herein. Each Noteholder, by its acceptance of the Notes, agrees that, subject to the repurchase obligations of the Contributor, the Depositor and the Issuer and the indemnification obligations provided for herein, in the Sale and Servicing Agreement and in the Contribution Agreement, it will have recourse solely against such Trust Estate and such repurchase and indemnification obligations.

          (b) Except as otherwise provided herein, all Notes shall be substantially identical in all respects. Except as specifically provided herein, all Notes issued, authenticated and delivered under this Indenture shall be in all respects equally and ratably entitled to the benefits hereof without preference, priority or distinction on account of the actual time or times of authentication and delivery, all in accordance with the terms and provisions of this Indenture.

          (c) The aggregate stated principal balance of the Notes that may be executed on behalf of the Issuer by an Authorized Officer of the Owner Trustee and authenticated and delivered by the Indenture Trustee and Outstanding at any given time under this Indenture is limited to $450,000,000.

          Noteholders shall be entitled to payments of interest as provided herein. The Notes shall have a final maturity on the Maturity Date. All Notes shall be secured on a parity with one another, with no Outstanding Note having any priority over any other Outstanding Note.

          (d) The Notes that are authenticated and delivered to the Noteholders by the Indenture Trustee to or upon an Issuer Order on the Closing Date or the Initial Funding Date, as applicable, shall be dated as of the Closing Date or Initial Funding Date, respectively. Any Note issued later in exchange for, or in replacement of, any Note issued on the Closing Date or the Initial Funding Date shall be dated the date of its authentication.

          (e) Each Note is issuable in the minimum denomination of $1,000,000 unless otherwise agreed to by the Issuer and the Agent.

     Section 2.02. Forms of Notes. The Notes shall be designated as the “Bay View 2005 Warehouse Trust Automobile Receivables-Backed Notes, Series 2005-1.” The Notes shall be in substantially the form set forth in Exhibit D with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may, consistently herewith, be determined by the Issuer, as evidenced by its execution thereof.

          The Notes shall be typewritten, printed, lithographed or engraved or produced by any combination of these methods, all as determined by the officers executing such Notes, as evidenced by their execution of such Notes.

          Each Note shall be dated the date of its authentication. The terms of the Notes are set forth in Exhibit D, and are part of the terms of this Indenture.

     Section 2.03. Payment of Principal and Interest. (a) Principal payments on the Notes will be made on each Payment Date in an amount at least equal to the Principal Payment

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Amount. Any outstanding Note Principal Balance shall be payable on the Maturity Date. The amount of principal payments on the Notes shall be made pursuant to the provisions of Section 5.03(b) hereof.

          (b) Noteholders shall be entitled to receive payments of interest on their respective Note Principal Balances as provided herein at the applicable Note Interest Rate from the date of issuance of each Note to such Holder until the Note Principal Balance of such Holder’s Note is reduced to zero or until payment is provided therefor as set forth in Article VI hereof. After the initial Payment Date following the Initial Funding Date, payments of interest accrued on each Note will be calculated on the average daily outstanding Note Principal Balance of such Note for the period from and including the first day of each calendar month through the last day of such month. With respect to the initial Payment Date following the Initial Funding Date, interest on each Note will be calculated on the average daily outstanding Note Principal Balance of such Note from the Initial Funding Date through the day preceding such initial Payment Date. All other computations of interest accrued on any Note shall be made on the basis of a 360-day year and the actual days elapsed as set forth in the Note Purchase Agreement.

          (c) If the entire amount of the Note Interest that is due on any Payment Date with respect to any Note shall not have been punctually made or duly provided for when and as due (after giving effect to any applicable cure or grace period), then interest on the applicable Overdue Interest shall accrue, from the date such amount was due until paid, at the applicable Note Interest Rate with respect to such Note.

          (d) On each succeeding LIBOR Determination Date, the Indenture Trustee will determine LIBOR on the basis of the offered rates for deposits in United States dollars having a maturity of a time period equal to the applicable Interest Rate Period, commencing on such LIBOR Determination Date as reported by any generally-recognized financial information service. With the consent of all of the Noteholders, the Indenture Trustee may use another method to determine LIBOR. If LIBOR cannot be reasonably determined, the Indenture Trustee may select an alternative but substantially equivalent index rate with the consent of all of the Noteholders. On each LIBOR Determination Date prior to 3:00 p.m., New York City time, the Indenture Trustee shall send to the Servicer by facsimile transmission notification of LIBOR.

     Section 2.04. Payments to Noteholders. (a) Noteholders shall, subject to the priorities and conditions set forth in Section 5.03(b), be entitled to receive payments of interest and principal on each Payment Date (including any Overdue Interest). Any payment of interest or principal payable with respect to the Notes on the applicable Payment Date shall be made to the Person in whose name such Note is registered at the close of business on the Record Date for such Payment Date in the manner provided in Section 5.04 hereof.

          (b) All reductions in the principal balance of a Note (or one or more Predecessor Notes) effected by payments of principal made on any Payment Date shall be binding upon all Holders of such Note and of any Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted on such Note.

     Section 2.05. Execution, Authentication, Delivery and Dating. (a) The Notes shall be executed on behalf of the Issuer by an Authorized Officer of the Owner Trustee. The signature

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of such Authorized Officer on the Notes may be manual or facsimile. Notes bearing the manual or facsimile signature of any individual who was, at the time of execution thereof, an Authorized Officer of the Issuer, shall bind the Issuer, notwithstanding the fact that such individual ceased to hold such office prior to the authentication and delivery of such Notes or did not hold such office at the date of issuance of such Notes.

          (b) At any time and from time to time after the execution and delivery of this Indenture, the Issuer may deliver Notes executed on behalf of the Issuer by an Authorized Officer of the Owner Trustee to the Indenture Trustee for authentication, and the Indenture Trustee, upon receipt of the Notes and of an Issuer Order, shall authenticate and deliver such Notes; provided, however, that the Indenture Trustee shall not authenticate the Notes on the Closing Date or the Initial Funding Date, as applicable, unless and until it shall have received the documents listed in Section 2.11 hereof.

          (c) Each Note authenticated and delivered by the Indenture Trustee to or upon Issuer Order on or prior to the Closing Date shall be dated the Closing Date. All other Notes that are authenticated after the Closing Date for any other purposes under the Indenture shall be dated the date of their authentication.

          (d) Notes issued upon transfer, exchange or replacement of other Notes shall be issued in authorized denominations reflecting the Note Principal Balance so transferred, exchanged or replaced, but shall represent only the principal balance of the Notes so transferred, exchanged or replaced. In the event that any Note is divided into more than one Note in accordance with this Article II, such Note Principal Balance shall be divided among the Notes delivered in exchange therefor.

          (e) No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Note a certificate of authentication, substantially in the form provided for herein, executed by the Indenture Trustee by the manual signature of a Responsible Officer of the Indenture Trustee, and such executed certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered.

     Section 2.06. Registration, Registration of Transfer and Exchange. (a) The Indenture Trustee (the “Note Registrar”) shall cause to be kept at its Corporate Trust Office a register (the “Note Register”), in which, subject to such reasonable regulations as it may prescribe, the Indenture Trustee shall provide for the registration of Notes and the registration of transfers of Notes.

          If a Person other than the Indenture Trustee is appointed by the Issuer as Note Registrar, the Issuer will give each of the Indenture Trustee, the Owner Trustee and the Agent prompt written notice of the appointment of such Note Registrar and of the location, and any change in the location, of the Note Register. The Indenture Trustee, the Owner Trustee, the Agent, each Noteholder and each Financial Institution shall have the right to inspect the Note Register at all reasonable times and to obtain copies thereof. The Indenture Trustee, the Owner Trustee, the Agent, each Noteholder and each Financial Institution shall have the right to rely upon a certificate executed on behalf of the Note Registrar by a Responsible Officer thereof as to the

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names and addresses of the Noteholders and the principal amounts and the amounts and number of such Notes.

          (b) Only upon surrender for registration of transfer of any Note at the Corporate Trust Office and subject to the conditions set forth in Section 2.05 hereof, an Authorized Officer of the Owner Trustee, on behalf of the Issuer, shall execute, and the Indenture Trustee or its agent shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Notes of any authorized denominations, and of a like aggregate principal amount and Maturity Date.

          (c) At the option of the Holder, a Note may be exchanged for other Notes of any authorized denominations and of a like aggregate principal amount and Maturity Date, upon surrender of the Notes to be exchanged at such office or agency. Whenever any Notes are so surrendered for exchange, an Authorized Officer of the Owner Trustee, on behalf of the Issuer, shall execute, and the Indenture Trustee or its agent shall authenticate and deliver, the Notes which the Noteholder making the exchange is entitled to receive.

          (d) All Notes issued upon any registration of transfer or exchange of Notes shall be the valid obligations of the Issuer, evidencing the same debt and entitled to the same benefits under this Agreement, as the Notes surrendered upon such registration of such transfer or exchange.

          Every Note presented or surrendered for registration of transfer or exchange shall (if so required by the Issuer or the Note Registrar) be duly endorsed or be accompanied by a written instrument of transfer in form reasonably satisfactory to the Issuer and the Indenture Trustee duly executed, by the Holder thereof or his attorney duly authorized in writing.

          No service charge shall be made to a Holder for any registration of transfer or exchange of Notes, but the Issuer may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Notes.

     Section 2.07. Transfer and Exchange. (a) The Notes have not been registered or qualified under the Securities Act or the securities laws of any State. No transfer of any Note shall be made unless that transfer is made in a transaction which does not require registration or qualification under the Securities Act or under applicable State securities or “Blue Sky” laws. In the event that a transfer is to be made without registration or qualification, such Noteholder’s prospective transferee shall either (i) deliver to the Indenture Trustee a Transferee Letter in the form attached hereto as Exhibit E (the “Transferee Letter”), or (ii) deliver to the Indenture Trustee an Opinion of Counsel that the transfer is exempt from such registration or qualification (which opinion shall not be at the expense of the Issuer, the Indenture Trustee or the Servicer, and which may be an opinion of in-house counsel to the transferor or the transferee of the Note). Neither the Issuer nor the Indenture Trustee is obligated to register or qualify the Notes under the Securities Act or any other securities law. Any such Holder desiring to effect such transfer shall, and does hereby agree to, indemnify the Indenture Trustee, the Owner Trustee (as such and in its individual capacity), the Agent and the Issuer against any liability, cost or expense (including

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attorneys’ fees) that may result if the transfer is not so exempt or is not made in accordance with such federal and State laws.

          (b) No acquisition or transfer of a Note or any interest therein may be made unless the Indenture Trustee is provided with evidence that establishes to the satisfaction of the Indenture Trustee that one of the following is true: either (a) that it will not acquire the Notes with the assets of any “employee benefit plan” as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) which is subject to Title I of ERISA or any “plan” as defined in Section 4975 of the Code (each such entity, a “Benefit Plan”) or (b) no non-exempt “prohibited transaction” under Section 406 of ERISA or Section 4975 of the Code will occur in connection with its acquisition or holding of the Notes.

          (c) The Indenture Trustee shall have no liability to the Issuer or any Noteholder arising from a transfer of any such Note in accordance with Section 2.07(a).

     Section 2.08. Mutilated, Destroyed, Lost or Stolen Notes. (a) If (i) any mutilated Note is surrendered to the Indenture Trustee or the Indenture Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (ii) there is delivered to the Indenture Trustee such security or indemnity as may be required by the Indenture Trustee to hold each of the Issuer and the Indenture Trustee harmless, then, in the absence of actual notice to the Issuer or the Indenture Trustee that such Note has been acquired by a protected purchaser, the Issuer shall execute, and the Indenture Trustee shall authenticate and deliver upon Issuer Order, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a new Note or Notes of the same tenor and principal balance bearing a number not contemporaneously outstanding; provided, however, that if any such mutilated, destroyed, lost or stolen Note shall have become subject to receipt of payment in full, instead of issuing a new Note, the Indenture Trustee may make a payment with respect to such Note without surrender thereof, except that any mutilated Note shall be surrendered. If, after the delivery of such new Note or payment with respect to a destroyed, lost or stolen Note pursuant to the proviso to the preceding sentence, a protected purchaser of the original Note in lieu of which such new Note was issued presents for receipt of payments such original Note, the Issuer and the Indenture Trustee shall be entitled to recover such new Note (or such payment) from the Person to whom it was delivered or any Person taking such new Note from such Person, except a protected purchaser, and each of the Issuer and the Indenture Trustee shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage or cost incurred by the Issuer or the Indenture Trustee in connection therewith.

          (b) Upon the issuance of any new Note under this Section, the Issuer or the Indenture Trustee may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto.

          (c) Every new Note issued pursuant to this Section 2.08 in lieu of any destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the Issuer, whether or not the destroyed, lost or stolen Note shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Notes duly issued hereunder.

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          (d) The provisions of this Section 2.08 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment with respect to mutilated, destroyed, lost or stolen Notes.

     Section 2.09. Persons Deemed Noteholders. Before due presentment for registration of transfer of any Note, the Issuer or the Indenture Trustee, and any agent of the Issuer or the Indenture Trustee, may treat the Person in whose name any Note is registered as the owner of such Note (a) on the applicable Record Date for the purpose of receiving payments with respect to principal and interest on such Note and (b) on any date for all other purposes whatsoever, whether or not such Note be overdue, and neither the Issuer, the Indenture Trustee nor any agent of the Issuer or the Indenture Trustee shall be affected by any notice to the contrary.

     Section 2.10. Cancellation of Notes. All certificated Notes surrendered for payment, registration of transfer, exchange or prepayment shall, if surrendered to any Person other than the Indenture Trustee, be delivered to the Indenture Trustee and shall be promptly canceled by it. The Issuer may at any time deliver to the Indenture Trustee for cancellation any Note previously authenticated and delivered hereunder which the Issuer may have acquired in any manner whatsoever, and all Notes so delivered shall be promptly canceled by the Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for any Notes canceled as provided in this Section 2.10 except as expressly permitted by this Indenture. All canceled Notes shall be held and disposed of by the Indenture Trustee in accordance with its standard retention and disposal policy.

     Section 2.11. Conditions to Closing. The Notes shall be executed, authenticated and delivered on the Closing Date in accordance with Section 2.05 and, upon receipt by the Indenture Trustee and the Agent, on behalf of the Noteholders, of the following:

     (a) an Issuer Order authorizing the authentication and delivery of such Notes by the Indenture Trustee;

     (b) fully executed originals of the Transaction Documents;

     (c) Opinions of Counsel addressed to the Indenture Trustee and the Agent, on behalf of the Noteholders in form and substance satisfactory to the Indenture Trustee and the Agent, on behalf of the Noteholders, addressing corporate, security interest, bankruptcy and other matters;

     (d) an Officer’s Certificate of an Authorized Officer of the Issuer, stating that:

     (i) all representations and warranties of the Issuer contained in the Transaction Documents are true and correct and no defaults exist under the Transaction Documents;

     (ii) the issuance of the Notes will not result in any breach of any of the terms, conditions or provisions of, or constitute a default under, this Indenture or any other Transaction Document, the organizational documents or any other constituting documents of the Issuer or any indenture, mortgage, deed of trust or other agreement or instrument to which the Issuer is a party or by which it is

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bound, or any order of any court or administrative agency entered in any proceeding to which the Issuer is a party or by which it may be bound or to which it may be subject, and that all conditions precedent provided in this Indenture relating to the authentication and delivery of the Notes have been fully satisfied; and

     (iii) all conditions precedent in this Indenture and in the other Transaction Documents have been satisfied;

     (e) an Officer’s Certificate dated as of the Closing Date, of an Authorized Officer of each of the Depositor and Bay View Acceptance that:

     (i) such Person is not in default under any of the Transaction Documents to which it is a party, and the transfer of the Receivables to the Depositor and the Issuer and the simultaneous Grant of the Receivables to the Indenture Trustee will not result in any breach of any of the terms, conditions or provisions of, or constitute a material default under, the organizational documents or any other constituent documents of such Person or any indenture, mortgage, deed of trust or other agreement or instrument to which such Person is a party or by which it is bound, or any order of any court or administrative agency entered in any proceeding to which such Person is a party or by which it may be bound or to which it may be subject;

     (ii) all representations and warranties of such Person contained in each of the Transaction Documents to which it is a party are true and correct; and

     (iii) all conditions precedent in this Indenture and in the other Transaction Documents have been satisfied;

     (f) a Secretary’s Certificate dated as of the Closing Date of each of the Depositor and Bay View Acceptance regarding certain organizational matters and the incumbency of the signatures of the Depositor and Bay View Acceptance;

     (g) the Contributor Assignment to the Depositor by the Contributor of its rights under the Initial Receivables and the related Contributed Assets, duly executed by the Contributor and the Depositor and the Depositor Assignment to the Issuer by the Depositor of its rights under the Initial Receivables and the related Deposited Assets, duly executed by the Depositor and the Issuer;

     (h) evidence of execution and filing of the Financing Statements with respect to the Trust Estate and all applicable UCC termination statements or partial releases (collectively, the “Termination Statements”) terminating the liens of creditors of the Contributor or any other Person with respect to the Trust Estate (except as expressly contemplated by the Transaction Documents) and presentment of the Financing Statements and Termination Statements (which shall constitute all of the Perfection UCCs with respect to the Closing Date) to the proper Person for recording to perfect the Indenture Trustee’s first priority security interest in such Trust Estate Granted on the Closing Date registered in the name of the Indenture Trustee or its nominee and agent (a

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copy of the file stamped Financing Statements and Termination Statements shall be delivered by the Servicer to the Indenture Trustee);

     (i) evidence that the Indenture Trustee has established the Collection Account, the Spread Account and the Pre-Funding Account;

     (j) delivery by the Custodian to the Issuer and the Indenture Trustee of an executed Certification and delivery by the Indenture Trustee to the Servicer, the Issuer, the Agent and the Custodian of an executed Acknowledgement;

     (k) the Servicer shall have deposited in the Collection Account all Collections received by the Servicer in respect of the Initial Receivables since the Initial Cutoff Date;

     (l) the Spread Account shall have been funded to an amount equal to the Requisite Amount;

     (m) a consolidated balance sheet of Bay View Acceptance and its subsidiaries as at the end of its fiscal year ending December 31, 2004, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year, all in reasonable detail and prepared in accordance with GAAP, audited and accompanied by a report and opinion of an independent certified public accountant of nationally recognized standing reasonably acceptable to the Agent, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit;

     (n) a form of Monthly Servicer Report; and

     (o) any other certificate, document or instrument reasonably requested by the Agent, the Noteholders or the Indenture Trustee.

     Section 2.12. Funding Events. (a) On the Closing Date and in connection with any Subsequent Transfer upon a Funding Date, the following conditions must be satisfied:

     (i) The Contributor shall have forwarded or caused to be forwarded to the Custodian for receipt at least two (2) Business Days preceding such Funding Date (each, a “Delivery Date”), the Custodian Files related to the Subsequent Receivables to be acquired and Granted on such Funding Date, the Custodian shall have delivered to the Issuer, the Indenture Trustee and the Agent an executed Certification for such Custodian Files and the Indenture Trustee shall have delivered to the Servicer, the Issuer, the Agent and the Custodian an executed Acknowledgement.

     (ii) On or prior to such Funding Date, the Issuer shall have delivered, or caused to be delivered, to the Indenture Trustee, the Agent and the Custodian, the following:

     (A) a duly executed Contributor Assignment and a duly executed Depositor Assignment with respect to the related Subsequent Receivables;

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     (B) an executed Notice of Funding relating to such Subsequent Transfer together with an electronic transmission of the information on the related Subsequent Receivables in a format acceptable to each of the Indenture Trustee, and the Agent and any other information reasonably requested by the Indenture Trustee or the Agent with respect to the Subsequent Receivables shall have been delivered at least two (2) Business Days prior to the Funding Date;

     (C) an executed Funding Certificate relating to such Subsequent Transfer together with a Schedule of Receivables; and

     (D) Opinions of Counsel in form and substance satisfactory to the Indenture Trustee and the Agent, with respect to certain corporate, security interest and bankruptcy matters with respect to the Subsequent Receivables; provided, however, that if the opinions delivered on the Closing Date cover such matters with respect to the Subsequent Receivables, then no such Opinions of Counsel need be delivered on such Funding Date.

     (iii) After the acquisition by the Issuer of the related Subsequent Receivables (with each Receivable Balance or APR for any Receivable measured as of its related Cutoff Date) the Collateral Test Amount is not less than zero (0), and each of the representations and warranties set forth in Section 3.02(a)(xxv) of the Sale and Servicing Agreement shall be true and correct on the Cutoff Date related to such Funding Date.

     (iv) No Default, Event of Default, Servicer Event of Default or Termination Event shall have occurred.

     (v) The Servicer shall have deposited in the Collection Account all Collections received by the Servicer in respect of the related Subsequent Receivables since the related Cutoff Date.

     (vi) Each of the Issuer, the Contributor and the Depositor shall have certified that as of such Funding Date, (A) no such Person shall be insolvent or become insolvent as a result of the transfer of Subsequent Receivables on such Funding Date, (B) no such Person shall intend to incur or believe that it shall incur debts that would be beyond its ability to pay as such debts mature, (C) such Subsequent Transfer shall not have been made with actual intent to hinder, delay or defraud any Person, (D) the assets of each such Person shall not constitute unreasonably small capital to carry out its respective business as conducted and (E) no such Person received less than a reasonably equivalent value in exchange for the conveyance of the Subsequent Receivables by the Contributor to the Depositor and the conveyance by the Depositor to the Issuer and the Grant of such Subsequent Receivables to the Indenture Trustee on the related Funding Date.

     (vii) The Funding Period shall not have terminated.

     (viii) Each of the Contributor and the Depositor shall, at its own expense, on or prior to the Funding Date indicate in its computer files that the related Subsequent Receivables have been sold to the Issuer pursuant to the Sale and Servicing Agreement

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and the related Contributor Assignment and Depositor Assignment and Granted to the Indenture Trustee pursuant to this Indenture.

     (ix) No selection procedures adverse to the interests of the Noteholders shall have been utilized in selecting the Subsequent Receivables.

     (x) The related Subsequent Transfer shall not result in a material adverse tax consequence to the Issuer or the Noteholders.

     (xi) Each of the Contributor and the Depositor shall have taken any action required to maintain the first priority perfected ownership interest of the Issuer and the Indenture Trustee in the Trust Estate.

     (xii) On or before such Funding Date (other than any Funding Date occurring prior to the delivery of the Hedge Agreement(s) as required by Section 3.15 hereof), the Issuer shall have executed one or more Hedge Agreements with an aggregate notional amount equal to the Note Principal Balance after taking into consideration the Additional Note Principal Balance to be advanced by the Noteholders on such Funding Date.

     (xiii) On or before such Funding Date, each of the Contributor, the Depositor and the Issuer shall have provided any other information reasonably requested by the Agent, the Noteholders or the Indenture Trustee with respect to any Subsequent Receivables.

     Section 2.13. Fundings. (a) Subject to satisfaction of the conditions precedent set forth in Sections 2.11 or 2.12 hereof, as applicable, and Eligible Receivables being available to be acquired pursuant to the Contribution Agreement, during the Funding Period the Issuer may, at its sole option, from time to time request that the Noteholders advance on any Funding Date additional amounts (such amounts, the “Additional Note Principal Balance”), and the Noteholders which are making such advances shall remit the Additional Note Principal Balance in accordance with the terms of the Note Purchase Agreement.

          Each Noteholder shall record, on the schedule attached to such Noteholder’s Note, the date and amount of any Additional Note Principal Balance advanced by it, and each repayment thereof; provided that failure to make such recordation on such schedule or any error in such schedule shall not adversely affect any Noteholder’s rights with respect to its Note Principal Balance and its right to receive interest payments in respect of the Note Principal Balance held by such Noteholder.

          The Indenture Trustee shall keep a written record of the Note Principal Balance, which amount is to be provided by the Servicer in its Monthly Servicer Report of each Note. Absent manifest error, the Note Principal Balance of each Note as set forth in the Noteholder’s records shall be binding upon all applicable parties, notwithstanding any other records; provided that failure by any the Indenture Trustee to make such recordation on such Noteholder’s records shall not adversely affect any Noteholder’s rights with respect to its Note Principal Balance and its right to receive interest payments in respect of the Note Principal Balance held by such Noteholder.

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          (b) The aggregate of the Receivable Balances for a Pool of Receivables (and the Aggregate Receivable Balance, including such Pool of Receivables) shall be determined by the Servicer on behalf of the Issuer and shall be reflected in the Funding Certificate with respect to Receivables identified on the related Schedule of Receivables attached to the Funding Certificate for such Funding. Each Pool shall become subject to this Indenture.

          (c) The Issuer shall acquire funds in an amount not to exceed the Receivables Advance Amount on the Initial Funding Date or any subsequent Funding Date throughout the Funding Period from the Noteholders, upon the request of the Issuer, and the making of advances by the Noteholders of Additional Note Principal Balances in accordance with the Note Purchase Agreement in an amount equal to or greater than $1,000,000 (or such lesser amount agreed to between the Issuer and the Agent from time to time); provided, however, that the conditions in Section 2.12 are satisfied and that after such Funding the Note Principal Balance shall not be greater than the Maximum Outstanding Note Amount.

     Section 2.14. Fundings by Noteholders. Subject to the terms hereof and further subject to the Note Purchase Agreement, each Noteholder which is making an advance will use its best efforts to initiate a wire transfer to the Indenture Trustee of the Additional Note Principal Balance, that is specified in the Funding Certificate (which shall be an amount equal to such Noteholder’s share of the Additional Note Principal Balance, determined by the terms of the Note Purchase Agreement) at JPMorgan Chase Bank, N.A., ABA 113000609, for further credit to Account # 00103409232, REF: Bay View 2005-A #10223546, by 1:00 p.m. (New York City time) on the applicable Funding Date in immediately available funds. The Indenture Trustee shall, subject to the satisfaction of the conditions precedent set forth in Section 2.11 or Section 2.12, as applicable, simultaneously transfer such Additional Note Principal Balance, to or at the direction of the Issuer in accordance with the written instructions of the Issuer. Such amounts received by the Indenture Trustee from the Noteholders shall be held by the Indenture Trustee as part of the Trust Estate until disbursed to or at the written direction of the Issuer. Such amounts shall not be commingled with any other monies held by the Indenture Trustee.

     Section 2.15. Access to List of Noteholders’ Names and Addresses. The Indenture Trustee shall furnish or cause to be furnished to the Servicer, the Agent, any Noteholder or any Financial Institution within 15 days after receipt by the Indenture Trustee of a request therefor from the Servicer in writing, a list, in such form as the Servicer may reasonably require, of the names and addresses of the Noteholders as of the most recent Record Date.

Article III

Covenants; Collateral; Representations; Warranties

     Section 3.01. Performance of Obligations. (a) The Issuer will not take any action or permit any action to be taken by others which would release any Person from any of such Person’s covenants or obligations under any instrument included in the Trust Estate, or which would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of, any such instrument, except as expressly provided in this Indenture.

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          (b) To the extent consistent with its organizational documents, the Issuer may contract with other Persons to assist it in performing its duties hereunder, and any performance of such duties shall be deemed to be action taken by the Issuer. To the extent that the Issuer contracts with other Persons which include or may include the furnishing of reports, notices or correspondence to the Indenture Trustee, the Issuer shall identify such Persons in a written notice to the Indenture Trustee, each Noteholder and the Agent.

          (c) The Issuer, the Contributor and the Depositor will characterize (i) the transfer of the Receivables by the Contributor to the Depositor pursuant to the Contribution Agreement as a contribution for financial accounting purposes and for federal income tax purposes, (ii) the transfer of the Receivables by the Depositor to the Issuer pursuant to the Sale and Servicing Agreement as an absolute transfer for legal purposes, (iii) the Grant of the Receivables by the Issuer under this Indenture as a pledge for federal income tax purposes and for financial accounting purposes, (iv) the Issuer as the owner of the Receivables for financial accounting purposes and for federal income tax purposes, (v) the Notes as indebtedness of the Depositor for federal income tax purposes and (vi) the Notes as indebtedness of the Contributor and its consolidated subsidiaries for financial accounting purposes. In this regard, the financial statements of the Contributor and its consolidated subsidiaries will show the Receivables as owned by the consolidated group and the Notes as indebtedness of the consolidated group (and will contain appropriate footnotes describing the transfers to the Depositor and the Issuer and the pledge to the Indenture Trustee), and the federal tax returns of the Contributor and its consolidated subsidiaries will indicate that the Notes are indebtedness of such consolidated group. The Issuer will cause the Servicer to file all required tax returns and associated forms, reports, schedules and supplements thereto in a manner consistent with such characterizations.

          (d) The Issuer covenants to pay all taxes or other similar charges levied by any governmental authority with regard to the Trust Estate (which shall include paying any Affiliate of the Issuer who pays such taxes for any affiliated group of which the Issuer is a member), except to the extent that the validity or amount of such taxes is contested in good faith, via appropriate proceedings and with adequate reserves established and maintained therefor in accordance with generally accepted accounting principles.

          (e) The Issuer hereby assumes liability for all liabilities associated with the Trust Estate or created under this Indenture, including but not limited to any obligation arising from the breach or inaccuracy of any representation, warranty or covenant of the Issuer set forth herein. Notwithstanding the foregoing, the Issuer has and shall have no liability with respect to the payment of principal and interest on the Notes, except as otherwise provided in this Indenture.

     Section 3.02. Negative Covenants. The Issuer will not: (a) sell, transfer, exchange or otherwise dispose of any portion of its interest in the Trust Estate except as expressly permitted by this Indenture;

          (b) claim any credit on, or make any deduction from, the principal of or interest on any of the Notes by reason of the payment of any taxes levied or assessed upon any portion of the Trust Estate;

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          (c) merge or consolidate in whole or in part, except (i) as permitted in paragraph (ii) of Section 3.10(b) or (ii) with the prior written consent of the Majority Holders;

          (d) permit the validity or effectiveness of this Indenture or any Grant hereunder to be impaired, or permit the Lien of this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations under this Indenture, except as may be expressly permitted hereby;

          (e) permit any Lien (other than the Lien of this Indenture or any Permitted Lien) to be created on or extend to or otherwise arise upon or burden the Trust Estate or any part thereof or any interest therein or the proceeds thereof;

          (f) permit the Lien of this Indenture not to constitute a valid first priority, perfected security interest in the Trust Estate;

          (g) incur, assume or guarantee any indebtedness of any Person secured by any Receivables pledged under this Indenture, except (i) for such obligations as may be incurred by the Issuer in connection with the issuance of the Notes pursuant to this Indenture and (ii) as otherwise expressly permitted herein;

          (h) amend or otherwise modify any Transaction Document unless such amendment is consented to in writing by the Majority Holders and the Indenture Trustee; or

          (i) act in violation of its Certificate of Trust or the Issuer Trust Agreement.

     Section 3.03. Money for Note Payments. (a) All payments with respect to any Notes which are to be made from amounts withdrawn from the Collection Account pursuant to Section 5.03 hereof shall be punctually made on behalf of the Issuer by the Indenture Trustee or by a Paying Agent, and no amounts so withdrawn from an Account for payments with respect to Notes shall be paid over to the Issuer under any circumstances except as provided in this Section 3.03 and Article V hereof.

          (b) When there shall be a Paying Agent that is not also the Note Registrar, the Issuer shall furnish, or cause the Note Registrar to furnish, no later than the fifth calendar day after each Record Date, a list, in such form as such Paying Agent may reasonably require, of the names and addresses of the Noteholders and of the number of individual Notes and the Note Principal Balance of such Notes held by each such Noteholder.

          (c) Whenever there shall be a Paying Agent other than the Indenture Trustee, the Issuer will, on or before the Business Day immediately preceding each Payment Date, direct the Indenture Trustee to deposit with such Paying Agent an aggregate sum sufficient to distribute the amounts then becoming due (to the extent funds are then available for such purpose in the Collection Account), such sums to be held in trust for the benefit of the Persons entitled thereto pursuant to this Indenture. Any moneys deposited with a Paying Agent in excess of an amount sufficient to distribute the amounts then becoming due on the Notes with respect to which such deposit was made shall, upon Issuer Order, be paid over by such Paying Agent to the Indenture Trustee for application in accordance with Article V hereof.

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          (d) The initial Paying Agent shall be the Indenture Trustee. Any additional or successor Paying Agent shall be appointed by Issuer Order with the prior written consent of the Majority Holders. The Issuer shall not appoint any Paying Agent that is not, at the time of such appointment, an Eligible Institution or trust company incorporated under the laws of the United States of America or any State thereof and subject to supervision and examination by federal or State banking authorities.

          (e) The Issuer will cause each Paying Agent other than the Indenture Trustee to execute and deliver to the Indenture Trustee an instrument in which such Paying Agent shall agree with the Indenture Trustee, and if the Indenture Trustee acts as Paying Agent, it hereby so agrees, subject to the provisions of this Section 3.03, that such Paying Agent will:

          (i) allocate all sums received for payment to the Holders for which it is acting as Paying Agent on each Payment Date among such Holders in the proportion specified in the applicable Monthly Servicer Report;

          (ii) hold all sums held by it for the payment of amounts due with respect to the Notes in trust for the benefit of the Persons entitled thereto until such sums shall be distributed to such Persons or otherwise disposed of as herein provided and distribute such sums to such Persons as herein provided;

          (iii) if such Paying Agent is not the Indenture Trustee, immediately resign as a Paying Agent and forthwith pay to the Indenture Trustee all sums held by it in trust for payment with respect to the Notes if at any time it ceases to meet the standards set forth in clause (d) above required to be met by a Paying Agent at the time of its appointment;

          (iv) if such Paying Agent is not the Indenture Trustee, give the Indenture Trustee, the Noteholders, each Financial Institution and the Agent notice of any Termination Event, Default, Event of Default or Servicer Event of Default coming to its attention in the making of any payments required to be made with respect to the Notes for which it is acting as Paying Agent;

          (v) if such Paying Agent is not the Indenture Trustee, at any time during the continuance of any such Termination Event, Default, Event of Default or Servicer Event of Default, upon the written request of the Indenture Trustee, forthwith pay to the Indenture Trustee all sums so held in trust by such Paying Agent; and

          (vi) comply with all requirements of the Code and all regulations thereunder, with respect to the withholding from any payment made by it on any Notes of any applicable withholding taxes imposed thereon and with respect to any applicable reporting requirements in connection therewith; provided, however, that with respect to withholding and reporting requirements applicable to original issue discount (if any) on the Notes, the Paying Agent shall have first provided the calculations pertaining thereto to the Indenture Trustee.

          (f) The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, by Issuer Order direct any Paying Agent, if other than the Indenture Trustee, to pay to the Indenture Trustee all sums held in trust by such

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Paying Agent, such sums to be held by the Indenture Trustee upon the same terms as those upon which such sums were held by such Paying Agent; and upon such payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be released from all further liability with respect to such money.

          (g) Any money held by the Indenture Trustee or any Paying Agent in trust for the payment of any amount distributable but unclaimed with respect to any Note shall be held in a non-interest bearing trust account, and if the same remains unclaimed for two years after such amount has become due to the Noteholder, it shall be discharged from such trust and paid to the Issuer upon an Issuer Order, without any further action by any Person; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Issuer for payment thereof (but only to the extent of the amounts so paid to the Issuer), and all liability of the Indenture Trustee or such Paying Agent with respect to such trust money shall thereupon cease. The Indenture Trustee may adopt and employ, at the expense of the Issuer, any reasonable means of notification of such payment (including, but not limited to, mailing notice of such payment to Noteholders whose Notes have been called but have not been surrendered for prepayment or whose right to or interest in moneys due and payable but not claimed is determinable from the records of the Indenture Trustee or any Paying Agent, at the last address of record for each such Noteholder).

     Section 3.04. Restriction of Issuer Activities. Until the date that is one year and one day after the payment by the Issuer in full of all payments on the Notes, the Issuer will not on or after the date of execution of this Indenture: (i) engage in any business or investment activities other than those necessary for, incident to, connected with or arising out of, owning and Granting the Trust Estate to the Indenture Trustee for the benefit of the Noteholders, or contemplated hereby, in the Certificate of Trust, the Issuer Trust Agreement, the Contribution Agreement and the Sale and Servicing Agreement; (ii) incur any indebtedness secured in any manner by, or having any claim against, the Trust Estate or the Issuer other than indebtedness arising under the Sale and Servicing Agreement or the letter agreement relating to the Indenture Trustee Fee; (iii) incur any other indebtedness except as permitted in the Certificate of Trust or Issuer Trust Agreement; (iv) amend, or propose to the shareholders of the Depositor for their consent any amendment of, the Issuer Trust Agreement at the date of this Indenture (or, if the Issuer shall be a successor to the Person named as the Issuer in the first paragraph of this Indenture, amend, consent to amendment or propose any amendment of, the governing instruments of such successor), without giving notice thereof in writing, 90 days prior to the date on which such amendment is to become effective, to the Agent and obtaining the prior written consent thereto of the Majority Holders; (v) except as expressly permitted by this Indenture or the Transaction Documents, sell, transfer, exchange or otherwise dispose of any of the properties or assets of the Issuer, including those included in the Trust Estate; (vi) claim any credit on, or make any deduction from the principal or interest payable in respect of, the Notes (other than amounts properly withheld from such payments under the Code) or assert any claim against any present or former Noteholder by reason of the payment of the taxes levied or assessed upon any part of the Trust Estate; (vii) permit the validity or effectiveness of this Indenture to be impaired, or permit the Lien in favor of the Indenture Trustee created by this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations with respect to the Notes under this Indenture except as may be expressly permitted hereby; (viii) permit the Lien of this Indenture not to constitute a valid perfected first priority (other than with

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respect to any Permitted Lien) security interest in the Trust Estate; (ix) amend, modify or fail to comply with the provisions of the Transaction Documents without the prior written consent of the Majority Holders; or (x) dissolve or liquidate in whole or in part or merge or consolidate with any other Person, other than in compliance with Section 3.10.

     Section 3.05. Protection of Trust Estate. (a) The Issuer intends the security interest Granted pursuant to this Indenture in favor of the Indenture Trustee, for the benefit of the Noteholders, the Agent and the Financial Institutions, to be prior to all other liens in respect of the Trust Estate, and the Issuer shall take all actions necessary to obtain and maintain, in favor of the Indenture Trustee, for the benefit of the Noteholders, the Agent and the Financial Institutions, a first lien on and a first priority, perfected security interest in the Trust Estate. The Issuer will from time to time prepare, execute and deliver all such supplements and amendments hereto and all such financing statements, continuation statements, instruments of further assurance, and other instruments (all as presented to it in final execution form), and will take such other action as may be necessary or advisable to:

          (i) provide further assurance with respect to such Grant and/or Grant more effectively all or any portion of the Trust Estate,

          (ii) maintain, preserve or enforce (a) the lien and security interest (and the priority thereof) in favor of the Indenture Trustee created by this Indenture and (b) the terms and provisions of this Indenture or carry out more effectively the purposes hereof,

          (iii) perfect, publish notice of, or protect the validity of, any Grant made or to be made by this Indenture,

          (iv) enforce any of the Trust Estate,

          (v) preserve and defend title to any Receivable or other item included in the Trust Estate and the rights of the Indenture Trustee and of the Noteholders in such Receivable or other item against the claims of all Persons, or

          (vi) pay all taxes or assessments levied or assessed upon the Trust Estate when due.

          The Issuer shall deliver or cause to be delivered to the Indenture Trustee file-stamped copies of, or filing receipts for, any document recorded, registered or filed as provided above, as soon as available following such recording, registration or filing. The Issuer shall cooperate fully with the Indenture Trustee and the Agent in connection with the obligations set forth above and will execute any and all documents reasonably required to fulfill the intent of this Section 3.05.

          (b) The Issuer hereby irrevocably appoints the Indenture Trustee as its agent and attorney-in-fact (such appointment being coupled with an interest) to execute, or authorize the filing of, upon the Issuer’s failure to do so, any financing statement, continuation statement or other instrument, document, certificate or agreement required pursuant to this Section 3.05; provided, however, that such designation shall not be deemed to create any duty in the Indenture Trustee to monitor the compliance of the Issuer with the foregoing covenants or to execute, or

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authorize the filing of, any instrument. The Issuer shall cooperate with the Indenture Trustee and provide to the Indenture Trustee any information, documents or instruments with respect to such financing statement, continuation statement or other instrument that the Indenture Trustee may reasonably require. For purposes of this Section 3.05(b), the Indenture Trustee will not be deemed to have actual knowledge of any such default if the Indenture Trustee has not, but should have, received an Opinion of Counsel pursuant to Section 3.06 addressing the facts surrounding such default.

          (c) Except as necessary or advisable in connection with the fulfillment by the Indenture Trustee of its duties and obligations described herein or in the Sale and Servicing Agreement, the Indenture Trustee shall not remove any portion of the Trust Estate that consists of money or is evidenced by an instrument, certificate or other writing from the jurisdiction in which it was held as described in the most recent Opinion of Counsel that was delivered pursuant to Section 3.06 (or from the jurisdiction in which it was held as described in the Opinion of Counsel delivered at the Closing Date pursuant to Section 2.11(c), if no Opinion of Counsel has yet been delivered pursuant to Section 3.06) unless the Indenture Trustee shall have first received an Opinion of Counsel to the effect that the Lien created by this Indenture with respect to such property will continue to be maintained after giving effect to such action or actions.

          (d) No later than sixty (60) days prior to any of the Contributor, the Depositor or the Issuer making any change in its or their name, identity, jurisdiction of organization or structure which would make any financing statement or continuation statement filed in accordance with paragraph (a) above seriously misleading within the meaning of Section 9-506 of the UCC as in effect in New York or wherever else necessary or appropriate under applicable law, or otherwise impair the perfection of the security interest referred to in Article II hereof, the Issuer shall give or cause to be given to the Indenture Trustee, the Noteholders and the Agent written notice of any such change and shall file such financing statements or amendments as may be necessary to continue the perfection of the Indenture Trustee’s security interest in the Trust Estate. None of the Contributor, the Depositor or the Issuer shall become or seek to become organized under the laws of more than one jurisdiction.

          (e) The Issuer shall give the Indenture Trustee, the Noteholders and the Agent written notice at least sixty (60) days prior to any relocation of the Contributor’s, the Depositor’s or the Issuer’s respective principal executive office or jurisdiction of organization and whether, as a result of such relocation, the applicable provisions of relevant law or the UCC would require the filing of any amendment of any previously filed financing or continuation statement or of any new financing statement and shall file such financing statements or amendments as may be necessary to continue the perfection of the Indenture Trustee’s security interest in the Trust Estate. The Issuer shall at all times maintain its principal executive office and jurisdiction of organization within the United States of America.

     Section 3.06. Opinions as to Trust Estate. (a) On the Closing Date and on the date of each indenture supplement hereto, if any, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either stating that, in the opinion of such counsel, such action has been taken with respect to the recording and filing of this Indenture, and indentures supplemental hereto and other requisite documents and with respect to the execution and filing of any financing statements and continuation statements, as are necessary to perfect and make effective the first

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priority Lien and security interest in favor of the Indenture Trustee for the benefit of the Noteholders, created by this Indenture and reciting the details of such action, or stating that, in the opinion of such counsel, no such action is necessary to make such lien and security interest effective.

          (b) Within 90 days after the beginning of each calendar year, beginning with the first calendar year beginning more than three months after the Closing Date, the Issuer shall furnish to the Indenture Trustee and the Agent an Opinion of Counsel either stating that, in the opinion of such counsel, such action has been taken with respect to the recording, filing, re-recording and re-filing of this Indenture, any indentures supplemental hereto and any other requisite documents and with respect to the execution and filing of any financing statements and continuation statements as is necessary to maintain the Lien created by this Indenture with respect to the Trust Estate and reciting the details of such action or stating that in the opinion of such counsel no such action is necessary to maintain such lien and security interest. The Issuer shall also provide the Indenture Trustee and the Agent with a file stamped copy of any document or instrument filed as described in such Opinion of Counsel contemporaneously with the delivery of such Opinion of Counsel. Such Opinion of Counsel shall also describe the recording, filing, re-recording and re-filing of this Indenture, any indentures supplemental hereto and any other requisite documents and the execution and filing of any financing statements and continuation statements that will, in the opinion of such counsel, be required to maintain the Lien of this Indenture with respect to the Trust Estate. If the Opinion of Counsel delivered to the Indenture Trustee and the Agent hereunder specifies future action to be taken by the Issuer, the Issuer shall furnish a further Opinion of Counsel no later than the time so specified in such former Opinion of Counsel to the effect required hereby.

     Section 3.07. Statement as to Compliance. The Issuer will deliver to the Indenture Trustee, the Agent and the Initial Purchasers , within 90 days after the end of each fiscal year, an Officer’s Certificate stating, as to the signer thereof, that, (a) a diligent review of the activities of the Issuer during the preceding calendar year and of its performance under this Indenture has been made under such officer’s supervision, (b) to the best of such officer’s knowledge, based on such review, the Issuer has fulfilled all its obligations under this Indenture throughout such year, or, if there has been a default in the fulfillment of any such obligation, specifying each such default known to such officer and the nature and status thereof and remedies therefor being pursued, and (c) no event has occurred and is continuing which is, or after notice or lapse of time or both would become, an Event of Default hereunder or, if such an event has occurred and is continuing, specifying each such event known to him or her and the nature and status thereof and remedies therefor being pursued.

     Section 3.08. Limitations on Lien. Except for the Lien created by this Indenture, the Issuer will not create, incur or suffer, or permit to be created or incurred or to exist, any Lien on any of the Trust Estate.

     Section 3.09. Recording. The Issuer will, upon the Closing Date and thereafter from time to time, cause financing statements and such other instruments as may be required with respect thereto, including without limitation, the Financing Statements to be filed, registered and recorded as may be required by present or future law (with file stamped copies thereof delivered to the Indenture Trustee and the Agent), publish notice thereof and create, perfect and protect the

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lien hereof upon the Receivables and the other items of the Trust Estate, and publish notice of and protect the validity of this Indenture. The Issuer will, from time to time, perform or cause to be performed any other act as required by law and will execute or cause to be executed any and all further instruments (including financing statements, continuation statements and similar statements with respect to any of said documents with file stamped copies thereof delivered to the Indenture Trustee and the Agent) that are necessary or reasonably requested by the Indenture Trustee or the Agent for such creation, perfection, publication and protection. The Issuer shall pay, or shall cause to be paid, all filing, registration and recording taxes and fees incident thereto, and all expenses, taxes and other governmental charges incident to or in connection with the preparation, execution, delivery or acknowledgment of the recordable documents, any instruments of further assurance, and the Notes. The Issuer shall deliver (or cause to be delivered) to the Indenture Trustee and the Agent file stamped copies of, or filing receipts for any document filed as provided above, as soon as available following such filing.

     Section 3.10. Agreements Not to Institute Bankruptcy Proceedings; Additional Covenants. (a) The Issuer shall not, without the unanimous consent of the board of directors of the Depositor (including each of its Independent Directors), voluntarily institute any proceedings to adjudicate the Issuer a bankrupt or insolvent, consent to the institution of bankruptcy or insolvency proceedings against the Issuer, file a petition seeking or consenting to reorganization or relief under any applicable federal or State law relating to bankruptcy, consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Issuer or a substantial part of its property or admit its inability to pay its debts generally as they become due or authorize any of the foregoing to be done or taken on behalf of the Issuer.

          (b) So long as any of the Notes are Outstanding:

          (i) The Issuer will keep in full effect its existence, rights and franchises as a statutory trust under the laws of the State of Delaware and will obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Indenture, the Notes and each asset included in the Trust Estate.

          (ii) The Issuer shall not consolidate or merge with or into any other entity or convey or transfer its properties and assets substantially as an entirety to any entity unless (A) the entity (if other than the Issuer) formed or surviving such consolidation or merger, or that acquires by conveyance or transfer the properties and assets of the Issuer substantially as an entirety, shall be organized and existing under the laws of the United States of America or any State thereof or the District of Columbia as a special purpose bankruptcy remote entity, and shall expressly assume in form satisfactory to the Majority Holders the obligation to make due and punctual payments of principal and interest on the Notes then Outstanding and the performance of every covenant on the part of the Issuer to be performed or observed pursuant to the Indenture, (B) immediately after giving effect to such transaction, no Default or Event of Default under this Indenture shall have occurred and be continuing, (C) the Issuer shall have delivered to the Noteholders, the Agent and the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance or transfer complies

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with this Indenture, and (D) the Majority Holders shall have given their prior written consent.

          (iii) The funds and other assets of the Issuer shall not be commingled with those of any other Person except to the extent expressly permitted under the Transaction Documents.

          (iv) The Issuer shall not be, become or hold itself out as being liable for the debts of any other Person.

          (v) The Issuer shall not form, or cause to be formed, any subsidiaries.

          (vi) The Issuer shall not change its name and shall act solely in its own name and through its duly authorized officers or agents in the conduct of its business, and shall conduct its business so as not to mislead others as to the identity of the entity with which they are concerned. The Issuer shall not have any employees.

          (vii) The Issuer shall maintain its records and books of account and shall not commingle its records and books of account with the records and books of account of any other Person. The books of the Issuer may be kept (subject to any provision contained in the applicable statutes) inside or outside the State of Delaware at such place or places as may be designated from time to time by the Certificate of Trust or Issuer Trust Agreement.

          (viii) All actions of the Issuer shall be taken by an Authorized Officer of the Issuer (or any Person acting on behalf of the Issuer).

          (ix) The Issuer shall not amend, alter, change or repeal any provision contained in this Section 3.10(b) without the prior written consent of the Majority Holders, in their sole and absolute discretion.

          (x) The Issuer shall not amend its Certificate of Trust (except as required under the Delaware Statutory Trust Act, 12 Del. C., §3801 et seq.) or the Issuer Trust Agreement, without first obtaining the prior written consent of the Majority Holders, in their sole and absolute discretion.

          (xi) The Issuer shall not dissolve or liquidate, in whole or in part, except with the prior written consent of the Majority Holders, in their sole and absolute discretion.

          (xii) The Issuer maintains and will maintain separate records and books of account from the Depositor and the Contributor and the formalities of the form of its organization.

          (xiii) The annual financial statements (if any) of a beneficial owner of the Issuer and the annual financial statements of the Depositor and the Contributor will disclose the effects of these transactions in accordance with generally accepted accounting principles. Any consolidated financial statements which consolidate the assets and earnings of the Depositor and the Contributor with those of the Issuer will contain a footnote stating that

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the assets of the Issuer will not be available to creditors of the Contributor or the Depositor. The financial statements of the Issuer, if any, will disclose that the assets of the Depositor and the Contributor are not available to pay creditors of the Issuer.

          (xiv) Other than certain costs and expenses related to the issuance of the Notes, neither the Depositor nor the Contributor shall pay the Issuer’s expenses, guarantee the Issuer’s obligations or advance funds to the Issuer for payment of expenses except for costs and expenses for which either the Depositor or the Contributor is required to make payments, in which case the Issuer will reimburse such Person for such payment.

          (xv) All business correspondences of the Issuer are and will be conducted in the Issuer’s own name and using its own stationary.

          (xvi) The Depositor and the Contributor do not act and will not act as agent of the Issuer and the Issuer does not and will not act as agent of the Depositor or the Contributor.

          (xvii) Except during the Funding Period, the Issuer shall not fund the acquisition of any additional Receivables.

          (xviii) The Issuer shall not make any expenditure (by long-term or operating lease or otherwise) for capital assets (either realty or personalty).

          (xix) The Issuer shall comply with the requirements of all applicable laws, the non-compliance with which would, individually or in the aggregate, materially and adversely affect the ability of the Issuer to perform its obligations under the Notes, this Indenture or any other Transaction Document.

          (xx) The Issuer shall not, directly or indirectly, (i) pay any dividend or make any distribution (by reduction of capital or otherwise), whether in cash, property, securities or a combination thereof, to the Owner Trustee or any owner of a beneficial interest in the Issuer or otherwise with respect to any ownership or equity interest or security in or of the Issuer or to the Servicer or the Backup Servicer, (ii) redeem, purchase, retire or otherwise acquire for value any such ownership or equity interest or security or (iii) set aside or otherwise segregate any amounts for any such purpose; provided, however, that the Issuer may make, or cause to be made, distributions to the Servicer, the Backup Servicer, the Owner Trustee and the Indenture Trustee as permitted by, and to the extent funds are available for such purpose under, the Sale and Servicing Agreement and the Issuer Trust Agreement. The Issuer will not, directly or indirectly, make payments to or distributions from the Collection Account or any other Account except in accordance with this Indenture and the Transaction Documents.

     Section 3.11. Providing of Notice. The Issuer, upon learning of any failure on its part to observe or perform in any material respect any covenant, representation or warranty of the Issuer set forth in this Indenture, the Sale and Servicing Agreement or any other Transaction Document to which it is a party, or of any failure on the part of the Contributor or the Depositor to observe or perform in any material respect any covenant, representation or warranty of the Contributor or the Depositor, as applicable, set forth in the Contribution Agreement, the Sale and Servicing

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Agreement or any other Transaction Document to which it is a party, as applicable, or upon learning of any Default, Event of Default, Servicer Event of Default or Termination Event, shall promptly notify, in writing, the Indenture Trustee, the Noteholders, and the Contributor of such failure or Default, Event of Default, Servicer Event of Default or Termination Event.

     Section 3.12. Representations and Warranties of the Issuer. The Issuer hereby reaffirms all of its representations, warranties and covenants made in each of the other Transaction Documents and represents, warrants and covenants to the Indenture Trustee, the Noteholders and the Agent that as of the Closing Date and each Funding Date:

          (a) The Issuer is duly formed and is validly existing as a statutory trust in good standing under the laws of the State of Delaware with full power and authority to execute and deliver this Indenture, the Sale and Servicing Agreement, the Custodian Agreement and each other Transaction Document to which it is a party and to perform the terms and provisions hereof and thereof; the Issuer is duly qualified to do business as a foreign business entity in good standing, and has obtained all required licenses and approvals, if any, in all jurisdictions in which the ownership or lease of property or the conduct of its business requires such qualifications except those jurisdictions in which failure to be so qualified would not have a material adverse effect on the business or operations of the Issuer, the Trust Estate, the Noteholders, the Agent or any Receivable;

          (b) All necessary action has been taken by the Issuer to authorize and empower the Issuer, and the Issuer has full power and authority to execute, deliver and perform its obligations under this Indenture, the Sale and Servicing Agreement, the Custodian Agreement and each other Transaction Document to which it is a party, and the Issuer has full power and is duly authorized to execute, deliver and perform its obligations under this Indenture, the Sale and Servicing Agreement, the Custodian Agreement and each other Transaction Document to which it is a party, and no consent or approval of any Person is required for the execution, delivery or performance by the Issuer of this Indenture, the Sale and Servicing Agreement, the Custodian Agreement and each other Transaction Document to which it is a party;

          (c) This Indenture, the Sale and Servicing Agreement, the Custodian Agreement and each other Transaction Document to which it is a party have been duly executed and delivered, and the execution and delivery of this Indenture, the Sale and Servicing Agreement, the Custodian Agreement and each other Transaction Document to which it is a party by the Issuer and its performance and compliance with the terms hereof and thereof will not violate the Certificate of Trust or the Issuer Trust Agreement or constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, or result in the breach of, any material contract, indenture, loan, credit agreement or any other agreement or instrument (including, without limitation, the Transaction Documents) to which the Issuer is a party or which may be applicable to the Issuer or any of its assets;

          (d) This Indenture, the Sale and Servicing Agreement, the Custodian Agreement and each other Transaction Document to which it is a party constitute valid, legal and binding obligations of the Issuer, enforceable against it in accordance with their

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respective terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the enforcement of creditors’ rights generally and to general principles of equity;

          (e) The Issuer is not in violation of, and the execution, delivery and performance of this Indenture, the Sale and Servicing Agreement, the Custodian Agreement and each other Transaction Document to which it is a party by the Issuer will not constitute a violation with respect to, any order or decree of any court or any order, regulation or demand of any federal, State, municipal or governmental agency, which violation might have consequences that would materially and adversely affect the condition (financial or other) or operations of the Issuer or its properties or might have consequences that would materially affect the performance of its duties hereunder or thereunder;

          (f) No proceeding of any kind, including but not limited to litigation, arbitration, judicial or administrative, is pending or, to the Issuer’s knowledge, threatened against or contemplated by the Issuer which would under any circumstance have an adverse effect on the execution, delivery, performance or enforceability of this Indenture, the Notes or any other Transaction Document;

          (g) Each of the representations and warranties of the Issuer set forth in the Sale and Servicing Agreement, the Issuer Trust Agreement and each other Transaction Document to which it is a party is, as of the Closing Date, and will be, as of each Funding Date, true and correct in all material respects and each such representation and warranty is hereby incorporated in this Indenture as if set forth herein in full.

          (h) The Issuer has not incurred debt or engaged in activities not related to the transactions contemplated hereunder except as permitted by the Issuer Trust Agreement or Section 3.04 hereof.

          (i) The Issuer is not insolvent and did not become insolvent as a result of the Grant pursuant to this Indenture; the Issuer is not engaged and is not about to engage in any business or transaction for which any property remaining with the Issuer is unreasonably small capital or for which the remaining assets of the Issuer are unreasonably small in relation to the business of the Issuer or the transaction; the Issuer does not intend to incur, and does not believe or reasonably should not have believed that it would incur, debts beyond its ability to pay as they become due; and the Issuer has not made a transfer or incurred an obligation and does not intend to make such a transfer or incur such an obligation with actual intent to hinder, delay or defraud any entity to which the Issuer was or became, on or after the date that such transfer was made or such obligation was incurred, indebted.

          (j) (i) The transfer of the Receivables by the Contributor to the Depositor pursuant to the Contribution Agreement is a contribution for financial accounting purposes and federal income tax purposes, (ii) the transfer of the Receivables by the Depositor to the Issuer pursuant to the Sale and Servicing Agreement is an absolute transfer for legal purposes, (iii) the Grant of the Receivables by the Issuer pursuant to the

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terms of this Indenture is a pledge for financial accounting purposes and federal income tax purposes, (iv) the Issuer is the owner of the Receivables for financial accounting purposes and federal income tax purposes, and (v) the Notes will be treated by the Issuer as indebtedness of the Depositor for federal income tax purposes. In this regard, the financial statements of the Contributor and its consolidated subsidiaries will show that the Receivables are owned by such consolidated group and the Notes as indebtedness of the consolidated group (and will contain footnotes describing the transfers to the Depositor and the Issuer and the pledge to the Indenture Trustee), and the federal tax returns of the Contributor and its consolidated subsidiaries will indicate that the Notes are indebtedness of such consolidated group.

          (k) As of the Initial Cutoff Date, the Aggregate Receivable Balance is $266,513,454.44.

          (l) The legal name of the Issuer is as set forth in this Indenture; the Issuer has no trade names, fictitious names, assumed names or “doing business as” names.

          (m) Upon the delivery to the Custodian of the Custodian Files and receipt from the Custodian of a Certification and the filing of the Perfection UCCs in accordance with applicable law, the Indenture Trustee, for the benefit of the Noteholders, shall have a first priority perfected security interest in the Receivables and in the proceeds thereof, limited with respect to proceeds to the extent set forth in Section 9-315 of the UCC as in effect in the applicable jurisdiction. Other than with respect to the Financed Vehicles, all filings (including, without limitation, UCC filings) and other actions as are necessary in any jurisdiction to perfect the ownership, security interest, or other interest of the Indenture Trustee in the related Trust Estate, including delivery of the Receivables and the Custodian Files to the Custodian, and the payment of any fees, have been made or, with respect to Termination Statements, will be made within two (2) Business Days of the Closing Date.

          (n) None of the absolute transfer of the Receivables and security interest in the Financed Vehicles by the Contributor to the Depositor pursuant to the Contribution Agreement, the absolute transfer of the Receivables and security interest in the Financed Vehicles by the Depositor to the Issuer pursuant to the Sale and Servicing Agreement, or the Grant by the Issuer to the Indenture Trustee pursuant to this Indenture is subject to the bulk transfer or any similar statutory provisions in effect in any applicable jurisdiction.

          (o) The Issuer is not an “investment company” as such term is defined in the 1940 Act.

          (p) The principal place of business of the Issuer is located in the State of California and the chief executive office and the jurisdiction of organization of the Issuer are located in the State of Delaware, and there are no other such locations.

          (q) All tax returns or extensions required to be filed by the Issuer in any jurisdiction (other than jurisdictions in which the failure to file would not have a material adverse effect on the Issuer, the Issuer’s ability to perform its obligations under the

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Transaction Documents, any Noteholder or any Receivable or any other part of the Trust Estate) have in fact been filed, and all taxes, assessments, fees and other governmental charges upon the Issuer, or upon any of the properties, income or franchises shown to be due and payable on such returns have been, or will be, paid or are being contested in good faith by appropriate proceedings with respect to which the Agent has received written notice. To the knowledge of the Issuer, all such tax returns are true and correct and the Issuer has no knowledge of any proposed additional tax assessment against it in any material amount nor of any basis therefor.

          (r) All information heretofore furnished by the Issuer for purposes of or in connection with any of the Transaction Documents or any transaction contemplated hereby or thereby is, and all such information hereafter furnished by the Issuer will be, true and accurate in every material respect on the date such information is stated or certified and does not and will not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading.

          (s) Since March 31, 2005, no event has occurred that would have a material adverse effect on (i) the financial condition or operations of Issuer, (ii) the ability of Issuer to perform its obligations under the Transaction Documents, or (iii) the collectibility of the Receivables generally or any material portion of the Receivables.

          (t) The Issuer has complied in all respects with all applicable laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject, except where the failure to so comply could not reasonably be expected to have a material adverse effect on the Issuer, any Noteholder, any Receivable or other part of the Trust Estate.

     Section 3.13. Representations and Warranties of the Indenture Trustee. The Indenture Trustee hereby represents and warrants to the Noteholders that as of the Closing Date and each Funding Date:

          (a) The Indenture Trustee has been duly organized and is validly existing as a national banking association under the laws of the United States;

          (b) The Indenture Trustee has full power and authority and legal right to execute, deliver and perform its obligations under this Indenture, the Sale and Servicing Agreement and each other Transaction Document to which it is a party and has taken all necessary action to authorize the execution, delivery and performance by it of this Indenture, the Sale and Servicing Agreement and each other Transaction Document to which it is a party;

          (c) This Indenture, the Sale and Servicing Agreement and each other Transaction Document to which it is a party have been duly executed and delivered by the Indenture Trustee and constitute the legal, valid, and binding obligations of the Indenture Trustee, enforceable against the Indenture Trustee in accordance with their respective terms, except as such enforceability may be limited by applicable bankruptcy,

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reorganization, insolvency, liquidation, moratorium, fraudulent conveyance, or similar laws affecting creditors’ or creditors of banks’ rights and/or remedies generally or by general principles of equity (regardless of whether such enforcement is sought in a proceeding in equity or at law);

          (d) The execution, delivery and performance this Indenture, the Sale and Servicing Agreement and each other Transaction Document to which it is a party by the Indenture Trustee will not constitute a violation with respect to any order or decree of any court or any order, regulation or demand of any federal, State, municipal or governmental agency binding on the Indenture Trustee, which violation might have consequences that would materially and adversely affect the performance of its duties under this Indenture; and

          (e) The execution, delivery and performance of this Indenture, the Sale and Servicing Agreement and each other Transaction Document to which it is a party by the Indenture Trustee do not require any approval or consent of any Person, do not conflict with the articles of incorporation or bylaws of the Indenture Trustee.

     Section 3.14. Performance of Obligation. (a) The Issuer will not take any action and will use its best efforts not to permit any action to be taken by others that would release any Person from any of such Person’s material covenants or obligations in any Transaction Document or under any instrument or agreement included in the Trust Estate or that would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of, any such instrument or agreement, except as ordered by any bankruptcy or other court or as expressly provided in this Indenture, the Transaction Documents or such other instrument or agreement.

          (b) The Issuer may contract with other Persons acceptable to the Majority Holders to assist it in performing its duties under this Indenture, and any performance of such duties by a Person identified to the Indenture Trustee in an Officer’s Certificate of the Issuer shall be deemed to be action taken by the Issuer.

          (c) The Issuer will punctually perform and observe all of its obligations and agreements contained in this Indenture, the Transaction Documents and in the instruments and agreements included in the Trust Estate, including, but not limited to, preparing (or causing to be prepared) and filing (or causing to be filed) all UCC financing statements and continuation statements required to be filed by the terms of this Indenture and the other Transaction Documents in accordance with and within the time periods provided for herein and therein. Except as otherwise expressly provided therein, the Issuer shall not waive, amend, modify, supplement or terminate any Transaction Document or any provision thereof without the consent of the Majority Holders.

          (d) If an Event of Default, Servicer Event of Default or a Termination Event shall arise from the failure of the Servicer to perform any of its duties or obligations under the Sale and Servicing Agreement with respect to the Receivables, the Issuer shall take all reasonable steps available to it to remedy such failure.

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          (e) The Issuer agrees that it will not waive timely performance or observance by the Servicer, the Contributor or the Depositor of their respective duties under the Transaction Documents, without the prior written consent of the Majority Holders and each Noteholder that may be adversely affected thereby.

          (f) If the adoption after the date hereof of any applicable law, rule or regulation (including any applicable law, rule or regulation regarding capital adequacy), any accounting principles, or any change in any of the foregoing, or any change in the interpretation or administration thereof by any governmental authority charged with the interpretation or administration thereof, or by the Financial Accounting Standards Board (“FASB”), or compliance by any Noteholder with any request or directive (whether or not having the force of law) after the date hereof of any such governmental authority or FASB (a) subjects such Noteholder to any charge or withholding on or in connection with this Note, the Note Purchase Agreement, the Liquidity Agreement, the Indenture, or any other Transaction Document (collectively, the “Funding Documents”) or any amounts outstanding hereunder or thereunder, (b) changes the basis of taxation of payments to such Noteholder of any amounts payable under any of the Funding Documents (except for changes in the rate of tax on the overall net income of the Noteholder), (c) imposes, modifies or deems applicable any reserve, assessment, insurance charge, special deposit or similar requirement against assets of, deposits with or for the account of, or any credit extended by, such Noteholder, (d) has the effect of reducing the rate of return on such Noteholder’s capital to a level below that which such Noteholder could have achieved but for such adoption, change or compliance (taking into consideration the Noteholder’s policies concerning capital adequacy) or (e) imposes any other condition, and the result of any of the foregoing is (i) to impose a cost on, or increase the cost to, such Noteholder of its commitment under any Funding Document or of purchasing, maintaining or funding any interest acquired under any Funding Document, or (ii) to reduce the amount of any sum received or receivable by, or to reduce the rate of return of, such Noteholder under any Funding Document (collectively, the “Increased Costs”), then, upon demand by such Noteholder with written notice to the Indenture Trustee of the amount claimed hereunder, the Issuer promises to pay to such Noteholder such additional amounts as will compensate such Noteholder for such increased cost or reduction. Without limiting the foregoing, the Issuer acknowledges and agrees that the fees and other amounts payable by the Issuer to the Noteholders have been negotiated on the basis that the unused portion of the Noteholders’ commitments under the Note Purchase Agreement and Liquidity Agreement are treated as “short term commitments” for which there is no regulatory capital requirement. If any Noteholder determines it is required to maintain capital against its unused commitment, such Noteholder shall be entitled to compensation hereunder. Further, for the avoidance of doubt, if the issuance of FASB Interpretation No. 46, or any other change in accounting standards or the issuance of any other pronouncement, release or interpretation, causes or requires the consolidation of all or a portion of the assets and liabilities of the Issuer or the Initial Purchasers with the assets and liabilities of JPMorgan Chase Bank, N.A. or any Financial Institution, such event shall constitute a circumstance on which such JPMorgan Chase Bank, N.A. or such Financial Institution may base a claim for reimbursement under this Section.

     Section 3.15. Hedge Agreement Provisions.

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          (a) No later than June 30, 2005, the Issuer shall enter into, and shall at all times thereafter, until the Termination Date, maintain in effect, one or more Hedge Agreements with an aggregate notional amount (measured as of the last Business Day of each month) not less than the Note Principal Balance, each executed by an Eligible Hedge Counterparty, relating to the Notes and containing such terms and conditions as are required by the Majority Holders. It is expressly understood that the following shall be deemed by the Majority Holders to be an acceptable hedging arrangement:

          (a) The Interest Rate Hedge Cap Strike Price for each Hedge Agreement that is an interest rate cap agreement will be equal to: (A) the weighted average APR of the Eligible Receivables as of the last day of the prior Collection Period less (B) the sum of (x) the Program Fee Rate, (y) the Servicing Fee Rate and (z) 1.00%.

          (b) With respect to any Hedge Agreement, the notional amount under such Hedge Agreement may be stepped down on a schedule resulting from the use of an ABS Speed not greater than 1.0 with respect to the Receivables, which schedule shall be reasonably acceptable to the Agent.

          (c) Whenever the aggregate notional amount of the Hedge Agreements may be reduced as a result of a reduction in the Note Principal Amount, the notional amounts under Hedge Agreements shall be reduced first until such Hedge Agreements are terminated before any notional amounts under Hedge Agreements are reduced.

          (b) The benefits of each Hedge Agreement shall be assigned to the Indenture Trustee for the benefit of the Noteholders, the Agent and the Financial Institutions and each such Hedge Agreement shall be included in the Trust Estate. The Issuer shall pay all acquisition costs associated with the Hedge Agreements. Any amounts paid under any such Hedge Agreement to or for the benefit of the Issuer shall be deposited into the Collection Account immediately upon receipt by the Issuer or the Servicer for application pursuant to Section 5.03(b).

Article IV

Administration and Servicing of Receivables

     Section 4.01. Sale and Servicing Agreement. (a) The Sale and Servicing Agreement, duly executed counterparts of which have been filed with the Indenture Trustee, sets forth the covenants and obligations of the Servicer with respect to the Trust Estate and other matters addressed in the Sale and Servicing Agreement, and reference is hereby made to the Sale and Servicing Agreement for a detailed statement of said covenants and obligations of the Servicer thereunder. The Issuer agrees that the Indenture Trustee, in its name or (to the extent required by law) in the name of the Issuer, may (but is not, unless so directed by the Majority Holders, required to) enforce all rights of the Issuer under the Sale and Servicing Agreement for and on behalf of the Noteholders whether or not the Issuer is in default hereunder.

          (b) Promptly following a request from the Indenture Trustee to do so, the Issuer shall take all such lawful action as the Indenture Trustee may request to compel or secure the performance and observance by the Servicer of each of its obligations to the Issuer and with

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respect to the Trust Estate under or in connection with the Sale and Servicing Agreement, in accordance with the terms thereof, and in effecting such request shall exercise any and all rights, remedies, powers and privileges lawfully available to the Issuer under or in connection with the Sale and Servicing Agreement to the extent and in the manner directed by the Indenture Trustee, including, without limitation, the transmission of notices of default on the part of the Servicer thereunder and the institution of legal or administrative actions or proceedings to compel or secure performance by the Servicer of each of its obligations under the Sale and Servicing Agreement.

          (c) The Issuer shall not waive any default by the Servicer under the Sale and Servicing Agreement without the written consent of the Majority Holders.

          (d) The Indenture Trustee does not assume any duty or obligation of the Issuer under the Sale and Servicing Agreement, and the rights given to the Indenture Trustee thereunder are subject to the provisions of Article VII hereof.

          (e) The Issuer has not and will not provide any payment instructions to any Obligor that are inconsistent with the provisions of Section 7.01 of the Sale and Servicing Agreement.

Article V

Accounts, Collections, Payments of Interest and Principal, Releases, Spread
Account, and Statements to Noteholders

     Section 5.01. Accounts. (a)(i) The Indenture Trustee, on behalf of the Noteholders, shall establish and maintain in the name of the Issuer an Eligible Account (the “Collection Account”), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Indenture Trustee on behalf of the Noteholders. The Collection Account shall initially be established with the Indenture Trustee.

          (ii) The Indenture Trustee, on behalf of the Noteholders, shall establish and maintain in the name of the Issuer an Eligible Account (the “Spread Account”), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Indenture Trustee on behalf of the Noteholders. The Spread Account shall initially be established with the Indenture Trustee.

          (iii) The Indenture Trustee, on behalf of the Noteholders, shall establish and maintain in the name of the Issuer an Eligible Account (the “Pre-Funding Account”), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Indenture Trustee on behalf of the Noteholders, titled “Pre-Funding Account, JPMorgan Chase Bank, N.A., in trust for the Noteholders”. The Pre-Funding Account shall initially be established with the Indenture Trustee. The Formal Transfer Requirements with respect to the Pre-Funded Receivables must be completed within six (6) Business Days after purchase by the Issuer.

          (b) Funds on deposit in the Accounts shall be invested by the Indenture Trustee in Eligible Investments selected by the Servicer (pursuant to standing instructions or otherwise) that will mature so that such funds will be available at the close of business on the Business Day immediately preceding the next Payment Date. All such Eligible Investments shall be held by or

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on behalf of the Indenture Trustee for the benefit of the Noteholders. Other than as permitted by the Majority Holders, funds on deposit in the Accounts shall be invested in Eligible Investments that will mature so that such funds will be available at the close of business on the Business Day immediately preceding the following Payment Date. All Eligible Investments will be held to maturity.

          (c) All investment earnings of moneys deposited in an Account shall be deposited (or caused to be deposited) by the Indenture Trustee in such Account, and any loss resulting from such investments shall be charged to such Account. The Servicer will not direct the Indenture Trustee to make any investment of any funds held in the Accounts unless the security interest Granted and perfected in such account will continue to be perfected in such investment, in either case without any further action by any Person, and, in connection with any direction to the Indenture Trustee to make any such investment, if requested by the Indenture Trustee, the Servicer shall deliver to the Indenture Trustee an Opinion of Counsel, acceptable to the Indenture Trustee, to such effect.

          (d) The Indenture Trustee shall not in any way be held liable by reason of any insufficiency in the Accounts resulting from any loss on any Eligible Investment included therein except for losses attributable to the Indenture Trustee’s gross negligence or bad faith or its failure to make payments on such Eligible Investments issued by the Indenture Trustee, in its commercial capacity as principal obligor and not as Indenture Trustee, in accordance with their terms.

          (e) If (i) the Servicer shall have failed to give investment directions in writing for any funds on deposit in the Accounts to the Indenture Trustee by 3:00 p.m. New York City time (or such other time as may be agreed by the Servicer and Indenture Trustee) on any Business Day; or (ii) a Default or Event of Default shall have occurred and be continuing with respect to the Notes but the Notes shall not have been declared due and payable, or, if such Notes shall have been declared due and payable following an Event of Default, amounts collected or receivable from the Trust Property are being applied as if there had not been such a declaration; then the Indenture Trustee shall, to the fullest extent practicable, invest and reinvest funds in the Accounts in the investment described in clause (e) of the definition of Eligible Investments.

          (f) (i) The Indenture Trustee shall possess all right, title and interest in all funds on deposit from time to time in the Accounts and in all proceeds thereof (including all investment earnings on the Accounts) and all such funds, investments, proceeds and income shall be part of the Trust Estate. Except as otherwise provided herein, the Accounts shall be under the control (as defined in Section 8-106 of the UCC) of the Indenture Trustee for the benefit of the Noteholders. If, at any time, any of the Accounts ceases to be an Eligible Account, the Indenture Trustee (or the Servicer on its behalf) shall within five Business Days (or such longer period as to which the Agent may consent) establish a new Account as an Eligible Account and shall transfer any cash and/or any investments to such new Account. In connection with the foregoing, the Servicer agrees that, in the event that any of the Accounts are not accounts with the Indenture Trustee, the Servicer shall notify the Indenture Trustee in writing promptly upon any of such Accounts ceasing to be an Eligible Account.

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(ii) With respect to the Account Property, the Indenture Trustee agrees that:

          (A) any Account Property that is held in deposit accounts shall be held solely in Eligible Accounts; and, except as otherwise provided herein, each such Eligible Account shall be subject to the exclusive custody and control of the Indenture Trustee, and the Indenture Trustee shall have sole signature authority with respect thereto;

          (B) any Account Property that constitutes physical property shall be delivered to the Indenture Trustee in accordance with paragraph (1)(a) or (1)(b), as applicable, of the definition of “Delivery” and shall be held, pending maturity or disposition, solely by the Indenture Trustee or a securities intermediary (as such term is defined in Section 8-102(a)(14) of the UCC) acting solely for the Indenture Trustee;

          (C) any Account Property that is a book-entry security held through the Federal Reserve System pursuant to Federal book-entry regulations shall be delivered in accordance with paragraph (1)(c) or (1)(e), as applicable, of the definition of “Delivery” and shall be maintained by the Indenture Trustee, pending maturity or disposition, through continued book-entry registration of such Account Property as described in such paragraph;

          (D) any Account Property that is an “uncertificated security” under Article 8 of the UCC and that is not governed by clause (C) above shall be delivered to the Indenture Trustee in accordance with paragraph (1)(d) of the definition of “Delivery” and shall be maintained by the Indenture Trustee, pending maturity or disposition, through continued registration of the Indenture Trustee’s (or its nominee’s) ownership of such security;

          (E) the Servicer shall have the power, revocable by the Indenture Trustee, to instruct the Indenture Trustee to make withdrawals and payments from the Accounts for the purpose of permitting the Servicer and the Indenture Trustee to carry out their respective duties hereunder; and

          (F) any Account held by it hereunder shall be maintained as a “securities account” as defined in the Uniform Commercial Code as in effect in New York (the “New York UCC”), and that it shall be acting as a “securities intermediary” for the Indenture Trustee itself as the “entitlement holder” (as defined in Section 8-102(a)(7) of the New York UCC) with respect to each such Account. The parties hereto agree that each Account shall be governed by the laws of the State of New York, and regardless of any provision in any other agreement, the “securities intermediary’s jurisdiction” (within the meaning of Section 8-110 of the New York UCC) shall be the State of New York. The Indenture Trustee acknowledges and agrees that (a) each item of property (whether investment property, financial asset, security, instrument or cash) credited to the Accounts shall be treated as a “financial asset” within the meaning of Section 8-102(a)(9) of the New York UCC and (b) notwithstanding anything to

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the contrary, if at any time the Indenture Trustee shall receive any order from the Servicer directing transfer or redemption of any financial asset relating to the Accounts, the Indenture Trustee shall comply with such entitlement order without further consent by the Issuer, the Depositor or any other person. In the event of any conflict of any provision of this Section 5.01(f)(ii)(F) with any other provision of this Indenture or any other agreement or document, the provisions of this Section 5.01(f)(ii)(F) shall prevail.

     Section 5.02. Collection Account and Spread Account. (a) On or prior to the Closing Date, the Indenture Trustee shall establish and maintain the Collection Account as the account into which all amounts received by the Local Bank from or on behalf of Obligors under the terms of the Receivables, and all other amounts required to be deposited therein pursuant to the Transaction Documents, will be deposited within two (2) Business Days of receipt thereof. The Indenture Trustee shall provide or make available electronically (or upon written request, by first class mail or facsimile) monthly statements on all amounts received in the Collection Account to the Agent, the Issuer and the Servicer.

          (b) The Servicer will be entitled to be reimbursed from amounts on deposit in the Collection Account with respect to a Collection Period for amounts previously deposited in the Collection Account but later determined by the Servicer to have resulted from mistaken deposits or postings or checks returned for insufficient funds. The amount to be reimbursed hereunder shall be paid to the Servicer on the related Payment Date pursuant to Section 5.03(b) upon certification by the Servicer of such amounts and the provision of such information to the Indenture Trustee and the Agent as may be necessary in the opinion of the Agent to verify the accuracy of such certification; provided, however, that the Servicer must provide such certification within three months of such mistaken deposit, posting or returned check. In the event that the Agent has not received evidence satisfactory to it of the Servicer’s entitlement to reimbursement pursuant to this Section, the Agent shall give the Indenture Trustee notice in writing to such effect, following receipt of which the Indenture Trustee shall not make a distribution to the Servicer in respect of such amount pursuant to Section 5.03, or if the Servicer prior thereto has been reimbursed pursuant to Section 5.03, the Indenture Trustee shall withhold such amounts from amounts otherwise distributable to the Servicer on the next succeeding Payment Date.

          (c) On or prior to the Closing Date, the Indenture Trustee shall establish and maintain the Spread Account. On the Closing Date and on each subsequent Funding Date, the Issuer shall make a deposit into the Spread Account sufficient to maintain an amount equal to 1.25% of the Current Peak Aggregate Receivables Balance on such date. Thereafter, on each Payment Date, the Indenture Trustee shall continue to make deposits into the Spread Account until the Spread Account equals or exceeds the Requisite Amount, as set forth in the Monthly Servicer Report. The Indenture Trustee shall provide or make available electronically (or upon written request, by first class mail or facsimile) monthly statements on all amounts received in the Spread Account to the Agent, the Issuer and the Servicer.

          (d) Once the amount on deposit in the Spread Account equals or exceeds the Requisite Amount, on the Transfer Date relating to each subsequent Payment Date, the Indenture Trustee shall transfer to the Collection Account the amount specified by the Servicer in the

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related Monthly Servicer Report representing investment earnings on amounts held in the Spread Account as of the related Determination Date.

          (e) In the event that, after giving effect to the transfers from the Spread Account made on any Transfer Date pursuant to Sections 5.02(d) and 5.03(a), the amount on deposit in the Spread Account on the related Payment Date exceeds the Requisite Amount (determined after giving effect to the payments required to be made on such Payment Date to the Noteholders of the Principal Payment Amount pursuant to Section 5.03(b)), the Indenture Trustee shall, in accordance with the Monthly Servicer Report, transfer to the Issuer on such Payment Date an amount equal to such excess.

     Section 5.03. Distribution of Funds in the Collection Account. (a) On the Transfer Date relating to each Payment Date and subject to Section 5.02(c), the Indenture Trustee shall transfer, based on the information set forth in the Monthly Servicer Report, the Deficiency Claim Amount, if any, from the Spread Account into the Collection Account.

          (b) On each Payment Date, the Indenture Trustee shall, based on the information set forth in the related Monthly Servicer Report, (i) allocate funds for payment from the Collection Account out of Monthly Available Funds in the following manner and order of priority and (ii) on the Payment Date, apply amounts on deposit in the Collection Account specified below in the following manner and order of priority:

          First, to reimburse unreimbursed Servicer Advances in respect of prior Payment Dates; provided, however, that unreimbursed Servicer Advances shall not be paid with amounts transferred from the Spread Account pursuant to Section 5.03(a);

          Second, to pay the Indenture Trustee any amounts owing to the Indenture Trustee pursuant to Section 7.07 (including any prior unpaid Indenture Trustee Fees, indemnities and expenses (including but not limited to any reasonable attorney’s fees and expenses of the Indenture Trustee)); provided, however, that unless an Event of Default shall have occurred and be continuing with the Indenture Trustee Fee payable pursuant to this clause Second shall be limited to an aggregate amount of $10,000 per annum, together with any amounts accrued and owing under this clause Second and not paid on a prior Payment Date;

          Third, to pay each Hedge Counterparty the net amounts owing, if any, by the Issuer under the related Hedge Agreement, other than amounts constituting Breakage Costs.

          Fourth, to pay the Servicer the amount necessary to reimburse the Servicer for any mistaken deposits or postings or checks returned for insufficient funds in accordance with Section 5.02(b);

          Fifth, to the extent not paid by the Servicer, to pay, pro rata, to (i) the Local Bank and (ii) the Custodian any unpaid fees and reasonable out-of-pocket costs and expenses incurred by each of them;

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     Sixth, pro rata, to pay the initial Servicer and the Backup Servicer (so long as Bay View Acceptance is acting in its role as initial Servicer), the Servicing Fee (less the total of fees and expenses to be paid to the Custodian, the Local Bank, and the Back-up Servicer to the extent that such amounts have not been previously paid by the Servicer), together with any amounts accrued and owing under this clause Sixth and not paid on a prior Payment Date;

     Seventh, to pay the Back-up Servicer, upon becoming successor Servicer, the Servicing Fee and expenses of the Back-up Servicer permitted under the Sale and Servicing Agreement, including any costs incurred in connection with any required re-titling or re-liening of the Financed Vehicles, to the extent such costs have not been reimbursed by the terminated Servicer, and including any boarding fees incurred by the Backup Servicer at the rate set forth in Schedule II to the Sale and Servicing Agreement, together with any amounts accrued and owing under this clause Seventh and not paid on a prior Payment Date;

     Eighth, pro rata, to pay the Agent, the Noteholders, the Owner Trustee and the Backup Servicer any indemnity amounts due and owing to such party under the Transaction Documents; provided, however, that indemnity amounts paid to any single claimant pursuant to this priority Eighth shall not exceed $100,000 per annum (it being understood that all Noteholders shall constitute a single claimant and that each indemnified party and any Person claiming by or through such indemnified party, including officers, directors, employees and agents of such indemnified party, shall constitute a single claimant), together with any amounts accrued and owing under this clause Eighth and not paid on a prior Payment Date;

     Ninth, to pay to the Agent, the Program Fee and the Unused Fee;

     Tenth, to the Noteholders, any Broken Funding Costs and the applicable Note Interest;

     Eleventh, to the Noteholders, an amount equal to the Principal Payment Amount;

     Twelfth, to pay to the Back-up Servicer, upon the replacement of the Servicer, any reasonable expenses of the Back-up Servicer in connection with the transition of servicing duties, to the extent not paid pursuant to clause Seventh, including reasonable attorneys’ fees and expenses, in each case, to the extent such costs have not been reimbursed by the terminated Servicer, together with any amounts accrued and owing under this clause Twelfth and not paid on a prior Payment Date;

     Thirteenth, on each Payment Date prior to the end of the Funding Period or the occurrence and continuance of a Termination Event, to deposit into the Spread Account an amount such that the balance in the Spread Account shall equal the Requisite Amount;

     Fourteenth, to pay to the Noteholders, any Increased Costs;

     Fifteenth,, on each Payment Date following the end of the Funding Period or the occurrence and continuance of a Termination Event, to pay to the Noteholders any

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remaining amounts as a payment of principal until the Note Principal Balance of the Notes is reduced to zero;

     Sixteenth, pro rata, to pay to the Agent, the Noteholders, the Owner Trustee and the Backup Servicer, any indemnity amounts due and owing to such parties under the Transaction Documents and not paid to it pursuant to clause Eighth;

     Seventeenth, to pay to the Hedge Counterparty any Breakage Costs due and payable under any Hedge Agreement;

     Eighteenth, to pay to the Agent and the Noteholders any other amounts due to the Agent and the Noteholders as expressly provided in the Transaction Documents;

     Nineteenth, to pay any amounts due and owing to the Indenture Trustee and not paid pursuant to clause Second; and

     Twentieth, to remit any excess funds to or at the direction of the Issuer.

     Section 5.04. Note Payments. (a) The Indenture Trustee shall pay to each Noteholder of record as of the related Record Date either (i) by wire transfer, in immediately available funds to the account of such Noteholder at a bank or other entity having appropriate facilities therefor, if such Noteholder shall have provided to the Indenture Trustee appropriate written instructions at least five (5) Business Days prior to related Payment Date (which instructions may remain in effect for subsequent Payment Dates unless revoked by such Noteholder), or (ii) if not, by check mailed to such Noteholder at the address of such Noteholder appearing in the Note Register, the amounts to be paid to such Noteholder pursuant to such Noteholder’s Notes.

          (b) In the event that any withholding tax is imposed on the Issuer’s payment (or allocations of income) to a Noteholder, such withholding tax shall reduce the amount otherwise distributable to the Noteholder in accordance with this Section. The Indenture Trustee is hereby authorized and directed to retain from amounts otherwise distributable to the Noteholders sufficient funds for the payment of any withholding tax that is legally owed by the Issuer as instructed by the Servicer, in writing in a Monthly Servicer Report (but such authorization shall not prevent the Indenture Trustee from contesting at the expense of the Depositor any such withholding tax in appropriate proceedings, and withholding payment of such withholding tax, if permitted by law, pending the outcome of such proceedings). The amount of any withholding tax imposed with respect to a Noteholder shall be treated as cash distributed to such Noteholder at the time it is withheld by the Trust and remitted to the appropriate taxing authority. If there is a possibility that withholding tax is payable with respect to a distribution (such as a distribution to a non-US Noteholder), the Indenture Trustee may in its sole discretion withhold such amounts in accordance with this clause (b). In the event that a Noteholder wishes to apply for a refund of any such withholding tax, the Indenture Trustee shall reasonably cooperate with such Noteholder in making such claim so long as such Noteholder agrees to reimburse the Indenture Trustee for any out-of-pocket expenses incurred.

          (c) Each Noteholder, by its acceptance of its Note, will be deemed to have consented to the provisions of Section 5.03(b) relating to the priority of payments, and will be further deemed to have acknowledged that no property rights in any amount or the proceeds of any such

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amount shall vest in such Noteholder until such amounts have been distributed to such Noteholder pursuant to such provisions; provided, that the foregoing shall not restrict the right of any Noteholder, upon compliance with the provisions hereof, from seeking to compel the performance of the provisions hereof by the parties hereto.

          (d) For purposes of federal income, State and local income and franchise and any other income taxes, each Noteholder, by its acceptance of its Note, will be deemed to have agreed to, and hereby instructs the Indenture Trustee to, (i) treat the Notes as indebtedness of the Contributor and its consolidated subsidiaries, (ii) treat the transfer of the Receivables by the Contributor to the Depositor pursuant to the Contribution Agreement as a contribution, (iii) treat the Grant of the Receivables by the Issuer to the Indenture Trustee pursuant to the Indenture as a pledge and (iv) treat the Issuer as the owner of the Receivables.

     Section 5.05. Statements to Noteholders; Tax Returns. Within thirty (30) days after the end of each calendar year, the Issuer shall cause the Indenture Trustee to furnish to each Person who at any time during such calendar year was a Noteholder of record and received any payment thereon (a) a report as to the aggregate of amounts paid during such calendar year to each such Noteholder allocable to principal and allocable to interest for such calendar year or applicable portion thereof during which such Person was a Noteholder and (b) such information required by the Code, to enable such Noteholders to prepare their federal and State income tax returns. The obligation of the Indenture Trustee set forth in this paragraph shall be deemed to have been satisfied to the extent that information shall be provided by the Indenture Trustee, in the form of Form 1099 or other comparable form, pursuant to any requirements of the Code.

          The Issuer shall cause the Servicer, at the Servicer’s expense, to cause a firm of Independent Public Accountants to prepare any tax returns required to be filed by the Issuer. The Indenture Trustee, upon reasonable written request, shall furnish the Issuer with all such information in the possession of the Indenture Trustee as may be reasonably required in connection with the preparation of all tax returns of the Issuer.

     Section 5.06. Reports by Indenture Trustee. Within five (5) Business Days after the end of each Collection Period, the Indenture Trustee shall provide or make available electronically (or upon written request, by first class mail or facsimile) to the Contributor, the Depositor, the Agent, each Noteholder and the Servicer a written report setting forth the amount in the Collection Account and the Spread Account, and the identity of the investments included therein. Without limiting the generality of the foregoing, the Indenture Trustee shall, upon the written request of the Contributor, the Depositor or the Agent, promptly transmit to the Contributor, the Depositor or the Agent, as the case may be, copies of all accountings of, and information with respect to, the Collection Account and the Spread Account and payments thereto and therefrom.

     Section 5.07. Final Balances. Upon payment of all principal and interest with regard to the Notes, all other amounts due to the Agent and the Noteholders as expressly provided for in the Transaction Documents (including, without limitation, Increased Costs) and payment of all reasonable fees, charges and other expenses, such as fees and expenses of the Indenture Trustee, all moneys remaining in all Accounts, except moneys necessary to make payments equal to such amounts and payments of principal and interest with respect to the Notes, which moneys shall be

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held and disbursed by the Indenture Trustee pursuant to this Article V, shall be remitted to the Issuer.

Article VI

Repayment of Notes

     Section 6.01. Optional Repayment. (a) The Notes are subject to full or partial repayment prior to the Termination Date, at the option of the Issuer, at any time (the “Repayment Date") upon (i) delivery to the Indenture Trustee, the Noteholders and the Agent not less than three (3) Business Days prior to the date fixed for repayment, of an Officer’s Certificate from the Issuer stating the Issuer’s election to repay all or a portion of the Notes, (ii) the deposit by the Issuer into the Collection Account, to the extent of any shortfall therein, in the following order of priority, an amount equal to the sum of (A) the Note Interest due on the outstanding principal balance of the Notes being repaid, (B) the principal balance of the Notes being repaid, (C) all other amounts of the type specified in clauses First through Seventeenth of Section 5.03(b) accrued and unpaid through the Repayment Date and (D) an amount sufficient to pay all costs and expenses related to the repayment, including the release of any collateral and re-liening of any collateral. Such repayment shall be in connection with a term securitization or whole loan sale of the Receivables by the Issuer (or a combination thereof), or in connection with other refinancing of the Receivables by the Issuer.

          (b) In connection with any repayment which does not constitute repayment of 100% of the then outstanding Note Principal Balance, the Receivables to be securitized or refinanced, as the case may be, will be selected and released from the lien hereof only so long as: (i) no selection criteria adverse to the Noteholders shall have been used in selecting the Receivables to be securitized or refinanced, as the case may be, and the Servicer shall have described the selection criteria to the Agent’s reasonable satisfaction, (ii) after giving effect to the repayment, the representations set forth in Section 2.12(a)(iii) remain true and correct, (iii) after giving effect to the repayment, the Note Principal Balance must not exceed the Note Percentage times the Aggregate Receivable Balance (excluding any Delinquent Receivables and Receivables that are no longer Eligible Receivables), (iv) all remaining Receivables must be Eligible Receivables and (v) the Servicer shall have certified the satisfaction of each of the foregoing clauses (i) through (iv) to each of the Noteholders and the Agent.

          (c) On the Repayment Date, provided that the Indenture Trustee has received such amounts, the Indenture Trustee shall (w) as directed by the Servicer in writing, pay to the Noteholders the principal balance of the Notes being repaid and the Note Interest due thereon and all other amounts due to such Noteholders, (x) pay all other Persons the amounts specified in clauses First through Seventeenth of Section 5.03(b) accrued and unpaid through the Repayment Date, (y) as directed by the Servicer in writing, release any Collections being held in the Collection Account which are attributable solely to the Receivables being repaid to, or at the direction of, the Servicer, and (z) if such repayment is the final repayment in full of the principal balance and all other amounts due to the Noteholders, release any remaining assets in the Trust Estate to the Issuer.

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     Section 6.02. Repayment Payments. Prior to the date fixed for repayment, any additional funds required to pay Note Interest and to reduce the Note Principal Balance and to pay all other amounts of the type specified in clauses First through Seventeenth of Section 5.03(b) through the date of such repayment shall be deposited in the Collection Account with the Indenture Trustee to pay, and the Indenture Trustee is hereby authorized and directed to apply such funds to the repayment of, the Notes to be so repaid, together with accrued payments of interest thereon to the Repayment Date and all other amounts in accordance with the payment priority provisions contained in Section 5.03(b). Upon the deposit of funds in full for repayment and payment thereof pursuant to Section 5.04, payments of interest on the Notes or portions thereof thus repaid shall no longer accrue interest on and after the date fixed for such final repayment.

     Section 6.03. Cancellation of Notes. After the expiration of the facility provided for hereunder, all Notes which have been fully repaid, paid in full or retired or received by the Indenture Trustee for exchange shall not be reissued but shall be canceled and destroyed in accordance with its customary procedures.

     Section 6.04. Release of Collateral. (a) The Indenture Trustee shall, on or after the Termination Date, release any remaining portion of the Trust Estate from the lien created by this Indenture and shall deposit in the Collection Account any funds then on deposit in any other Account. The Indenture Trustee shall release property from the lien created by this Indenture pursuant to this Section only upon receipt by the Indenture Trustee and the Agent of an Issuer Order accompanied by an Officer’s Certificate and an Opinion of Counsel described in Section 314(c)(2) of the Trust Indenture Act of 1939, as amended, and meeting the applicable requirements of Section 10.02.

          (b) The Issuer shall be entitled to obtain a release from the lien of this Indenture for any Receivable at any time (i) after a payment by the Depositor, the Contributor or the Issuer of the Repurchase Price of the Receivable and the deposit of such payment into the Collection Account, or (ii) if the Servicer, in accordance with the terms of the Transaction Documents, delivers to the Indenture Trustee and the Agent a Request for Release in substantially the form of Exhibit B hereto, (A) identifying the Receivables to be released, (B) requesting the release thereof, (C) setting forth the amount deposited in the Collection Account with respect thereto, and (D) certifying that the amount deposited in the Collection Account (x) equals the Repurchase Price of the Receivable, in the event a Receivable is being released from the lien of this Indenture pursuant to (i) above or (y) equals the entire amount of Insurance Proceeds and Recoveries received or expected to be received with respect to such Receivable and related Financed Vehicle and is being released from the lien of this Indenture in accordance with the terms of the Transaction Documents pursuant to (ii) above; provided, however, the Issuer shall only be entitled to any such release purported to be allowed pursuant to (i) or (ii) above if all other provisions of the Transaction Documents are met.

          (c) Upon satisfaction of the conditions specified in subsection (b), the Indenture Trustee shall release from the lien of this Indenture and deliver to or upon the order of the Issuer (or to or upon the order of the Depositor or the Contributor if it has satisfied its obligations under Section 3.03 of the Servicing Agreement and Section 3.03 of the Contribution Agreement with respect to a Receivable) the Receivable and the related Custodian File. Upon the order of the

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Issuer, the Indenture Trustee shall authorize a UCC financing statement prepared by the Servicer evidencing such release. The Servicer shall file any such authorized UCC financing statements.

          (d) So long as the Indenture Trustee has neither received notice, nor has actual knowledge, that any Default, Event of Default, Termination Event or Servicer Event of Default shall have occurred and be continuing or shall result from such release, the Indenture Trustee shall release its interest in certain Receivables and collateral related thereto from time to time following its receipt from the Servicer of a request for release in the form of Exhibit B hereto and upon written notification from the Issuer to the Lender Group Agents (with a copy to the Indenture Trustee) of the Issuer’s request for release of Receivables. Upon the execution and delivery of a request for release and the satisfaction of such conditions precedent, the applicable Receivables and collateral related thereto shall be released by the Indenture Trustee from the lien of this Indenture. Upon such release, the Issuer shall have the power to direct the disposition of, or enter into agreements relating to, its rights, title and interest in the released Receivables including, but not limited to, a sale thereof to a third party.

Article VII

The Indenture Trustee

     Section 7.01. Duties of Indenture Trustee. (a) If the Indenture Trustee has received notice pursuant to Section 7.02, or a Responsible Officer of the Indenture Trustee shall otherwise have actual knowledge that an Event of Default has occurred and is continuing, the Indenture Trustee shall, at the written direction of the Majority Holders, exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.

          (b) Except during the occurrence and continuance of such an Event of Default:

     (i) The Indenture Trustee need perform only those duties that are specifically set forth in this Indenture and no others and no implied covenants or obligations of the Indenture Trustee shall be read into this Indenture.

     (ii) In the absence of gross negligence or bad faith on its part, the Indenture Trustee may conclusively rely, and shall be fully protected from acting or refraining from acting, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates, opinions, resolutions, reports, notices, requests, consents, orders, approvals or other instruments furnished to the Indenture Trustee and conforming to the requirements of this Indenture. The Indenture Trustee shall, however, examine such certificates and opinions to determine whether they conform on their face to the requirements of this Indenture but the Indenture Trustee shall not be required to determine, confirm or recalculate information contained in such certificates or opinions.

          (c) No provision of this Indenture shall be construed to relieve the Indenture Trustee from liability for its own grossly negligent action, its own grossly negligent failure to act, or its own willful misconduct, except that:

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     (i) This paragraph does not limit the effect of subsection (b) of this Section 7.01.

     (ii) The Indenture Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Indenture Trustee, unless it is proved that the Indenture Trustee was negligent in ascertaining the pertinent facts.

     (iii) The Indenture Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it from the Noteholders in accordance with this Indenture or for any action taken, suffered or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture.

     (iv) Except in connection with the performance of its obligations under Section 3.05(b) hereof, the Indenture Trustee shall have no responsibility for filing any financing or continuation statement in any public office at any time or otherwise to perfect or to maintain the perfection of any security interest in any Receivable.

          (d) No provision of this Indenture shall require the Indenture Trustee to expend or risk its own funds or otherwise incur any financial or other liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not assured to it. In having reasonable grounds for believing that such repayment or indemnity is not assured to it, the Indenture Trustee must consider not only the likelihood of repayment or indemnity by or on behalf of the Issuer but also the likelihood of repayment or indemnity from amounts payable to it from the Trust Estate pursuant to Sections 7.07 and 5.03(b) hereof.

          (e) Every provision of this Indenture that in any way relates to the Indenture Trustee is subject to the provisions of this Section 7.01.

          (f) The provisions of subsections (a), (b), (c) and (d) of this Section 7.01 shall apply to any co-trustee or separate trustee appointed by the Issuer and the Indenture Trustee pursuant to Section 7.13 hereof.

          (g) Money held in trust by the Indenture Trustee need not be segregated from other trust funds held by the Indenture Trustee except to the extent required by law.

          (h) The permissive right of the Indenture Trustee to take actions enumerated in this Indenture shall not be construed as a duty, and the Indenture Trustee shall not be answerable for other than its negligence or willful misconduct.

          (i) The Indenture Trustee shall not in any way be held liable by reason of any insufficiency in any account held by the Indenture Trustee resulting from any loss experienced on any Receivables.

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          (j) In no event shall the Indenture Trustee be required to take any action that conflicts with any of the provisions of this Indenture or with the Indenture Trustee’s fiduciary duties or that adversely affect its rights and immunities hereunder.

          (k) Upon discovery by the Indenture Trustee of the occurrence of a Termination Event, Default, Servicer Event of Default or Event of Default or receipt of notice thereof, the Indenture Trustee shall provide notice thereof to the Noteholders, the Servicer, the Agent and the Issuer. In the event the Servicer does not make available to the Agent all reports of the Servicer and all reports to the Noteholders, upon request of any of the Agent or one of the Rating Agencies, the Indenture Trustee shall make available promptly after such request, copies of such Servicer reports as are in Indenture Trustee’s possession to the Agent and the Noteholders.

          (l) In no event shall the Indenture Trustee have any obligations or duties under or have any liabilities whatsoever to Noteholders under ERISA.

          (m) With respect to all Receivables and any related part of the Trust Estate released from the Lien of this Indenture, the Indenture Trustee shall assign, without recourse, representation or warranty, to the appropriate Person as directed by the Issuer, prior to the Termination Date, with the consent of the Majority Holders, all the Indenture Trustee’s right, title and interest in and to such assets, such assignment being in the form as prepared by the Servicer or the Issuer and acceptable to the Indenture Trustee. Such Person will thereupon own such Receivable and related rights appurtenant thereto free of any further obligation to the Indenture Trustee or the Noteholders with respect thereto. The Indenture Trustee shall also execute and deliver all such other instruments or documents as shall be reasonably requested by any such Person to be required or appropriate to effect a valid transfer of title to a Receivable and the related assets.

          (n) The Indenture Trustee shall, upon reasonable prior notice to the Indenture Trustee by the Agent, permit any representative of the Agent, during the Indenture Trustee’s normal business hours, to examine all books of account, records, reports and other papers of the Indenture Trustee relating to the Notes, to make copies and extracts therefrom and to discuss the Indenture Trustee’s affairs and actions, as such affairs and actions relate to the Indenture Trustee’s duties with respect to the Notes, with the Indenture Trustee’s officers and employees responsible for carrying out the Indenture Trustee’s duties with respect to the Notes.

          (o) Promptly (but in any event within two Business Days after its receipt thereof) the Indenture Trustee will furnish to each Noteholder and the Agent a copy of each certificate, opinion, report, statement, notice or other communication furnished by or on behalf of the Issuer, the Contributor, the Depositor, the Servicer or the Custodian to the Indenture Trustee (but not to the Noteholders or the Agent) pursuant to the Transaction Documents.

          Section 7.02. Notice of Termination Event, Default, Servicer Event of Default or Event of Default. The Indenture Trustee shall not be required to take notice of or be deemed to have notice or knowledge of any Termination Event, Default, Servicer Event of Default or Event of Default, unless specifically notified in writing at the address set forth in Section 11.04 or until a Responsible Officer of the Indenture Trustee shall have acquired actual knowledge of any Termination Event, Default, Servicer Event of Default or Event of Default. If written notice of the

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existence of a Termination Event, Default, Event of Default or Servicer Event of Default has been delivered to a Responsible Officer of the Indenture Trustee or a Responsible Officer of the Indenture Trustee has actual knowledge thereof, the Indenture Trustee shall promptly mail to the Agent and each Noteholder notice thereof, but in any event, no later than 5 days after such knowledge or notice occurs.

     Section 7.03. Rights of Indenture Trustee. (a) The Indenture Trustee may rely on any document believed by it to be genuine and to have been signed or presented by the proper Person. The Indenture Trustee need not investigate any fact or matter stated in any document.

          (b) Before the Indenture Trustee acts or refrains from acting, it may require an Officers’ Certificate or an Opinion of Counsel. The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officer’s Certificate or Opinion of Counsel.

          (c) The Indenture Trustee shall not be liable for any action it takes or omits to take or any action or inaction it believes in good faith to be authorized or within its rights or powers.

          (d) Except as provided in Section 7.01(b) hereof, the Indenture Trustee shall not be bound to make any investigation into the facts of matters stated in any reports, certificates, payment instructions, opinion, notice, order or other paper or document unless the Indenture Trustee has actual knowledge to the contrary.

          (e) The Indenture Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys or a custodian or nominee, but the Indenture Trustee shall be responsible for any willful misconduct or negligence on the part of, and for the supervision of, any such agent, attorney, custodian or nominee appointed by it hereunder. The Indenture Trustee may consult with counsel, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Notes shall be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

     Section 7.04. Not Responsible for Recitals, Issuance of Notes or Application of Moneys as Directed. The recitals contained herein and in the Notes, except the certificates of authentication on the Notes, shall be taken as the statements of the Issuer, and the Indenture Trustee assumes no responsibility for their correctness. The Indenture Trustee makes no representations with respect to the Trust Estate or as to the validity or sufficiency of the Trust Estate or this Indenture or of the Notes. The Indenture Trustee shall not be accountable for the use or application by the Issuer of the proceeds of the Notes. Subject to Section 7.01(b), the Indenture Trustee shall not be liable to any Person for any money paid to the Issuer upon Issuer Order, Servicer instruction or order or direction provided in a Monthly Servicer Report contemplated by this Indenture.

     Section 7.05. May Hold Notes. The Indenture Trustee or any agent of the Issuer, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise

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deal with the Issuer or any Affiliate of the Issuer with the same rights it would have if it were not Indenture Trustee or other agent.

     Section 7.06. Money Held in Trust. The Indenture Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Issuer and except to the extent of income or other gain on investments which are obligations of the Indenture Trustee.

     Section 7.07. Compensation and Reimbursement. (a) The Issuer agrees:

     (i) to pay the Indenture Trustee from time to time the Indenture Trustee Fee. The Indenture Trustee’s compensation shall not be limited by any law with respect to compensation of a trustee of an express trust and the payments to the Indenture Trustee provided by Article V hereto shall constitute payment due with respect to the applicable fee agreement or letter;

     (ii) to reimburse the Indenture Trustee upon request for all reasonable expenses, disbursements and advances incurred or made by the Indenture Trustee in accordance with any provision of this Indenture (including, but not limited to, the reasonable compensation, expenses and disbursements of its agents and counsel and allocable costs of in-house counsel); provided, however, in no event shall the Issuer pay or reimburse the Indenture Trustee or the agents or counsel, including in-house counsel of either, for any expenses, disbursements and advances incurred or made by the Indenture Trustee in connection with any negligent action or inaction on the part of the Indenture Trustee;

     (iii) to indemnify the Indenture Trustee and its officers, directors, employees and agents for, and to hold them harmless against, any loss, liability or expense incurred without negligence or bad faith on the part of the Indenture Trustee arising out of, or in connection with, the acceptance or administration of this trust, including the costs and expenses of defending itself against any claim of whatever kind or nature, regardless of its merit, demanded, asserted or claimed against the Indenture Trustee, directly or indirectly, in connection with the exercise or performance of any of its powers or duties hereunder, including, without limitation all reasonable attorneys’ and consultants’ fees and expenses and court costs; provided, however, that:

     (A) with respect to any such claim the Indenture Trustee shall have given the Issuer, the Contributor, the Agent and the Servicer written notice thereof promptly after the Indenture Trustee shall have actual knowledge thereof, provided, that failure to notify shall not relieve the parties of their obligations hereunder;

     (B) notwithstanding anything to the contrary in this Section 7.07(a)(iii), none of the Issuer, the Contributor, the Depositor or the Servicer shall be liable for settlement of any such claim by the Indenture Trustee entered into without the prior consent of the Issuer, the Contributor, the Depositor

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or the Servicer, as the case may be, which consent shall not be unreasonably withheld or delayed; and

     (C) the Indenture Trustee, its officers, directors, employees and agents, as a group, shall be entitled to counsel separate from the Issuer, the Contributor, the Depositor and the Servicer; to the extent the Issuer’s, the Contributor’s, the Depositor’s or the Servicer’s interests are not (in the determination of the Indenture Trustee) adverse to the interests of the Indenture Trustee, its officers, directors, employees or agents, the Indenture Trustee may agree to be represented by the same counsel as the Issuer, the Contributor, the Depositor or the Servicer.

Such payment obligations and indemnification shall survive the termination of this Indenture and the earlier resignation or removal of the Indenture Trustee. The Indenture Trustee’s expenses are intended as expenses of administration.

          (b) The Indenture Trustee shall, on each Payment Date, in accordance with the priority of payment set forth in Section 5.03(b), deduct payment of its fees and expenses hereunder from moneys in the Collection Account to the extent not otherwise paid by the Servicer or any other Person.

          (c) The Issuer agrees to assume and to pay, and to indemnify, defend and hold harmless the Indenture Trustee and the Noteholders from any taxes which may at any time be asserted with respect to, and as of the date of, the Grant of the Trust Estate to the Indenture Trustee, including, without limitation, any sales, gross receipts, general corporation, personal property, privilege or license taxes (but with respect to the Noteholders only, not including any federal, State or other taxes arising out of the creation or the issuance of the Notes or payments with respect thereto) and costs, expenses and reasonable counsel fees in defending against the same.

          (d) When the Indenture Trustee incurs expenses after the occurrence of a Default specified in Section 8.01 with respect to the Issuer, if the surviving entity has failed to honor such obligation the expenses are intended to constitute expenses of administration under any insolvency law or under Title 11 of the United States Code.

     Section 7.08. Eligibility; Disqualification. The Indenture Trustee shall always have a combined capital and surplus as stated in Section 7.09, and shall always be a bank or trust company with corporate trust powers organized under the laws of the United States or any State thereof which is a member of the Federal Reserve System and shall be rated at least “Aa2” by Moody’s and “A+” by S&P. Except as set forth in Section 7.10(d)(ii), each successor Indenture Trustee must be approved in writing by the Majority Holders.

     Section 7.09. Indenture Trustee’s Capital and Surplus. The Indenture Trustee and/or its parent shall at all times have a combined capital and surplus of at least $100,000,000. If the Indenture Trustee publishes annual reports of condition of the type described in Section 310(a)(2) of the Trust Indenture Act of 1939, as amended, its combined capital and surplus for purposes of this Section 7.09 shall be as set forth in the latest such report.

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     Section 7.10. Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Indenture Trustee and no appointment of a successor Indenture Trustee pursuant to this Section 7.10 shall become effective until the acceptance of appointment by the successor Indenture Trustee under Section 7.11.

          (b) The Indenture Trustee may resign at any time by giving written notice thereof to the Issuer, the Servicer, the Agent and each Noteholder. If an instrument of acceptance by a successor Indenture Trustee, which Indenture Trustee shall be acceptable to the Majority Holders, shall not have been delivered to the Indenture Trustee within thirty (30) days after the giving of such notice of resignation, the resigning Indenture Trustee may petition any court of competent jurisdiction for the appointment of a successor Indenture Trustee.

          (c) The Indenture Trustee may be removed at any time by the Majority Holders upon 30 days’ prior written notice, delivered to the Indenture Trustee, with copies to the Servicer, the Issuer, the Agent and each Noteholder.

          (d) (i) If at any time the Indenture Trustee shall cease to be eligible under Section 7.08 or 7.09 or shall become incapable of acting or shall be adjudged bankrupt or insolvent, or a receiver of the Indenture Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Indenture Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (x) the Issuer with the prior written consent of the Majority Holders, by an Issuer Order, or (y) the Majority Holders may remove the Indenture Trustee.

          (ii) If the Indenture Trustee shall be removed pursuant to Sections 7.10(c) or (d) and no successor Indenture Trustee acceptable to the Majority Holders shall have been appointed pursuant to paragraph (e) below and accepted such appointment within thirty (30) days of the date of removal, the removed Indenture Trustee may petition any court of competent jurisdiction for appointment of a successor Indenture Trustee acceptable to the Majority Holders.

          (e) If the Indenture Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of the Indenture Trustee for any cause, (i) the Issuer, with the prior written consent of the Majority Holders, by an Issuer Order or (ii) the Majority Holders shall promptly appoint a successor Indenture Trustee.

          (f) The Issuer shall give to the Agent and the Noteholders notice of each resignation and each removal of the Indenture Trustee and each appointment of a successor Indenture Trustee. Each notice shall include the name of the successor Indenture Trustee and the address of its Corporate Trust Office.

          (g) The provisions of this Section 7.10 shall apply to any co-trustee or separate trustee appointed by the Issuer and the Indenture Trustee with the consent of the Majority Holders pursuant to Section 7.13 hereof.

     Section 7.11. Acceptance of Appointment by Successor. (a) Every successor Indenture Trustee appointed hereunder shall execute, acknowledge and deliver to the Issuer and the retiring Indenture Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Indenture Trustee shall become effective and such successor Indenture

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Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Indenture Trustee. Notwithstanding the foregoing, on request of the Issuer or the successor Indenture Trustee, such retiring Indenture Trustee shall, upon payment of its fees, expenses and other charges, execute and deliver an instrument transferring to such successor Indenture Trustee all the rights, powers and trusts of the retiring Indenture Trustee and shall duly assign, transfer and deliver to such successor Indenture Trustee all property and money held by such retiring Indenture Trustee hereunder. Upon request of any such successor Indenture Trustee, the Issuer shall execute and deliver any and all instruments for more fully and certainly vesting in and confirming to such successor Indenture Trustee all such rights, powers and trusts.

          (b) No successor Indenture Trustee shall accept its appointment unless at the time of such acceptance such successor Indenture Trustee shall be qualified and eligible under Sections 7.08 and 7.09.

          (c) Notwithstanding the replacement of the Indenture Trustee, the obligations of the Issuer pursuant to Section 7.07 shall continue for the benefit of the retiring Indenture Trustee.

     Section 7.12. Merger, Conversion, Consolidation or Succession to Business of Indenture Trustee. Any corporation or national banking association into which the Indenture Trustee may be merged or converted or with which it may be consolidated, or any corporation, bank, trust company or national banking association resulting from any merger, conversion or consolidation to which the Indenture Trustee shall be a party, or any corporation, bank, trust company or national banking association succeeding to all or substantially all of the corporate trust business of the Indenture Trustee, shall be the successor of the Indenture Trustee hereunder if such corporation, bank, trust company or national banking association shall be otherwise qualified and eligible under Sections 7.08 and 7.09 hereof, without the execution or filing of any paper or any further act on the part of any of the parties hereto. The Indenture Trustee shall provide the Agent prior written notice of any such transaction. In case any Notes have been authenticated, but not delivered, by the Indenture Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Indenture Trustee may adopt such authentication and deliver the Notes so authenticated with the same effect as if such successor Indenture Trustee had authenticated such Notes.

     Section 7.13. Co-trustees and Separate Indenture Trustees. (a) At any time or times, for the purpose of meeting the legal requirements of any jurisdiction in which any of the Trust Estate may at the time be located, the Issuer and the Indenture Trustee shall have power to appoint, with the prior written consent of the Majority Holders (and, upon the written request of the Indenture Trustee, the Issuer shall for such purpose join with the Indenture Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to appoint) one or more Persons approved by the Indenture Trustee either to act as co-trustee, jointly with the Indenture Trustee, of all or any part of the Trust Estate, or to act as separate trustee of any such property, in either case with such powers as may be provided in the instrument of appointment, and to vest in such Person or Persons in the capacity aforesaid, any property, title, right or power deemed necessary or desirable, subject to the other provisions of this Section 7.13. If the Issuer does not join in such appointment within fifteen (15) days after the receipt by it of a request so to do, or in case an Event of Default has occurred and is continuing, the Indenture Trustee alone

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with the prior written consent of the Majority Holders shall have power to make such appointment.

          (b) Should any written instrument from the Issuer be required by any co-trustee or separate trustee so appointed for more fully confirming to such co-trustee or separate trustee such property, title, right or power, any and all such instruments shall, on request, be executed, acknowledged and delivered by the Issuer.

          (c) Every co-trustee or separate trustee shall, to the extent permitted by law, but to such extent only, be appointed subject to the following terms:

     (i) The Notes shall be authenticated and delivered and all rights, powers, duties and obligations hereunder in respect of the custody of securities, cash and other personal property held by, or required to be deposited or pledged with, the Indenture Trustee hereunder, shall be exercised solely by the Indenture Trustee.

     (ii) The rights, powers, duties and obligations hereby conferred or imposed upon the Indenture Trustee in respect of any property covered by such appointment shall be conferred or imposed upon and exercised or performed by the Indenture Trustee or by the Indenture Trustee and such co-trustee or separate trustee jointly, as shall be provided in the instrument appointing such co-trustee or separate trustee, except to the extent that under any law of any jurisdiction in which any particular act is to be performed, the Indenture Trustee shall be incompetent or unqualified to perform such act, in which event such rights, powers, duties and obligations shall be exercised and performed solely by such co-trustee or separate trustee.

     (iii) The Indenture Trustee at any time, by an instrument in writing executed by it, with the concurrence of the Issuer evidenced by an Issuer Order, may accept the resignation of, or remove, any co-trustee or separate trustee appointed under this Section 7.13, and, in case an Event of Default has occurred and is continuing, the Indenture Trustee shall have power to accept the resignation of, or remove, any such co-trustee or separate trustee without the concurrence of the Issuer. Upon the written request of the Indenture Trustee, the Issuer shall join with the Indenture Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to effectuate such resignation or removal. A successor to any co-trustee or separate trustee so resigned or removed may be appointed in the manner provided in this Section 7.13.

     (iv) No co-trustee or separate trustee hereunder shall be financially or otherwise liable by reason of any act or omission of the Indenture Trustee, or any other such trustee hereunder, and the Indenture Trustee shall not be financially or otherwise liable by reason of any act or omission of any co-trustee or other such separate trustee hereunder.

     (v) Any Act of Noteholders delivered to the Indenture Trustee shall be deemed to have been delivered to each such co-trustee and separate trustee.

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     Section 7.14. Books and Records. The Indenture Trustee agrees to provide to the Noteholders and the Agent the right during normal business hours upon prior reasonable notice in writing to inspect its books and records insofar as the books and records relate to the functions and duties of the Indenture Trustee pursuant to this Indenture.

     Section 7.15. Control. Upon the Indenture Trustee being adequately indemnified in writing to its satisfaction, the Majority Holders shall have the right to direct the Indenture Trustee with respect to any action or inaction by the Indenture Trustee hereunder, the exercise of any trust or power conferred on the Indenture Trustee, or the conduct of any proceeding for any remedy available to the Indenture Trustee with respect to the Notes or the Trust Estate provided that:

     (a) such direction shall not be in conflict with any rule of law or with this Indenture or expose the Indenture Trustee to financial or other liability (for which it has not been adequately indemnified) or be unduly prejudicial to the Noteholders not approving such direction including, but not limited to and without intending to narrow the scope of this limitation, direction to the Indenture Trustee to act or omit to act, directly or indirectly, to amend, hypothecate, subordinate, terminate or discharge any Lien benefiting the Noteholders in the Trust Estate;

     (b) the Indenture Trustee may take any other action deemed proper by the Indenture Trustee which is not inconsistent with such direction; and

     (c) except as expressly provided otherwise herein (but only with the consent of or at the direction of the Majority Holders), the Indenture Trustee shall have the authority to take any enforcement action which it reasonably deems to be necessary to enforce the provisions of this Indenture.

     Section 7.16. Suits for Enforcement. If an Event of Default shall occur and be continuing, the Indenture Trustee shall, at the direction of the Majority Holders and upon receipt of an Opinion of Counsel, if it so chooses, proceed to protect and enforce its rights and the rights of any Noteholders under this Indenture by a suit, action or proceeding in equity or at law or otherwise, whether for the specific performance of any covenant or agreement contained in this Indenture or in aid of the execution of any power granted in this Indenture or for the enforcement of any other legal, equitable or other remedy as the Indenture Trustee, being advised by counsel, shall deem most effectual to protect and enforce any of the rights of the Indenture Trustee or any Noteholders, but in no event shall the Indenture Trustee be liable for any failure to act in the absence of direction from the Majority Holders.

Article VIII

Event of Default

     Section 8.01. Events of Default. The occurrence of any of the following events shall constitute an “Event of Default” hereunder:

     (a) default in the payment of any interest on the Notes when the same becomes due and payable;

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     (b) default in the payment of the principal of or any installment of the principal of the Notes on the Maturity Date; or the failure of the Issuer or the Servicer to make any other payment, deposit or transfer required hereunder within two (2) Business Days of its due date;

     (c) the Issuer shall consent to the appointment of a conservator or receiver or liquidator in any insolvency, marshaling of assets and liabilities or similar proceedings or relating to the Issuer or relating to all or substantially all of the property of the Issuer, or a decree or order of a court or agency or supervisory authority having jurisdiction in the premises for the appointment of a conservator or receiver or liquidator in any insolvency, marshaling of assets and liabilities or similar proceedings shall have been entered against the Issuer; or the Issuer shall admit in writing its inability to pay all or substantially all of its debts generally as they become due, file (or have filed against it) a petition to take advantage of any applicable insolvency, bankruptcy or reorganization statute or make an assignment of all or substantially all of its property for the benefit of its creditors;

     (d) (i) failure to observe or perform any covenant or obligation of the Issuer set forth in this Indenture (other than the failure to make any required payment with respect to the Notes), which has not been cured within twenty (20) days from the date of receipt by the Issuer of written notice from the Indenture Trustee of such breach or default, or (ii) the failure of the Issuer to deposit into the Collection Account all amounts required to be deposited therein by the required deposit date;

     (e) any representation, warranty or statement of the Issuer (other than certain representations and warranties with respect to the eligibility of the Receivables) contained in this Indenture, the Sale and Servicing Agreement or any report, document or certificate delivered by the Issuer pursuant to the foregoing agreements shall prove to be incorrect in any material respect as of the time when the same shall have been made and, the circumstances or condition in respect of which such representation, warranty or statement was incorrect shall not have been eliminated or otherwise cured within thirty (30) days after written notice thereof shall have been given to the Indenture Trustee and the defaulting party by the Servicer, the Indenture Trustee, the Agent or the Majority Holders;

     (f) the cessation of a valid perfected first priority security interest in the Receivables (the aggregate outstanding balance of which is in excess of $100,000) or the Accounts in favor of the Indenture Trustee which is not cured within three (3) days of receipt of notice thereof;

     (g) any of the Issuer, the Contributor or the Depositor shall become an “investment company” within the meaning of the Investment Company Act; and

     (h) any Termination Event specified in clause (a), (c), (d), (f), (g), (h), (i), (j), (k), (l), (m), (n), (o), (p), (q), (r), (s), (u), (v) or (w) of the definition thereof.

then in the case of any event described in the foregoing subparagraphs, after the applicable grace period set forth in such subparagraphs, if any, the Indenture Trustee shall give written notice of

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the occurrence of an Event of Default to the Agent and the Noteholders, and the Indenture Trustee, at the direction of the Majority Holders, shall then give notice in writing to the Contributor, the Depositor, the Backup Servicer and the Issuer that an Event of Default has occurred as of the date of such notice. The Issuer is required to give the Indenture Trustee and the Agent written notice of the occurrence of any Event of Default immediately after actual knowledge thereof.

     Section 8.02. Actions of Indenture Trustee. If an Event of Default shall occur and be continuing, the Indenture Trustee shall, at the direction of the Supermajority Holders, in addition to taking those actions set forth elsewhere in Article VIII hereof, do one or more of the following:

     (a) declare the entire unpaid principal amount of the Notes, all interest accrued and unpaid thereon, interest from the date of the Event of Default, at the Default Rate and all other amounts payable under this Indenture and the other Transaction Documents to become immediately due and payable;

     (b) take possession of and sell the Trust Estate;

     (c) institute proceedings for collection of amounts due on the Notes or under this Indenture by automatic acceleration or otherwise, or if no such acceleration or collection efforts have been made, or if such acceleration or collection efforts have been made, but have been annulled or rescinded, the Indenture Trustee may elect to take possession of the Trust Estate and collect or cause the collection of the proceeds thereof and apply such proceeds in accordance with the applicable provisions of the Indenture;

     (d) enforce any judgment obtained and collect any amounts adjudged from the Issuer;

     (e) institute any proceedings for the complete or partial foreclosure of the lien created by the Indenture with respect to the Trust Estate; and

     (f) protect the rights of the Indenture Trustee and the Noteholders by taking any appropriate action including exercising any remedy of a secured party under the UCC or any other applicable law.

     Section 8.03. Indenture Trustee May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, composition or other judicial proceeding relative to the Issuer or any other obligor upon the Notes or the property of the Issuer or of such other obligor or their creditors, the Indenture Trustee (irrespective of whether the Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Indenture Trustee shall have made any demand on the Issuer for the payment of overdue principal or any interest or other amounts) shall, at the written direction of the Majority Holders, by intervention in such proceeding or otherwise,

     (a) file and prove a claim for the whole amount owing and unpaid in respect of the Notes issued hereunder and to file such other papers or documents as may be

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necessary or advisable in order to have the claims of the Indenture Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee, its agents and counsel) and of the Noteholders allowed in such proceeding, and

     (b) collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same;

and any receiver, assignee, trustee, liquidator, or sequestrator (or other similar official) in any such proceeding is hereby authorized by each Noteholder to make such payments to the Indenture Trustee and, in the event that the Indenture Trustee shall consent to the making of such payments directly to the Noteholders, to pay to the Indenture Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee, its agents and counsel, and any other amounts due the Indenture Trustee under Section 7.07.

          Nothing herein contained shall be deemed to authorize the Indenture Trustee to authorize and consent to or accept or adopt on behalf of any Noteholder any plan of reorganization, arrangement, adjustment, or composition affecting any of the Notes or the rights of any Noteholder thereof, or to authorize the Indenture Trustee to vote in respect of the claim of any Noteholder in any such proceeding.

     Section 8.04. Indenture Trustee May Enforce Claim Without Possession of Notes. All rights of action and claims under this Indenture or the Notes may be prosecuted and enforced by the Indenture Trustee, with the prior written consent of the Majority Holders or at the direction of the Majority Holders, without the possession of any of the Notes or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Indenture Trustee shall be brought in its own name as trustee for the benefit of the Noteholders, and any recovery of judgment shall be applied first, to the payment of the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee, its agents and counsel and any other amounts due the Indenture Trustee under Section 7.07 (provided that, any indemnification by the Issuer under Section 7.07 shall be paid only in the priority set forth in Section 5.03(b)) hereof, second, to the Back-up Servicer, if any, for any fees and expenses due to the Back-up Servicer under the Transaction Documents, third, to the Agent, for any fees and expenses due to the Agent hereunder, fourth, for the ratable benefit of the Noteholders for all amounts due to such Noteholders, and fifth, to the Issuer.

     Section 8.05. Knowledge of Indenture Trustee. Any references herein to the knowledge, discovery or learning of the Indenture Trustee shall mean and refer to a Responsible Officer of the Indenture Trustee.

     Section 8.06. Limitation on Suits. No Holder of any Note shall have any right to institute any Proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder unless:

     (a) such Holder has previously given written notice to the Indenture Trustee of a continuing Event of Default;

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     (b) the Majority Holders shall have made written request to the Indenture Trustee to institute Proceedings in respect of such Event of Default in its own name as Indenture Trustee hereunder;

     (c) such Holder or Holders have offered to the Indenture Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request;

     (d) the Indenture Trustee for 30 days after its receipt of such notice, request and offer of security or indemnity has failed to institute any such Proceedings; and

     (e) no direction inconsistent with such written request has been given to the Indenture Trustee during such 30-day period by the Majority Holders;

it being understood and intended that no one or more Noteholders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Noteholders, or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner herein provided.

     Section 8.07. Unconditional Right of Noteholders to Receive Principal and Interest. The Noteholders shall have the right, which is absolute and unconditional, subject to the express terms of this Indenture, to receive payment of principal and interest on such Notes, subject to the respective relative priorities provided for in this Indenture, as such principal and interest becomes due and payable from the Trust Estate and to institute Proceedings for the enforcement of any such payment, and such right shall not be impaired except as expressly permitted herein without the consent of such Holders.

     Section 8.08. Restoration of Rights and Remedies. If the Indenture Trustee or any Noteholder has instituted any Proceeding to enforce any right or remedy under this Indenture and such Proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Indenture Trustee or to such Noteholder, then, and in every case, the Issuer, the Indenture Trustee and the Noteholders shall, subject to any determination in such Proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Indenture Trustee and the Noteholders shall continue as though no such Proceeding had been instituted.

     Section 8.09. Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes in the last paragraph of Section 2.08 hereof, no right or remedy herein conferred upon or reserved to the Indenture Trustee or to the Noteholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

     Section 8.10. Delay or Omission; Not Waiver. No delay or omission of the Indenture Trustee or of any Holder of any Note to exercise any right or remedy accruing upon any Event of

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Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or any acquiescence therein. Every right and remedy given by this Article VIII or by law to the Indenture Trustee or to the Noteholders may be exercised from time to time, and as often as may be deemed expedient, by the Indenture Trustee or by the Noteholders, as the case may be.

     Section 8.11. Control by Noteholders. The Majority Holders shall have the right to direct the time, method and place of conducting any Proceeding for any remedy available to the Indenture Trustee or exercising any trust or power conferred on the Indenture Trustee; provided that:

     (a) such direction shall not be in conflict with any rule of law or with this Indenture including, without limitation, any provision hereof which expressly provides for approval by a greater percentage of the aggregate principal amount of all Outstanding Notes;

     (b) the Indenture Trustee may take any other action deemed proper by the Indenture Trustee which is not inconsistent with such direction; provided, however, that, subject to Section 7.01 hereof, the Indenture Trustee need not take any action which a Responsible Officer or Officers of the Indenture Trustee in good faith determines might involve it in personal liability (unless the Indenture Trustee is furnished with the reasonable indemnity referred to in Section 8.11(c) below); and

     (c) the Indenture Trustee has been furnished reasonable indemnity against costs, expenses and liabilities which it might incur in connection therewith.

     Section 8.12. Waiver of Certain Events by Less than All Noteholders. The Supermajority Holders may, on behalf of the Holders of all the Notes, waive any past Termination Event, Default, Event of Default or Servicer Event of Default hereunder, and its consequences, except:

     (a) a Default in the payment of the principal of or interest on any Note, or a Default caused by the Issuer becoming an “investment company” under the Investment Company Act of 1940, as amended, or

     (b) in respect of a covenant or provision hereof which under Article IX hereof cannot be modified or amended without the consent of the Holder of each Outstanding Note affected.

          Upon any such waiver, such Termination Event, Default, Event of Default or Servicer Event of Default shall cease to exist, and any Termination Event, Default, Event of Default or Servicer Event of Default or other consequence arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Termination Event, Default, Event of Default or Servicer Event of Default or impair any right consequent thereon.

     Section 8.13. Undertaking for Costs. All parties to this Indenture agree, and each Holder of any Note by its acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this

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Indenture, or in any suit against the Indenture Trustee for any action taken, suffered or omitted by it as Indenture Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 8.13 shall not apply to any suit instituted by the Indenture Trustee or to any suit instituted by any Noteholder for the enforcement of the payment of the principal of or interest on any Note on or after the Maturity Date expressed in such Note.

     Section 8.14. Waiver of Stay or Extension Laws. The Issuer covenants (to the extent that it may lawfully do so) that it will not, at any time, insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Indenture Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

     Section 8.15. Sale of Trust Estate. (a) The power to effect any sale of any portion of the Trust Estate pursuant to this Article VIII shall not be exhausted by any one or more sales as to any portion of the Trust Estate remaining unsold, but shall continue unimpaired until the entire Trust Estate securing the Notes shall have been sold or all amounts payable on the Notes and under this Indenture with respect thereto shall have been paid. The Indenture Trustee may from time to time postpone any sale by public announcement made at the time and place of such sale.

          (b) The Indenture Trustee shall not, in any private sale, sell to a third party the Trust Estate, or any portion thereof unless the Majority Holders direct the Indenture Trustee to make such sale; provided, however, that either (x) such sale does not result in any Note receiving less than all of its outstanding principal, accrued interest to the date of such sale and all other amounts due and owing to the related Noteholders as of the date of such sale, and the Indenture Trustee and the Backup Servicer receive all amounts owed them or (y) 100% of the Holders have consented to such sale.

          (c) The Indenture Trustee or any Noteholder may bid for and acquire any portion of the Trust Estate in connection with a public or private sale thereof, and in lieu of paying cash therefor, any Noteholder may make settlement for the purchase price by crediting against amounts owing on the Notes of such Holder or other amounts owing to such Holder secured by this Indenture, that portion of the net proceeds of such sale to which such Holder would be entitled, after deducting the reasonable costs, charges and expenses incurred by the Indenture Trustee or the Noteholders in connection with such sale. The Notes need not be produced in order to complete any such sale, or in order for the net proceeds of such sale to be credited against the Notes. The Indenture Trustee or the Noteholders may hold, lease, operate, manage or otherwise deal with any property so acquired in any manner permitted by law.

          (d) The Indenture Trustee shall execute and deliver an appropriate instrument of conveyance transferring its interest in any portion of the Trust Estate in connection with a sale thereof. In addition, the Indenture Trustee is hereby irrevocably appointed the agent and

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attorney-in-fact of the Issuer to transfer and convey its interest in any portion of the Trust Estate in connection with a sale thereof, and to take all action necessary to effect such sale. No purchaser or transferee at such a sale shall be bound to ascertain the Indenture Trustee’s authority, inquire into the satisfaction of any conditions precedent or see to the application of any monies.

          (e) The method, manner, time, place and terms of any sale of all or any portion of the Trust Estate shall be commercially reasonable.

     Section 8.16. Action on Notes. The Indenture Trustee’s right to seek and recover judgment on the Notes or under this Indenture shall not be affected by the seeking, obtaining or application of any other relief under or with respect to this Indenture. Neither the lien of this Indenture nor any rights or remedies of the Indenture Trustee or the Noteholders shall be impaired by the recovery of any judgment by the Indenture Trustee against the Issuer or by the levy of any execution under such judgment upon any portion of the Trust Estate or upon any of the assets of the Issuer.

Article IX

Supplemental Indentures

     Section 9.01. Supplemental Indentures Without Noteholder Approval. (a) With prior written notice to the Agent and the Noteholders, the Issuer and the Indenture Trustee, when authorized by an Issuer Order, at any time and from time to time, may enter into one or more amendments or indentures supplemental hereto, in form satisfactory to the Indenture Trustee, for any of the following purposes:

     (i) to correct, amplify or add to the description of any property at any time subject to the Lien of this Indenture, or better to assure, convey and confirm unto the Indenture Trustee any property subject or required to be subjected to the Lien of this Indenture, or to subject to the Lien of this Indenture additional property;

     (ii) to evidence the succession of another Person to either the Issuer or the Indenture Trustee in accordance with the terms hereof, and the assumption by any such successor of the covenants of the Issuer or the Indenture Trustee contained herein and in the Notes;

     (iii) to add to the covenants of the Issuer or the Indenture Trustee, for the benefit of the Noteholders or to surrender any right or power herein conferred upon the Issuer; or

     (iv) to effect any matter specified in Section 9.06 hereof.

          (b) Promptly after the execution by the Issuer and the Indenture Trustee of any amendment or supplemental indenture pursuant to this Section 9.01, the Indenture Trustee shall mail to the Noteholders and the Agent a copy of such supplemental indenture. Any failure of the Indenture Trustee to mail such copy shall not, however, in any way impair or affect the validity of any such amendment or supplemental indenture.

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     Section 9.02. Supplemental Indentures with Consent of Noteholders. (a) With the prior written consent of each Noteholder affected thereby, the Issuer and the Indenture Trustee, when authorized by an Issuer Order, may enter into an amendment or a supplemental indenture for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, the Indenture or of modifying in any manner the rights of the Noteholders under the Indenture for the following purposes:

     (i) change the Maturity Date of the principal of any Note, or the due date of any payment of interest on any Note, or reduce the principal amount thereof, or the interest rate thereon, change the place of payment where, or the coin or currency in which any Note or any interest thereon is payable, or impair the right to institute suit for the enforcement of the payment of interest due on any Note on or after the due date thereof or for the enforcement of the payment of the entire remaining unpaid principal amount of any Note on or after the Maturity Date thereof or change any provision of Article VI hereof;

     (ii) reduce the percentage of the principal balance of the Outstanding Notes, the consent of the Noteholders of which is required to approve any such supplemental indenture; or the consent of the Noteholders of which is required for any waiver of compliance with provisions of the Indenture or Termination Events or Events of Default or Servicer Events of Default under this Indenture or under the Sale and Servicing Agreement and their consequences provided for in this Indenture or for any other purpose hereunder;

     (iii) modify any of the provisions of this Section 9.02;

     (iv) modify or alter the provisions of the proviso to the definition of the term “Outstanding”; or

     (v) permit the creation of any other Lien with respect to any part of the Trust Estate or terminate the Lien of this Indenture on any property at any time subject hereto or, except with respect to any action which would not have a material adverse effect on any Noteholder (as evidenced by an Opinion of Counsel to such effect), deprive the Noteholder of the security afforded by the lien of this Indenture.

          (b) With the prior written consent of the Noteholders constituting Supermajority Holders, the Issuer and the Indenture Trustee, when authorized by an Issuer Order, may enter into an amendment or a supplemental indenture for the purpose of (i) modifying the definition of “Termination Event”, any provision of Section 8.01 hereof or (ii) waiving the existence of any Termination Event or Event of Default.

          (c) With the consent of the Majority Holders, the Issuer and the Indenture Trustee, when authorized by an Issuer Order, at any time and from time to time, may enter into one or more amendments or indentures supplemental hereto, in form and substance satisfactory to the Indenture Trustee for the purpose of modifying, eliminating or adding to the provisions of this Indenture; provided, that such supplemental indentures shall not have any of the effects described in paragraphs (i) through (v) of Section 9.02(a) or Section 9.02(b) of this Indenture;

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provided, further, that such action shall not adversely affect the interests of any Noteholder (without the prior written consent of such Noteholder).

          (d) Promptly after the execution by the Issuer and the Indenture Trustee of any amendment or supplemental indenture pursuant to this Section 9.02, the Indenture Trustee shall mail to the Noteholders and the Agent a copy of such supplemental indenture. Any failure of the Indenture Trustee to mail such copy shall not, however, in any way impair or affect the validity of any such supplemental indenture.

          (e) Whenever the Issuer or the Indenture Trustee solicits a consent to any amendment or supplement to the Indenture, the Issuer shall fix a record date in advance of the solicitation of such consent for the purpose of determining the Noteholders entitled to consent to such amendment or supplement. Only those Noteholders at such record date shall be entitled to consent to such amendment or supplement whether or not such Noteholders continue to be Holders after such record date.

     Section 9.03. Execution of Amendments and Supplemental Indentures. In executing, or accepting the additional trusts created by, any amendment or supplemental indenture permitted by this Article IX or the modifications thereby of the trusts created by this Indenture, the Indenture Trustee shall be entitled to receive, and (subject to Section 7.01) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Indenture Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Indenture Trustee’s own rights, duties or immunities under this Indenture or otherwise.

     Section 9.04. Effect of Amendments and Supplemental Indentures. Upon the execution of any amendment or supplemental indenture under this Article IX, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Notes which have theretofore been or thereafter are authenticated and delivered hereunder shall be bound thereby.

     Section 9.05. Reference in Notes to Amendments and Supplemental Indentures. Notes authenticated and delivered after the execution of any amendment or supplemental indenture pursuant to this Article IX may, and if required by the Issuer shall, bear a notation in form approved by the Indenture Trustee as to any matter provided for in such supplemental indenture. If the Issuer shall so determine, new Notes so modified as to conform, in the opinion of the Indenture Trustee and the Issuer, to any such supplemental indenture may be prepared and executed by the Issuer and authenticated and delivered by the Indenture Trustee in exchange for Outstanding Notes.

     Section 9.06. Indenture Trustee to Act on Instructions. Notwithstanding any provision herein to the contrary (other than Section 9.02), in the event the Indenture Trustee is uncertain as to the intention or application of any provision of this Indenture or any other agreement to which it is a party, or such intention or application is ambiguous as to its purpose or application, or is, or appears to be, in conflict with any other applicable provision thereof, or if this Indenture or any other agreement to which it is a party permits or does not prohibit any determination by the Indenture Trustee, or is silent or incomplete as to the course of action which the Indenture

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Trustee is required or is permitted or may be permitted to take with respect to a particular set of facts or circumstances, the Indenture Trustee shall, at the expense of the Issuer, request and rely upon the following: (a) written instructions of the Issuer directing the Indenture Trustee to take certain actions or refrain from taking certain actions, which written instructions shall contain a certification that the taking of such actions or refraining from taking certain actions is in the best interest of the Noteholders, and (b) prior written consent of the Majority Holders. In such case, the Indenture Trustee shall have no liability to the Issuer or the Noteholders for, and the Issuer shall hold harmless the Indenture Trustee from, any liability, costs or expenses arising from or relating to any action taken by the Indenture Trustee acting upon such instructions, and the Indenture Trustee shall have no responsibility to the Noteholders with respect to any such liability, costs or expenses.

Article X

Miscellaneous

     Section 10.01. Compliance Certificates and Opinions; Furnishing of Information. Upon any application or request by the Issuer to the Indenture Trustee to take any action under any provision of this Indenture, the Issuer shall furnish to the Indenture Trustee a certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with or an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of certificates and Opinions of Counsel are specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or Opinion of Counsel need be furnished.

     Section 10.02. Form of Documents Delivered to Indenture Trustee. (a) If several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

          (b) Any certificate or opinion of an Authorized Officer of the Issuer may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by outside counsel, unless such Authorized Officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or opinion or any Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an Authorized Officer of any relevant Person, stating that the information with respect to such factual matters is in the possession of such Person, unless such officer or counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Any Opinion of Counsel may be based on the written opinion of other counsel, in which event such Opinion of Counsel shall be accompanied by a copy of such other counsel’s opinion and shall include a statement to the

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           effect that such counsel believes that such counsel and the Indenture Trustee may reasonably rely upon the opinion of such other counsel.

          (c) Where any Person is required to make, give or execute two or more applications, requests, consents, notices, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

          (d) Wherever in this Indenture, in connection with any application or certificate or report to the Indenture Trustee, it is provided that the Issuer or the Servicer shall deliver any document as a condition of the granting of such application, or as evidence of the Issuer’s or the Servicer’s compliance with any term hereof, it is intended that the truth and accuracy, at the time of the granting of such application or at the effective date of such notice or report (as the case may be), of the facts and opinions stated in such document shall in such case be conditions precedent to the right of the Issuer to have such application granted or to the sufficiency of such notice or report. The foregoing shall not, however, be construed to affect the Indenture Trustee’s right to rely upon the truth and accuracy of any statement or opinion contained in any such document as provided in Section 7.01(b)(ii).

          (e) Wherever in this Indenture it is provided that the absence of the occurrence and continuation of a Termination Event, Default, an Event of Default or a Servicer Event of Default is a condition precedent to the taking of any action by the Indenture Trustee at the request or direction of the Issuer, then notwithstanding that the satisfaction of such condition is a condition precedent to the Issuer’s or the Indenture Trustee’s right to make such request or direction, the Indenture Trustee shall be protected in acting in accordance with such request or direction if it does not have actual knowledge of the occurrence and continuation of such Termination Event, Default, Event of Default or Servicer Event of Default.

     Section 10.03. Acts of Noteholders. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Noteholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Noteholders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Indenture Trustee, and, where it is hereby expressly required, to the Issuer. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Noteholders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 7.01) conclusive in favor of the Indenture Trustee and the Issuer, if made in the manner provided in this Section 10.03.

          (b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Whenever such execution is by an officer of a corporation or a member of a partnership on behalf of such corporation or partnership, such certificate or affidavit shall also constitute sufficient proof of his authority.

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          (c) The ownership of Notes shall be proved by the Note Register.

          (d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Notes shall bind the Holder of every Note issued upon the registration or transfer thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Indenture Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Notes.

     Section 10.04. Notices, Etc. Any request, demand, authorization, direction, notice, consent, waiver or act of Noteholders or other documents provided or permitted by this Indenture to be made upon, given or furnished to, or filed with:

     (a) the Indenture Trustee, by any Noteholder, the Agent or by the Issuer, shall be in writing and shall be delivered personally or mailed by first-class registered or certified mail, postage prepaid, or by telephonic facsimile transmission and overnight delivery service, postage prepaid, and received by, a Responsible Officer of the Indenture Trustee at its Corporate Trust Office listed below, or

     (b) any other Person shall be in writing and shall be delivered personally or mailed by first-class registered or certified mail, postage prepaid, or by telephonic facsimile transmission and overnight delivery service, postage prepaid, at the address listed below or at any other address previously furnished in writing to the Indenture Trustee by the applicable Person.

To the Indenture Trustee:		JPMorgan Chase Bank, N.A.
		600 Travis St., 9th Floor
		Houston, TX 77002
		Attention: Structured Finance — Bay View 2005
		Phone:	(713) 216-3682
		Fax:	(212) 216-4880
To the Issuer:		Bay View 2005 Warehouse Trust
		c/o Wilmington Trust Company
		Rodney Square North
		1100 North Market Street
		Wilmington, DE 19890-0001
		Attention: Corporate Trust Administration
		Phone:	(302) 636-6119
		Fax:	(302) 636-4148
	with a copy to:	Bay View Acceptance Corporation
		1840 Gateway Drive, Suite 300
		San Mateo, CA 94404
		Attention: Counsel
		Phone:	(650) 312-6807
		Fax:	(650) 573-6381

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To the Agent:	JP Morgan Chase Bank, N.A.
	Asset Backed Finance
	Suite IL1-00594, 1-19
	1 Bank One Plaza
	Chicago, Illinois 60670-0079
	Fax: (312) 732-1844
	Harris Nesbitt Corp.
	Address: 115 S. LaSalle St., Floor 13W
	Chicago, IL 60603
	Attn: Conduit Administration
	Phone: 312-461-5640
	Fax: 312-461-3189
	Email: fundingdesk@harrisnesbitt.com
To the Initial Purchasers:	Fairway Finance Company, LLC
	Address: c/o Lord Securities Corporation
	48 Wall Street, 27th Floor
	New York, New York 10005
	Attn: Orlando Figueroa
	Phone: (212) 346-9007
	Fax: (212) 346-9012
	Email: of@lordspv.com
	Copy to:
	Harris Nesbitt Corp.
	Address: 115 S. LaSalle St., Floor 13W
	Chicago, IL 60603
	Attn: Conduit Administration
	Phone: 312-461-5640
	Fax: 312-461-3189
	Email: fundingdesk@harrisnesbitt.com
	Falcon Asset Securitization
	Asset Backed Finance
	Suite IL1-0079
	1 Bank One Plaza
	Chicago, IL 60670-0079
	Fax: 312-732-3600

     Section 10.05. Notices and Reports to Noteholders; Waiver of Notices. (a) Where this Indenture provides for notice to Noteholders of any event or the mailing of any report to the Noteholders, such notice or report shall be written and shall be sufficiently given (unless

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otherwise herein expressly provided) if mailed, first-class, postage-prepaid, to each Noteholder affected by such event or to whom such report is required to be mailed, at the address of such Noteholder as it appears on the Note Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice or the mailing of such report. In any case where a notice or report to Noteholders is mailed in the manner provided above, neither the failure to mail such notice or report, nor any defect in any notice or report so mailed, to any particular Noteholder shall affect the sufficiency of such notice or report with respect to other Noteholders, and any notice or report which is mailed in the manner herein provided shall be conclusively presumed to have been duly given or provided.

          (b) Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Noteholders shall be filed with the Indenture Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

          (c) If, by reason of the suspension of regular mail service as a result of a strike, work stoppage or similar activity, it shall be impractical to mail notice of any event to the Agent or the Noteholders when such notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a sufficient giving of such notice.

     Section 10.06. Rules by Indenture Trustee. The Indenture Trustee may make reasonable rules for any meeting of Noteholders.

     Section 10.07. Issuer Obligation. No recourse may be taken, directly or indirectly, against (a) any incorporator, subscriber to the capital stock, stockholder, officer, employee, agent or director of the Issuer or of any predecessor of the Issuer, (b) any partner, beneficiary, agent, trustee, officer, director, employee, or successor or assign of a holder of a beneficial interest in the Issuer or the Owner Trustee, (c) any incorporator, subscriber to the capital stock, stockholder, officer, director, employee or agent of the Indenture Trustee or any predecessor or successor of the Indenture Trustee, or (d) any incorporator, subscriber to capital stock, stockholder, officer, director, employee or agent of the Indenture Trustee or any predecessor or successor thereof, with respect to the Issuer’s obligations with respect to the Notes or any of the statements, representations, covenants, warranties or obligations of the Issuer under this Indenture or any Note or other writing delivered in connection herewith or therewith.

     Section 10.08. Enforcement of Benefits. The Agent, the Indenture Trustee (with the consent of the Majority Holders), and the Noteholders shall be entitled to enforce and, at the direction of the Agent, the Indenture Trustee shall enforce the covenants and agreements of the Servicer and the Contributor contained in the Sale and Servicing Agreement, the Contribution Agreement and each other Transaction Document.

     Section 10.09. Effect of Headings and Table of Contents. The Section and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

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     Section 10.10. Successors and Assigns. All covenants and agreements in this Indenture by the Issuer and the Indenture Trustee shall bind their respective successors and assigns, whether so expressed or not.

     Section 10.11. Separability. If any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Furthermore, in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as part of this Indenture, a provision as similar in its terms and purpose to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable.

     Section 10.12. Benefits of Indenture. The Agent and its successors and assigns shall be third-party beneficiaries to the provisions of this Indenture, and shall be entitled to rely upon and directly to enforce such provisions of this Indenture. Nothing in this Indenture or in the Notes, expressed or implied, shall give to any Person, other than the parties hereto and their successors hereunder, the Agent, any separate trustee or co-trustee appointed under Section 7.13 and the Noteholders, any benefit or any legal or equitable right, remedy or claim under this Indenture.

     Section 10.13. Legal Holidays. If the date of any Payment Date or any other date on which principal of or interest on any Note is proposed to be paid or any date on which mailing of notices by the Indenture Trustee to any Person is required pursuant to any provision of this Indenture, shall not be a Business Day, then (notwithstanding any other provision of the Notes or this Indenture) payment or mailing of such notice need not be made on such date, but may be made or mailed on the next succeeding Business Day with the same force and effect as if made or mailed on the nominal date of any such Payment Date or other date for the payment of principal of or interest on any Note, or as if mailed on the nominal date of such mailing, as the case may be, and in the case of payments, no interest shall accrue for the period from and after any such nominal date, provided such payment is made in full on such next succeeding Business Day; provided further, however, that if any such payment is a payment of Note Interest calculated based on LIBOR, and such next succeeding Business Day is in a different calendar month then the scheduled Payment Date, then such payment shall be made on the Business Day next preceding such scheduled Payment Date.

     Section 10.14. Governing Law. This Indenture and each Note shall be construed in accordance with and governed by the substantive laws of the State of New York (including New York General Obligations Laws §§ 5-1401 and 5-1402, but otherwise without regard to conflict of law provisions thereof, except with regard to the UCC) applicable to agreements made and to be performed therein.

     Section 10.15. Counterparts. This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

     Section 10.16. Recording of Indenture. If this Indenture is subject to recording in any appropriate public recording offices, the Issuer shall effect such recording at its expense in compliance with an Opinion of Counsel to the effect that such recording is necessary either for the protection of the Noteholders or any other person secured hereunder or for the enforcement

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of any right or remedy granted to the Indenture Trustee under this Indenture or the Sale and Servicing Agreement or any other Transaction Document.

     Section 10.17. Further Assurances. The Issuer agrees to do and perform, from time to time, any and all acts and to execute any and all further instruments required or reasonably requested by the Indenture Trustee or the Agent more fully to effect the purposes of this Indenture, including, without limitation, the execution of any financing statements or continuation statements relating to the Trust Estate for filing under the provisions of the UCC of any applicable jurisdiction.

     Section 10.18. No Bankruptcy Petition Against the Issuer. The Indenture Trustee agrees (and the Agent and each Noteholder by acceptance of the Notes shall be deemed to agree) that, prior to the date that is one year and one day after the payment in full of all amounts payable with respect to the Notes, it will not institute against the Issuer or the Depositor, or join any other Person in instituting against the Issuer or the Depositor, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other proceedings under the laws of the United States or any State of the United States. This Section 10.18 shall survive the termination of this Indenture.

     Section 10.19. Limitation of Liability. Notwithstanding any other provision herein or elsewhere, this Indenture has been executed and delivered by Wilmington Trust Company, not in its individual capacity, but solely in its capacity as Owner Trustee of the Issuer under the Issuer Trust Agreement, and in no event shall Wilmington Trust Company or the Owner Trustee have any liability in respect of the representations, warranties, or obligations of the Issuer hereunder or under any other Transaction Document, as to all of which recourse shall be had solely to the assets of the Issuer, and for all purposes of this Indenture and each other Transaction Document the Owner Trustee and Wilmington Trust Company shall be entitled to the benefits of the Issuer Trust Agreement.

     Section 10.20. Limitation on Recourse. Notwithstanding any provision herein to the contrary, the obligations of the Issuer shall not be a general obligation of, or construed as permitting recourse to, the Issuer; it being understood that the sole recourse of any party with respect to the payment obligations of the Issuer shall be the Monthly Available Funds and such obligations shall be paid in accordance with the priority of payments set forth in Section 5.03(b) hereof.

     Section 10.21. Confidentiality. (a) The Issuer, the Servicer, the Agent and each Noteholder shall maintain and shall cause each of its employees and officers to maintain the confidentiality of this Indenture and the other confidential or proprietary information with respect to the Issuer, the Servicer, the Agent and each Noteholder and their respective businesses obtained by it or them in connection with the structuring, negotiating and execution of the transactions contemplated herein, except that Issuer, the Servicer, the Agent and each Noteholder and its officers and employees may disclose such information to such party’s external accountants and attorneys, as required by any applicable law or order of any judicial or administrative proceeding, and as may be required in connection with any examination by applicable regulatory authorities.

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          (b) Anything herein to the contrary notwithstanding, each of the Issuer and the Servicer hereby consents to the disclosure of any nonpublic information with respect to it (i) to the Agent, each Noteholder or the Financial Institutions by each other, (ii) by the Agent, the Financial Institutions or the Noteholders to any prospective or actual assignee or participant of any of them, (iii) by the Agent, the Financial Institutions or any Noteholder to any Rating Agency or Commercial Paper dealer, and (iv) by the Agent to any provider of a surety, guaranty or credit or liquidity enhancement to the Noteholder or any entity organized for the purpose of purchasing, or making loans secured by, financial assets for which JPMorgan Chase Bank, N.A. acts as the agent or administrator and to any officers, directors, employees, outside accountants and attorneys of any of the foregoing; provided that in the case of any party identified in clauses (ii) and (iv) above, such party shall have agreed to abide by the confidentiality provisions set forth in this Section. In addition, the Noteholders, the Financial Institutions and the Agent may disclose any such nonpublic information pursuant to any law, rule, regulation, direction, request or order of any judicial, administrative or regulatory authority or proceedings (whether or not having the force or effect of law).

          (c) Without limiting the generality of the foregoing, the parties hereto agree that their use and disclosure of any such confidential or proprietary information shall be in compliance with all applicable laws and regulations.

     Section 10.22. Amendment and Restatement. On and after the Effective Date of this Agreement, each reference in the other Transaction Documents to the "Indenture,” “thereunder,” “thereof,” "therein” or any other expression of like import referring to the Prior Agreement shall mean and be a reference to this Agreement. The amendment and restatement of the Prior Agreement shall not constitute a novation or termination of the Transaction Documents and all obligations thereunder are in all respects continuing with only the terms thereof being modified as provided herein or in any other amended, restated, supplement or otherwise modified Transaction Document.

Article XI

Termination

     Section 11.01. Termination of Indenture. (a) This Indenture shall terminate on or after the Termination Date upon the payment to the Noteholders and the Indenture Trustee of all amounts required to be paid to them pursuant to this Indenture, and the conveyance and transfer of all right, title and interest in and to the Receivables and other property and funds in the Trust Estate to the Issuer. The Issuer shall promptly notify the Indenture Trustee of any prospective termination pursuant to this Article XI.

          (b) Notice of any prospective termination, specifying the Payment Date for payment of the final payment and requesting the surrender of the Notes for cancellation, shall be given promptly by the Indenture Trustee by letter to the Noteholders as of the applicable Record Date and the Agent upon the Indenture Trustee receiving written notice of such event from the Issuer or the Servicer. The Issuer or the Servicer shall give such notice to the Indenture Trustee not later than the 5th day of the month of the final Payment Date stating (A) the Payment Date upon which final payment of the Notes shall be made, (B) the amount of any such final payment, and

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          (C) the location for presentation and surrender of the Notes. Surrender of the Notes shall be a condition of payment of such final payment.

[Signature Page Follows]

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          IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this Indenture to be duly executed as of the day and year first above written.

Bay View 2005 Warehouse Trust,
	as Issuer
By:	Wilmington Trust Company,
		not in its individual capacity, but solely as Owner Trustee
By:
	Name:
	Title:

Signature Page to Indenture

JPMorgan Chase Bank,N.A., as Indenture Trustee
By:
	Name:
	Title:

Agreed and Acknowledged:
Bay View Acceptance Corporation,
as Servicer

By
	Name:
	Title:

Acknowledged and consented to:

Falcon Asset Securitization Corporation,
as Purchaser

By:
	Name:
	Title:

Acknowledged and consented to:

Fairway Finance Company, LLC, as Purchaser

By:
	Name:
	Title:

Schedule I

Schedule of Initial Receivables

EXHIBIT A

FORM OF
NOTICE OF FUNDING, CERTIFICATION
AND FUNDING CERTIFICATE

To:	JPMorgan Chase Bank, N.A.
	600 Travis St., 9th Floor
	Houston, Texas 77002
	Attn: Structured Finance — Bay View 2005
	JPMorgan Chase Bank, N.A.
	Asset Backed Finance
	Suite IL1-0594
	1 Bank One Plaza
	Chicago, Illinois 60670-0079
	Harris Nesbitt Corp.
	Address: 115 S. LaSalle St., Floor 13W
	Chicago, IL 60603
	Attn: Conduit Administration

     Reference is made to (i) the Indenture, dated as of June 20, 2005 (as amended, supplemented, or otherwise modified from time to time in accordance with its terms, the “Indenture”), by and between Bay View 2005 Warehouse Trust, as issuer (the “Issuer”) and JPMorgan Chase Bank, N.A., as indenture trustee (the “Indenture Trustee"), (ii) the Custodian Agreement, dated as of June 20, 2005 (as amended, supplemented, or otherwise modified from time to time in accordance with its terms, the “Custodian Agreement”), among Issuer, Indenture Trustee and Bay View Acceptance Corporation (“Bay View Acceptance”), as custodian (in such capacity, the “Custodian”), (iii) the Contribution Agreement, dated as of June 20, 2005 (as amended, supplemented, or otherwise modified from time to time in accordance with its terms, the “Contribution Agreement”), by and between Bay View Acceptance, as contributor (in such capacity, the “Contributor") and Bay View Warehouse Corporation, as depositor (the “Depositor”), and (iv) the Sale and Servicing Agreement, dated as of June 20, 2005 (as amended, supplemented, or otherwise modified from time to time in accordance with its terms, the “Sale and Servicing Agreement”), by and among the Issuer, the Depositor, the Indenture Trustee, Systems & Services Technologies, Inc., as backup servicer, and Bay View Acceptance, as Contributor and Servicer. Unless otherwise defined herein, capitalized terms have the meanings set forth in the Indenture and to the extent not defined therein, in the Custodian Agreement.

Form of Request for Release

ARTICLE 1
[Notice of Funding]
[See Exhibit C to the Indenture]

ARTICLE 2
[Certification]
[See Exhibit A to the Custodian Agreement]

ARTICLE 3
Funding Certificate

     This Funding Certificate is being issued in accordance with Section 2.12 of the Indenture.

     The Issuer, the Contributor, and the Depositor, as transferee, hereby certify that:

     (a) The matters set forth in Section 3.02 of the Contribution Agreement are true and correct, and that the matters set forth in Section 3.02 of the Sale and Servicing Agreement are true and correct as of the date hereof. All Receivables to be acquired on the Funding Date to occur on or before                                          constitute Eligible Receivables.

     (b) the representations and warranties of the Issuer set forth in Section 3.12 of the Indenture are true and correct as of the date hereof;

     (c) the documents listed in Section 2.12 of the Indenture have been delivered to the Custodian;

     (d) the requirements stated in Section 2.12 of the Indenture regarding the Subsequent Transfer to be effected on the Funding Date have been met; and

     (e) no Termination Event, Default, Event of Default or Servicer Event of Default has occurred or is continuing.

     (f) All conditions in Article IV of the Contribution Agreement and Article IV of the Sale and Servicing Agreement have been met.

     This Notice of Funding, Certification and Funding Certificate may be executed in one or more counterparts, each of which when so executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same instrument.

[signature pages follows]

3

     By signing in the space provided below, the Issuer hereby acknowledges and agrees that it is becoming a party to this Notice of Funding, Certification and Funding Certificate for, and will only be bound, by the certifications it has made as contained in Articles 1 and 3 hereof.

Bay View 2005 Warehouse Trust, As Issuer

By: Wilmington Trust Company, not in its
individual capacity, but solely as Owner Trustee

By:

Name:

Title:

     By signing in the space provided below, the Depositor (i) hereby acknowledges and agrees that it is becoming a party to this Notice of Funding, Certification and Funding Certificate for, and will only be bound, by the certifications it has made as contained in Articles 1 and 3 hereof and (ii) as the Certificateholder of the Issuer, hereby directs the Owner Trustee indicated above to execute this Notice of Funding, Certification and Funding Certificate to the extent set forth herein on behalf of the Issuer.

Bay View Warehouse Corporation, as Depositor

By:

Name: John K. Okubo

Title: Senior Vice President, Chief Financial Officer and Treasurer

     By signing in the space provided below, Bay View Acceptance as Contributor and Custodian, as applicable, hereby acknowledges and agrees that it is becoming a party to this Notice of Funding, Certification and Funding Certificate for, and will be bound, by the certifications it has made as contained in Articles 1, 2 and 3 hereof.

Bay View Acceptance Corporation, as Contributor and custodian

By:

Name: John K. Okubo

Title: Chief Financial Officer

4

EXHIBIT B

REQUEST FOR RELEASE

TO:	JPMorgan Chase Bank, N.A.
	600 Travis St., 9th Floor
	Houston, Texas 77002
	Attn: Structured Finance — Bay View 2005
	Harris Nesbitt Corp.
	Address: 115 S. LaSalle St., Floor 13W
	Chicago, IL 60603
	Attn: Conduit Administration
	JPMorgan Chase Bank, N.A.
	Asset Backed Finance
	Suite IL1-0594
	1 Bank One Plaza
	Chicago, Illinois 60670-0079

     Pursuant to Section 6.04 of the Indenture, dated as of June 20, 2005 (as amended, modified or otherwise supplemented from time to time, the “Indenture”), by and between Bay View 2005 Warehouse Trust, as issuer (the “Issuer”) and JPMorgan Chase Bank, N.A. (as indenture trustee (the “Indenture Trustee”), the undersigned, as Servicer, requests that the Indenture Trustee (i) release its lien under the Indenture in the Receivables identified on Schedule I hereto (the “Released Receivables”) and the related Custodian Files and (ii) authorize the preparation and filing by the Servicer of all UCC financing statement amendments necessary to terminate all of the Indenture Trustee’s interest in the Released Receivables, in each case by countersigning this Request for Release below. Capitalized terms used but not otherwise defined herein shall have the respective meanings assigned to such terms in the Indenture.

     The Servicer hereby certifies that $                                         has been deposited in the Collection Account and that such amount equals the Repurchase Price of the Released Receivables (the “Repurchase Price”).

     Pursuant to the receipt in immediately available funds of the Repurchase Price, the Indenture Trustee hereby releases its lien under the Indenture in the Released Receivables. Pursuant to Section 6.04 of the Indenture, upon the release contemplated herein, the Issuer shall have the power to direct the disposition of, or enter into agreements relating to, its rights, title and interest in the Released Receivables including, but not limited to, a sale thereof to a third party.

5

     This Request for Release may be executed in multiple counterparts, each of which will be deemed an original and all of which together shall constitute one agreement. Delivery of an executed counterpart of a signature page to this Request for Release by facsimile or other electronic transmission shall be effective as delivery of a manually executed original counterpart thereof.

[SIGNATURE PAGE OF FOLLOW]

6

DATE:                                         ,	BAY VIEW ACCEPTANCE CORPORATION, as   Servicer
	By:
		Name:
		Title:

ACKNOWLEDGED AND AGREED TO
THIS                      DAY OF                                         :

BAY VIEW ACCEPTANCE CORPORATION, as Custodian

By:
	Name:
	Title:

ACKNOWLEDGED AND AGREED TO
THIS                      DAY OF                                         :
(with respect to the receipt of the
Repurchase Price and the release of its lien)

JPMORGAN CHASE BANK, N.A.,
as Indenture Trustee

By:
	Name:
	Title:

SCHEDULE I
TO REQUEST FOR RELEASE

RELEASED RECEIVABLES

EXHIBIT C

FORM OF
NOTICE OF FUNDING, CERTIFICATION
AND FUNDING CERTIFICATE

To:	JPMorgan Chase Bank, N.A.
	600 Travis St., 9th Floor
	Houston, Texas 77002
	Attn: Structured Finance — Bay View 2005
	Harris Nesbitt Corp.
	Address: 115 S. LaSalle St., Floor 13W
	Chicago, IL 60603
	Attn: Conduit Administration
	JPMorgan Chase Bank, N.A.
	Asset Backed Finance
	Suite IL1-0594
	1 Bank One Plaza
	Chicago, Illinois 60670-0079

     Reference is made to (i) the Indenture, dated as of June 20, 2005 (as amended, supplemented, or otherwise modified from time to time in accordance with its terms, the “Indenture”), by and between Bay View 2005 Warehouse Trust, as issuer (the “Issuer”) and JPMorgan Chase Bank, N.A., as indenture trustee (the “Indenture Trustee"), (ii) the Custodian Agreement, dated as of June 20, 2005 (as amended, supplemented, or otherwise modified from time to time in accordance with its terms, the “Custodian Agreement”), among Issuer, Indenture Trustee and Bay View Acceptance Corporation (“Bay View Acceptance”), as custodian (in such capacity, the “Custodian”), (iii) the Contribution Agreement, dated as of June 20, 2005 (as amended, supplemented, or otherwise modified from time to time in accordance with its terms, the “Contribution Agreement”), by and between Bay View Acceptance, as contributor (in such capacity, the “Contributor") and Bay View Warehouse Corporation, as depositor (the “Depositor”), and (iv) the Sale and Servicing Agreement, dated as of June 20, 2005 (as amended, supplemented, or otherwise modified from time to time in accordance with its terms, the “Sale and Servicing Agreement”), by and among the Issuer, the Depositor, the Indenture Trustee, Systems & Services Technologies, Inc., as backup servicer, and Bay View Acceptance, as Contributor and Servicer. Unless otherwise defined herein, capitalized terms have the meanings set forth in the Indenture and to the extent not defined therein, in the Custodian Agreement.

ARTICLE 1
Notice of Funding

     In accordance with the Indenture, the Issuer, Bay View Acceptance and Depositor hereby give notice of the Funding Date to occur on or before                                          for each of the Subsequent Receivables listed on the Schedule of Receivables attached hereto.

     The Aggregate Receivable Balance of such Subsequent Receivables, the Aggregate Receivable Balance after adding such Subsequent Receivables, the Note Principal Balance for each of the Notes, and the Receivables Advance Amount, are as follows:

Aggregate Receivable Balance of Subsequent Receivables as of the Cutoff Date:	$
Aggregate Receivable Balance after addition of Subsequent Receivables:	$
Note Principal Balance for the Notes as of Funding Date:	$
Aggregate Receivables Advance Amount:	$
[Break down above aggregate Advance Amount by each purchaser based upon its Noteholder Pro Rata Share]	$

     The Issuer, Bay View Acceptance, as Contributor and Custodian, and Depositor hereby certify that, in connection with the Funding Date specified above, each has complied with all terms and provisions specified in Section 2.12 of the Indenture, as applicable, including, but not limited to, delivery of the Funding Certificate, as specified below.

ARTICLE 2
[Certification]
[See Exhibit A to the Custodial Agreement]

ARTICLE 3
[Funding Certificate]

     This Notice of Funding, Certification and Funding Certificate may be executed in one or more counterparts, each of which when so executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same instrument.

[signature pages follows]

     By signing in the space provided below, the Issuer hereby acknowledges and agrees that it is becoming a party to this Notice of Funding, Certification and Funding Certificate for, and will only be bound, by the certifications it has made as contained in Articles 1 and 3 hereof.

Bay View 2005 Warehouse Trust, As Issuer

By: Wilmington Trust Company, not in its
individual capacity, but solely as Owner Trustee

By:

Name:

Title:

     By signing in the space provided below, the Depositor (i) hereby acknowledges and agrees that it is becoming a party to this Notice of Funding, Certification and Funding Certificate for, and will only be bound, by the certifications it has made as contained in Articles 1 and 3 hereof and (ii) as the Certificateholder of the Issuer, hereby directs the Owner Trustee indicated above to execute this Notice of Funding, Certification and Funding Certificate to the extent set forth herein on behalf of the Issuer.

Bay View Warehouse Corporation, as Depositor

By:

Name: John K. Okubo

Title: Senior Vice President, Chief Financial Officer and Treasurer

     By signing in the space provided below, Bay View Acceptance as Contributor and Custodian, as applicable, hereby acknowledges and agrees that it is becoming a party to this Notice of Funding, Certification and Funding Certificate for, and will be bound, by the certifications it has made as contained in Articles 1, 2 and 3 hereof.

Bay View Acceptance Corporation, as Contributor and custodian

By:

Name: John K. Okubo

Title: Chief Financial Officer

Exhibit D

Form of Note

     The outstanding principal amount of this Note at any time may be less than the Maximum Outstanding Note Amount shown on the face hereof. Any purchaser of this Note may ascertain the outstanding principal amount hereof by inquiry of the Indenture Trustee.

     This Note has not been and will not be registered under the Securities Act of 1933, as amended (the “Securities Act") or any State securities laws, and may not be sold or otherwise transferred, pledged or hypothecated except in compliance with the Securities Act and applicable State securities laws. The transfer of this Note is subject to certain restrictions and conditions set forth in the Indenture under which this Note is issued (A copy of which is available from the Indenture Trustee upon request).

     Each Noteholder, by its acceptance of this Note (or interest therein), covenants and agrees that such Noteholder, as the case may be, shall not, prior to the date that is one year and one day after the termination of the Indenture, acquiesce, petition or otherwise invoke or cause the Issuer or the Depositor to invoke the process of any court or governmental authority for the purpose of commencing or sustaining a case against the Issuer or the Depositor under any federal or State bankruptcy, insolvency, reorganization or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or the Depositor or any substantial part of either of their property, or ordering the winding up or liquidation of the affairs of the Issuer or the Depositor.

No. Maximum Outstanding Note Amount: $450,000,000

Bay View 2005 Warehouse Trust
Automobile Receivables-Backed Notes, Series 2005-1

Dated:                                         

     Bay View 2005 Warehouse Trust, a statutory trust duly organized and existing under the laws of the State of Delaware (the “Issuer,” which term includes any successor entity under the Indenture referred to below), for value received, hereby promises to pay to                     , the principal sum of up to a maximum of FourHundred Fifty Million Dollars ($450,000,000) or so much thereof as may be advanced and outstanding hereunder in accordance with the provisions of the Indenture, and to pay interest monthly as provided herein on the twentieth day of each calendar month beginning in July, 2005 or, if such twentieth day is not a Business Day, the Business Day immediately following (each, a “Payment Date") as set forth herein. Each monthly installment of principal payable on this Note, if any, shall be an amount equal to the Noteholder’s pro rata share of the Principal Payment Amount, as such term is defined in the Indenture described herein. Any remaining unpaid portion of the principal amount of this Note shall be due and payable on the Maturity Date as defined in the

Indenture. The interest and principal so payable on any Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Note is registered on the Record Date for such Payment Date, which shall be the close of business on the last day of the calendar month immediately preceding such Payment Date (whether or not a Business Day).

     By its acceptance of this Note, the Noteholder covenants and agrees, during the Funding Period, to advance additional principal amounts hereunder to the Issuer, subject to and in accordance with the terms of the Indenture, the Sale and Servicing Agreement, and the Note Purchase Agreement.

     In the event of an advance of Additional Note Principal Balances by the Noteholder as provided in Section 2.13 of the Indenture, the Noteholder shall, and is hereby authorized to, record on the schedule attached to its Note the date and amount of any Additional Note Principal Balance advanced by it, and each repayment thereof; provided that failure to make any such recordation on such schedule or any error in such schedule shall not adversely affect the Noteholder’s rights with respect to the Note Principal Balance and its right to receive interest payments in respect of the Note Principal Balance.

     The Indenture Trustee shall keep a written record of the Note Principal Balance of this Note. Absent manifest error, the Note Principal Balance of this Note as set forth in the Noteholder’s records shall be binding upon all applicable parties, notwithstanding any other records; provided that failure by the Noteholder to make such recordation on the Noteholder’s records shall not adversely affect the Noteholder’s rights with respect to the Note Principal Balance and its right to receive interest payments in respect of the Note Principal Balance.

     This Note is one of a duly authorized issue of Notes of the Issuer designated as its Automobile Receivables-Backed Notes, Series 2005-1 (herein called the “Notes") issued and to be issued under the Indenture dated as of June 20, 2005 (herein called the “Indenture"), among the Issuer and JPMorgan Chase Bank, N.A. as Indenture Trustee (the “Indenture Trustee,” which term includes any successor Indenture Trustee under the Indenture), to which Indenture, and all amendments and indentures supplemental thereto, reference is hereby made for a statement of the respective rights thereunder of the Issuer, the Indenture Trustee and the Noteholders, and the terms upon which the Notes are, and are to be, authenticated and delivered. All terms used in this Note and not defined herein shall have the meanings assigned to them in the Indenture.

     Interest will accrue on the outstanding principal balance of this Note for each applicable Interest Rate Period at the applicable Note Interest Rate on the basis of a 360-day year and actual days elapsed until the last day preceding the final Payment Date and (to the extent that the payment of such interest shall be legally enforceable) on any overdue installment of interest from the date such interest became due and payable (giving effect to any applicable grace periods) until fully paid. Interest will be due and payable in arrears on each Payment Date, with each payment of interest calculated as described above on the average daily outstanding principal balance of this Note for the period from and including the Payment Date immediately preceding the applicable Payment Date (after giving effect to any payments of principal on such immediately preceding Payment Date) to but excluding the applicable Payment Date or, with respect to the initial Payment Date, for the period from the Closing Date through the day

preceding the initial Payment Date. In making any such interest payment, if the interest calculation with respect to this Note shall result in a portion of such payment being less than $0.01, then such payment shall be decreased to the nearest whole cent, and no subsequent adjustment shall be made in respect thereof.

     The obligation of the Issuer to repay this Note is a limited, nonrecourse obligation secured only by the Trust Estate. All payments of principal of and interest on this Note shall be made only from the Trust Estate, and each Holder hereof, by its acceptance of this Note, agrees that it shall be entitled to payments solely from such Trust Estate pursuant to the terms of the Indenture. The actual outstanding principal balance on this Note may be less than the principal balance indicated on the face hereof. The actual principal balance on this Note at any time may be obtained from the Indenture Trustee.

     All payments of interest and principal on this Note on the applicable Payment Date shall be paid to the Person in whose name this Note is registered at the close of business on the Record Date for such Payment Date in the manner provided in the Indenture. All reductions in the principal amount of this Note (or one or more Predecessor Notes) effected by full or partial payments of installments of principal shall be binding upon all past, then current, and future Holders of this Note and of any Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted on this Note.

     This Note is scheduled to mature on the Payment Date in 97th month following the final Funding Date, unless this Note is earlier repaid or accelerated pursuant to the Indenture. The Indenture Trustee shall pay to the Noteholder of record on the preceding Record Date either (i) by wire transfer, in immediately available funds to the account of the Noteholder at a bank or other entity having appropriate facilities therefor, if the Noteholder shall have provided to the Indenture Trustee appropriate written instructions at least five (5) Business Days prior to the related Payment Date (which instructions may remain in effect for subsequent Payment Dates unless revoked by the Noteholder), or (ii) if not, by check mailed to the Noteholder at the address of the Noteholder appearing in the Note Register, the amounts to be paid to the Noteholder pursuant hereto.

     Without limiting any provision in the Transaction Documents, if the adoption after the date hereof of any applicable law, rule or regulation (including any applicable law, rule or regulation regarding capital adequacy), any accounting principles or any change in any of the foregoing, or any change in the interpretation or administration thereof by any governmental authority charged with the interpretation or administration thereof, or by the Financial Accounting Standards Board (“FASB”) or compliance by the Noteholder with any request or directive (whether or not having the force of law) after the date hereof of any such governmental authority or FASB (a) subjects the Noteholder to any charge or withholding on or in connection with this Note, the Note Purchase Agreement, the Liquidity Agreement, the Indenture, or any other Transaction Document (collectively, the “Funding Documents") or any amounts outstanding hereunder or thereunder, (b) changes the basis of taxation of payments to the Noteholder of any amounts payable under any of the Funding Documents (except for changes in the rate of tax on the overall net income of the Noteholder), (c) imposes, modifies or deems applicable any reserve, assessment, insurance charge, special deposit or similar requirement against assets of, deposits with or for the account of, or any credit extended by, the Noteholder,

(d) has the effect of reducing the rate of return on the Noteholder’s capital to a level below that which the Noteholder could have achieved but for such adoption, change or compliance (taking into consideration the Noteholder’s policies concerning capital adequacy) or (e) imposes any other condition, and the result of any of the foregoing is (i) to impose a cost on, or increase the cost to, the Noteholder of its commitment under any Funding Document or of purchasing, maintaining or funding any interest acquired under any Funding Document, or (ii) to reduce the amount of any sum received or receivable by, or to reduce the rate of return of, the Noteholder under any Funding Document, then, upon demand by the Noteholder with written notice to the Indenture Trustee of the amount claimed hereunder, the Issuer promises to pay to the Noteholder such additional amounts as will compensate the Noteholder for such increased cost or reduction. Without limiting the foregoing, the Issuer acknowledges and agrees that the fees and other amounts payable by the Issuer to the Noteholder have been negotiated on the basis that the unused portion of the Noteholder’s commitment under the Note Purchase Agreement and Liquidity Agreement is treated as a “short term commitment” for which there is no regulatory capital requirement. If the Noteholder determines it is required to maintain capital against its unused commitment, the Noteholder shall be entitled to compensation hereunder. Further, for the avoidance of doubt, if the issuance of FASB Interpretation No. 46, or any other change in accounting standards or the issuance of any other pronouncement, release or interpretation, causes or requires the consolidation of all or a portion of the assets and liabilities of the Issuer or the Initial Purchasers with the assets and liabilities of JPMorgan Chase Bank, N.A. or any Financial Institution, such event shall constitute a circumstance on which JPMorgan Chase Bank, N.A. or such Financial Institution may base a claim for reimbursement hereunder.

     This Note shall be subject to optional repayment at the option of the Issuer in the manner and subject to the provisions of the Indenture. Whenever by the terms of the Indenture, the Indenture Trustee is required to repay Notes, and subject to and in accordance with the terms of Article VI of the Indenture, the Indenture Trustee shall give notice of the repayment in the manner prescribed by the Indenture.

     This Note is issuable only in registered form in denominations as provided in the Indenture and subject to certain limitations therein set forth.

     The final payment on this Note shall be made only upon presentation and surrender of this Note at the Corporate Trust Office of the Indenture Trustee.

     The Noteholder shall have no right to enforce the provisions of the Indenture or to institute action to enforce the covenants therein, or to take any action with respect to any Event of Default, or to institute, appear in or defend any suit or other proceedings with respect thereto, except as provided in the Indenture.

     At the option of the Noteholder, this Note may be exchanged for a Note or Notes of like terms, in any authorized denominations and of like aggregate principal amount, and the transfer may be registered, by the Noteholder in person or by their attorneys duly authorized in writing at the Corporate Trust Office of the Indenture Trustee only in the manner, subject to the limitations provided in the Indenture, and upon surrender and cancellation of this Note. Upon exchange or registration of such transfer, a new registered Note or Notes evidencing the same outstanding principal amount will be executed in exchange therefor.

     All amounts collected as payments on the Trust Estate or otherwise shall be applied in the order of priority specified in the Indenture.

     Each Person who has or who acquires any Ownership Interest in this Note shall be deemed by the acceptance or acquisition of such Ownership Interest to have agreed to be bound by the provisions of Sections 2.06 and 2.07 of the Indenture. The Noteholder may not sell, offer for sale, assign, pledge, hypothecate or otherwise transfer or encumber all or any part of its interest in this Note except pursuant to an effective registration statement covering such transaction under the Securities Act of 1933, as amended, and effective qualification or registration under all applicable State securities laws and regulations or under an exemption from registration under said Securities Act and said State securities laws and regulations.

     In addition, each Person who has or who acquires any Ownership Interest in this Note shall be deemed by the acceptance or acquisition of such Ownership Interest to have agreed to be bound by the provisions of Section 10.18 of the Indenture. Prior to the date that is one year and one day after the payment in full of all amounts payable with respect to the Notes, each Person who has or acquires an Ownership Interest in this Note agrees that such Person will not institute against the Issuer or the Depositor, or join any other Person in instituting against the Issuer or the Depositor, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other proceedings under the laws of the United States or any State of the United States. This covenant shall survive the termination of the Indenture.

     Before the due presentment for registration of transfer of this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the person in whose name this Note is registered (i) on any Record Date for purposes of making payments, and (ii) on any other date for any other purpose, as the owner hereof, whether or not this Note be overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall be affected by notice to the contrary.

     The Indenture permits the amendment thereof for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, the Indenture or of modifying in any manner the rights of the Noteholders under the Indenture at any time by the Issuer and the Indenture Trustee with the consent of the Majority Holders (and, in some cases, only with the consent of each Noteholder affected thereby) and compliance with certain other conditions. Any such consent by the Holder, at the time of the giving thereof, of this Note (or any one or more Predecessor Notes) shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Note.

     This Note and all obligations with respect thereto, including obligations under the Indenture, will be limited recourse obligations of the Issuer payable solely from the Trust Estate. Neither the Issuer, the Depositor, the Servicer, the Backup Servicer, the Custodian, the Paying Agent, the Note Registrar, the Indenture Trustee in its individual capacity or in its capacity as Indenture Trustee, nor any of their respective Affiliates, agents, partners, beneficiaries, officers, directors, stockholders, stockholders of partners, employees or successors or assigns, shall be personally liable for any amounts payable, or performance due, under this Note or the Indenture.

Without limiting the foregoing, each Holder by its acceptance hereof, and the Indenture Trustee, shall be deemed to have agreed (i) that it shall look only to the Trust Estate to satisfy the Issuer’s obligations hereunder or the Indenture, including but not limited to liabilities under Article V of the Indenture and liabilities arising (whether at common law or equity) from breaches by the Issuer of any obligations, covenants and agreements herein or, to the extent enforceable, for any violation by the Issuer of applicable State or federal law or regulation, provided that, the Issuer shall not be relieved of liability hereunder with respect to any misrepresentation in the Indenture or the Sale and Servicing Agreement, or fraud, of the Issuer, and (ii) to waive any rights it may have to obtain a deficiency or other monetary judgment against either the Issuer or any of its principals, directors, officers, beneficial owners, employees or agents (whether disclosed or undisclosed) or their respective assets (other than the Trust Estate). The foregoing provisions of this paragraph shall not (i) prevent recourse to the Trust Estate or any Person (other than the Issuer or the Owner Trustee (as such or in its individual capacity)) for the sums due or to become due under any security, instrument or agreement which is part of the Trust Estate, (ii) constitute a waiver, release or discharge of any indebtedness or obligation evidenced by this Note or secured by the Indenture, but the same shall continue until paid or discharged, or (iii) prevent the Indenture Trustee from exercising its rights with respect to the Grant, pursuant to the Indenture, of the Issuer’s rights under the Contribution Agreement and the Sale and Servicing Agreement. It is further understood that the foregoing provisions of this paragraph shall not limit the right of any Person to name the Indenture Trustee in its capacity as Indenture Trustee under the Indenture or the Issuer as a party defendant in any action or suit or in the exercise of any remedy under this Note or the Indenture, so long as no judgment in the nature of a deficiency judgment or seeking personal liability shall be asked for or (if obtained) enforced. It is expressly understood that all such liability is hereby expressly waived and released to the extent provided herein as a condition of, and as a consideration for, the execution of the Indenture and the issuance of this Note.

     The remedies of the Holder hereof as provided herein, or in the Indenture or the other Transaction Documents, shall be cumulative and concurrent and may be pursued solely against the assets of the Trust Estate. No failure on the part of the Noteholder in exercising any right or remedy hereunder shall operate as a waiver or release thereof, nor shall any single or partial exercise of any such right or remedy preclude any other further exercise thereof or the exercise of any other right or remedy hereunder.

     Reference is hereby made to the Indenture, a copy of which is on file with the Indenture Trustee, for the provisions, among others, with respect to (i) the nature and extent of the rights, duties and obligations of the Indenture Trustee, the Issuer and the Noteholder; (ii) the terms upon which this Note is executed and delivered; (iii) the collection and disposition of the Scheduled Obligor Payments; (iv) a description of the Trust Estate; (v) the modification or amendment of the Indenture; (vi) other matters; and (vii) the definition of capitalized terms used in this Note that are not defined herein; to all of which the Noteholder assents by the acceptance of this Note.

     This Note is issued pursuant to the Indenture and it and the Indenture shall be governed by and construed in accordance with the laws of the State of New York and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws (including, without limitation, §5-1401 and §5-1402 of

the General Obligations Laws, but otherwise without giving effect to principles of conflict of laws).

     Reference is hereby made to the provisions of the Indenture and such provisions are hereby incorporated by reference as if fully set forth herein.

     Unless the certificate of authentication hereon has been executed by the Indenture Trustee by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

     In Witness Whereof, the Issuer has caused this instrument to be duly executed as of the date set forth below.

Bay View 2005 Warehouse Trust, as Issuer

By: Wilmington Trust Company, not in its
individual capacity, but solely as Owner Trustee

By:

Name:

Title:

Schedule to
Bay View 2005 Warehouse Trust
Automobile Receivables-Backed Notes, Series 2005-1

Date of		Scheduled	Note	Note
Funding or	Advance	Note Principal	Principal	Principal
Payment	Amount	Payment	Prepayment	Balance
, 2005	$	$	$	$
, 200__
, 200__
, 200__
, 200__
, 200__
, 200__
, 200__
, 200__
, 200__
, 200__
, 200__
, 200__
, 200__
, 200__
, 200__
, 200__

[Form of Assignment]

For Value Received, the undersigned hereby sells, assigns and transfers unto

(Please insert Social Security or
Taxpayer Identification number of Assignee)

(Please Print or Typewrite Name and Address of Assignee)

the within Note, and all rights thereunder, and hereby does irrevocably constitute and appoint

Attorney to transfer the within Note on the books kept for registration thereof, with full power of substitution in the premises.

Date:
	Notice: The signature to this assignment must correspond with the name as it appears upon the face of the within Note in every particular, without alteration or enlargement or any change whatever.

Exhibit E

Form of Transferee Letter

(Date)

Bay View 2005 Warehouse Trust
                    % Automobile Receivables-Backed Notes, Series 2005-1

Bay View Warehouse Corporation
1840 Gateway Drive
San Mateo, CA 94404
Attention:                                         

JPMorgan Chase Bank, N.A.
600 Travis St., 9^th Floor
Houston, Texas 77002
Attn: Structured Finance — Bay View 2005

     The undersigned (the “Purchaser") understands that the purchase of the above-referenced Notes (the “Notes") may be made only by institutional investors which are “accredited investors” under Regulation D, as promulgated under the Securities Act of 1933, as amended (the “1933 Act"). The Purchaser represents that the Purchaser is an institutional “accredited investor” within the meaning of such definition. The Purchaser hereby represents, and with respect to paragraphs 1, 5, 6 and 8 acknowledges, additionally as follows:

     1. The Purchaser understands that the Notes are being issued only in transactions not involving any public offering within the meaning of the 1933 Act and Section 3(c)(1) of the Investment Company Act of 1940, as amended (the “Investment Company Act").

     2. The Purchaser is considered to be “one person” (or such other number of persons as the Issuer may agree to) for purposes of calculating the number of beneficial owners of securities of Bay View 2005 Warehouse Trust (the “Issuer") under Section 3(c)(1) of the Investment Company Act.

     3. The Purchaser is an institutional “accredited investor” as defined in Rule 501(a)(1), (2), (3) or (7) under the 1933 Act (an “Institutional Accredited Investor") and has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its investment in the Notes, and the Purchaser and any accounts for which the Purchaser is acting are each able to bear the economic risk of its investment.

     4. The Notes are being purchased for the Purchaser’s own account or for one or more accounts (each of which is an Institutional Accredited Investor) as to each of which Purchaser or such other Institutional Accredited Investor exercises sole investment discretion.

     5. If the Purchaser (or any other fiduciary or agent representing any such account) decides to sell any Note prior to maturity, the Purchaser acknowledges that (a) such Note may be sold only in a transaction exempt from registration under the 1933 Act, including but not limited

to a “qualified institutional buyer” pursuant to Rule 144A under the 1933 Act, or pursuant to a valid registration under the 1933 Act (and the Purchaser acknowledges that the Issuer has no obligation to so register the Notes) and (b) the Purchaser must comply with the transfer restrictions contained in the Indenture (defined below).

     6. The Purchaser understands that the Notes will bear a legend substantially as set forth in the form of the Note included in the Indenture (the “Indenture”) dated as of June 20, 2005, among the Issuer and JPMorgan Chase Bank, N.A., as Indenture Trustee (the “Indenture Trustee”).

     7. Either (a) the Purchaser will not acquire the Notes with the assets of any “employee benefit plan” as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) which is subject to Title I of ERISA or any “plan” as defined in Section 4975 of the Code (each such entity, a “Benefit Plan”) or (b) no non-exempt “prohibited transaction” under Section 406 of ERISA or Section 4975 of the Code will occur in connection with its acquisition or holding of the Notes.

     8. The Purchaser acknowledges that transfer of a Note can only be effected in accordance with the Indenture.

     9. The Purchaser represents that the Purchaser is a U.S. Person.

     The representations and warranties and acknowledgments contained herein shall be binding upon the successors of the undersigned.

     Executed this                      day of                     ,                     .

	By:
	Signature of Purchaser
Purchaser’s Name and Title (Print)	Signature of Purchaser
Address of Purchaser
Purchaser’s Taxpayer Identification or Social Security Number

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EX-10.3

Exhibit 10.3

EXECUTION COPY

AMENDED AND RESTATED NOTE PURCHASE AGREEMENT

among

BAY VIEW ACCEPTANCE CORPORATION
(the “Contributor”)

BAY VIEW 2005 WAREHOUSE TRUST
(the “Issuer”)

FALCON ASSET SECURITIZATION CORPORATION

and

FAIRWAY FINANCE COMPANY, LLC
(the “Initial Purchasers”)

JPMORGAN CHASE BANK, N.A. and HARRIS NESBITT CORP.

(the “Lender Group Agents”)

JPMORGAN CHASE BANK, N.A. and BANK OF MONTREAL

(the “Financial Institutions”)

and

JPMORGAN CHASE BANK, N.A.
(the “Administrative Agent”)

Dated as of November 11, 2005

Table of Contents

SECTION		HEADING	PAGE
Article I DEFINITIONS				1
	Section 1.01.	Certain Defined Terms		1
	Section 1.02.	Other Definitional Provisions		6
Article II PURCHASE AND SALE				7
	Section 2.01.	Initial Purchase and Sale of the Notes		7
	Section 2.02.	Initial Advance Amount		7
	Section 2.03.	Advances		7
	Section 2.04.	Pre-Funding Account		8
	Section 2.05.	Interest Rates		9
	Section 2.06.	Taxes		9
	Section 2.07.	Extension of Commitment Expiry Date		11
Article III CLOSING				11
	Section 3.01.	Initial Funding Date		11
	Section 3.02.	Transactions to Be Effected		11
Article IV CONDITIONS PRECEDENT TO PURCHASE ON THE INITIAL FUNDING DATE				12
	Section 4.01.	Conditions to Initial Purchase		12
	Section 4.02.	Conditions Precedent to Advances		13
Article V REPRESENTATIONS AND WARRANTIES				14
	Section 5.01.	Authority, Etc.		14
	Section 5.02.	Notes		15
	Section 5.03.	Litigation		15
	Section 5.04.	Taxes, Etc.		15
	Section 5.05.	Financial Condition		15
	Section 5.06.	Transaction Document Representations and Warranties		15
	Section 5.07.	Issuer and Servicer Representations and Warranties		15
	Section 5.08.	No Registration of the Note; No Qualification of the Indenture		15
	Section 5.09.	Power and Authority		16
	Section 5.10.	Confirmation of Written Information		16
Article VI COVENANTS OF THE PARTIES				16
	Section 6.01.	Information from the Transaction Parties		16

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SECTION		HEADING	PAGE
	Section 6.02.	Covenants		16
Article VII ADDITIONAL COVENANTS				17
	Section 7.01.	Expenses		17
	Section 7.02.	Restrictions on Transfer		17
	Section 7.03.	Securities Act		17
Article VIII INDEMNIFICATION				17
	Section 8.01.	Indemnification by the Contributor		17
	Section 8.02.	Procedure		18
	Section 8.03.	Defense of Claims		18
Article IX MISCELLANEOUS				19
	Section 9.01.	Amendments		19
	Section 9.02.	Notices		19
	Section 9.03.	No Waiver; Remedies		19
	Section 9.04.	Binding Effect; Assignability		19
	Section 9.05.	Provision of Documents and Information		20
	Section 9.06.	Governing Law; Jurisdiction		20
	Section 9.07.	No Proceedings		20
	Section 9.08.	Execution in Counterparts		21
	Section 9.09.	Waiver of Set-off		21
	Section 9.10.	Corporate Obligations – Issuer		21
	Section 9.11.	Survival		21
	Section 9.12.	Appointment of Administrative Agent for the Purchasers and Lender Group Agents		21
	Section 9.13.	Bankruptcy Petition Against any CP Issuing Purchaser		24
	Section 9.14.	Trial by Jury Waived		24
	Section 9.15.	Severability of Provisions		24
	Section 9.16.	Captions		24
	Section 9.17.	Integration		24
	Section 9.18.	Limitation of Liability		25
	Section 9.19.	Pre-Funding Exceptions		25
	Section 9.20.	Amendment and Restatement		25
Schedule I — Addresses for Notices

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          THIS AMENDED AND RESTATED NOTE PURCHASE AGREEMENT (the “Agreement”) is dated and made as of November 11, 2005 (the “Effective Date”), by and among Bay View 2005 Warehouse Trust (the “Issuer”), Bay View Acceptance Corporation (the “Contributor”), FALCON ASSET SECURITIZATION CORPORATION and FAIRWAY FINANCE COMPANY, LLC, as the initial Noteholders (the “Initial Purchasers”), JPMORGAN CHASE BANK, N.A. and BANK OF MONTREAL (the “Financial Institutions”; and together with the Initial Purchasers, the “Purchasers”), JPMORGAN CHASE BANK, N.A. and HARRIS NESBITT CORP. as Lender Group Agents (as defined below), and JPMORGAN CHASE BANK, N.A. as administrative agent for the Purchasers and the Lender Group Agents (the “Administrative Agent”).

RECITALS

          WHEREAS, the Issuer, the Contributor, the Purchasers, the Lender Group Agents and the Administrative Agent (collectively, the “Parties”) entered into the Note Purchase Agreement, dated as June 20, 2005 (the “Prior Agreement”);

          WHEREAS, the Parties wish to amend and restate the Prior Agreement.

          NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto hereby agree as follows:

Article I

DEFINITIONS

     Section 1.01. Certain Defined Terms. Capitalized terms used herein without definition shall have the meanings set forth in the Indenture and the Sale and Servicing Agreement (as defined below), as applicable. Additionally, the following terms shall have the following meanings:

          “Advance” means a payment by a Noteholder under its Note pursuant to the provisions of Section 2.03 hereof or Section 2.13 of the Indenture.

          “Advance Date” means the Funding Date on which each Advance occurs.

          “Agents” means the Lender Group Agents and the Administrative Agent.

          “Aggregate Advance” has the meaning specified in Section 2.03 hereof.

          “Assignment Agreement” means an assignment agreement entered into by a Noteholder and a permitted assignee pursuant to Section 9.04, pursuant to which such assignee may become a party to this Agreement.

          “Business Day” has the meaning ascribed to such term in the Indenture.

     “Commercial Paper” means promissory notes issued by a CP Issuing Purchaser in the United States commercial paper market.

     “Commitment Expiry Date” means June 19, 2006, as such date may be extended from time to time pursuant to Section 2.06 hereof.

     “Contribution Agreement” means the Contribution Agreement, dated as of June 20, 2005, between the Contributor and the Depositor relating to the transfer of Receivables by the Contributor to the Depositor, as amended, modified or otherwise supplemented from time to time in accordance with the terms thereof.

     “CP Costs” means, for each day, the sum of (i) discount or yield accrued on Pooled Commercial Paper (as defined below) on such day, plus (ii) any and all accrued commissions in respect of placement agents and dealers for the applicable Purchaser’s commercial paper, and issuing and paying agent fees incurred, in respect of such Pooled Commercial Paper for such day, plus (iii) other costs associated with funding small or odd-lot amounts with respect to all receivable purchase facilities which are funded by Pooled Commercial Paper for such day, minus (iv) any accrual of income net of expenses received on such day from investment of collections received under all receivable purchase facilities funded substantially with Pooled Commercial Paper, minus (v) any payment received on such day net of expenses in respect of liquidation fees related to any prepayment of any receivable interest of such Initial Purchaser pursuant to the terms of any receivable purchase facilities funded substantially with Pooled Commercial Paper. In addition to the foregoing costs, if the Issuer shall request any purchase hereunder during any period of time determined by the Lender Group Agent for such Purchaser in its sole discretion to result in incrementally higher CP Costs applicable to such Purchase, the principal amount of any Note Advance associated with any such Purchase shall, during such period, be deemed to be funded by such Purchaser in a special pool (which may include capital associated with other receivable purchase facilities) for purposes of determining such additional CP Costs applicable only to such special pool and charged each day during such period against such Capital. Each Note Advance funded substantially with Pooled Commercial Paper will accrue CP Costs each day on a pro rata basis, based upon percentage share the principal amount of such Note Advance represents in relation to all assets held by such Purchaser and funded substantially with Pooled Commercial Paper.

     “CP Disruption” means the inability of a CP Issuing Purchaser, at any time, whether as a result of a prohibition or any event or circumstance whatsoever, to raise funds through the issuance of Commercial Paper in the United States commercial paper market.

     “CP Issuing Purchaser” means a Purchaser that issues Commercial Paper and may fund all or any portion of any purchase of a Note hereunder through the issuance of Commercial Paper.

     “CP Rate” means, when used in reference to either of the Initial Purchasers shall have, when used in reference to any Purchaser, for each day during a Fixed Period and to the extent such Purchaser funds a Note Advance on such day through the issuance of Notes, the aggregate CP Costs for each day during such Fixed Period associated with the principal amount of such

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Note Advance, expressed as a percentage of such principal amount and converted to an interest bearing equivalent rate per annum.

     “CP Tranche” means any portion of the Note Principal Balance funded by a CP Issuing Purchaser.

     “Depositor” means Bay View Warehouse Corporation, a Delaware corporation, and its successors.

     “Fairway Lender Group” means Fairway Finance Company, LLC, Harris Nesbitt Corp. and Bank of Montreal.

     “Federal Bankruptcy Code” means the Bankruptcy Code of the United States of America codified in Title 11 of the United States Code, as amended from time to time.

     “Financial Institution” means any financial institution which from time to time may become a party hereto as a Financial Institution and party to a Liquidity Agreement as a party to whom a CP Issuing Purchaser may assign all or a portion of such CP Issuing Purchaser’s Note(s).

     “Fixed Period” means the period commencing on the twentieth day of each calendar month and ending on twentieth day of the next succeeding calendar month.

     “Formal Transfer Requirements” means the formal requirements related to the transfer of receivables from the Contributor to the Depositor and then from the Depositor to the Issuer and related “tagging” and identification of such receivables prescribed by the Contribution Agreement, the Sale and Servicing Agreement and/or the Indenture.

     “Governmental Action” means any and all consents, approvals, permits, orders, authorizations, waivers, exceptions, variances, exemptions or licenses of, or registrations, declarations or filings with, any Governmental Authority required under any Governmental Rule.

     “Governmental Authority” means any nation or government, any state or other political subdivision thereof, and any agency, department or other entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

     “Governmental Rule” means any and all laws, statutes, codes, rules, regulations, ordinances, orders, writs, decrees and injunctions, of any Governmental Authority and any and all legally binding conditions, standards, prohibitions, requirements and judgments of any Governmental Authority.

     “Indemnified Party” means each Purchaser, including without limitation each Initial Purchaser and each Financial Institution, and the Agents, and their respective officers, members, directors, employees, agents, representatives, successors and assignees.

     “Indenture” means the Indenture dated as of June 20, 2005 between the Issuer and JPMorgan Chase Bank, N.A., as Indenture Trustee, as amended, modified or otherwise supplemented from time to time in accordance with the terms thereof.

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     “Initial Advance Amount” has the meaning specified in Section 2.02 hereof.

     “Initial Funding Date” has the meaning specified in Article III hereof.

     “Initial Purchasers” means each of Falcon Asset Securitization Corporation (“Falcon”), a Delaware limited liability company, and Fairway Finance Company, LLC (“Fairway”), a Delaware limited liability company, the administrator for which is Harris Nesbitt Corp., and their successors and assigns.

     “Instruction Letter” means the Instruction Letter dated June 23, 2005 to the Indenture Trustee from the Issuer, and consented to by the Initial Purchasers and the Contributor.

     “Falcon Lender Group” means Falcon and JPMorgan Chase Bank, N.A.

     “Lender Group” means the Falcon Lender Group or the Fairway Lender Group.

     “Lender Group Agent” means, with respect to the Falcon Lender Group, JPMorgan Chase Bank, N.A., not individually but as agent for such Lender Group, and with respect to the Fairway Lender Group, Harris Nesbitt Corp., as administrator for Fairway Finance Company, LLC, not individually but as agent for such Lender Group.

     “LIBOR” means the rate per annum equal to the applicable British Bankers’ Association Interest Settlement Rate for deposits in U.S. dollars appearing on Reuters Screen FRBD as of 11:00 a.m. (London time) two Business Days prior to the first day of the relevant Tranche Period, and having a maturity equal to such Tranche Period, provided that, (i) if Reuters Screen FRBD is not available to the Administrative Agent for any reason, the applicable LIBOR for the relevant Tranche Period shall instead be the applicable British Bankers’ Association Interest Settlement Rate for deposits in U.S. dollars as reported by any other generally recognized financial information service as of 11:00 a.m. (London time) two Business Days prior to the first day of such Tranche Period, and having a maturity equal to such Tranche Period, and (ii) if no such British Bankers’ Association Interest Settlement Rate is available to the Administrative Agent, the applicable LIBOR for the relevant Tranche Period shall instead be the rate determined by the Administrative Agent to be the rate at which JPMorgan Chase Bank, N.A. offers to place deposits in U.S. dollars with first-class banks in the London interbank market at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Tranche Period, in the approximate amount to be funded at LIBOR and having a maturity equal to such Tranche Period, divided by (b) one minus the maximum aggregate reserve requirement (including all basic, supplemental, marginal or other reserves) which is imposed against the Administrative Agent in respect of Eurocurrency liabilities, as defined in Regulation D of the Board of Governors of the Federal Reserve System as in effect from time to time (expressed as a decimal), applicable to such Tranche Period plus LIBOR shall be rounded, if necessary, to the next higher 1/16 of 1%.

     “LIBOR Tranche” means any portion of the Note Principal Balance of any Note funded by any Purchaser through the borrowing of loans (or the sale of participation interests) at an interest rate based on LIBOR.

     “Liquidity Agreement” means any agreement between a CP Issuing Purchaser and an affiliated Financial Institution, including, without limitation, (i) that certain Asset Purchase

4

Agreement (Bay View Warehouse Corporation) dated as of June 20, 2005, by and among Falcon, the Falcon Lender Group Agent, and the “Assignees” from time to time party thereto, as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, and (ii) that certain Amended and Restated Liquidity Asset Purchase Agreement dated as of October 20, 2000, by and among Fairway, Bank of Montreal, and the “Assignees” from time to time party thereto, as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.

     “London Business Day” means any Business Day on which commercial banks are open for international business in London, England.

     “Note” has the meaning ascribed to it in the Indenture.

     “Note Advance” means an Advance under a Note.

     “Noteholder” means any holder of a Note.

     “Pool” means the aggregation of Receivables and related assets contained from time to time in the Issuer’s trust estate.

     “Pooled Commercial Paper” means commercial paper notes of a Purchaser subject to any particular pooling arrangement by such Purchaser, but excluding commercial paper issued by such Purchaser for a tenor and in an amount specifically requested by any Person in connection with any agreement effected by such Purchaser.

     “Pre-Funded Collateral” means the lesser of (a) $15,000,000 and (b) the amount on deposit in the Pre-Funding Account plus the product of the Pre-Funded Receivables times the Pre-Funding Advance Percentage.

     “Pre-Funded Receivables” means accounts receivable purchased by the Issuer with the proceeds of a distribution from the Pre-Funding Account and which are owned and identified or identifiable as such by the Issuer, but with respect to which the Formal Transfer Requirements have not been completed.

     “Pre-Funding Account” means the account established and maintained pursuant to Section 5.01(a)(iii) of the Indenture.

     “Pre-Funding Advance Percentage” has the meaning ascribed to it in the Monthly Servicer Report.

     “Pre-Funding Receivables Advance” means as of any Funding Date, (a) the lesser of (i) $15,000,000 and (ii) the Issuer’s projected borrowing needs for such week minus (b) the amount on deposit in the Pre-Funding Account on such date.

     “Pre-Funding Servicer Report” means a report in the form attached hereto as Exhibit A.

     “Pre-Funding Transfer Date” means the Business Day on which a Pre-Funding Servicer Report is received from the Issuer by the Servicer, with a copy to each Lender Group Agent and

5

the Indenture Trustee by 1:00 p.m. Eastern time (or if received after such time, the next Business Day).

          “Prime Rate Tranche” means any portion of the Note Principal Balance of any Note that is not a CP Tranche or a LIBOR Tranche.

          “Pro Rata Share” means, with respect to each Noteholder, a fraction, expressed as a percentage the numerator of which is the face amount of such Noteholder’s Note and the denominator of which is the Maximum Outstanding Note Amount. On the Initial Funding Date, the Falcon Lender Group’s Pro Rata Share shall be 67% and the Fairway Lender Group’s Pro Rata Share shall be 33%.

          “Purchasers” means the Initial Purchasers, the Financial Institutions and any other Purchaser of a Note from time to time party hereto.

          “Sale and Servicing Agreement” means the Sale and Servicing Agreement, dated as of June 20, 2005, among the Issuer, the Depositor, the Indenture Trustee, the Backup Servicer and the Servicer, relating to the transfer of the Receivables and related Deposited Assets from the Depositor to the Issuer and the servicing of the Receivables and the rest of the Trust Estate, as the same may be amended, modified or otherwise supplemented from time to time in accordance with the terms thereof.

          “Third Party Claim” has the meaning specified in Section 8.02 hereof.

          “Tranche” means a Prime Rate Tranche, a CP Tranche and/or a LIBOR Tranche.

          “Transaction Party” means each of the Issuer, the Contributor, the Depositor, the Servicer and the Custodian.

          “Trust Agreement” means the Amended and Restated Trust Agreement, dated June 20, 2005 by and between Bay View Warehouse Corporation and Wilmington Trust Company.

     Section 1.02. Other Definitional Provisions. (a) All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein.

          (b) As used herein and in any certificate or other document made or delivered pursuant hereto or thereto, accounting terms not defined in Section 1.01, and accounting terms partially defined in Section 1.01 to the extent not defined, shall have the respective meanings given to them under generally accepted accounting principles. To the extent that the definitions of accounting terms herein are inconsistent with the meanings of such terms under generally accepted accounting principles, the definitions contained herein shall control.

          (c) The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; and Article, Section, subsection, Schedule and Exhibit references contained in this Agreement are references to Articles, Sections, subsections, the Schedule and Exhibits in or to this Agreement unless otherwise specified.

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Article II

PURCHASE AND SALE

     Section 2.01. Initial Purchase and Sale of the Notes. On the terms and subject to the conditions set forth in this Agreement, and in reliance on the covenants, representations, warranties and agreements herein set forth, the Issuer shall sell to the Initial Purchasers, and the Initial Purchasers shall purchase, on the Initial Funding Date, Notes with an aggregate outstanding principal amount of $266,513,454.44.

     Section 2.02. Initial Advance Amount. On the Initial Funding Date, Notes will be purchased at a price (the “Initial Advance Amount”) equal to $273,200,000.00 in the aggregate.

     Section 2.03. Advances. The Initial Purchasers, with respect to the Notes, may be requested by the Issuer to make Advances from time to time in accordance with, and subject to the conditions and terms of the Indenture and upon the satisfaction, as of the applicable Advance Date but other than in connection with an Advance that is to be funded into the Pre-Funding Account, of each of the conditions set forth in Sections 2.11 or 2.12 of the Indenture and Sections 4.01 and/or 4.02 hereof. Advances shall be funded pursuant to Section 2.14 of the Indenture. The aggregate amount of Advances to be made pursuant to any Funding Request (as defined below) is referred to as an “Aggregate Advance” and each Noteholder’s Note Advance as part of such Aggregate Advance shall be in an amount equal to its Pro Rata Share of the Noteholder Advances which are part of such Aggregate Advance. Unless otherwise agreed to by the Lender Group Agents, each Aggregate Advance shall be in a minimum amount of $1,000,000, provided that: (a) after giving effect to such Aggregate Advance, the Note Principal Balance with respect to the Notes shall not exceed the Maximum Outstanding Note Amount and the amount on deposit in the Spread Account shall be equal to or greater than the Requisite Amount, (b) the number of Aggregate Advances shall not exceed two during any calendar week and (c) the Issuer shall, by 1:00 p.m. Eastern time at least one (1) Business Day prior to the proposed date of such Aggregate Advance, give the Lender Group Agents an irrevocable written notice, (each a “Funding Request”) specifying: (i) the proposed date of such Aggregate Advance, (ii) the amount of such Aggregate Advance and the amount of each Note Advance which shall comprise such Aggregate Advance, (iii) the amount, if any, of such Aggregate Advance to be deposited in accordance with Section 2.14 of the Indenture together with the bank account to which any such funds shall be sent, (iv) a computation of the Receivables Advance Amount, (v) a calculation of the Requisite Amount after giving effect to such Aggregate Advance, and (vi) the amount, if any, to be allocated from such Aggregate Advance and deposited to the Spread Account on the related Funding Date such that the amount on deposit therein is equal to or greater than the Requisite Amount. Each Funding Request shall also include a computation demonstrating that after giving effect to such Aggregate Advance, the Collateral Test Amount shall not be less than zero (0) and that the representations and warranties set forth in Section 3.02(a)(xxv) of the Sale and Servicing Agreement are true and correct with respect to the Subsequent Receivables to be transferred on the proposed date of such Advance. Each Noteholder shall transfer the amount of its Advance or Advances in immediately available funds to the account and on the date of the Aggregate Advance specified in such request. The purchase price of each Advance shall be funded to the Pre-Funding Account or paid in accordance with Section 2.14 of the Indenture.

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     Section 2.04. Pre-Funding Account.

          (a) Notwithstanding the foregoing subsection 2.03(b), the Issuer shall use reasonable efforts to limit the number of Funding Requests submitted to the Lender Group Agents to two per week. Such request shall be made to the Lender Group Agents by 1:00 pm Eastern time one (1) Business Day prior and shall include the requested Pre-Funded Receivables Advance.

          (b) No later than the Initial Funding Date, pursuant to Section 5.01(a)(iii) of the Indenture, the Indenture Trustee shall establish and maintain a trust account in the name of the Issuer which shall at all times be an Eligible Account and shall be titled “Pre-Funding Account, JPMorgan Chase Bank, N.A., in trust for the Noteholders” (the “Pre-Funding Account”). The Indenture Trustee shall, promptly upon receipt, deposit in the Pre-Funding Account, and retain therein, the Pre-Funding Receivables Advance, remitted either on the Initial Funding Date by the Depositor, or on any Funding Date by the Noteholders. Funds deposited in the Pre-Funding Account shall be held in trust for, and shall constitute cash collateral for the obligations owed by the Issuer to the Noteholders. Funds deposited in the Pre-Funding Account may not exceed $15,000,000 at any time. If, at any time, funds in the Pre-Funding Account are released to the Issuer to fund a Pre-Funded Receivable that is prepaid, such funds shall be redeposited by the Issuer into the Pre-Funding Account.

          (c) The Indenture Trustee will invest funds deposited in the Pre-Funding Account in Eligible Investments as directed by the Depositor in writing. For federal income tax purposes, the Depositor shall be the owner of the Pre-Funding Account and shall report all items of income, deduction, gain or loss arising therefrom. All income and gain realized from investment of funds deposited in the Pre-Funding Account shall be transferred to the Depositor as requested by the Depositor in writing. The Depositor shall deposit in the Pre-Funding Account the amount of any net loss incurred in respect of any such Eligible Investment immediately upon realization of such loss without any right of reimbursement therefor.

          (d) Pre-Funded Receivables Advances shall be withdrawn by the Indenture Trustee as follows:

               (i) On any Pre-Funding Transfer Date, the Indenture Trustee, in accordance with the Pre-Funding Servicer Report, shall withdraw from the Pre-Funding Account an amount equal to the lesser of (a) the amount on deposit in the Pre-Funding Account and (b) the product of (i) the Pre-Funding Advance Percentage times (ii) the aggregate principal balance of the Pre-Funded Receivables transferred and assigned to the Indenture Trustee for deposit in the Pool on such Pre-Funding Transfer Date, and pay such amount to or upon the order of the Depositor upon satisfaction of the conditions set forth in Section 2.12 of the Indenture as modified by the Instruction Letter;

               (ii) At the written request of the Noteholders, to return to the Purchasers, any remaining funds on deposit in the Pre-Funding Account;

               (iii) To withdraw any amount not required to be deposited in the Pre-Funding Account or deposited therein in error; and

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               (iv) To clear and terminate the Pre-Funding Account upon the termination of this Agreement, with any amounts remaining on deposit therein being paid to the Noteholders then entitled to distributions in respect of principal.

     Section 2.05. Interest Rates. (a) Any portion of the Note Principal Balance of any Note shall be a LIBOR Tranche unless: (i) it is held by a CP Issuing Purchaser and is allocated to a CP Tranche; (ii) on or prior to the first day of the next related Interest Rate Period, a Lender Group Agent has given the Issuer and the Servicer notice that the introduction of or any change in or in the interpretation of any law or regulation makes it unlawful, or that any central bank or other Governmental Authority asserts that it is unlawful, for the Purchaser affiliated with such Lender Group Agent to fund Advances pursuant to Section 2.01 and 2.02 or 2.03 hereof or, in the case of a CP Issuing Purchaser, the related Financial Institution under the related Liquidity Agreement to fund the purchase of Advances at LIBOR (and the affiliated Lender Group Agent shall not have subsequently notified the Servicer and the Issuer that such circumstances no longer exist); (iii) such Interest Rate Period is not a period of one month; (iv) such Tranche was not designated a LIBOR Tranche by 3:00 p.m. (New York, New York time) on the third London Business Day preceding the first day of such Interest Rate Period; or (v) the outstanding principal amount of such Tranche is less than $1,000,000. In each case in which a portion of the related Note Principal Balance is not allocated to a CP Tranche or a LIBOR Tranche it shall be a Prime Rate Tranche.

          (b) The Lender Group Agent for the affected Lender Group shall select the duration of the Interest Rate Period related to each Tranche. In selecting such Interest Rate Periods, such Agent shall use reasonable efforts, taking into consideration market conditions.

          (c) The Lender Group Agents shall, on or before the third (3^rd) Business Day of each calendar month, deliver to the Administrative Agent one consolidated invoice for interest accrued during, and any fees or other charges payable with respect to, the immediately prior calendar month (the “Invoice”). Upon the occurrence and during the continuance of any Termination Event, the duration of any Interest Rate Period that commences during such period on or after such date shall be of such duration as shall be selected by the Lender Group Agents. In addition, if a CP Disruption shall have occurred and be continuing, a CP Issuing Purchaser, or the Financial Institution affiliated with such Purchaser, on its behalf, may, upon notice to the Servicer, the Issuer and the Indenture Trustee, terminate any Interest Rate Period then in effect for any CP Tranche (it being understood that, upon such termination, the portion of the Note Principal Balance of any Note held by such Purchaser and allocated to such CP Tranche shall be reallocated to a LIBOR Tranche or a Prime Rate Tranche as provided in clause (a)). Interest on each Tranche during each Interest Rate Period shall accrue at the applicable Note Interest Rate for the applicable Note and such Interest Rate Period and all accrued and unpaid interest on each Tranche shall be payable on each Payment Date in accordance with the terms of the Indenture. Interest with respect to any Tranche due but not paid on any Payment Date will be due on the next succeeding Payment Date together with Overdue Interest as calculated in accordance with the terms of the Indenture.

     Section 2.06. Taxes. (a) All payments made by the Issuer under this Agreement, the Indenture, the Notes, the other Transaction Documents and any other agreement or document executed in connection with any of the foregoing, to or for the benefit of any Purchaser shall be

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made, to the extent allowed by law, free and clear of, and without deduction or withholding for or on account of, any present or future taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority having taxing authority (excluding income taxes, branch profits or franchise taxes imposed or based on income or gross receipts imposed on any Purchaser or Lender Group, any Lender Group Agent or the Administrative Agent as a result of any present or former connection between the jurisdiction of the government or taxing authority imposing such tax or any political subdivision or taxing authority thereof or therein and such Agent or Purchaser (other than any connection arising solely from such Agent or Purchaser having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement or the Note or any other related document to which any Purchaser or any Agent is a party)) (all such non-excluded taxes, levies, imposts, duties, charges, fees, deductions and withholdings being hereinafter called “Taxes”). If any Taxes are required to be withheld from any amounts payable to or under any Note, (i) the sum payable shall be increased as may be necessary so that, after making all required deductions (including deductions applicable to additional sums payable under this Section 2.05) the applicable Purchaser or Agent receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Issuer shall make such deductions, (iii) the Issuer shall pay the full amount deducted to the relevant taxing authority or other authority in accordance with applicable law, (iv) the Lender Group Agents shall furnish to the Issuer, at its address referred to in the Indenture, the original or a certified copy of a receipt evidencing payment thereof, and (v) in the event the applicable Purchaser or Agent receives a refund of any Taxes paid by the Issuer pursuant to Section 2.05(a) or 2.05(b), or receives a tax credit or other reduction in Taxes which is attributable to a payment made by the Issuer pursuant to this Section 2.05, such party shall pay an amount equal to such refund, credit or reduction to the Issuer within 45 days of the receipt of such refund or application of such credit or reduction.

     (b) In addition, the Issuer agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies that arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to any Liquidity Agreement (hereinafter, “Other Taxes”).

     (c) Subject to the provisions set forth in this Section 2.05, and except to the extent provided in Section 2.05(a), the Issuer will indemnify each Indemnified Party for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section 2.05) paid by such Indemnified Party and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, provided, that such Indemnified Party, in making a demand for indemnity, shall provide the Issuer with a certificate from the relevant taxing authority or from a responsible officer of such Person stating or otherwise evidencing that such Person has made payment of such Taxes or Other Taxes and will provide a copy of or extract from documentation, if available, furnished by such taxing authority evidencing assertion or payment of such Taxes or Other Taxes. Whenever any Taxes are payable by the Issuer, within thirty (30) days after receipt by the Issuer of an original official receipt showing payment thereof, the Issuer shall send to the applicable Purchaser or Agent a certified copy of such receipt. If the Issuer fails to pay any Taxes when due to the appropriate taxing authority or fails to remit to the applicable Purchaser or Agent the required receipts or other required documentary evidence, the Issuer shall indemnify such Person

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for any incremental Taxes, interest or penalties that such Person is legally required to pay as a result of any such failure. The agreements in this subsection shall survive the termination of this Agreement, the Indenture and the payment of the Note.

          (d) All Taxes and Other Taxes owing under this Section 2.05 shall be payable in accordance with the provisions of the Indenture.

     Section 2.07. Extension of Commitment Expiry Date. (a) The Issuer may request the Administrative Agent to extend the Commitment Expiry Date by giving the Administrative Agent written notice of such request not more than six (6) months but not less than 60 days prior (the “Extension Request Date”) to the Commitment Expiry Date then in effect (the “Original Commitment Expiry Date”). The Administrative Agent shall promptly notify each Lender Group Agent of the Administrative Agent’s receipt of such request and each Lender Group Agent shall notify the Administrative Agent not later than 45 days after the Extension Request Date whether or not it consents to such extension. Consent to any extension requested by the Issuer may be given or withheld in the sole and absolute discretion of each Purchaser. If each Purchaser consents to an extension requested by the Issuer, then the Administrative Agent will notify the Issuer not later than 60 days after the Extension Request Date that such extension request has been granted (the “Extension Acceptance Date”) and, effective as of the Original Commitment Expiry Date, the Commitment Expiry Date shall be extended to an agreed Business Day that is no more than 364 days from the Extension Acceptance Date.

          (b) If any Purchaser does not consent to an extension of the Original Commitment Expiry Date as provided in Section 2.06(a), the Commitment Expiry Date shall automatically occur on the Original Commitment Expiry Date.

Article III

CLOSING

     Section 3.01. Initial Funding Date. The closing (the “Closing”) of the purchase and sale of the Notes and the issuance thereof to the Initial Purchasers shall take place on June 20, 2005, or if the conditions to purchase set forth in Article IV of this Agreement shall not have been satisfied or waived by such date, as soon as practicable after such conditions shall have been satisfied or waived, or at such other time, date and place as the parties shall agree upon (the date of the Closing being referred to herein as the “Initial Funding Date”). The date of the initial Advance shall be the Initial Funding Date.

     Section 3.02. Transactions to Be Effected. (a) On the Initial Funding Date, the Initial Purchasers shall deliver to the Issuer funds in an amount equal to the Initial Advance Amount of the Notes; and (b) upon such delivery, the Issuer shall deliver to the Initial Purchasers the Notes and the Note Principal Balance of the Notes so held shall be increased to reflect such initial Advance.

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Article IV

CONDITIONS PRECEDENT TO PURCHASE ON THE INITIAL FUNDING DATE

     Section 4.01. Conditions to Initial Purchase. The purchase by the Initial Purchasers of the Notes on the Initial Funding Date is subject to the satisfaction of the conditions set forth in Section 2.11 of the Indenture and of the following conditions (any or all of which (except Section 4.01(c)) may be waived by unanimous consent of the Agents in the Agents’ sole discretion):

          (a) Each of the Transaction Documents shall be in full force and effect and all consents, waivers and approvals necessary for the consummation of the transactions contemplated by the Transaction Documents shall have been obtained and shall be in full force and effect, and all other legal matters relating to the Transaction Documents and the transactions contemplated thereby, shall be reasonably satisfactory in all respects to the Initial Purchasers, the Financial Institutions and the Agents, and each of the parties to such agreements shall have furnished to each of the Initial Purchasers, the Financial Institutions and the Agents all documents and information that any of them or their counsel may reasonably request to enable them to pass on such matters.

          (b) Each of the representations and warranties contained in this Agreement, the Indenture, the Contribution Agreement, the Sale and Servicing Agreement, and the other Transaction Documents made by each of the parties to such agreements shall be true and correct in all material respects as of the time of the Initial Funding Date as though made as of such time (except to the extent that they expressly relate to an earlier time, then such representations and warranties shall be true and correct as of such earlier time).

          (c) The Contributor and the Issuer and their affiliates shall be in compliance with each of the covenants contained in this Agreement, the Indenture, and the other Transaction Documents.

          (d) No Default, Event of Default, Servicer Event of Default or Termination Event has occurred and is continuing (both before and after giving effect to the purchases contemplated hereunder).

          (e) The Initial Purchasers and the Administrative Agent shall have received from each Transaction Party other than the Issuer, which shall deliver the certificate required under Section 2.11(d) of the Indenture, a certificate or certificates signed by any of the Chairman of the Board of Directors, the President, the Chief Financial Officer, any Vice President, the Treasurer or any Assistant Treasurer of such Person, dated the Initial Funding Date, in which such officer shall state that, to the best of his/her knowledge (i) the representations and warranties of such Person in this Agreement and any other Transaction Documents to which such Person is a party are true and correct in all material respects on and as of the Initial Funding Date, or, in the case of the representations and warranties of the Transaction Documents, on and as of the dates specified in such agreements, as though made as of such time (except to the extent that they expressly relate to an earlier time, then such representations and warranties shall be true and correct as of such earlier time); (ii) that such Transaction Party has complied with all agreements

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and satisfied all conditions on its part to be performed or satisfied hereunder or under the Transaction Documents at or prior to the Initial Funding Date; and (iii) no Event of Default, Servicer Event of Default, Default, or Termination Event shall have occurred and be continuing.

          (f) All accrued and unpaid fees owing to the Purchasers and the Agents under the Fee Letter shall have been paid.

          Section 4.02. Conditions Precedent to Advances. The funding of any Aggregate Advance under this Agreement shall be subject to the satisfaction, as of the applicable date of the Aggregate Advance, of each of the following conditions:

          (a) All of the terms, covenants, agreements and conditions of the Transaction Documents, including Section 2.12 of the Indenture, required to be complied with and performed by each Transaction Party on or prior to the applicable date of such Aggregate Advance, shall have been complied with and performed;

          (b) Each of the representations and warranties contained in this Agreement, the Indenture and the other Transaction Documents made by each Transaction Party to such agreements shall be true and correct in all material respects as of such date as though made as of such time (except to the extent that they expressly relate to an earlier time, then such representations and warranties shall be true and correct as of such earlier time);

          (c) The representations and warranties set forth in Section 3.02(a)(xxv) of the Sale and Servicing Agreement shall be true and correct with respect to the Subsequent Receivables to be transferred on the proposed date of such Advance;

          (d) No Event of Default, Servicer Event of Default, Default, or Termination Event shall have occurred and be continuing (both before and after giving effect to such Advance);

          (e) Both before and immediately after giving effect to such Aggregate Advance, the Collateral Test Amount shall not be less than zero (0);

          (f) The end of the Funding Period shall not have occurred;

          (g) On or before the proposed date of such Aggregate Advance, the Administrative Agent shall have received executed copies of one or more Hedge Agreements as required by Section 3.15 of the Indenture;

          (h) All fees due and payable under the Fee Letter (as defined in the Indenture) to the Initial Purchasers and the Agent as of the applicable date of such Aggregate Advance shall have been paid in full;

          (i) All fees and expenses due and payable pursuant to Section 7.01 hereof shall have been paid in full; and

          (j) Each of the Transaction Documents shall be in full force and effect.

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Notwithstanding the foregoing, with respect to any Pre-Funding Receivables Advance and the related Pre-Funding Receivables, each of the requirements of Section 4.02(a) and (b) above that relate to any of the Formal Transfer Requirements shall be satisfied after the related Pre-Funding Transfer Date, as indicated on the Weekly Servicer Report.

Article V

REPRESENTATIONS AND WARRANTIES

          The Contributor and the Issuer each hereby makes the following representations and warranties as to itself to the Purchasers and the Agents, as of the Initial Funding Date and as of each Funding Date, and the Purchasers shall be deemed to have relied on such representations and warranties in accepting delivery of the Notes on the Initial Funding Date and in making (or committing to make) each Advance on each Funding Date (including the Initial Funding Date).

     Section 5.01. Authority, Etc. (a) Such Person has been duly organized and is validly existing and in good standing under the laws of the State of its organization, with corporate power and authority to own its properties and to transact the business in which it is now engaged, and each such Person is duly qualified to do business and is in good standing (or is exempt from such requirements) in each State of the United States where the nature of its business requires it to be so qualified and the failure to be so qualified and in good standing would have a material adverse effect on such Person or any part of the Trust Estate or any material adverse effect on the interests of the Noteholders.

          (b) The issuance, sale, assignment and conveyance of the Notes, the performance of such Person’s obligations under this Agreement, and the consummation of the transactions contemplated in the Transaction Documents will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any Lien (other than any Lien created by the Transaction Documents), charge or encumbrance upon any of the property or assets of each such Person or any of their Affiliates pursuant to the terms of, any indenture, mortgage, deed of trust, loan agreement or other material agreement or instrument to which they or any of their Affiliates is bound or to which any of its property or assets is subject, nor will such action result in any violation of the provisions of any Person’s organizational documents or any Governmental Rule applicable to such Person.

          (c) No Governmental Action which has not been obtained is required by or with respect to, as the case may be, such Person in connection with the execution and delivery of the Notes or any of the Transaction Documents by such Person, or the consummation by such Person of the transactions contemplated hereby or thereby.

          (d) Each of the Transaction Documents to which such Person is a party has been duly authorized, executed and delivered by such Person and is the valid and legally binding obligation of such Person, enforceable against such Person in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, reorganization, moratorium and other similar laws of general applicability relating to or affecting creditors’ rights and to general principles of equity.

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     Section 5.02. Notes. The Notes have been duly and validly authorized, and, when executed and authenticated in accordance with the terms of the Indenture, and delivered to and paid for in accordance with this Agreement, will be duly and validly issued and outstanding and will be entitled to the benefits of the Indenture and will constitute the legal, valid and binding obligation of the Issuer enforceable in accordance with its terms (except as enforcement thereof may be limited by bankruptcy, insolvency, or other similar laws relating to or affecting generally the enforcement of creditors’ rights or by general equitable principles) and will be entitled to the benefits of the Indenture, this Agreement and the other Transaction Documents.

     Section 5.03. Litigation. There is no pending or, to such Person’s knowledge, threatened action, suit or proceeding by or against such Person before any Governmental Authority or any arbitrator (i) with respect to the Trust Estate, the Notes, the Transaction Documents or any of the transactions contemplated herein or therein, or (ii) with respect to such Person which, in the case of any such action, suit or proceeding with respect to such Person if adversely determined, would have a material adverse effect on the ability of such Person to perform its obligations hereunder or thereunder.

     Section 5.04. Taxes, Etc. Any taxes, fees and other charges of Governmental Authorities applicable to such Person, in connection with the execution, delivery and performance by such Person of the Transaction Documents or otherwise applicable to such Person in connection with the Trust Estate have been paid or will be paid by such Person at or prior to the Initial Funding Date or any applicable Advance Date, as applicable, to the extent then due.

     Section 5.05. Financial Condition. On the date hereof and on each Advance Date, such Person is not insolvent or the subject of any voluntary or involuntary bankruptcy proceeding.

     Section 5.06. Transaction Document Representations and Warranties. Each such Person hereby reaffirms each representation and warranty made by it in each Transaction Document to which it is a party (including, without limitation, by the Contributor in its roles as Servicer and as Custodian) for the benefit of the Purchasers, the Agents and the Financial Institutions and acknowledges that such Persons have relied on such representations and warranties in entering into the transactions contemplated hereby and by the Transaction Documents.

     Section 5.07. Issuer and Servicer Representations and Warranties. The Notes have been duly and validly authorized for issue and sale as contemplated by this Agreement, and when duly executed and authenticated in accordance with the terms of the Indenture, and when duly delivered to and paid for by the Initial Purchasers in accordance with this Agreement, will be duly and validly issued and outstanding and will constitute the legal, valid and binding obligations of the Issuer enforceable in accordance with their terms (except as enforcement thereof may be limited by bankruptcy, insolvency, or other similar laws relating to or affecting generally the enforcement of creditors’ rights or by general equitable principles) and will be entitled to the benefits of the Indenture, this Agreement and the other Transaction Documents.

     Section 5.08. No Registration of the Note; No Qualification of the Indenture. It is not necessary, in connection with the offer, sale and delivery of the Notes to the Initial Purchasers to

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register any Note under the Securities Act or to qualify the Indenture under the Trust Indenture Act of 1939, as amended.

     Section 5.09. Power and Authority. Such Person has the requisite power and authority (a) to execute and deliver this Agreement, the Notes and the other Transaction Documents to which it is a party and (b) to perform its obligations under this Agreement, the Notes and the other Transaction Documents to which it is a party.

     Section 5.10. Confirmation of Written Information. All written information furnished by such Person to the Initial Purchasers, any Financial Institution or the Agents pursuant to or in connection with any Transaction Documents or any transaction contemplated herein or therein with respect to the Trust Estate or such Person is true and correct in all material respects and is not misleading.

Article VI

COVENANTS OF THE PARTIES

     Section 6.01. Information from the Transaction Parties. So long as the Notes remain outstanding, each of the Contributor and the Issuer will furnish to the Purchasers and the Agents:

          (a) a copy of each certificate, opinion, report, statement, notice or other communication (other than investment instructions) furnished by or on behalf of such Person to the Indenture Trustee under the Indenture, concurrently therewith, and promptly after receipt thereof, a copy of each notice, demand or other communication received by or on behalf of such Person under the Indenture, the Sale and Servicing Agreement or the Contribution Agreement;

          (b) such other information (including financial information), documents, records or reports respecting the Trust Estate, the Receivables, and each such Person as the Initial Purchasers, the Agents or any Financial Institution may from time to time reasonably request; and

          (c) as soon as possible and in any event within five Business Days after the occurrence thereof, notice of each Termination Event, Event of Default or Servicer Event of Default or event which with the giving of notice or the passage of time or both would constitute a Termination Event, Event of Default or Servicer Event of Default.

     Section 6.02. Covenants.

          (a) Each of the Contributor and the Issuer will duly observe and perform each of its covenants set forth in each Transaction Document to which such Person is a party (including, without limitation, their obligations to furnish information to the Purchasers and the Agents in accordance with Section 6.01 hereof, and by the Contributor in its roles as Servicer and as Custodian).

          (b) The Contributor and the Issuer shall deliver to the Agents for distribution to the Noteholders on or prior to June 20, 2005 an opinion of local counsel from the states of

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California, Arizona, Tennessee, Florida and Texas with respect to perfection matters and compliance with applicable state law in form and substance satisfactory to the Initial Purchasers.

Article VII

ADDITIONAL COVENANTS

     Section 7.01. Expenses. Except as otherwise expressly provided herein, all costs and expenses (including, without limitation, all Rating Agency fees and legal fees, costs and expenses in connection with (a) due diligence, structuring, negotiating, documenting and closing the facility evidenced by the Transaction Documents, (b) advising each party as to its rights under the Transaction Documents, (c) each amendment, waiver, restatement, supplement or other modification to any Transaction Document and (d) each enforcement action necessary or desirable with respect to the facility evidenced by the Transaction Documents) incurred in connection with this Agreement and the Transaction Documents and the transactions contemplated hereby, shall (as between the Issuer, the Initial Purchasers, the Agents and the Financial Institutions be paid by the Contributor).

     Section 7.02. Restrictions on Transfer. Each Purchaser agrees that it will comply with the restrictions on transfer of the Notes set forth in Section 2.07 of the Indenture and that it will resell the Notes only in compliance with such restrictions.

     Section 7.03. Securities Act. The Notes purchased by each Purchaser pursuant to this Agreement will be acquired for investment only without a view to any public distribution thereof, and no Purchaser will offer to sell or otherwise dispose of the respective Notes so acquired by it (or any interest therein) in violation of any of the registration requirements of the Securities Act or any applicable state or other securities laws. Each Purchaser acknowledges that it has no right to require the Issuer to register under the Securities Act or any other securities law the Notes to be acquired by such Purchaser pursuant to this Agreement.

Article VIII

INDEMNIFICATION

     Section 8.01. Indemnification by the Contributor. The Contributor agrees to indemnify and hold harmless each Indemnified Party against any and all losses, claims, suits, damages, costs, liabilities or expenses of any kind (including legal and accounting fees) (collectively, “Losses”), as incurred (payable promptly upon written request), for or on account of or arising from or in connection with this Agreement, or any acquisition by any Noteholder of any Note or any interest therein, including any breach of any representation, warranty or covenant of the Contributor or the Issuer in this Agreement or in any certificate or other written material delivered pursuant hereto to the extent any such breach results in a Loss; provided, however, that the Contributor shall not be so required to indemnify any such Person or otherwise be liable to any such Person hereunder for any Losses (i) resulting solely from the performance of the Receivables, or (ii) arising solely from such Person’s gross negligence or willful misconduct.

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     Section 8.02. Procedure. With respect to a claim made by any Person against an Indemnified Party (a “Third Party Claim”), such Indemnified Party shall notify the Contributor in writing of the Third Party Claim within a reasonable time after receipt by such Indemnified Party of written notice of the Third Party Claim unless the Contributor shall have previously obtained actual knowledge thereof. Thereafter, the Indemnified Party shall deliver to the Contributor, within a reasonable time after the Indemnified Party’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnified Party relating to the Third Party Claim. No failure to give such notice or deliver such documents shall affect the rights to indemnity hereunder.

     Section 8.03. Defense of Claims. If a Third Party Claim is made against an Indemnified Party, (a) the Contributor will be entitled to participate in the defense thereof and, (b) if it so chooses, to assume the defense thereof with counsel selected by the Contributor, provided that in connection with such assumption such counsel is reasonably satisfactory to the Indemnified Party. Should the Contributor so elect to assume the defense of a Third Party Claim, the Contributor will not be liable to the Indemnified Party for any legal expenses subsequently incurred by the Indemnified Party in connection with the defense thereof unless (i) employment of such counsel has been specifically authorized by the Contributor, (ii) the Indemnified Party shall have been advised by its counsel that there may be a conflict of interest between the Indemnified Party and the Contributor in the defense of such action (in which case the Contributor shall not have the right to direct the defense of such action on the Indemnified Party’s behalf), or (iii) the Contributor shall have failed to contest or defend such action within a reasonable time or failed to continue to employ counsel satisfactory to the Indemnified Party, in any of which cases the fees and expenses of the Indemnified Party’s counsel shall be at the Contributor’s cost and expense and subject to the indemnity provided for hereunder. If the Contributor elects to assume the defense of a Third Party Claim, the Indemnified Party will (i) cooperate in all reasonable respects with the Contributor in connection with such defense and (ii) not admit any liability with respect to, or settle, compromise or discharge, such Third Party Claim without the Contributor’s prior written consent, as the case may be. If the Contributor shall assume the defense of any Third Party Claim, the Contributor shall not settle, compromise or discharge such Third Party Claim without the prior written consent of each applicable Indemnified Party, unless such settlement, compromise or discharge includes a complete release of each such Indemnified Party reasonably satisfactory to such Indemnified Party. If the Contributor shall assume the defense of any Third Party Claim, except as provided above, the Indemnified Party shall be entitled to participate in (but not control) such defense with its own counsel at its own expense. If the Contributor does not assume the defense of any such Third Party Claim, the Indemnified Party may defend the same in such manner as it may deem appropriate, including settling such claim or litigation after giving notice to the Contributor of such terms and the Contributor will promptly reimburse the Indemnified Party upon written request. Anything contained in this Agreement to the contrary notwithstanding, the Contributor shall not be entitled to assume the defense of any part of a Third Party Claim that seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnified Party or unless the Contributor has demonstrated to the Indemnified Party reasonable financial capacity to meet its obligations with respect to such Third Party Claim.

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Article IX

MISCELLANEOUS

     Section 9.01. Amendments. No amendment or waiver of any provision of this Agreement shall in any event be effective unless the same shall be in writing and signed by all of the parties hereto, and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

     Section 9.02. Notices. All notices and other communications provided for hereunder shall, unless otherwise stated herein, be in writing (including telecopies) and mailed, telecopied or delivered, as to each party hereto, at its address set forth in Schedule I hereto or at such other address as shall be designated by such party in a written notice to the other party hereto. All such notices and communications shall only be effective upon receipt thereof.

     Section 9.03. No Waiver; Remedies. No failure on the part of any party hereto to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

     Section 9.04. Binding Effect; Assignability. (a) This Agreement shall be binding upon and inure to the benefit of each party hereto and their respective permitted successors and assigns (including any subsequent Holders of the Notes); provided, however, neither the Contributor or the Issuer shall have the right to assign its rights or any claims hereunder or any interest herein (by operation of law or otherwise).

          (b) Each Financial Institution may at any time and from time to time assign to one or more Persons (each a “Purchasing Financial Institution”) all or any part of its rights and obligations under this Agreement and the related Liquidity Agreement pursuant to an assignment agreement, in form and substance satisfactory to the Lender Group Agents (the “Assignment Agreement”), executed by such Purchasing Financial Institution and such selling Financial Institution, provided, however, that, prior to the occurrence of a Termination Event or a downgrade of the credit rating of any CP Issuing Purchaser’s Commercial Paper in effect on the Initial Funding Date, the Contributor shall have consented (which consent may not be unreasonably withheld or delayed) to any assignments to Purchasing Financial Institutions other than Lender Group affiliates. Upon delivery of the executed Assignment Agreement to the Administrative Agent, such selling Financing Institution shall be released from its obligations hereunder to the extent of such assignment. Thereafter the Purchasing Financial Institution shall for all purposes be a Financial Institution party to this Agreement and shall have all the rights and obligations of a Financial Institution under this Agreement to the same extent as if it were an original party hereto and no further consent or action by the Issuer, the Contributor, any Purchaser, the Purchasing Financial Institution or the Agents shall be required.

          (c) The Initial Purchasers and the Financial Institutions may, in the ordinary course of their respective business and in accordance with applicable law, at any time sell to one or more Persons (each, a “Participant”), participating interests in all or a portion of their respective rights

19

and obligations under this Agreement. Notwithstanding any such sale by any Purchaser or Financial Institution of participating interests to a Participant, such person’s rights and obligations under this Agreement shall remain unchanged, the Purchasers and the Financial Institutions shall remain solely responsible for the performance thereof, and the Issuer and the Contributor shall continue to deal solely and directly with the Purchasers and the Financial Institutions in connection with the Purchasers’ and the Financial Institutions’ rights and obligations under this Agreement. Each of the Issuer and the Contributor also agrees that each Participant shall be entitled to the benefits of Article VIII hereof; provided, however, that all amounts payable by the Contributor to any such Participant shall be limited to the amounts which would have been payable to the Purchaser or the Financial Institutions selling such participating interest had such interest not been sold.

          (d) This Agreement shall create and constitute the continuing obligation of the parties hereto in accordance with its terms, and shall remain in full force and effect until such time (i) as all amounts payable with respect to the Notes shall have been indefeasibly paid in full and (ii) all amounts owed to the Agents, the Purchasers and the Financial Institutions under this Agreement, the Indenture and each other Transaction Document shall have been indefeasibly paid in full; provided, however, that the rights and remedies with respect to any breach of representations and warranties made by the Issuer or the Contributor pursuant to Article V hereof and the rights, remedies and provisions of Sections 2.04, 2.05, 7.01, 7.02, Article VIII, and Sections 9.06, 9.11, 9.12 and 9.13 shall be continuing and survive any termination of this Agreement.

     Section 9.05. Provision of Documents and Information. Each of the Issuer and the Contributor acknowledges and agrees that the Purchasers and the Agents are permitted to provide to permitted assignees and participants, the placement agents for their commercial paper notes, the rating agencies with respect to such notes, and other liquidity and credit providers under their respective commercial paper programs, opinions, notes, documents and other information relating to such Person and the Receivables delivered to such Purchaser and/or the Agents pursuant to this Agreement.

     Section 9.06. Governing Law; Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING NEW YORK GENERAL OBLIGATIONS LAW SECTIONS 5-1401 AND 5-1402 BUT OTHERWISE WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS). EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND ANY APPELLATE COURT HAVING JURISDICTION TO REVIEW THE JUDGMENTS THEREOF. EACH OF THE PARTIES HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY OF THE AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.

     Section 9.07. No Proceedings. (a) Each of the Purchasers and the Financial Institutions agrees that it shall not at any time file or join in the filing of, a petition against the Issuer under the Federal Bankruptcy Code, or join in the commencement of any bankruptcy, reorganization,

20

arrangement, insolvency, liquidation or other similar proceeding against the Issuer or the Trust Estate.

          (b) So long as this Agreement is in effect, and for one year and one day following its termination and the termination of the Sale and Servicing Agreement, the Contribution Agreement and the Indenture, the Purchasers and the Financial Institutions will not file, and shall cause any Participant not to file, any involuntary petition or otherwise institute any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding or other proceeding under any federal or state bankruptcy or similar law against or by the Issuer.

     Section 9.08. Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts (including, in each case, by facsimile or other electronic means), each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.

     Section 9.09. Waiver of Set-off. Each of the Issuer and the Contributor hereby waives any right of set-off that it may have against any Purchaser for any failure of such Purchaser to make an Advance in accordance with the terms of this Agreement.

     Section 9.10. Corporate Obligations – Issuer. The obligations of the Issuer under this Agreement are solely the corporate obligations of such Person. No recourse shall be had for the payment of any fee or other obligation or claim arising out of or relating to this Agreement or any other agreement, instrument, document or certificate executed and delivered or issued by the Issuer or any officer thereof in connection therewith, against any stockholder, employee, officer or director of the Issuer in their capacity as such.

     Section 9.11. Survival. All representations, warranties, covenants, guaranties and indemnifications contained in this Agreement and in any document, note or statement delivered pursuant hereto or in connection herewith shall survive the sale, transfer or repayment of the Notes.

     Section 9.12. Appointment of Administrative Agent for the Purchasers and Lender Group Agents. Each Purchaser and each Lender Group Agent hereby irrevocably designates and appoints JPMorgan Chase Bank, N.A. as Administrative Agent hereunder, and authorizes the Administrative Agent to take such action on its behalf under the provisions of this Agreement and the other Transaction Documents and to exercise such powers and perform such duties as are expressly delegated to the Administrative Agent by the terms of this Agreement and the other Transaction Documents, together with such other powers as are reasonably incidental thereto. The Administrative Agent hereby agrees to provide to the Noteholders a copy of (i) each certification received by it from the Servicer pursuant to Section 6.06(a) of the Sale and Servicing Agreement, (ii) any notice of termination given by the Administrative Agent to the Servicer and the Backup Servicer pursuant to Section 10.02 of the Sale and Servicing Agreement and (iii) the Schedule of Receivables pursuant to Section 2.12(ii)(C) of the Indenture.

          Notwithstanding any provision to the contrary elsewhere in this Agreement and the other Transaction Documents, the Administrative Agent shall not have any duties or responsibilities,

21

except those expressly set forth herein and in the other Transaction Documents, or any fiduciary relationship with any other party hereto or any Noteholder, and no implied covenants, functions, responsibilities, duties, obligations or liabilities on the part of the Administrative Agent shall be read into this Agreement or any other Transaction Document or otherwise exist against the Administrative Agent. The provisions hereof are solely for the benefit of the administrative Agent, and no other party shall have any rights as a third-party beneficiary or otherwise under any of the provisions hereof. In performing its functions and duties hereunder, the Administrative Agent shall act solely as the agent of the Purchasers and the Lender Group Agents and does not assume nor shall it be deemed to have assumed any obligation or relationship of trust or agency with or for any other Noteholder or the Issuer or any of their respective successors and assigns. The Administrative Agent may execute any of its duties under this Agreement by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care.

          Neither the Administrative Agent nor any of its directors, officers, agents or employees shall be (a) liable for any action lawfully taken or omitted to be taken by it or them under or in connection with this Agreement (except for its, their or such person’s own gross negligence or willful misconduct), or (b) responsible in any manner to any of the Purchasers and the Lender Group Agents for any recitals, statements, representations or warranties contained herein or in any other Transaction Document or in any certificate, report, statement or other document referred to or provided for in, or received under or in connection with, the Advances or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of the Advances, this Agreement and the other Transaction Documents or any other document furnished in connection therewith or herewith, or for the satisfaction of any condition specified in the Indenture. The Administrative Agent shall not be under any obligation to any Purchaser or Lender Group Agent to ascertain or to inquire as to the observance or performance of any of the agreements or covenants contained in, or conditions of, the Advances, or to inspect the properties, books or records of any Person.

          The Administrative Agent shall in all cases be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document believed by it to be genuine and correct and to have been signed, sent or made by the proper person or persons and upon advice and statements of legal counsel, independent accountants and other experts selected by the Administrative Agent. The Administrative Agent shall in all cases be fully justified in failing or refusing to take any action under this Agreement or any other document furnished in connection herewith or therewith unless it shall first receive such advice or concurrence of the Majority Noteholders, or all of the Noteholders, as required by the Transaction Documents, as it deems appropriate and it shall be indemnified to its satisfaction by the Noteholders against any and all liability, cost and expense which may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement in accordance with a request of the Majority Noteholders or all of the Noteholders as required by the Transaction Documents and such request and any action taken or failure to act pursuant thereto shall be binding upon the Purchasers and the Lender Group Agents.

22

          Each Purchaser and Lender Group Agent expressly acknowledges that neither the Administrative Agent, nor any of its officers, directors, employees, agents, attorneys-in-fact or affiliates has made any representations or warranties to it and that no act by the Administrative Agent hereafter taken, including, without limitation, any review of the affairs of the Issuer and the Contributor, shall be deemed to constitute any representation or warranty by the Administrative Agent. The Administrative Agent shall not have any duty or responsibility to provide any Purchaser or Lender Group Agent with any credit or other information concerning the business, operations, property, prospects, financial and other condition or creditworthiness of the Issuer, the Contributor or any other Person which may come into the possession of the Administrative Agent or any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates.

          The Purchasers agree to indemnify the Administrative Agent (in its capacity as Administrative Agent) and its officers, directors, employees, representatives and agents (to the extent not reimbursed by the Issuer and without limiting the obligation of the Issuer to do so), ratably according to their pro rata shares of the aggregate Note Principal Balance, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever (including, without limitation, the reasonable fees and disbursements of counsel for the Administrative Agent or such person in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not the Administrative Agent or such person shall be designated a party thereto) that may at any time be imposed on, incurred by or asserted against the Administrative Agent or such person as a result of, or arising out of, or in any way related to or by reason of, any of the transactions contemplated hereunder or the other Transaction Documents or the execution, delivery or performance of this Agreement or the other Transaction Documents or the Advances or any other document furnished in connection herewith or therewith (but excluding any such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting solely from the gross negligence or willful misconduct of the Agent or such Person).

          The Administrative Agent and its Affiliates may make loans to, accept deposits from and generally engage in any kind of business with any other party hereto or any Affiliate of any other party hereto or any Noteholder as though the Administrative Agent were not the Administrative Agent hereunder. With respect to the purchases of Advances pursuant to this Agreement or the other Transaction Documents, JPMorgan Chase Bank, N.A. as a Noteholder shall have the same rights and powers under this Agreement and the Transaction Documents as any Noteholder and may exercise the same as though it were not the Administrative Agent, and the terms “Financial Institution” and “Noteholder” and the plural forms thereof shall include JPMorgan Chase Bank, N.A. in its individual capacity.

          The Administrative Agent may, upon ten (10) days’ notice to the Issuer and the Purchasers, resign as Administrative Agent for the Purchasers and the Lender Group Agents. If the Administrative Agent shall resign as Agent for the Purchasers and the Lender Group Agents, then (i) the Majority Noteholders during such 10-day period shall appoint a successor Administrative Agent or (ii) if the Majority Noteholders do not so appoint a successor Administrative Agent after the closing of such 10-day period, the Administrative Agent shall appoint a commercial bank to be the Administrative Agent or petition a court of competent

23

jurisdiction to appoint a successor Administrative Agent for the Purchasers and the Lender Group Agents. In either case, such successor agent shall succeed to the rights, powers and duties of the Administrative Agent and the term “Administrative Agent” shall mean such successor agent, effective upon its appointment and acceptance, and the former Administrative Agent’s rights, powers and duties as Administrative Agent shall be terminated, without any other or further act or deed on the part of such former Administrative Agent or any of the parties to this Agreement. After the retiring Administrative Agent’s resignation hereunder as Administrative Agent, the provisions of this Section and Sections 2.04, 2.05, 7.02, 8.01, 9.11, 9.12 and 9.13 shall continue to inure to its benefit as to any actions taken or omitted to be taken by it.

     Section 9.13. Bankruptcy Petition Against any CP Issuing Purchaser. Each party hereto hereby covenants and agrees, on behalf of itself and each of its Affiliates, that prior to the date which is one year and one day after the payment in full of all indebtedness for borrowed money of any CP Issuing Purchaser, such party will not institute against, or join any other Person in instituting against, any CP Issuing Purchaser any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding under the laws of the United States or any state of the United States. The agreements set forth in this paragraph and the parties’ respective obligations hereunder shall survive termination of this Agreement and repayment of the Notes.

     Section 9.14. Trial by Jury Waived. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING DIRECTLY OR INDIRECTLY OUT OF, UNDER OR IN CONNECTION WITH ANY OF THE TRANSACTION DOCUMENTS OR THE TRANSACTION. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT IT WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THE TRANSACTION DOCUMENTS TO WHICH IT IS A PARTY BY, AMONG OTHER THINGS, THIS WAIVER.

     Section 9.15. Severability of Provisions. If one or more of the provisions of this Agreement shall be held invalid for any reason, such provisions shall be deemed severable from the remaining provisions of this Agreement in the jurisdictions in which they are held invalid and shall in no way affect the validity or enforceability of such remaining provisions. To the extent permitted by law, the parties hereto hereby waive any law which renders any provision of this Agreement prohibited or unenforceable.

     Section 9.16. Captions. The article, paragraph and other headings contained in this Agreement are for reference purposes only, and shall not limit or otherwise affect the meaning hereof.

     Section 9.17. Integration. This Agreement and each other Transaction Document contain the final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire agreement among the parties

24

hereto with respect to the subject matter hereof superseding all prior oral or written understandings.

     Section 9.18. Limitation of Liability. Notwithstanding any other provision herein or elsewhere, this Agreement has been executed and delivered by Wilmington Trust Company, not in its individual capacity, but solely in its capacity as Owner Trustee of the Issuer under the Issuer Trust Agreement, and in no event shall Wilmington Trust Company or the Owner Trustee have any liability in respect of the representations, warranties, or obligations of the Issuer hereunder (or under any other Transaction Document), as to all of which recourse shall be had solely to the assets of the Issuer, and for all purposes of this Agreement and each other Transaction Document, the Owner Trustee and Wilmington Trust Company shall be entitled to the benefits of the Issuer Trust Agreement.

     Section 9.19. Pre-Funding Exceptions. Notwithstanding anything to the contrary contained herein or in the Contribution Agreement, the Sale and Servicing Agreement, the Indenture or any of the related documents, the parties hereto intend to “pre-fund” the Issuer’s purchase of receivables on a weekly basis by means of the Pre-Funding Account. Until such time as the Formal Transfer Requirements are completed, any Pre-Funding Receivables will not satisfy the requirements and procedures prescribed by such documents that would otherwise be applicable to subsequently transferred receivables and none of the parties intend for such delay in compliance to cause or create a default under any such agreements.

     Section 9.20. Amendment and Restatement. This Agreement is an amendment and restatement of the Prior Agreement. On and after the Effective Date of this Agreement, each reference in the other Transaction Documents to the “Note Purchase Agreement,” “thereunder,” “thereof,” “therein” or any other expression of like import referring to the Prior Agreement shall mean and be a reference to this Agreement. The amendment and restatement of the Prior Agreement shall not constitute a novation or termination of the Transaction Documents and all obligations thereunder are in all respects continuing with only the terms thereof being modified as provided herein or in any other amended, restated, supplement or otherwise modified Transaction Document. The execution, delivery and effectiveness of this Agreement shall not operate as a waiver of any right, power or remedy of the Lender Group Agents or the Administrative Agent under any of the Transaction Documents or constitute a waiver of any provision of any of the Transaction Documents.

25

     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers hereunto duly authorized, as of the date first above written.

BAY VIEW ACCEPTANCE CORPORATION, as Contributor
By
	Name:
	Title:

Signature Page to Note Purchase Agreement

BAY VIEW 2005 WAREHOUSE TRUST, as Issuer
By:	Wilmington Trust Company, not in its individual capacity but solely as Owner Trustee

Signature Page to Note Purchase Agreement

FALCON ASSET SECURITIZATION CORPORATION, as Purchaser
By
	Name: George S. Wilkins
	Title: Authorized Signer

Signature Page to Note Purchase Agreement

JPMORGAN CHASE BANK, N.A., as Financial Institution, Lender Group Agent and Administrative Agent
By
	Name: George S. Wilkins
	Title: Authorized Signer

Signature Page to Note Purchase Agreement

FAIRWAY FINANCE COMPANY, LLC, as Purchaser
By
	Name:
	Title:

Signature Page to Note Purchase Agreement

HARRIS NESBITT CORP., as Administrator and Lender Group Agent
By
	Name:
	Title:

Signature Page to Note Purchase Agreement

BANK OF MONTREAL, as Financial Institution
By
	Name:
	Title:

Signature Page to Note Purchase Agreement

AGREED AND ACKNOWLEDGED TO BY:

BAY VIEW WAREHOUSE CORPORATION,
      as Depositor

By
	Name:
	Title:

BAY VIEW ACCEPTANCE CORPORATION
     as Servicer and as Custodian

By
	Name:
	Title:

Signature Page to Note Purchase Agreement

SCHEDULE I

ADDRESSES FOR NOTICES

Bay View Acceptance Corporation
1840 Gateway Drive, Suite 300
San Mateo, California 94404
Attention: Counsel
Phone: (650) 312-6807
Fax: (650) 573-6381

Bay View 2005 Warehouse Trust
c/o Wilmington Trust Company, as Owner Trustee
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
Phone: (302) 636-6119
Fax: (302) 636-4148

With a copy to:

Bay View Acceptance Corporation
1840 Gateway Drive, Suite 300
San Mateo, California 94404
Attention: Counsel
Phone: (650) 312-6807
Fax: (650) 573-6381

Falcon Asset Securitization
Asset Backed Finance
Suite IL1-0079
1 Bank One Plaza
Chicago, Illinois 60670-0079
Fax: (312) 732-3600

JPMorgan Chase Bank, N.A.
Asset Backed Finance
Suite IL1-0594
1 Bank One Plaza
Chicago, Illinois 60670-0079
Fax: (312) 732-1844

Bank of Montreal
Address: 115 S. LaSalle St., Floor 12W
Chicago, IL 60603
Attn: Gary Herron

Phone: 312-845-2011
Fax: 312-312-750-6057
Email: Gary.Herron@Bmo.com

Fairway Finance Company, LLC
Address: c/o Lord Securities Corporation
48 Wall Street, 27th Floor
New York, New York 10005
Attn: Orlando Figueroa
Phone: (212) 346-9007
Fax: (212) 346-9012
Email: of@lordspv.com

Copy to:

Harris Nesbitt Corp.
Address: 115 S. LaSalle St., Floor 13W
Chicago, IL 60603
Attn: Conduit Administration
Phone: 312-461-5640
Fax: 312-461-3189
Email: fundingdesk@harrisnesbitt.com

To the Indenture Trustee:

JPMorgan Chase Bank, N.A.
600 Travis St., 9^th Floor
Houston, Texas 77002
Attn: Structured Finance – Bay View 2005
Phone: (713) 216-3682
Fax: (713) 216-4880

Exhibit A

[Pre-Funding Servicer Report]

EX-10.4

Exhibit 10.4

EXECUTION COPY

Amended and Restated
Sale and Servicing Agreement

by and among

Bay View 2005 Warehouse Trust,
as Issuer,

Bay View Warehouse Corporation,
as Depositor

Bay View Acceptance Corporation,
as Servicer and as Contributor

and

JPMorgan Chase Bank, N.A.,
as Indenture Trustee

and

Systems & Services Technologies, Inc.,
as Backup Servicer

Dated as of November 11, 2005

Bay View 2005 Warehouse Trust
Up to $450,000,000 Warehouse Funding Facility

Table of Contents

	Page
Article I Definitions		2
Section 1.01. Defined Terms		2
Article II Transfer and Acquisition of Receivables		5
Section 2.01. Transfer and Acquisition of Receivables		5
Section 2.02. The Closing		6
Section 2.03. Funding Dates		6
Article III Representations and Warranties		7
Section 3.01. Representations and Warranties of the Issuer		7
Section 3.02. Representations and Warranties of the Depositor		8
Section 3.03. Repurchase of Receivables		21
Section 3.04. Issuer’s Assignment of Repurchased Receivables		22
Section 3.05. Survival of Representations and Warranties		22
Article IV Conditions		23
Section 4.01. Conditions to Obligation of the Issuer		23
Section 4.02. Conditions to Obligation of the Depositor		25
Article V Covenants of the Depositor		25
Section 5.01. Protection of Right, Title and Interest		25
Section 5.02. Other Liens or Interest		26
Section 5.03. Principal Executive Office; Jurisdiction of Organization		27
Section 5.04. Costs and Expenses		27
Section 5.05. No Waiver		27
Section 5.06. Depositor’s Records		27
Section 5.07. Cooperation by Depositor		27
Section 5.08. Notice of Breach		28
Section 5.09. Liability of Depositor; Indemnities		28
Section 5.10. Merger or Consolidation of, or Assumption of the Obligations of, Depositor		29
Section 5.11. Limitation on Liability of Contributor, Depositor and Others		30
Section 5.12. Contributor and Depositor May Own Notes		30
Section 5.13. Additional Covenants of the Depositor		31
Article VI Administration and Servicing of Receivables		31
Section 6.01. Appointment and Duties of the Servicer		31
Section 6.02. Realization upon Receivables		33
Section 6.03. Insurance		34
Section 6.04. Maintenance of Security Interests in Vehicles		35
Section 6.05. Servicing Fee; Payment of Certain Expenses by Servicer		36

i

	Page
Section 6.06. Weekly Servicer Report; Monthly Servicer Report; Pre-Funding Servicer Report		37
Section 6.07. Annual Statement as to Compliance; Notice of Servicer Event of Default; Annual and Quarterly Financial Statements		37
Section 6.08. Annual Independent Accountants’ Report		38
Section 6.09. Access to Certain Documentation and Information Regarding Receivables		39
Section 6.10. Recalculation of Monthly Servicer Report		39
Section 6.11. Fidelity Bond		41
Section 6.12. No Offset		41
Section 6.13. Delivery of Backup Tapes to Backup Servicer		41
Section 6.14. Covenants of Servicer		41
Section 6.15. Purchase of Receivables upon Breach		42
Section 6.16. Custodian Files		42
Article VII Collections		43
Section 7.01. Collection of Receivable Payments; Modification and Amendment of Receivables		43
Article VIII Representations, Warranties and Covenants		45
Section 8.01. Covenants, Representations and Warranties of the Servicer		45
Section 8.02. Purchase of Receivables upon Breach of Representation and Warranty		48
Section 8.03. Representations of Backup Servicer		49
Article IX The Servicer and Backup Servicer		50
Section 9.01. Liability of Servicer; Indemnities		50
Section 9.02. Merger or Consolidation of, or Assumption of the Obligations of, the Servicer and Backup Servicer		52
Section 9.03. Limitation on Liability of Servicer, the Backup Servicer and Others		53
Section 9.04. Delegation of Duties		54
Section 9.05. Servicer and Backup Servicer Not to Resign		54
Section 9.06. Backup Servicer’s Reliance; Liability; Errors		55
Article X Servicer Events of Default		56
Section 10.01. Servicer Event of Default		56
Section 10.02. Consequences of a Servicer Event of Default		58
Section 10.03. Appointment of Successor		60
Section 10.04. Notification		61
Section 10.05. Waiver of Past Defaults		62
Article XI Administration of Trust Duties		62
Section 11.01. Administrative Duties		62
Article XII Termination of Agreement		63

ii

	Page
Section 12.01. Term		63
Section 12.02. Effect of Termination		63
Article XIII Miscellaneous Provisions		63
Section 13.01. Amendment		63
Section 13.02. Waivers		63
Section 13.03. Notices		63
Section 13.04. Severability of Provisions		66
Section 13.05. Rights Cumulative		66
Section 13.06. No Offset		66
Section 13.07. Powers of Attorney		66
Section 13.08. Assignment and Binding Effect		67
Section 13.09. Captions		67
Section 13.10. Legal Holidays		67
Section 13.11. Counterparts		67
Section 13.12. Governing Law		67
Section 13.13. Consent to Jurisdiction		67
Section 13.14. Trial by Jury Waived		68
Section 13.15. Parties		68
Section 13.16. Relationship of the Parties		68
Section 13.17. No Bankruptcy Petition Against the Issuer or the Depositor		68
Section 13.18. Third Party Beneficiaries		69
Section 13.19. Reports to Holders		69
Section 13.20. Obligations of Depositor		69
Section 13.21. Subsequent Pledge		69
Section 13.22. Protection of Title to Trust		69
Section 13.23. Limitation of Liability		71
Section 13.24. Integration		72
Section 13.25. Limitation on Recourse		72
Section 13.26. Repurchase Option		72
Section 13.27. Amendment and Restatement		73
Schedule I — Initial Receivables
Schedule II — Backup Servicer Fees
Exhibit A — Form of Assignment and Assumption Agreement		A-1
Exhibit B — Form of Contract		B-1
Exhibit C — Contributor’s Underwriting Guidelines		C-1
Exhibit D — Servicer’s Monthly Report		D-1
Exhibit E — Bay View Acceptance Corporation’s Collection Policy		E-1
Exhibit F — Form of Loan Master File and History Information		F-1
Exhibit G — Servicer’s Weekly Report		G-1
Exhibit H — Pre-Funding Servicer Report		H-1

iii

Sale and Servicing Agreement

     This Amended and Restated Sale and Servicing Agreement (as amended and supplemented from time to time, the “Sale and Servicing Agreement” or the “Agreement”) is made as of November 11, 2005 (the “Effective Date”), by and among Bay View 2005 Warehouse Trust, a statutory trust established under the laws of the State of Delaware, as issuer (the “Issuer”), Bay View Warehouse Corporation, a corporation established under the laws of the State of Delaware, as depositor (the “Depositor”), Bay View Acceptance Corporation (“Bay View Acceptance”), a Nevada corporation, as servicer (the “Servicer”) and as contributor (the “Contributor”), JPMorgan Chase Bank, N.A., as indenture trustee (the “Indenture Trustee”), and Systems & Services Technologies, Inc., as backup servicer (the “Backup Servicer”). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in that certain Indenture dated as of even date herewith (the “Indenture”) by and between the Issuer and the Indenture Trustee.

Preliminary Statement

     Whereas, the Issuer, the Depositor, the Servicer, the Indenture Trustee, and the Backup Servicer (collectively, the “Parties”), entered into the Sale and Servicing Agreement, dated as June 20, 2005 (the “Prior Agreement”); and

     Whereas, the Parties wish to amend and restate the Prior Agreement.

     Whereas, the Indenture provides for the issuance by the Issuer of its Automobile Receivables Backed Notes, Series 2005-1 (the “Notes”) to the Noteholders; and

     Whereas, Bay View Acceptance has acquired and will acquire certain motor vehicle receivables evidenced by retail installment contracts and security agreements secured by security interests in the related Financed Vehicles; and

     Whereas, pursuant to the Contribution Agreement and each Contributor Assignment on the Closing Date and on each Funding Date, Bay View Acceptance, as Contributor, contributed the Initial Receivables and will contribute the related Subsequent Receivables, respectively, to the Depositor; and

     Whereas, pursuant to the terms of the Indenture, on the Closing Date, the Issuer pledged the Receivables and the security interests in the Financed Vehicles and the other items of the Trust Estate to the Indenture Trustee for the benefit of the Noteholders, the Agent and the Financial Institutions; and

     Whereas, pursuant to the terms of the Custodian Agreement, the Depositor is obligated to deliver or cause to be delivered to the Custodian, the documents to be included in the Custodian File, which are to be held by the Custodian pursuant to the terms of the Custodian Agreement; and

     Whereas, the Issuer, the Depositor, the Servicer, the Indenture Trustee and the Backup Servicer wish to enter into this Sale and Servicing Agreement and each Depositor Assignment pursuant to which the Depositor transferred on the Closing Date and on each Funding Date will

transfer the Initial Receivables and the related Subsequent Receivables, respectively, to the Issuer, and the Servicer will perform the duties as described herein, including servicing and administering collections on all of the Receivables transferred to the Issuer pursuant to the terms of this Agreement and pledged to the Indenture Trustee pursuant to the terms of the Indenture, realizing upon such Receivables, and administering claims made under the Insurance Policies.

     Now Therefore, in consideration of the covenants and conditions contained in this Sale and Servicing Agreement, the parties, intending to be legally bound, hereby agree as follows:

Article I

Definitions

     Section 1.01. Defined Terms. Capitalized terms used but not defined in this Sale and Servicing Agreement shall have the respective meanings assigned to them in the Indenture and the Contribution Agreement unless the context otherwise requires, and the definitions of such terms are equally applicable both to the singular and plural forms of such terms and to the masculine, feminine and neuter genders of such terms.

     “Actual Payment” means, with respect to a Collection Period and a Receivable, all payments received from or on behalf of an Obligor with respect to such Receivable, all of which amounts shall be deposited into the Local Bank Account for deposit into the Collection Account. An Actual Payment does not include Repurchase Prices.

     “Backup Servicer Account” means Account Number 2806462 in the name of the Backup Servicer at Commerce Bank N.A (ABA# 101000019).

     “Backup Servicer Lockbox” means the locked postal box associated with the Backup Servicer Account with respect to which Commerce Bank N.A. has been granted exclusive access for the purpose of retrieving and processing payments made on the Receivables.

     “Backup Servicer Termination Fee” means the product of (x) 2 times (y) the Monthly Fee (as set forth in item I.B. of Schedule II hereto) in effect at the time of the Backup Servicer’s termination pursuant to Section 6.01(a) hereof.

     “Backup Servicing Fee” means the fee payable to the Backup Servicer as set forth in Schedule II hereto including, if applicable, the Backup Servicer Termination Fee.

     “Chapter 13 Receivable” means a Receivable (a) the Obligor of which is subject to a proceeding under Chapter 13 of the Bankruptcy Code, (b) the terms of which have been set forth in a plan confirmed in that Chapter 13 proceeding, under which plan, no default has occurred, and (c) on which at least one payment has been made since the confirmation of the plan in the Chapter 13 proceeding.

     “Collection Policy” means the servicing policies and procedures utilized by the Servicer in connection with its servicing of the Receivables, a copy of which is attached hereto as Exhibit E, or, with respect to the Backup Servicer as successor Servicer, the servicing policies and procedures utilized by the Backup Servicer in connection with its servicing of the Receivables.

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     “Collection Records” means all manually prepared or computer generated records relating to collection efforts or payment histories with respect to the Receivables.

     “Core State” means, as of any date of determination, any State in which Bay View Acceptance has originated Receivables for more than 12 consecutive months as of such date of determination.

     “Custodian File” shall have the meaning specified in Section 4.01(d).

     “Deposited Assets” means, with respect to each Receivable, all right, title and interest of the Depositor in, to and under (i) the security interest in the related Financed Vehicle granted by the related Obligor pursuant to such Receivable and any accessions thereto, and any other interest of the Depositor in the Financed Vehicles and accessions, including, without limitation, the related Certificate of Title; (ii) any service warranties and service contracts and any physical damage, credit life, risk default, disability, gap or other insurance policies covering the related Financed Vehicle or the related Obligor or refunds in connection therewith relating to the Receivables (including, without limitation, State tax refunds) and any proceeds from the liquidation of the Receivables or Financed Vehicles received after the related Cutoff Date; (iii) all property (including the right to receive future Recoveries) that shall secure a Receivable; (iv) the rights that relate to a Receivable under each Dealer Agreement, including, but not limited to, any recourse against any Dealer; (v) rebates or refunds of premiums and other amounts relating to insurance policies and other items financed under the Receivables or otherwise covering an Obligor or a Financed Vehicle; (vi) the original retail installment contract and security agreement and any amendments thereof evidencing the Receivables; (vii) all documentation in the Custodian File and other documents maintained by the Contributor according to its customary procedures with respect to the Receivables, Financed Vehicles or Obligors; (viii) the Depositor’s rights under the Contribution Agreement and each Contributor Assignment, including, but not limited to, any recourse against the Contributor and any right to require the Contributor to repurchase or make indemnity payments; and (ix) the proceeds of any and all of the foregoing including all proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or other property whether now existing or hereafter arising.

     “Depositor Address” means 818 Oak Park Road, Covina, CA 91724.

     “Depositor Assignment” means the document of assignment substantially in the form attached to this Agreement as Exhibit A.

     “Determination Date” means with respect to a Collection Period, the 15th day of the next calendar month, or if such 15th day is not a Business Day, the next succeeding Business Day.

     “Eligible Servicer” means the Servicer, the Backup Servicer or an entity which, at the time of its appointment as Servicer, (a) is legally qualified and has the capacity to service the Receivables, (b) has demonstrated the ability to service a portfolio of motor vehicle retail installment sale contracts in accordance with the standards of skill and care customary in the industry and (c) is approved in writing by the Majority Holders. The determination of the qualifications specified in subsections (a) and (b) of this definition shall be made by the Majority Holders.

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     “FICO Score” means, with respect to any Receivable, the Fair, Isaac & Company Inc. credit risk score with respect to such Receivable.

     “Ineligible Receivable” means any Receivable which: (a) was originated in Maryland and which, at the time of the origination of such Receivable, had a Receivable Balance of less than $25,000, until such time as all required licenses and approvals are obtained, or (b) was originated in Pennsylvania until such time as all the required licenses and approvals are obtained.

     “Holiday Pay Receivables” means those Receivables that (A) have an original FICO Score above 700; (B) have not been Delinquent Receivables within the preceding six (6) months; and (C) have been on the books for at least six (6) months.

     “Holiday Pay Receivables Program” means an extension program offered once per year in the fourth quarter to Receivables meeting the requirements of Holiday Pay Receivables; provided, however that the Agent reserves the right to suspend the Holiday Pay Receivables Program at any time, in its sole discretion.

     “Initial Receivable” means each Receivable transferred from the Contributor to the Depositor and then from the Depositor to the Issuer, and a security interest in which was simultaneously granted by the Issuer to the Indenture Trustee on the Closing Date as set forth on Schedule I attached to the Depositor Assignment dated as of the Closing Date.

     “Insurance Policy” means with respect to a Receivable, any insurance policy (including the insurance policies described in Section 6.03) benefiting the holder of the Receivable and providing coverage for loss or physical damage, credit life, credit disability, theft, mechanical breakdown, gap or similar coverage with respect to the Financed Vehicle or the Obligor.

     “Lendco Receivable” means a Receivable originated by, and purchased by the Contributor from, Lendco Financial Services.

     “Local Bank Account” shall have the meaning specified in Section 7.01(d).

     “Monthly Servicer Report” means with respect to each Determination Date, a report, completed by and executed by the Servicer, in accordance with Section 6.06(b), in the form of Exhibit D or otherwise in form and substance acceptable to the Agent.

     “Non-Core State” means any State which is not a Core State.

     “Pool” means the aggregation of Receivables and related assets contained from time to time in the Issuer’s trust estate.

     “Post Office Boxes” shall have the meaning specified in Section 7.01(d).

     “Pre-Funding Servicer Report” means a report completed by and executed by the Servicer in accordance with Section 6.06(c), in the form of Exhibit H or otherwise in form and substance acceptable to the Agent.

     “Reliening Expenses” shall have the meaning specified in Section 6.04(b).

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     “Rule of 78s Method” means the method under which a portion of a payment allocable to earned interest and the portion allocable to principal are determined according to the sum of the month’s digits or any equivalent method commonly referred to as the “Rule of 78s.”

     “Rule of 78s Receivable” means any Receivable under which the portion of a payment allocable to interest and the portion allocable to principal are determined in accordance with the Rule of 78s Method.

     “Servicer Event of Default” means an event described in Section 10.01.

     “Servicing Fee” means, with respect to any Payment Date, the fee payable to (i) the initial Servicer for services rendered during the related Collection Period, which shall be equal to one-twelfth of the Servicing Fee Rate multiplied by Aggregate Receivable Balance as of the first day of such Collection Period and (ii) the Backup Servicer (both prior to and while acting as successor Servicer) for services rendered during the related Collection Period, which shall be equal to the Backup Servicing Fees applicable for such services and such Collection Period.

     “Servicing Fee Rate” means 1.0% per annum, so long as Bay View Acceptance or an Affiliate of Bay View Acceptance is the Servicer and the per annum rate negotiated with such successor Servicer if a successor Servicer is acting as the Servicer.

     “Subsequent Receivable” means, with respect to each Funding Date, each Receivable contributed to the Depositor by the Contributor and then transferred from the Depositor to the Issuer and a security interest simultaneously granted to the Indenture Trustee by the Issuer on such Funding Date as set forth as Schedule I to the related Depositor Assignment.

     “Tangible Net Worth” shall have the meaning set forth in the Indenture.

     “Ultra Receivable” means a Receivable originated by, and purchased by the Contributor from, Ultra Funding, Ltd.

     “Weekly Servicer Report” means a report completed by and executed by the Servicer each week in accordance with Section 6.06(a), in the form of Exhibit G or otherwise in form and substance acceptable to the Agent.

Article II

Transfer and Acquisition of Receivables

     Section 2.01. Transfer and Acquisition of Receivables. On the Closing Date and on each Funding Date, subject to the terms and conditions of this Agreement, the Depositor agrees to transfer to the Issuer, and the Issuer agrees to acquire from the Depositor, the Initial Receivables and the related Subsequent Receivables, respectively, and the Deposited Assets relating thereto.

     (a) Initial Transfer of Receivables. On the Closing Date, simultaneously with the transactions set forth in the Indenture and the Contribution Agreement, the Depositor shall transfer to the Issuer, without recourse except as set forth herein: (i) the Initial

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Receivables, and all moneys received thereon on or after the Initial Cutoff Date; and (ii) the related Deposited Assets.

     (b) Consideration for Initial Receivables. In consideration of the Receivables and the related Deposited Assets described in Section 2.01(a), the Depositor shall, on the Closing Date, receive an amount equal to the Receivables Purchase Price in immediately available funds.

     (c) Transfer of Subsequent Receivables. On each Funding Date, upon the simultaneous transfer of such assets from the Contributor to the Depositor, the Depositor shall transfer to the Issuer, without recourse except as set forth herein: (i) the related Subsequent Receivables, and all moneys received thereon on or after the applicable Cutoff Date; and (ii) the related Deposited Assets; provided, however, that Subsequent Receivables may not be transferred by the Depositor to the Issuer or a security interest granted by the Issuer to the Indenture Trustee unless each of the conditions precedent in Section 2.12 of the Indenture has been satisfied.

     (d) Consideration for Subsequent Receivables. Upon two (2) Business Days’ prior written notice given by the Depositor to the Issuer and then from the Issuer to the Indenture Trustee, the Depositor shall cause the Issuer to cause the Indenture Trustee, on the applicable Funding Date, to pay to the Issuer, which will pay the Depositor, which will pay to or at the direction of the Contributor an amount equal to the Receivables Purchase Price with respect to the related Subsequent Receivables in immediately available funds.

     (e) Transfer. It is the intention of the Depositor and the Issuer that each transfer hereunder constitute an absolute transfer of the Receivables and the Deposited Assets from the Depositor to the Issuer with the intention of removing them from the Depositor’s estate pursuant to Section 541 of the United States Bankruptcy Code, as the same may be amended from time to time, or any successor provision thereto. If, notwithstanding the express intention of the parties, this Agreement is deemed not to constitute an absolute transfer of the Receivables and the related Deposited Assets from the Depositor to the Issuer, this Agreement shall be deemed to be a security agreement within the meaning of Article 8 and Article 9 of the Uniform Commercial Code as in effect in the State of New York, and the conveyance provided for in this Section 2.01 shall be deemed to be a grant by the Depositor to the Issuer of a valid first priority perfected security interest in all of the Depositor’s right, title and interest in and to the Receivables and the Deposited Assets.

     Section 2.02. The Closing. The transfer of the Initial Receivables shall take place at a closing (the “Closing”), on the Closing Date, simultaneously with the grant by the Issuer of all of its right, title and interest in and to the Initial Receivables and related Deposited Assets to the Indenture Trustee for the benefit of the Noteholders, and the issuance of the Notes pursuant to the Indenture.

     Section 2.03. Funding Dates. The transfer of Subsequent Receivables on a Funding Date shall take place at such location as the Depositor, the Issuer and the Indenture Trustee may

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reasonably agree. The transfer of Subsequent Receivables shall be made in accordance with Sections 2.12 through 2.14 of the Indenture pursuant to which (a) the Depositor will transfer all of its right, title and interest in and to the Subsequent Receivables and the related Deposited Assets to the Issuer, and (b) the Issuer will confirm the grant of all of its right, title and interest in and to such Subsequent Receivables and the related Deposited Assets to the Indenture Trustee for the benefit of the Noteholders, the Agent and the Financial Institutions.

Article III

Representations and Warranties

     Section 3.01. Representations and Warranties of the Issuer. The Issuer hereby represents and warrants to the Depositor, the Indenture Trustee, the Servicer and the Backup Servicer as of the Closing Date and each Funding Date:

    (a) Organization, Etc. The Issuer is a statutory trust duly formed, validly existing and in good standing under the laws of the State of Delaware with full power and authority to execute and deliver this Agreement and to perform the terms and provisions hereof; the Issuer is duly qualified to do business as a foreign business entity in good standing, and has obtained all required licenses and approvals, if any, in all jurisdictions in which the ownership or lease of property or the conduct of its business (including, without limitation, the purchase of the Receivables from the Depositor hereunder and under each Depositor Assignment, the conveyance of the Receivables by the Issuer pursuant to the Indenture, and the performance of its other obligations under this Agreement, each Depositor Assignment and the other Transaction Documents to which it is a party) requires such qualifications except those jurisdictions in which failure to be so qualified would not have a material adverse effect on the business or operations of the Issuer, on the ability of the Issuer to perform its obligations under the Transaction Documents, or on the Noteholders, the Receivables or the Trust Estate.

    (b) Due Authorization. The execution, delivery and performance by the Issuer of this Agreement have been duly authorized by all necessary action, do not require any approval or consent of any Person, do not and will not conflict with any provision of the Issuer Trust Agreement, and do not and will not conflict with or result in a breach which would constitute (with or without notice or lapse of time) a default under any agreement, indenture, mortgage, deed of trust, or other instrument binding upon or applicable to it or its property, or any law or governmental regulation or court decree applicable to it or its property, do not and will not result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any indenture, agreement, mortgage, deed of trust, or other instrument (other than as expressly provided in the Transaction Documents), and this Agreement is the legal, valid and binding obligation of the Issuer enforceable in accordance with its terms except as the same may be limited by insolvency, bankruptcy, reorganization or other laws relating to or affecting the enforcement of creditors’ rights or by general equity principles.

    (c) No Proceedings. There are no proceedings or investigations pending, or to the Issuer’s knowledge, threatened, before any court, regulatory body, administrative

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agency or other governmental instrumentality having jurisdiction over the Issuer or its properties: (A) asserting the invalidity of this Agreement, any Depositor Assignment, the Indenture, the Notes, or any other Transaction Document; (B) seeking to prevent the issuance of the Notes or the consummation of any of the transactions contemplated by this Agreement, any Depositor Assignment, the Indenture or any other Transaction Document to which it is a party; (C) seeking any determination or ruling that might materially and adversely affect the performance by the Issuer of its obligations under, or the validity or enforceability of, this Agreement, any Depositor Assignment, the Indenture, the Notes or any other Transaction Document to which it is a party; (D) which might adversely affect the federal or State income, excise, franchise or similar tax attributes of the Notes; or (E) that could reasonably be expected to have a material adverse effect on the Receivables.

    (d) Business Purpose. The Issuer will acquire the Receivables for a bona fide business purpose and has undertaken the transactions contemplated herein as principal rather than as agent for the Depositor or any other person.

    (e) Issuer’s Records. The books and records of the Issuer will disclose that the Depositor transferred the Receivables to the Issuer; provided, however, the Issuer acknowledges that the Receivables will appear as assets of the Contributor and its consolidated subsidiaries in the consolidated financial statements of the Contributor (which financial statements will include a footnote stating that the Receivables are not available to satisfy the Contributor’s or the Depositor’s creditors).

    (f) Valid Assignment. Each Receivable has been validly pledged by the Issuer to the Indenture Trustee pursuant to the Indenture; and no Receivable has been sold, transferred, assigned or pledged by the Issuer to any Person other than the Indenture Trustee.

    (g) Issuer’s Address. The principal place of business of the Issuer is located 1840 Gateway Drive, San Mateo, CA 94404, and the executive office of the Issuer is located at Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001. All books and records of the Issuer relating to the Trust Estate are (and have been since its date of organization) stored at such principal place of business. The Depositor’s jurisdiction of organization is, and has been since its date of organization, Delaware.

     Section 3.02. Representations and Warranties of the Depositor. The Depositor hereby represents and warrants to the Issuer, the Indenture Trustee, the Servicer and the Backup Servicer as of the Closing Date and each Funding Date (except as otherwise provided):

    (a) On the Closing Date, with respect to the Initial Receivables, and on the related Funding Date, with respect to the Subsequent Receivables:

    (i) Characteristics of Receivables. Each Receivable (A) was originated by the Contributor or a Dealer for the retail sale or refinancing of a Financed Vehicle in the ordinary course of the Contributor’s or such Dealer’s business, and the Contributor or

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such Dealer had all necessary licenses and permits to originate Receivables in the State where the Contributor or such Dealer was located (except for any Ineligible Receivable), was fully and properly executed by the parties thereto, and, in the case of Receivables originated by a Dealer, was purchased by the Contributor from such Dealer under an existing Dealer Agreement with the Contributor and was validly assigned by such Dealer to the Contributor, (B) was purchased by the Depositor from the Contributor pursuant to the Contribution Agreement and was validly assigned by the Contributor to the Depositor, (C) contains customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for realization against the collateral security, (D) is not a Rule of 78s Receivable or a pre-computed interest Receivable, but is a fully amortizing simple interest receivable which provides for level monthly payments (provided that the payment or payments in the first Collection Period and the final Collection Period of the life of the Receivable may be different from the level payment) which, if made when due, shall fully amortize the Amount Financed over the original term, (E) provides that, in the event such Receivable is prepaid, such prepayment fully pays the principal balance and all accrued and unpaid interest through the date of such prepayment at an interest rate equal to or greater than the APR, (F) has not been amended, rewritten, modified or deferred, nor any provisions thereof waived, except in accordance with the Collection Policy and the provisions of the Transaction Documents, (G) is payable in United States dollars and (H) does not entitle the Contributor to reduce, nor has the Contributor reduced, the APR under such Receivable to below 4%. No Subsequent Receivable will be a Chapter 13 Receivable, an Ultra Receivable or a Lendco Receivable, as of its transfer date.

    (ii) No Fraud or Misrepresentation. Each Receivable was originated by a Dealer and was sold by the Dealer to the Contributor, or was originated by the Contributor, and was transferred by the Contributor to the Depositor without any fraud or material misrepresentation on the part of such Dealer or the Contributor or on the part of the related Obligor.

    (iii) Compliance with Law. All requirements of applicable federal, State and local laws, and regulations thereunder (including, without limitation, usury laws, the Federal Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade Commission Act, the Federal Trade Commission Credit Practices Rule, the Magnuson-Moss Warranty Act, the Federal Reserve Board’s Regulations “B” and “Z,” the Servicemembers’ Civil Relief Act of 2003, Division 3 of the California Vehicle Code, State unfair and deceptive trade practices laws and State adaptations of the National Consumer Act and of the Uniform Consumer Credit Code and other consumer credit laws and equal credit opportunity and disclosure laws) in respect of all of the Receivables, each and every sale of Financed Vehicles have been complied with in all material respects, and each Receivable and the sale of the Financed Vehicle evidenced by each Receivable complied in all material respects at the time such Receivable or sale was originated or made and now complies in all material respects with all applicable legal requirements.

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    (iv) Origination. Each Receivable was originated in the United States, and each Receivable (other than the Lendco Receivables and the Ultra Receivables), at the time of origination, conformed to requirements of the Contributor’s then current “Underwriting Guidelines” (the most recent copy of which is attached hereto as Exhibit C) and credit policies applicable to such Receivable.

    (v) Binding Obligation. Each Receivable represents the genuine, legal, valid and binding payment obligation of the Obligor thereon, enforceable by the holder thereof in accordance with its terms, except (A) as enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the enforcement of creditors’ rights generally and by equitable limitations on the availability of specific remedies, regardless of whether such enforceability is considered in a proceeding in equity or at law and (B) as such Receivable may be modified by the application after the related Cutoff Date of the Servicemembers’ Civil Relief Act of 2003, as amended; and all parties to each Receivable had full legal capacity to execute and deliver such Receivable and all other documents related thereto and to grant the security interest purported to be granted thereby.

    (vi) Obligors. Each Obligor is domiciled in the United States. None of the Obligors is an Affiliate of Bay View Acceptance or is employed by Bay View Acceptance. None of the Obligors is the United States of America or any State or any agency, department, subdivision or instrumentality thereof. No Receivable has been included in a “fleet” sale (i.e., a sale to any single Obligor of more than five (5) Financed Vehicles).

    (vii) Obligor Bankruptcy. As of the related Cutoff Date, no Obligor has been identified on the Depositor’s records as being the subject of a current bankruptcy proceeding as a debtor, except for Obligors under Chapter 13 Receivables.

    (viii) Schedule of Receivables. The information pertaining to each Receivable set forth in the Schedule of Receivables was true and correct in all material respects as of the close of business on the related Cutoff Date and at the Closing Date or the related Funding Date, as applicable.

    (ix) Marked Records. By the Closing Date or the related Funding Date, as applicable, each of the Contributor and the Depositor will have caused the portions of its records relating to the Receivables to be clearly and unambiguously marked to show that the Receivables constitute part of the Trust Estate and are owned by the Issuer and pledged to the Indenture Trustee.

    (x) Computer Tape or Listing. The computer tape made available by the Contributor to the Backup Servicer on the Closing Date or the related Funding Date was complete and accurate as of the related Cutoff Date and includes a description of the same Receivables that are described in the related Schedule of Receivables.

    (xi) Chattel Paper. The Receivables constitute chattel paper within the meaning of the UCC.

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    (xii) One Original. There is only one original executed copy of each Receivable.

    (xiii) Custodian Files Complete. There exists a Custodian File pertaining to each Receivable, and such Custodian File contains: (A) a fully executed original of the related retail installment contract, and an acknowledgment of the Custodian that it holds such Receivable for the benefit of the Noteholders, (B) evidence of either (1) a certificate of insurance, (2) an application form for insurance signed by the Obligor, or (3) a signed representation letter from the Obligor named in the Receivable pursuant to which the Obligor has agreed to obtain physical damage insurance for the related Financed Vehicle, (C) the original or electronic equivalent of the Certificate of Title or, with respect to a Certificate of Title filed electronically, a report prepared by a third party service that shows such service maintains perfection related to such Certificate of Title on behalf of the Servicer; or, if the Certificate of Title has not yet been received, and in the case of each electronic Certificate of Title, an application therefor, or a copy of such Certificate of Title with a copy of the application filed to amend the Certificate of Title to indicate the security interest of the Contributor in the related Financed Vehicle, (D) an electronic or hard copy of an original credit application signed by the Obligor, (E) the originals of all written assumption, consolidation, extension, modification or waiver agreements, if any, relating to such Receivable except for any such item listed above which has been preserved by electronic means, (F) any other documents that the Servicer shall keep on file, in accordance with its customary procedures, or reasonably required by the Issuer, from time to time to be kept on file, relating to a Receivable, the related Obligor or the related Financed Vehicle, and (G) any additional original loan documents evidencing any assumption, consolidation, extension, modification or waiver of a Receivable approved by the Servicer. Each of such documents which is required to be signed by the Obligor has been signed by the Obligor in the appropriate spaces. All blanks on any form have been properly filled in and each form has otherwise been correctly prepared in all material respects. The complete Custodian File for each Receivable is currently in the possession of the Custodian.

    (xiv) Receivables in Force. No Receivable has been satisfied, subordinated or rescinded, and the Financed Vehicle securing each such Receivable has not been released from the Lien of the related Receivable in whole or in part. No provisions of any Receivable have been waived, altered or modified in any respect since its origination, except by instruments or documents identified in the Custodian File held by the Custodian and in accordance with the Collection Policy in all material respects. Any modification to any Receivable necessary to comply with the Servicemembers’ Civil Relief Act of 2003, as amended, has been made in compliance with the Act and any laws related thereto.

    (xv) Lawful Assignment. No Receivable was originated in, or is subject to the laws of any jurisdiction, the laws of which would make unlawful, void or voidable the sale, transfer and assignment of such Receivable under this Agreement, the Contribution Agreement or the Indenture. The Depositor has not entered into any agreement with any account debtor that prohibits, restricts or conditions the assignment of any portion of the Receivables. Each Receivable, by its terms, is assignable.

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    (xvi) Good Title. No Receivable has been sold, transferred, assigned or pledged by the Depositor to any Person other than the Issuer. Immediately prior to the conveyance of the Receivables to the Issuer pursuant to this Agreement, the Depositor was the sole owner thereof and had good and indefeasible title thereto, free of any Lien and, upon execution and delivery of this Agreement and the applicable Depositor Assignment by the Depositor, the Issuer shall have good and indefeasible title to and will be the sole owner of such Receivables, free of any Lien. No Dealer has a participation in, or other right to receive, proceeds of any Receivable. The Depositor has not taken any action to convey any right to any Person that would result in such Person having a right to payments received under the related Insurance Policies or the related Dealer Agreements or to payments due under such Receivables. Each Initial Receivable has been validly assigned by the Depositor to the Issuer on the Closing Date pursuant to this Agreement and each Subsequent Receivable will be validly assigned to the Issuer on the related Funding Date pursuant to this Agreement and the related Depositor Assignment.

    (xvii) Security Interest in Financed Vehicle. Each Receivable from each respective Obligor is secured by a valid, binding and enforceable first priority perfected security interest in favor of the Contributor in the Financed Vehicle. The Certificate of Title for each Financed Vehicle shows or, if a new or replacement Certificate of Title is being applied for with respect to such Financed Vehicle, the Certificate of Title will be received within one hundred eighty (180) days of the Closing Date or the related Funding Date, as applicable, and will show, the Contributor named as the original secured party under each Receivable as the holder of a first priority perfected security interest in such Financed Vehicle. With respect to each Receivable for which the Certificate of Title has not yet been returned from the applicable governmental authority, the Servicer has received written evidence from the related Dealer that such Certificate of Title showing the Contributor as first lienholder has been applied for. If the Receivable was originated in a State in which the filing or recording of a financing statement under the UCC is required to perfect a security interest in motor vehicles, such filings or recordings have been duly made and show the Contributor named as the original secured party under the related Receivable. As of the related Cutoff Date, there were no Liens or claims for taxes, work, labor, storage or materials affecting a Financed Vehicle which are or may be Liens prior or equal to the lien of the related Receivable. Each security interest in the Financed Vehicles has been or, with respect to Subsequent Receivables, will be as of the related Funding Date, validly assigned by the Depositor to the Issuer pursuant to this Agreement and the related Depositor Assignment. Immediately after the sale, assignment and transfer thereof to the Issuer, although the related Certificates of Title will not indicate the Issuer as secured party, each Receivable will be secured by an enforceable and perfected first priority security interest in the Financed Vehicle in favor of the Indenture Trustee as secured party for the benefit of the Noteholders, the Agent and the Financial Institutions which security interest is prior to all other Liens in such Financed Vehicle.

    (xviii) All Filings Made. On the Closing Date or the related Funding Date, as applicable, all filings (including, without limitation, UCC filings) required to be made by any Person and actions required to be taken or performed by any Person in any jurisdiction (A) to give the Issuer a first priority perfected ownership interest in, and (B)

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to give the Indenture Trustee a first priority perfected Lien on, the Initial Receivables and the Subsequent Receivables, respectively, and the proceeds thereof and the rest of the Trust Estate (other than the Financed Vehicles) have been made, taken or performed or will be made, taken or performed on or prior to the Closing Date or the related Funding Date, as applicable, and as of the Closing Date or the related Funding Date, as applicable, the Issuer has or will have, as applicable, such a first priority perfected ownership interest and the Indenture Trustee has or will have, as applicable, such a first priority perfected Lien.

     (xix) No Impairment. The Depositor has not done anything to convey any right to any Person that would result in such Person having a right to payments due under the Receivables or otherwise to impair the rights of the Issuer, the Indenture Trustee, the Agent or the Noteholders in any Receivable or the proceeds thereof.

     (xx) Receivable Not Assumable. No Receivable is assumable by another Person in a manner which would release the Obligor thereof from such Obligor’s obligations to the Depositor with respect to such Receivable.

     (xxi) No Defenses. No Receivable is subject to any right of rescission, setoff, counterclaim or defense and no such right has been asserted or threatened with respect to any Receivable. The operation of the terms of any Receivable or the exercise of any right thereunder will not render such Receivable unenforceable in whole or in part or subject to any such right of rescission, setoff, counterclaim or defense.

     (xxii) No Default. There has been no uncured default, breach, violation or event permitting acceleration under the terms of any Receivable (other than payment delinquencies of not more than sixty (60) days as of the Initial Cutoff Date or the related Funding Date, as applicable, or payment delinquencies of sixty (60) days or more that have been cured on or prior to the Closing Date or related Funding Date, as applicable), and no condition exists or event has occurred and is continuing that with notice, the lapse of time or both would constitute a default, breach, violation or event permitting acceleration under the terms of any Receivable, and there has been no waiver of any of the foregoing. As of the related Cutoff Date, no Financed Vehicle had been repossessed from the related Obligor or repossessed by the Servicer from any other Person.

     (xxiii) Insurance. At the time of the origination of each Receivable with a Receivable Balance of $50,000 or greater, the related Financed Vehicle was covered by a comprehensive and collision Insurance Policy (A) in an amount at least equal to the lesser of (a) its maximum insurable value or (b) the principal amount due from the Obligor under the related Receivable, (B) naming the Contributor and its successors and assigns as loss payee and (C) insuring against loss and damage due to fire, theft, transportation, collision and other risks generally covered by comprehensive and collision coverage. Each Receivable that finances the cost of premiums for gap, credit life and credit accident and health insurance is covered by such an Insurance Policy. The Financed Vehicle relating to each Receivable that finances the cost of an extended service contract is covered by such a service contract. Each Receivable requires the Obligor to maintain physical loss and damage insurance, naming the Contributor and its successors and

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assigns as additional insured parties, and each Receivable permits the holder thereof to obtain physical loss and damage insurance at the expense of the Obligor if the Obligor fails to do so.

     (xxiv) Receivables. (A) Each Receivable had an original maturity of not less than eighteen (18) and not more than ninety-seven (97) months; (B) each Receivable has an Annual Percentage Rate (exclusive of prepaid finance charges) of at least 4%; (C) no Receivable was a Defaulted Receivable or a Delinquent Receivable as of the Cutoff Date; (D) no funds have been advanced by the Depositor, the Contributor, the Servicer, the Issuer, any Dealer, or anyone acting on behalf of any of them in order to cause any Receivable to qualify under subclause (B) of this clause (xxiv); (E) none of the Receivables have been re-aged (except for Receivables extended in compliance with Section 7.01(c)); (F) the Receivable Balance of each Receivable set forth in the Schedule of Receivables is true and accurate in all material respects as of the related Cutoff Date; (G) no more than five percent (5%) of the Aggregate Receivable Balance may be Receivables with individual principal balances in excess of $100,000.00 (after giving effect to acquisitions on such Funding Date); and (H) the application with respect to the Certificate of Title for each Receivable has been applied for.

     (xxv) Subsequent Receivables. The addition of Subsequent Receivables on any Funding Date shall not occur unless each of the funding conditions set forth in Section 2.12 of the Indenture have been satisfied and unless each of the following representations and warranties are true and correct on the related Cutoff Date (with each Receivable Balance or APR for any Receivable measured as of its related Cutoff Date):

     (A) no more than (i) 35% (determined by the Aggregate Receivable Balance) of all of the Receivables pledged to the Indenture Trustee, after taking into consideration the Subsequent Receivables pledged to the Indenture Trustee on such Funding Date, shall have been originated in each of California, Florida, and Tennessee;

     (B) no more than 25% (determined by the Aggregate Receivable Balance) of all of the Receivables pledged to the Indenture Trustee, after taking into consideration the Subsequent Receivables pledged to the Indenture Trustee on such Funding Date, shall have been originated in each Core State other than California or Florida or Tennessee;

     (C) no more than 10% (determined by the Aggregate Receivable Balance) of all Receivables pledged to the Indenture Trustee, after taking into consideration the Subsequent Receivables pledged to the Indenture Trustee on such Funding Date, shall have been originated in each Non-Core State;

     (D) no more than 40% (determined by the Aggregate Receivable Balance) of all of the Receivables pledged to the Indenture Trustee, after taking into consideration the Subsequent Receivables pledged to the Indenture Trustee on such Funding Date, shall have had a FICO Score at the time of origination thereof equal to or below 700;

     (E) no more than 15% (determined by the Aggregate Receivable Balance) of all of the Receivables pledged to the Indenture Trustee, after taking into consideration the

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Subsequent Receivables pledged to the Indenture Trustee on such Funding Date, shall have had a FICO Score at the time of origination thereof equal to or below 660;

     (F) no more than 5% (determined by the Aggregate Receivable Balance) of all of the Receivables pledged to the Indenture Trustee, after taking into consideration the Subsequent Receivables pledged to the Indenture Trustee on such Funding Date, shall have had a FICO Score at the time of origination thereof below 640;

     (G) no more than 35% (determined by the Aggregate Receivable Balance) of all of the Receivables pledged to the Indenture Trustee, after taking into consideration the Subsequent Receivables pledged to the Indenture Trustee on such Funding Date, shall have an original term of more than 84 months;

     (H) no more than 85% (determined by the Aggregate Receivable Balance) of all of the Receivables pledged to the Indenture Trustee, after taking into consideration the Subsequent Receivables pledged to the Indenture Trustee on such Funding Date, shall have an original term of more than 72 months;

     (I) no more than 75% (determined by the Aggregate Receivable Balance) of all of the Receivables pledged to the Indenture Trustee, after taking into consideration the Subsequent Receivables pledged to the Indenture Trustee on such Funding Date, shall have been, at the time of origination thereof, associated with a Financed Vehicle which is a used vehicle;

     (J) no more than 20% (determined by the Aggregate Receivable Balance) of all of the Receivables pledged to the Indenture Trustee, after taking into consideration the Subsequent Receivables pledged to the Indenture Trustee on such Funding Date, shall be associated with a Financed Vehicle which has a model year greater than 5 years prior to the calendar year in which such Funding Date occurs;

     (K) at least 95% (determined by the Aggregate Receivable Balance) of all of the Receivables pledged to the Indenture Trustee, after taking into consideration the Subsequent Receivables pledged to the Indenture Trustee on such Funding Date, shall have been, at the time of origination thereof, associated with a Financed Vehicle which is a passenger car, sport utility vehicle or light-duty truck;

     (L) no more than $50,000 of all of the Receivables pledged to the Indenture Trustee, after taking into consideration the Subsequent Receivables pledged to the Indenture Trustee on such Funding Date, shall be Lendco Receivables or Ultra Receivables;

     (M) no more than 0.50% (determined by the Aggregate Receivable Balance) of all of the Receivables pledged to the Indenture Trustee, after taking into consideration the Subsequent Receivable pledged to the Indenture Trustee on such Funding Date, shall be Chapter 13 Receivables; and

     (N) the weighted average loan-to-value of the Aggregate Receivable Balance in the Pool is less than 130%.

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     (xxvi) No Adverse Selection. No selection procedures adverse to the Noteholders have been utilized in selecting such Receivable from all other similar receivables originated or acquired by the Contributor.

     (xxvii) Form of Contract. For any State wherein 10% or more, determined by the Aggregate Receivable Balance, of all Receivables have been pledged to the Indenture Trustee, each such Receivable contains provisions that give the obligee substantially the same benefits as provided in one of the form contracts attached as Exhibit B hereto, except for such immaterial modifications or deviations from such form contracts which appear in certain Receivables or which may appear in the future form contracts of the Contributor or which the Depositor acquires from the Contributor; any such modifications or deviations from the form loan contracts will not have a material adverse effect on the Noteholders.

     (xxviii) Loss or Destruction. As of the related Cutoff Date, no Financed Vehicle related to a Receivable has been the subject of a total loss or destruction.

     (xxix) No Obligation to Dealers. The Issuer and its assignees will assume no obligation to Dealers or other holders of the Receivables as a result of its acquisition of the Receivables.

     (xxx) No Future Obligation. The full Amount Financed of each Receivable has been advanced to or on behalf of each Obligor, and there are no requirements for future advances thereunder. The Obligor with respect to each Receivable does not have any option under such Receivable to borrow from the Depositor or any Affiliate additional funds secured by the Financed Vehicle.

     (xxxi) Prior Servicing. The servicing of each Receivable and the collection practices relating thereto have been lawful and in accordance with the standards set forth in the Collection Policy; other than the Servicer and any back up servicer arrangement that has been entered into in accordance with the provisions of the Transaction Documents, no other person has the right to service any Receivable.

     (xxxii) Licenses. The Contributor, at the time of origination of each Receivable and as of Closing Date, with respect to the Initial Receivables, and as of the applicable Funding Date, with respect to the Subsequent Receivables, was in possession of all State and local licenses (including all debt collection licenses) required for it to acquire and own such Receivable and service such Receivable in accordance with the Collection Policy in effect on such date and to perform its services as Servicer under this Agreement, and none of such licenses has been suspended, revoked or terminated, except where the failure of the Contributor to obtain and maintain any such license could not have a material adverse effect on the Issuer, any Noteholder, any Receivable or other part of the Trust Estate or the Contributor’s ability to perform its obligations as Contributor, Custodian or Servicer under the Transaction Documents.

     (xxxiii) Payment Instructions. No Person has provided any payment instructions to any Obligor that are inconsistent with the provisions of Section 7.01(d) hereof.

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Notwithstanding anything to the contrary herein, within thirty (30) days after the Closing Date, the Depositor shall provide the forms of contracts required pursuant to Section 3.02(a)(xxvii) hereof and the representations and warranties made by the Depositor, prior to such delivery, pursuant to Section 3.02(a)(xxvii) hereof , shall be deemed to be true and correct in all respects.

     (b) Organization and Good Standing. The Depositor has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Delaware, with power and authority to own its properties and to conduct its business as such properties are currently owned and such business is currently conducted. The Depositor is not organized under the laws of any jurisdiction other than Delaware.

     (c) Due Qualification. The Depositor is duly qualified to do business as a foreign corporation in good standing, and has obtained all necessary licenses and approvals, in all jurisdictions in which the ownership or lease of its property or the conduct of its business (including, without limitation, the purchase of the Receivables from the Contributor under the Contribution Agreement and under each Contributor Assignment, the conveyance of the Receivables by the Depositor hereunder and under each Depositor Assignment, and the performance of its other obligations under this Agreement, each Contributor Assignment, each Depositor Assignment and the other Transaction Documents to which it is a party) requires such qualification where the failure to be so qualified would materially and adversely affect its business or operations, its ability to perform its obligations under the Transaction Documents, the Issuer, any Noteholder, the Receivables or any other part of the Trust Estate.

     (d) Power and Authority. The Depositor has the power and authority to execute and deliver this Agreement and the other Transaction Documents to which it is a party and to carry out its terms and their terms, respectively; the Depositor has all power, authority and legal right to acquire, own and transfer the Receivables and Deposited Assets to the Issuer; and the execution, delivery and performance of this Agreement and the other Transaction Documents to which it is a party have been duly authorized by the Depositor by all necessary corporate action.

     (e) Binding Obligations. This Agreement and the other Transaction Documents to which the Depositor is a party, when duly executed and delivered by the other parties hereto and thereto, shall constitute legal, valid and binding obligations of the Depositor enforceable in accordance with their respective terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and by equitable limitations on the availability of specific remedies, regardless of whether such enforceability is considered in a proceeding in equity or at law.

     (f) No Violation. The consummation of the transactions contemplated by this Agreement and the other Transaction Documents to which it is a party and the fulfillment of the terms of this Agreement and the other Transaction Documents to which it is a party shall not conflict with, result in any breach of any of the terms and provisions of or constitute (with or without notice, lapse of time or both) a default under, the certificate of incorporation or by-laws of the Depositor, or any material agreement, mortgage, deed of

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trust or other material instrument to which the Depositor is a party or by which it is bound, or result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement, mortgage, deed of trust or other instrument, or violate any material law, order, rule or regulation applicable to the Depositor of any court or of any federal or State regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Depositor or any of its properties, or in any way materially adversely affect the interests of the Noteholders or the Indenture Trustee in any Receivable or any other part of the Trust Estate, or affect the Depositor’s ability to perform its obligations under this Agreement or any other Transaction Document to which it is a party.

     (g) No Proceedings. There are no proceedings or investigations pending or, to the Depositor’s knowledge, threatened against the Depositor, before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality having jurisdiction over the Depositor or its properties (i) asserting the invalidity of this Agreement or any of the other Transaction Documents, (ii) seeking to prevent the issuance of the Notes or the consummation of any of the transactions contemplated by this Agreement or any of the other Transaction Documents, (iii) seeking any determination or ruling that might materially and adversely affect the performance by the Depositor of its obligations under, or the validity or enforceability of, this Agreement or any of the other Transaction Documents, (iv) seeking to adversely affect the federal income tax or other federal, State or local tax attributes of the Notes, or (v) that could reasonably be expected to have a material adverse effect on the Receivables.

     (h) Approvals. All approvals, authorizations, consents, orders or other actions of any person, corporation or other organization, or of any court, governmental agency or body or official, required in connection with the execution and delivery by the Depositor of this Agreement or any other Transaction Document to which it is a party have been or will be taken or obtained on or prior to the Closing Date.

     (i) Depositor Address. The Depositor Address is, and has been since its date of incorporation, the chief place of business and the office where the Depositor keeps its records concerning the Receivables and the Deposited Assets. The Depositor’s chief executive office is and has been since its date of incorporation 1840 Gateway Drive, Suite 401, San Mateo, California 94404. The Depositor’s jurisdiction of incorporation is, and has been since its date of incorporation, Delaware.

     (j) Solvency of the Depositor:

     (i) The Depositor does not believe, nor does it have any reasonable cause to believe, that it cannot perform each and every covenant contained in this Agreement.

     (ii) The transactions contemplated by the Transaction Documents are being consummated by the Depositor in furtherance of its ordinary business purposes, with no contemplation of insolvency and with no intent to hinder, delay or defraud any of its present or future creditors.

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     (iii) Neither on the date of the transactions contemplated by the Transaction Documents or immediately before or after such transactions, nor as a result of the transactions, will the Depositor:

     (A) be insolvent such that the sum of its debts is greater than all of its respective property, at a fair valuation;

     (B) be engaged in or about to engage in, business or a transaction for which any property remaining with the Depositor will be an unreasonably small capital or the remaining assets of the Depositor will be unreasonably small in relation to its respective business or the transaction; and

     (C) have intended to incur or believed it would incur, debts that would be beyond its respective ability to pay as such debts mature or become due. The Depositor’s assets and cash flow enable it to meet its present obligations in the ordinary course of business as they become due.

     (iv) Both immediately before and after the transactions contemplated by the Transaction Documents (a) the present fair salable value of the Depositor’s assets was or will be in excess of the amount that will be required to pay its probable liabilities as they then exist and as they become absolute and matured; and (b) the sum of the Depositor’s assets was or will be greater than the sum of its debts, valuing its assets at a fair salable value.

     (v) There are no proceedings or investigations pending, or to the knowledge of the Depositor, threatened, against or affecting the Depositor in or before any court, governmental authority or agency or arbitration board or tribunal (including, but not limited to any such proceeding or investigation with respect to any environmental or other liability resulting from the ownership of the Receivables) which, individually or in the aggregate, involve the possibility of materially and adversely affecting the properties, business, prospects, profits or condition (financial or otherwise) of the Depositor, or the ability of the Depositor to perform its obligations under this Agreement. The Depositor is not in default with respect to any order of any court, governmental authority or agency or arbitration board or tribunal.

     (k) Taxes. All tax returns or extensions required to be filed by the Depositor in any jurisdiction (other than jurisdictions in which the failure to file would not have a material adverse effect on the Depositor, the Depositor’s ability to perform its obligations under the Transaction Documents, the Issuer, any Noteholder or any Receivable or any other part of the Trust Estate) have in fact been filed, and all taxes, assessments, fees and other governmental charges upon the Depositor, or upon any of the properties, income or franchises shown to be due and payable on such returns have been, or will be, paid or are being contested in good faith by appropriate proceedings with respect to which the Agent has received written notice. To the knowledge of the Depositor, all such tax returns are true and correct and the Depositor has no knowledge of any proposed additional tax

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assessment against it in any material amount nor of any basis therefor. The provisions for taxes on the books of the Depositor are in accordance with generally accepted accounting principles.

     (l) Consolidated Returns. The Contributor, the Depositor and the Issuer are members of an affiliated group within the meaning of Section 1504 of the Internal Revenue Code which will file a consolidated federal income tax return at all times until termination of the Transaction Documents.

     (m) Intent of Transactions. It is the intention of the Depositor that the Receivables and the Deposited Assets are owned by the Issuer as of the Closing Date or the related Funding Date, as applicable, and that the beneficial interest in and title to the Receivables and the Deposited Assets are not part of the Depositor’s estate in the event of the filing of a bankruptcy petition by or against the Depositor under any bankruptcy law.

     (n) Notes as Debt. For federal, State and local income tax purposes, each of the Contributor and the Depositor, its shareholders and stockholders and the Issuer shall treat the Receivables and the Deposited Assets as owned by the Issuer, shall include in the computation of the Depositor’s gross income for such purposes the income from the Receivables and the Deposited Assets, shall treat the Notes as debt of the Depositor and its consolidated subsidiaries for such purposes, and shall cause the Contributor and its consolidated subsidiaries to deduct the interest paid or accrued with respect to the Notes in accordance with its applicable method of accounting for such purposes.

     (o) ERISA. The Depositor is in compliance with the Employee Retirement Income Security Act of 1974, as amended.

     (p) Certificates, Statements and Reports. The officers’ certificates, statements, reports and other documents prepared by the Depositor and furnished by the Depositor to the Issuer, the Indenture Trustee or the Agent pursuant to this Agreement or any other Transaction Document to which the Depositor is a party, and in connection with the transactions contemplated hereby or thereby, when taken as a whole, do not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained herein or therein not misleading.

     (q) Stock of Depositor. The Contributor is the registered owner of all of the shares of common stock of the Depositor, all of which are fully paid and nonassessable and owned of record, free and clear of all mortgages, assignments, pledges, security interests, warrants, options and rights to purchase other than those (if any) granted pursuant to the Transaction Documents.

     (r) Accuracy of Information. All information heretofore furnished by the Depositor for purposes of or in connection with any of the Transaction Documents or any transaction contemplated hereby or thereby is, and all such information hereafter furnished by the Depositor will be, true and accurate in every material respect on the date such information is stated or certified and does not and will not contain any material

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misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading.

     (s) Material Adverse Change. Since December 31, 2004, no event has occurred that would have a material adverse effect on (i) the financial condition or operations of Depositor, (ii) the ability of the Depositor to perform its obligations under the Transaction Documents, or (iii) the collectibility of the Receivables generally or any material portion of the Receivables.

     (t) Compliance with Laws. The Depositor has complied in all respects with all applicable laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject, except where the failure to so comply could not reasonably be expected to have a material adverse effect on the Issuer, any Noteholder, any Receivable or other part of the Trust Estate.

     Section 3.03. Repurchase of Receivables. (a) The Depositor hereby covenants and agrees to deliver to the Issuer, the Contributor, the Servicer, the Agent and the Indenture Trustee prompt written notice of the occurrence of a breach of any of the representations and warranties of the Depositor contained or deemed to be contained in Section 3.02(a) hereof with respect to a Receivable transferred hereunder. Upon discovery by the Depositor, the Issuer, the Indenture Trustee, the Agent or the Servicer of (a) a Nonconforming Receivable, or (b) the failure to deliver any document required to be included in any Custodian File or file any UCC Financing Statement required to be filed pursuant to the Transaction Documents, the party discovering such breach or failure to deliver shall give prompt written notice to each of the other foregoing parties. Except as specifically provided in this Agreement or the Indenture, the Indenture Trustee has no obligation to review or monitor the Receivables or the Deposited Assets for compliance with the representations and warranties or delivery requirements set forth herein. If (i) the breach of representations or warranties causing such Receivable to be a Nonconforming Receivable has a material adverse effect on such Receivable or its collectibility or the Noteholders and shall not have been (A) cured within thirty (30) days following notice thereof or (B) waived by the Majority Holders following notice thereof or (ii) the failure to deliver to the Custodian such Custodian File documents or UCC Financing Statements shall not have been cured within the time period required herein (other than the Certificates of Titles, with respect to which the Contributor shall have three (3) Business Days after the one hundred eighty (180) day period set forth in Section 3.02(a)(xvii)), the Depositor shall deposit or cause to be deposited the Repurchase Price with respect to such Receivable in the Collection Account within two (2) Business Days following the applicable cure period, if any; provided, that a breach of a representation and warranty set forth in paragraphs (ii), (iii), (v), (vii), (ix), (xiv), (xv), (xvi), (xvii), (xviii), (xix), (xx), (xxi), (xxii), (xxviii), (xxx) and (xxxii) of Section 3.02(a) automatically shall be deemed to have a material adverse effect on the applicable Receivable or the Noteholders. The Issuer shall transfer to the Depositor the Receivable (and the Deposited Assets relating solely to such Receivable) affected by such breach or failure to deliver; provided, that such transfer and assignment shall only be made upon receipt by the Issuer of notice from the Servicer that the Repurchase Price has been remitted to the Servicer and deposited into the Collection Account. The Issuer shall be entitled to enforce the obligations of the Depositor, the Contributor and each applicable Dealer under this Agreement, the Contribution Agreement and the applicable Dealer Agreement, respectively, to remit the Repurchase Price to the Servicer for

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deposit into the Collection Account. The Indenture Trustee and the Agent are authorized to take action on behalf of the Issuer (i) to enforce the obligations of the Depositor to repurchase such Receivable under this Agreement, (ii) to enforce the obligations of the Contributor to repurchase such Receivable under the Contribution Agreement and (iii) to enforce the obligation of a Dealer to repurchase such Receivable under the applicable Dealer Agreement.

     (b) The obligations of the Depositor, the Contributor and the Issuer to remove any Receivable (and the Deposited Assets relating solely to such Receivable) and to remit the Repurchase Price with respect to a Nonconforming Receivable which has a material adverse affect on the Noteholders or on such Receivable or its collectibility or as to which a failure to deliver has occurred and is continuing shall constitute the sole remedy, except for the indemnification provisions expressly set forth in the Indenture, this Agreement and the Contribution Agreement, against the Depositor, the Contributor and the Issuer for such breach or failure to deliver, available to the Indenture Trustee or the Noteholders.

     Notwithstanding the foregoing, the Depositor shall indemnify the Owner Trustee (as such and in its individual capacity), the Issuer, the Indenture Trustee, the Backup Servicer, the Agent, the Noteholders and their respective officers, directors, employees and agents against all costs, expenses, losses, damages, claims and liabilities, including reasonable fees and expenses of counsel, which may be asserted against or incurred by any of them, as a result of third-party claims arising out of the events or facts giving rise to a repurchase event set forth in Section 3.03(a).

     Section 3.04. Issuer’s Assignment of Repurchased Receivables. With respect to any Receivable reacquired by the Depositor pursuant to this Agreement, the Issuer shall assign, without recourse, representation or warranty, to the Depositor all the Issuer’s right, title and interest in and to such Receivable, and all security and documents relating thereto.

     Section 3.05. Survival of Representations and Warranties. The representations and warranties contained in this Agreement are made as of the execution and delivery of this Agreement, and shall survive the sale, transfer and assignment of the related Receivables and the other related Deposited Assets hereunder and under the related Depositor Assignment, as applicable, to the Issuer, and the pledge thereof by the Issuer to the Indenture Trustee under the Indenture. The Depositor and the Issuer agree that the Issuer will assign to the Indenture Trustee all of the Issuer’s rights under this Agreement and each Depositor Assignment and that the Indenture Trustee shall thereafter be entitled to enforce this Agreement and each Depositor Assignment directly against the Depositor in the Indenture Trustee’s own name on behalf of the Noteholders; provided, however, that the representations and warranties of the Depositor in this Agreement shall not be construed as a warranty or guaranty by the Depositor as to the future payments by any Obligor.

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Article IV

Conditions

     Section 4.01. Conditions to Obligation of the Issuer. The obligation of the Issuer to accept any transfer of Receivables hereunder is subject to the satisfaction of the following conditions:

          (a) The representations and warranties of the Depositor hereunder shall be true and correct on the Closing Date and each Funding Date, as the case may be, with the same effect as if then made, and the Depositor shall have performed all obligations to be performed by it hereunder on or prior to the Closing Date or Funding Date, as the case may be.

          (b) The Depositor shall, at its own expense, on or prior to the Closing Date and each Funding Date, as applicable, indicate in its files that the applicable Receivables have been transferred to the Issuer pursuant to this Agreement and pledged to the Indenture Trustee pursuant to the Indenture, and the Depositor shall deliver to the Issuer a related Schedule of Receivables certified by an Authorized Officer of the Depositor to be true, correct and complete. Further, the Depositor hereby agrees that the computer files and other physical records of the Receivables maintained by the Depositor will bear an indication reflecting that the Receivables were transferred to the Issuer and pledged to the Indenture Trustee.

          (c) The following documents must be delivered by the Depositor on or in connection with the Closing Date and each Funding Date, as applicable.

     (i) The Depositor Assignment. As of the Closing Date and each Funding Date, the Depositor shall execute a Depositor Assignment, substantially in the form of Exhibit A hereto, with respect to the Receivables and the related Deposited Assets being transferred by the Depositor on such date (as identified on the Schedule of Receivables attached to such Depositor Assignment).

     (ii) Evidence of UCC Filings. On or prior to the Closing Date and each Funding Date, as applicable, the Depositor shall provide the Issuer evidence that the Depositor has obtained, at the expense of the Depositor, (A) executed releases and UCC-3 releases or termination statements in each jurisdiction in which required by applicable law, if any, to release any prior security interests in the Receivables and the related Deposited Assets granted by the Depositor and (B) UCC-1 financing statements in each jurisdiction in which required by applicable law, executed by the Depositor, as seller or debtor, and naming the Issuer, as purchaser or secured party, identifying the Receivables and the related Deposited Assets as collateral, meeting the requirements of the laws of each such jurisdiction and in such manner as is necessary to perfect the transfer of such Receivables to the Issuer.

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     (iii) Other Documents. The Depositor must deliver such other documents and legal opinions as the Issuer or the Agent may reasonably request.

          (d) Documents to be Delivered by the Depositor in Connection with the Closing Date and each Funding Date. On or prior to the Closing Date or a Funding Date, as applicable, the Depositor shall deliver to the Custodian the following documents with respect to each Receivable transferred on such date (collectively, with respect to each such Receivable, a “Custodian File”): (a) a fully executed original of the related retail installment contract, and an acknowledgment of the Custodian that it holds such Receivable for the benefit of the Noteholders, (b) evidence of either (1) a certificate of insurance, (2) an application form for insurance signed by the Obligor, or (3) a signed representation letter from the Obligor named in the Receivable pursuant to which the Obligor has agreed to obtain physical damage insurance for the related Financed Vehicle, (c) the original or electronic equivalent of the Certificate of Title or, with respect to a Certificate of Title filed electronically, a report prepared by a third party service that shows such service maintains perfection related to such Certificate of Title on behalf of the Servicer; or, if the Certificate of Title has not yet been received, and in the case of each electronic Certificate of Title an application therefor, or a copy of such Certificate of Title with a copy of the application filed to amend the Certificate of Title to indicate the security interest of the Contributor in the related Financed Vehicle, (d) an electronic or hard copy of an original credit application signed by the Obligor, (e) the originals of all written assumption, consolidation, extension, modification or waiver agreements, if any, relating to such Receivable except for any such item listed above which has been preserved by electronic means, (f) any other documents that the Servicer shall keep on file, in accordance with its customary procedures, or reasonably required by the Issuer, from time to time to be kept on file, relating to a Receivable, the related Obligor or the related Financed Vehicle, and (g) any additional original loan documents evidencing any assumption, consolidation, extension, modification or waiver of a Receivable approved by the Servicer.

          On or prior to the Closing Date or a Funding Date, as applicable, the Depositor shall deliver or cause to be delivered to the Custodian the original Certificate of Title or copies of correspondence to the appropriate governmental authority, and all enclosures thereto, for issuance of the original Certificate of Title for the related Financed Vehicles.

          If any original Certificate of Title is not delivered to the Servicer due to the fact that such Certificate of Title has not yet been issued by the applicable governmental authority and delivered to or on behalf of the Contributor, such Certificate of Title shall be delivered by the Contributor to the Servicer promptly following receipt thereof by the Contributor but in no event later than one hundred eighty (180) days following the Closing Date or the related Funding Date, as applicable; provided, however, that for any original Certificate of Title not so delivered to Custodian prior to the expiration of such 180-day period, or if any other item of the Custodian File is not included therein, the Depositor shall be deemed to be in breach of its representations and warranties contained in Section 3.02(a) hereof, and the related Receivable shall be repurchased by the Depositor pursuant to Section 3.03(a) hereof.

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          (e) Other Transactions. The transactions contemplated by the Indenture, the Contribution Agreement, this Agreement and the other Transaction Documents shall be consummated on the Closing Date or, with respect to a Subsequent Transfer, shall have been consummated on the related Funding Date.

          Section 4.02. Conditions to Obligation of the Depositor. The obligation of the Depositor to transfer the Receivables to the Issuer on the Closing Date or each Funding Date, as the case may be, is subject to the satisfaction of the following conditions:

          (a) The representations and warranties of the Issuer hereunder shall be true and correct on the Closing Date or such Funding Date, as the case may be, with the same effect as if then made, and the Issuer shall have performed all obligations to be performed by it hereunder on or prior to the Closing Date or such Funding Date, as the case may be.

          (b) All corporate and legal proceedings and all instruments in connection with the transactions contemplated by this Agreement shall be satisfactory in form and substance to the Depositor and the Agent, and the Depositor and the Agent shall have received from the Issuer copies of all documents relevant to the transactions herein contemplated as the Depositor or the Agent may have requested.

          (c) The Depositor shall have received the related Receivables Purchase Price on the Closing Date and each Funding Date.

Article V

Covenants of the Depositor

     The Depositor agrees with the Issuer as follows:

     Section 5.01. Protection of Right, Title and Interest.

     (a) Filings. The Depositor shall cause all financing statements and continuation statements and any other necessary documents covering the right, title and interest of the Issuer in and to the Receivables and the related Deposited Assets to be promptly filed, and at all times to be kept recorded, registered and filed, all in such manner and in such places as may be required by law to fully preserve and protect the right, title and interest of the Issuer hereunder and the Indenture Trustee under the Indenture to the Receivables and the other property of the Trust Estate. The Depositor shall deliver or cause to be delivered to or at the direction of the Issuer (with copies to the Agent), file-stamped copies of, or filing receipts for, any document recorded, registered or filed as provided above, as soon as available following such recordation, registration or filing. The Issuer shall cooperate fully with the Depositor in connection with the obligations set forth above and will execute any and all documents reasonably required to fulfill the intent of this Section 5.01(a). In the event the Depositor fails to perform its obligations under this subsection, the Issuer or the Indenture Trustee may do so at the expense of the Depositor.

     (b) Name and Other Changes. At least thirty (30) days prior to the Depositor making any change in its name, identity, jurisdiction of organization or structure which would make any financing statement or continuation statement filed in accordance with paragraph (a) above

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seriously misleading within the applicable provisions of the UCC or any title statute, the Depositor shall give the Issuer, the Agent and the Indenture Trustee written notice of any such change, and, no later than five (5) days after the effective date thereof, the Depositor shall file such financing statements or amendments as may be necessary to continue the perfection of the Issuer’s interest in the Receivables and the Deposited Assets. At least sixty (60) days prior to the date of any relocation of its principal executive office or State of incorporation, the Depositor shall give the Indenture Trustee, the Agent and the Issuer written notice thereof and the Depositor shall, within five (5) days after the effective date thereof, file any amendment of any previously filed financing or continuation statement or new financing statement necessary or desirable to continue the perfection of the Issuer’s interest in the Receivables and the Deposited Assets. The Depositor shall at all times maintain its principal executive office within the United States of America. The Depositor shall not become or seek to become organized under the laws of more than one jurisdiction. The Depositor at all times shall be and remain a wholly-owned subsidiary of Bay View Acceptance.

     (c) Accounts and Records. The Depositor shall maintain accounts and records as to each Receivable accurately and in sufficient detail to permit the reader thereof to know at any time the status of such Receivable, including payments and recoveries made and payments owing (and the nature of each).

     (d) Sale of Other Receivables. If at any time the Depositor shall propose to sell, grant a security interest in, or otherwise transfer any interest in any automobile, van, sport utility vehicle or light duty truck installment sale contracts (other than the Receivables) to any prospective purchaser, lender, or other transferee, the Depositor shall give to such prospective purchaser, lender or other transferee computer tapes, records, or print-outs (including any restored from backup archives) that, if they shall refer in any manner whatsoever to any Receivable or Financed Vehicle, shall indicate clearly that such Receivable or Financed Vehicle has been transferred to the Issuer and pledged to the Indenture Trustee unless such Receivable has been paid in full or repurchased.

     (e) Access to Records. The Depositor shall, upon reasonable notice, permit the Issuer, the Agent, the Indenture Trustee, the Servicer and their respective agents at any time during normal business hours to inspect, audit, and make copies of and abstracts from the Depositor’s records regarding any Receivable.

     (f) Other Actions. The Depositor shall from time to time, at its expense, promptly execute and deliver all further instruments and documents (including, without limitation, powers of attorney for the benefit of the Servicer) and take all further action that may be necessary or desirable to permit the Servicer to perform its obligations under this Agreement, including, without limitation the Servicer’s obligation to preserve and maintain the perfected security interest of the Indenture Trustee in the Receivables, the Financed Vehicles and the other Deposited Assets.

     Section 5.02. Other Liens or Interest. Except for the transfers hereunder, the Depositor will not sell, pledge, assign or transfer to any other person, or grant, create, incur, assume or suffer to exist any Lien on, any interest, and the Depositor shall defend the right, title, and interest of the Issuer in, to and under the Initial Receivables and Subsequent Receivables and

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other Deposited Assets against all claims of third parties claiming through or under the Depositor; provided, however, that the Depositor’s obligations under this Section 5.02 shall terminate upon the termination of the Indenture in accordance with its terms.

     Section 5.03. Principal Executive Office; Jurisdiction of Organization. The Depositor shall maintain its principal executive office, principal place of business, location of all books and records relating to the Receivables and other Deposited Assets and sole jurisdiction of organization at the locations and in the jurisdiction, respectively, set forth in Section 3.02(i).

     Section 5.04. Costs and Expenses. The Depositor agrees to pay all reasonable costs and disbursements in connection with the perfection, as against all third parties, of the transfer to the Issuer of the Depositor’s right, title and interest in and to the Receivables and the Deposited Assets and the pledge thereof to the Indenture Trustee.

     Section 5.05. No Waiver. The Depositor shall not waive any default, breach, violation or event permitting acceleration under the terms of any Receivable; provided, however, nothing in this Section 5.05 shall affect the rights of and the restrictions on the Servicer with respect to such matters as set forth in this Agreement.

     Section 5.06. Depositor’s Records. The books and records of the Depositor will disclose that the Depositor transferred the Receivables to the Issuer; provided, however, the Depositor may show the Receivables as assets of the consolidated companies that include the Contributor, the Depositor and the Issuer as long as such financial statements indicate the transfers consummated hereunder, under the Contribution Agreement, under each Contributor Assignment and Depositor Assignment and under the Indenture and indicate that such assets will not be available to satisfy the claims of any creditor of the Contributor or the Depositor. In the event that the Issuer shall be deemed a separate taxable entity for federal income tax purposes, the Contributor will file or will cause to be filed all tax returns and reports in a manner consistent with the transfer to the Issuer of the Receivables for federal income tax purposes.

     Section 5.07. Cooperation by Depositor. (a) The Depositor will cooperate fully and in a timely manner with the Issuer, the Servicer, the Agent and the Indenture Trustee in connection with (i) the filing of any claims with an insurer or any agent of any insurer under any Insurance Policy affecting an Obligor or any of the Financed Vehicles; (ii) supplying any additional information as may be requested by the Issuer, the Agent, the Servicer, the Indenture Trustee or any such agent or insurer in connection with the processing of any such claim; and (iii) the execution or endorsement of any check or draft made payable to the Depositor representing proceeds from any such claim. The Depositor shall take all such actions as may be requested by the Issuer, the Servicer, the Agent or the Indenture Trustee to protect the rights of the Issuer or the Indenture Trustee on behalf of the Noteholders in and to any proceeds under any and all of the foregoing insurance policies. The Depositor shall not take or cause to be taken any action which would impair the rights of the Issuer or the Indenture Trustee on behalf of the Noteholders in and to any proceeds under any of the foregoing insurance policies.

     (b) The Depositor shall, within one (1) Business Day of receipt thereof, endorse any check or draft payable to the Depositor representing insurance proceeds and in the event there are no other payees on such check or draft, forward, via hand delivery, such endorsed check or

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draft to the Servicer for deposit into the Local Bank Account (or, if the Backup Servicer is acting as successor Servicer, for deposit into the Backup Servicer Account). The Depositor will hold in trust and remit to the Local Bank Account (or, if the Backup Servicer is acting as successor Servicer, for deposit into the Backup Servicer Account), within one (1) Business Day of receipt thereof, any funds received with respect to the Receivables after the related Cutoff Date.

     Section 5.08. Notice of Breach. The Depositor shall notify in writing the Indenture Trustee, the Noteholders, the Agent, and the Issuer promptly upon becoming aware of any breach of the representations and warranties or covenants of the Depositor or the Issuer contained herein or in any other Transaction Documents.

     Section 5.09. Liability of Depositor; Indemnities. The Depositor shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Depositor under this Agreement.

     (i) The Depositor shall indemnify, defend, and hold harmless the Indenture Trustee, the Agent, the Noteholders, the Servicer, the Backup Servicer, the Owner Trustee (as such and in its individual capacity) and the Issuer from and against any taxes (other than income or capital gains taxes related to the sale of the Notes) that may at any time be asserted against the Indenture Trustee or the Issuer with respect to, as of the Closing Date (with respect to the Initial Receivables) and as of the related Funding Date (with respect to the Subsequent Receivables), the sale of the related Receivables to the Issuer or the issuance and original sale of the Notes or asserted with respect to ownership of the Receivables, including any sales, gross receipts, general corporation, tangible personal property, privilege, or license taxes and costs and expenses in defending against the same.

     (ii) The Depositor shall indemnify, defend, and hold harmless the Indenture Trustee, the Agent, the Noteholders, the Servicer, the Backup Servicer, the Owner Trustee (as such and in its individual capacity) and the Issuer and their respective officers, directors, employees and agents, from and against any loss, liability, or expense incurred by reason of the Depositor’s bad faith, willful misconduct or negligence in the performance of its duties under this Agreement or any other Transaction Document to which it is a party, or by reason of reckless disregard of the Depositor’s obligations and duties under this Agreement or any other Transaction Document to which it is a party, or the Depositor’s violation of federal or State securities laws in connection with the initial sale of the Notes.

     (iii) The Depositor shall indemnify, defend, and hold harmless the Indenture Trustee, the Agent, the Noteholders, the Servicer, the Backup Servicer, the Owner Trustee (as such and in its individual capacity) and the Issuer and their respective officers, directors, employees and agents, from and against any loss, liability, or expense incurred as a result of third party claims arising out of the events or facts giving rise to a breach of the covenants or representations and warranties of the Depositor set forth in Article V hereof and Section 3.02 hereof.

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     Indemnification under this Section 5.09 shall survive the termination of this Agreement (or, in the case of indemnification of the Indenture Trustee or the Backup Servicer, shall survive the resignation or removal of the Indenture Trustee or Backup Servicer, respectively) and shall include, without limitation, reasonable fees and expenses of counsel and expenses of litigation. If the Depositor shall have made any indemnity payment to the Indenture Trustee, the Agent, the Noteholders, the Servicer, the Backup Servicer, the Owner Trustee (as such or in its individual capacity) or the Issuer pursuant to this Section and any such Person thereafter shall collect any of such amounts from others, then such Person shall repay such amounts to the Depositor, without interest. If the Depositor fails to indemnify any applicable Person pursuant to this Section 5.09, then such Person shall notify the Contributor of such failure and the Contributor shall pay the amount of such indemnification to the applicable Person within two (2) Business Days of receipt of such notice.

     Notwithstanding anything to the contrary contained in this Agreement, the obligations of the Depositor under this Section 5.09 are solely the corporate obligations of the Depositor, and shall be payable by the Depositor, as provided in this Section 5.09. The Depositor shall only be required to pay (a) any fees, expenses, indemnities or other liabilities that it may incur under this Section 5.09 to the extent the Depositor has funds available that would be in excess of amounts that would be necessary to pay the debt and other obligations of the Depositor incurred in accordance with the Depositor’s certificate of incorporation and all financing documents to which the Depositor is a party and (b) any expenses, indemnities or other liabilities that it may incur under this Section 5.09 only to the extent it receives funds designated for such purposes or to the extent it has funds available that would be in excess of amounts that would be necessary to pay the debt and other obligations of the Depositor incurred in accordance with the Depositor’s certificate of incorporation and all financing documents to which the Depositor is a party. In addition, no amount owing by the Depositor hereunder in excess of the liabilities that it is required to pay in accordance with the preceding sentence shall constitute a “claim” (as defined in Section 101(5) of the Bankruptcy Code) against it. No recourse shall be had for the payment of any amount owing hereunder or for the payment of any fee hereunder or any other obligation of, or claim against, the Depositor arising out of or based upon this Section 5.09, against any stockholder, employee, officer, agent, director or authorized person of the Depositor or of any Affiliate thereof (other than with respect to any obligation of the Contributor as set forth in the last sentence of the foregoing paragraph); provided, however, that the foregoing shall not relieve any such Person or entity of any liability they might otherwise have as a result of fraudulent actions or willful misconduct or omissions taken by them.

     Section 5.10. Merger or Consolidation of, or Assumption of the Obligations of, Depositor. Subject to Section 5.13 hereof, any Person (i) into which the Depositor may be merged or consolidated, (ii) resulting from any merger, conversion, or consolidation to which the Depositor shall be a party, (iii) succeeding to the business of the Depositor, or (iv) exercising control directly or indirectly of the Depositor, which Person in any of the foregoing cases executes an agreement of assumption acceptable, in their respective absolute discretion, to each of the Agent and the Indenture Trustee, to perform every obligation of the Depositor under this Agreement and the other Transaction Documents to which the Depositor is a party, will be the successor to the Depositor under this Agreement without the execution or filing of any document or any further act on the part of any of the parties to this Agreement; provided, however, that (a) immediately after giving effect to such transaction, (1) no representation or warranty made

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pursuant to Section 3.02(a) would have been breached (for purposes hereof, such representations and warranties shall speak as of the date of the consummation of such transaction) and (2) no event that, after notice or lapse of time, or both, would become a Servicer Event of Default, an Event of Default or a Termination Event, shall have occurred and be continuing, (b) the Depositor shall have delivered to the Agent and the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel each stating that such consolidation, conversion, merger, or succession and such agreement or assumption comply with this Section and Section 5.13(iii) and that all conditions precedent, if any, provided for in this Agreement relating to such transaction have been complied with, (c) the Depositor shall have delivered to the Agent and the Indenture Trustee an Opinion of Counsel either (1) stating that, in the opinion of such counsel, all financing statements and continuation statements and amendments thereto have been executed and filed that are necessary fully to preserve and protect the interest of the Issuer and the Noteholders in the Receivables, and reciting the details of such filings, or (2) stating that, in the opinion of such counsel, no such action shall be necessary to preserve and protect such interest, and (d) the organizational documents of the Person surviving or resulting from such transaction shall contain provisions the same in substantive effect as those of the Depositor’s articles of incorporation in respect of the issuance of debt, the independent director and bankruptcy remoteness. The Depositor shall provide written notice of any merger, consolidation, conversion, or succession pursuant to this Section and Section 5.13(iii) to the Agent. Notwithstanding anything herein to the contrary, the execution of the foregoing agreement of assumption and compliance with clauses (a) through (e) above shall be conditions to the consummation of the transactions referred to in clauses (i), (ii), (iii) or (iv) above.

     Section 5.11. Limitation on Liability of Contributor, Depositor and Others. Each of the Contributor and the Depositor and any director or officer or employee or agent of the Depositor or the Contributor may rely in good faith on the written advice of counsel, Opinion of Counsel, Officer’s Certificate, or on any document of any kind, prima facie properly executed and submitted by any Person respecting any matters arising hereunder. Neither the Contributor nor the Depositor shall be under any obligation to appear in, prosecute, or defend any legal action that shall not be incidental to its obligations under this Agreement and that in its opinion may involve it in any expense or liability; provided, however, that the Contributor or the Depositor, as the case may be, may undertake any reasonable action that it may in good faith deem necessary or desirable in respect of this Agreement and the rights and duties of the parties to this Agreement and the interests of the Noteholders under this Agreement. In such event, the legal expenses and costs of such action and any liability resulting therefrom shall be expenses, costs, and liabilities of the Contributor or the Depositor, as the case may be.

     Section 5.12. Contributor and Depositor May Own Notes. The Contributor or the Depositor and any Person controlling, controlled by, or under common control with the Contributor or the Depositor may in their individual or any other capacities become the owner or pledgee of Notes with the same rights as it would have if it were not the Contributor or the Depositor or an Affiliate thereof, except as otherwise specifically provided herein. Notes so owned by or pledged to the Contributor and the Depositor or such controlling, controlled or commonly controlled Person shall have an equal and proportionate benefit under the provisions of this Agreement, without preference, priority or distinction as among all of the Notes, as the case may be.

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     Section 5.13. Additional Covenants of the Depositor. The Depositor shall not do any of the following, without (a) the prior written consent of the Majority Holders, and (b) the prior written consent of the Indenture Trustee, who shall, without any exercise of its own discretion, also provide its written consent to the Depositor upon receipt by it of a copy of the written consent of the Majority Holders:

     (i) engage in any business or activity other than those set forth in the certificate of incorporation and bylaws of the Depositor or amend the Depositor’s certificate of incorporation and by laws other than in accordance with its terms as in effect on the date hereof;

     (ii) incur any indebtedness, or assume or guaranty any indebtedness of any other entity;

     (iii) dissolve or liquidate, in whole or in part, consolidate or merge with or into any other entity or convey or transfer its properties and assets substantially as an entirety to any entity; or

     (iv) without the affirmative vote of 100% of the members of the board of directors of the Depositor, including the independent directors, institute proceedings to be adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it, or file a petition seeking or consent to reorganization or relief under any applicable federal or State law relating to bankruptcy, or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Depositor or a substantial part of its property, or make any assignment for the benefit of creditors, or admit in writing its inability to pay its debts generally as they become due, or take corporate action in furtherance of any such action.

Article VI

Administration and Servicing of Receivables

     Section 6.01. Appointment and Duties of the Servicer.

     (a) The Issuer hereby appoints Bay View Acceptance as the Servicer for an initial term commencing on the Closing Date, which term shall be automatically extended for successive 364-day terms, until the Notes are paid in full, unless the Agent, in its sole discretion, delivers a Servicer Termination Notice as set forth below. The Servicer hereby agrees that, as of the date hereof, the Servicer shall become bound, for the initial term beginning on the Closing Date and for the duration of each successive term to continue as the Servicer subject to and in accordance with the other provisions of this Agreement. At any time during the initial term or any subsequent term, the Agent may, in its sole discretion, deliver to the Servicer a written notice (a “Servicer Termination Notice”) providing that the then current Servicer’s duties as Servicer shall terminate at the end of the then current term.

     (b) The Backup Servicer, if not then acting as successor Servicer, may be terminated as Backup Servicer at any time, with or without cause and without payment of the Backup Servicer Termination Fee. If the Backup Servicer is acting as successor Servicer, (i) the Backup

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Servicer may be terminated pursuant to the terms of Section 10.02, or (ii) the Agent may terminate the term of the Backup Servicer at any time for any reason, subject to the payment of the Backup Servicer Termination Fee, upon sixty (60) days’ written notice to the Backup Servicer. The Agent may terminate the term of the Backup Servicer upon five (5) days’ written notice, and the Backup Servicer shall not be entitled to the Backup Servicer Termination Fee, if the Agent has determined in its reasonable credit judgment that the Backup Servicer has engaged in willful misconduct or gross negligence in the performance of its duties hereunder.

     (c) The Servicer shall service, administer and make collections on the Receivables, and perform the other actions required of the Servicer under this Agreement. The Servicer agrees that its servicing of the Receivables shall be carried out in accordance with its customary and usual collection procedures. The Servicer’s duties shall include, without limitation, collection and posting of all payments, responding to inquiries of Obligors on the Receivables, investigating delinquencies, sending monthly statements to Obligors, reporting any required tax information to Obligors, policing and foreclosing on the collateral (including the Financed Vehicles), accounting for collections and furnishing the Weekly Servicer Report, the Monthly Servicer Report, the Pre-Funding Servicer Report and annual statements to the Backup Servicer, the Indenture Trustee and the Agent with respect to distributions, and performing the other duties specified herein (it being understood that if the Backup Servicer is acting as successor Servicer, it shall not be required to issue Weekly Servicer Reports). The Servicer shall also administer and enforce all rights and responsibilities of the holder of the Receivables provided for in the Dealer Agreements and the Insurance Policies, to the extent that such Dealer Agreements and Insurance Policies relate to the Receivables, the Financed Vehicles or the Obligors (it being understood that if the Backup Servicer is acting as successor Servicer, it shall have no duty to enforce such Dealer Agreements). To the extent consistent with the standards, policies and procedures otherwise required hereby, the Servicer shall follow its customary standards, policies, and procedures and shall have full power and authority, acting alone, to do any and all things in connection with such servicing, administration and collection that it may deem necessary or desirable. Without limiting the generality of the foregoing, the Servicer is hereby authorized and empowered by the Indenture Trustee, on behalf of the Trust, to execute and deliver, on behalf of the Noteholders and the Indenture Trustee, any and all instruments of satisfaction or cancellation, or of partial or full release or discharge, and all other comparable instruments, with respect to the Receivables and with respect to the Financed Vehicles; provided however, that notwithstanding the foregoing, the Servicer shall not, except pursuant to an order from a court of competent jurisdiction, release an Obligor from payment of any unpaid amount under any Receivable or waive the right to collect the unpaid balance of any Receivable from the Obligor, except that the Servicer may forego collection efforts if the amount subject to collection is Supplemental Servicing Fees or any other fees that are property of the Servicer or are otherwise de minimis (i.e., less than twenty dollars ($20)) or if it would forego collection in accordance with its customary procedures. The Servicer is hereby authorized to commence, in its own name or in the name of the Indenture Trustee, on behalf of the Trust, a legal proceeding to enforce a Receivable pursuant to Section 6.02 or to commence or participate in any other legal proceeding (including, without limitation, a bankruptcy proceeding) relating to or involving a Receivable, an Obligor or a Financed Vehicle. If the Servicer commences or participates in such a legal proceeding in its own name, the Indenture Trustee shall thereupon be deemed to have automatically assigned such Receivable to the Servicer solely for purposes of commencing or participating in any such proceeding as a party or claimant, and the Servicer is authorized and

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empowered by the Indenture Trustee, on behalf of the Trust, to execute and deliver in the Servicer’s name any notices, demands, claims, complaints, responses, affidavits or other documents or instruments in connection with any such proceeding. The Indenture Trustee, on behalf of the Trust, shall furnish, at the Servicer’s expense, the Servicer with any powers of attorney and other documents which the Servicer may reasonably request in writing and which the Servicer deems necessary or appropriate and take any other steps which the Servicer may deem necessary or appropriate to enable the Servicer to carry out its servicing and administrative duties under this Agreement; provided, however, that if the Backup Servicer is the successor Servicer, it shall be reimbursed for all out-of-pocket expenses incurred in connection with the enforcement of the Receivables and shall not be responsible for expenses incurred in connection with such powers of attorney necessary to satisfy its administrative and servicing duties hereunder. The Servicer shall furnish to the Owner Trustee, the Indenture Trustee, and the Agent from time to time such additional information regarding the Backup Servicer, the Issuer or the Transaction Documents as the Owner Trustee, the Backup Servicer, the Indenture Trustee or the Agent shall reasonably request.

     Section 6.02. Realization upon Receivables. (a) On behalf of the Noteholders and the Issuer and consistent in all material respects with the standards, policies and procedures required by the Collection Policy, the Servicer shall repossess (or otherwise comparably convert the ownership of) and liquidate any Financed Vehicle securing a Receivable with respect to which the Servicer has determined that payments thereunder are not likely to be resumed, as soon as is practicable after default on such Receivable but in no event later than the date on which ten percent (10%) or more of a Scheduled Obligor Payment remains unpaid for one hundred eighty (180) or more days from the date on which it is due and payable. The Servicer is authorized to follow such customary practices and procedures as it shall deem necessary or advisable, consistent with the standard of care required by Section 6.01, which practices and procedures may include reasonable efforts to realize upon any recourse to the Dealers (it being understood that if the Backup Servicer is acting as successor Servicer, it shall have no duty to enforce such remedy), selling the related Financed Vehicle at public or private sale, the submission of claims under an Insurance Policy and other actions by the Servicer in order to realize upon such a Receivable. The foregoing is subject to the provision that, in any case in which the Financed Vehicle shall have suffered damage, the Servicer shall not expend funds in connection with any repair or towards the repossession of such Financed Vehicle unless it shall determine in its discretion that there is a reasonable likelihood that such repair and/or repossession shall increase the proceeds of liquidation of the related Receivable by an amount greater than the amount of such expenses. All amounts received upon liquidation of a Financed Vehicle shall be remitted directly by the Servicer to the Local Bank Account (or, if the Backup Servicer is acting as successor Servicer, for deposit into the Backup Servicer Account) as soon as practicable, but in no event later than two (2) Business Days after receipt thereof. The Servicer shall be entitled to recover all reasonable expenses incurred by it in the course of repossessing and liquidating a Financed Vehicle, but only out of the cash proceeds of such Financed Vehicle, any deficiency obtained from the Obligor or any amounts received from the related Dealer, which amounts may be retained by the Servicer (and shall not be required to be deposited into the Local Bank Account (or, if the Backup Servicer is acting as successor Servicer, into the Backup Servicer Account)) to the extent of such expenses. The Servicer shall recover such reasonable expenses based on the information contained in the Monthly Servicer Report delivered on the related Determination Date. The Servicer shall pay on behalf of the Issuer any personal property taxes

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assessed on repossessed Financed Vehicles; the Servicer shall be entitled to reimbursement of any such tax from Recoveries with respect to such Receivable.

     (b) If the Servicer elects to commence a legal proceeding to enforce a Dealer Agreement, the act of commencement shall be deemed to be an automatic assignment from the Indenture Trustee to the Servicer of the rights under such Dealer Agreement for purposes of collection only. If, however, in any enforcement suit or legal proceeding, it is held that the Servicer may not enforce a Dealer Agreement on the grounds that it is not a real party in interest or a Person entitled to enforce the Dealer Agreement, the Indenture Trustee, at the Servicer’s expense, or the Issuer, at the Issuer’s expense, shall take such steps as the Servicer deems reasonably necessary to enforce the Dealer Agreement, including bringing suit in its name or the name of the Issuer, the Depositor, the Contributor or the Indenture Trustee for the benefit of the Noteholders. All amounts recovered (less the expenses of such enforcement) shall be remitted directly by the Servicer to the Local Bank Account (or, if the Backup Servicer is acting as successor Servicer, to the Backup Servicer Account) as soon as practicable, but in no event later than two (2) Business Days after receipt thereof.

     Section 6.03. Insurance. (a) The Servicer shall monitor the status of each Insurance Policy in accordance with its customary servicing procedures (it being understood that if the Backup Servicer is acting as successor Servicer, it shall have no duty to monitor the status of any Insurance Policy). If the Servicer shall determine that an Obligor has failed to obtain or maintain a physical loss and damage Insurance Policy covering the related Financed Vehicle which satisfies the conditions set forth in Section 3.02(a) of the Contribution Agreement and Section 3.02(a) of this Agreement (including during the repossession of such Financed Vehicle), the Servicer may, but shall not be required to, in accordance with its customary practice, enforce the rights of the holder of the Receivable thereunder to require the Obligor to obtain such physical loss and damage insurance.

     (b) To the extent applicable, the Servicer shall not take any action which would result in noncoverage under any of the Insurance Policies referred to in Section 6.03(a) which, but for the actions of the Servicer, would have been covered thereunder. The Servicer, on behalf of the Indenture Trustee, shall take such reasonable action as shall be necessary to permit recovery under any of the foregoing Insurance Policies. Any amounts collected by the Servicer under any of the foregoing Insurance Policies shall be deposited into the Local Bank Account (or, if the Backup Servicer is acting as successor Servicer, to the Backup Servicer Account) within two (2) Business Days of receipt.

     (c) The Servicer may sue to enforce or collect upon the Insurance Policies, in its own name, if possible, or as agent of the Issuer and Indenture Trustee on behalf of the Trust. If the Servicer elects to commence a legal proceeding to enforce an Insurance Policy, the act of commencement shall be deemed to be an automatic assignment of the rights of the Issuer and Indenture Trustee under such Insurance Policy to the Servicer for purposes of collection only. If, however, in any enforcement suit or legal proceeding it is held that the Servicer may not enforce an Insurance Policy on the grounds that it is not a real party in interest or a holder entitled to enforce the Insurance Policy, the Indenture Trustee, at the Servicer’s expense, or the Contributor, at the Contributor’s expense, shall take such steps as the Servicer deems reasonably necessary to

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enforce such Insurance Policy, including bringing suit in its name or the name of the Indenture Trustee for the benefit of the Noteholders.

     Section 6.04. Maintenance of Security Interests in Vehicles. (a) Consistent with the policies and procedures required by this Agreement, the Servicer shall take such steps as are necessary to maintain perfection of the security interest created in the name of the Contributor by each Receivable in the related Financed Vehicle on behalf of the Indenture Trustee, including but not limited to obtaining the execution by the Obligors and the recording, registering, filing, re-recording, re-filing, and re-registering of all security agreements, financing statements and continuation statements as are necessary to maintain the security interest granted by the Obligors under the respective Receivables. The Indenture Trustee hereby authorizes the Servicer, and the Servicer agrees, to take any and all steps necessary to re-perfect such security interest on behalf of the Indenture Trustee as necessary because of the relocation of a Financed Vehicle or for any other reason. In the event that the assignment of a Receivable to the Indenture Trustee is insufficient without a notation on the related Financed Vehicle’s Certificate of Title, or without fulfilling any additional administrative requirements under the laws of the State in which the Financed Vehicle is located, to perfect a security interest in the related Financed Vehicle in favor of the Indenture Trustee, the parties hereto agree that the Contributor’s designation as the secured party on the Certificate of Title is, with respect to each secured party, as applicable, in its capacity as agent of the Indenture Trustee. The Servicer shall provide copies of all such filings to the Indenture Trustee, the Agent and the Custodian. If the Backup Servicer is acting as successor Servicer, it shall be reimbursed pursuant to Section 5.03(b) of the Indenture for any costs incurred by it in performing its duties pursuant to this Section 6.04.

     (b) Upon the occurrence of a Termination Event, Servicer Event of Default or Event of Default, the Servicer (if the Servicer is Bay View Acceptance or a successor to the business of Bay View Acceptance) (the “Original Servicer”), at the written direction of the Majority Holders, shall take or cause to be taken such action as may, in the judgment of the Majority Holders, be necessary or desirable to perfect or re-perfect the security interests in the Financed Vehicles securing the Receivables in the name of the Indenture Trustee on behalf of the Issuer and the Noteholders by amending the title documents of such Financed Vehicles or by such other reasonable means as may be necessary or prudent, and shall deliver to the Indenture Trustee any Custodian File or portion thereof that has been released by the Indenture Trustee to the Servicer and is then in the possession of the Servicer, including any original Certificates of Title. The Servicer shall, and if the Servicer has been removed or otherwise fails to, the Contributor shall pay or reimburse all costs and expenses related to such perfection or re-perfection (the “Reliening Expenses”) on demand. If the Servicer is the Backup Servicer or any other Person acting in the capacity of successor Servicer, upon the occurrence of a Termination Event, Servicer Event of Default or Event of Default, such successor Servicer at the written direction of the Majority Holders shall take or cause to be taken such action as may, in the opinion of counsel to the Agent, which opinion shall be an expense of the Majority Holders (but shall be reimbursable to the Majority Holders in accordance with the Indenture), be necessary or desirable to perfect or re-perfect the security interests in the Financed Vehicles securing the Receivables in the name of the Indenture Trustee on behalf of the Issuer and the Noteholders by amending the title documents of such Financed Vehicles or by such other reasonable means as may, as set forth in such opinion of counsel to the Agent, be necessary or prudent and shall deliver to the Indenture Trustee any Custodian File or portion thereof that has been released by

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the Indenture Trustee to the Servicer and is then in the possession of the Servicer, including any original Certificates of Title. The Original Servicer shall pay or reimburse all Reliening Expenses on demand. If such successor Servicer is the Backup Servicer, such successor Servicer may, if it so chooses, attempt to employ a third party to perform the perfection and re-perfection duties under this Section 6.04(b) either prior to, or after the occurrence of, a Termination Event, Servicer Event of Default or Event of Default and, if after making reasonable efforts to employ such a third party such successor Servicer is unable to enter into an agreement with such a third party to perform such duties, the Agent shall identify and employ a third party to perform the perfection and re-perfection duties under this Section 6.04(b) and such successor Servicer shall only be required to provide such reasonable cooperation and assistance to such third party as may be necessary in connection with the perfection and re-perfection duties under this Section 6.04(b). In any case, such successor Servicer shall not be required to expend or risk its own funds or otherwise incur financial liability in the performance, or cooperating and assisting in the performance, of any of the duties under this Section 6.04(b) if the repayment of such funds or adequate written indemnity against such risk or liability is not reasonably assured to it prior to the expenditure or risk of such funds or incurrence of financial liability. In addition, prior to the occurrence of a Termination Event, Servicer Event of Default or Event of Default, the Agent may instruct the Servicer to take or cause to be taken such action, and instruct the Indenture Trustee to use its best efforts to cooperate and assist the Servicer with any such action, as may, in the judgment of the Majority Holders or the Agent, be reasonably necessary to perfect or re-perfect the security interest in the Financed Vehicles securing the Receivables in the name of the Indenture Trustee on behalf of the Issuer and the Noteholders, including by amending the Certificates of Title related to such Financed Vehicles to reflect the security interest of the Indenture Trustee in the related Financed Vehicle or by such other reasonable means as may be necessary or prudent.

     The Servicer hereby makes, constitutes and appoints the Indenture Trustee acting through its duly appointed officers or any of them, its true and lawful attorney, for it and in its name and on its behalf, for the sole and exclusive purpose of authorizing said attorney to execute and deliver as attorney-in-fact or otherwise, any and all documents and other instruments and to do or accomplish all other acts or things necessary or appropriate to show the Indenture Trustee as lienholder or secured party on the Certificate of Title relating to a Financed Vehicle. Notwithstanding anything herein to the contrary, the Indenture Trustee shall be under no obligation to file or prepare financing statements or continuation statements, or to take any action or to execute any further documents or instruments in order to create, preserve or perfect the security interest granter hereunder, such obligations being solely the obligations of the Servicer.

     Section 6.05. Servicing Fee; Payment of Certain Expenses by Servicer. On each Payment Date, the Servicer shall be entitled to receive out of the Collection Account the Servicing Fee and any late fees, prepayment charges, including any administration fees or similar charges owed by an Obligor under a Receivable, for the related Collection Period pursuant to Section 5.03(b) of the Indenture. The Servicer shall be required to pay all expenses incurred by it in connection with its activities under this Agreement (including taxes imposed on the Servicer, expenses incurred in connection with distributions and reports to Noteholders). The Servicer shall be liable for the fees and expenses of the Independent Accountants.

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     Section 6.06. Servicer Report; Monthly Servicer Report; Pre-Funding Servicer Report.

     (a) No later than 1:00 p.m. New York time on the Business Day prior to any proposed Funding Date, the Servicer shall deliver to the Indenture Trustee, the Backup Servicer, the Agent and the Issuer a Weekly Servicer Report for the preceding week executed by a Responsible Officer of the Servicer containing, among other things, (i) all information necessary whether the conditions for a Subsequent Transfer on the next Funding Date will be satisfied, and (ii) a certification that all Receivables are Eligible Receivables, that the Collateral Test Amount is not less than zero (0), that the Issuer is in compliance with Section 3.15 of the Indenture, and whether any Termination Event or Event of Default has occurred (it being understood that if the Backup Servicer is acting as successor Servicer, it shall not be required to issue Weekly Servicer Reports).

     (b) No later than 1:00 p.m. New York time on each Determination Date, the Servicer shall deliver to the Indenture Trustee, the Backup Servicer, the Agent and the Issuer a Monthly Servicer Report for the related Collection Period executed by a Responsible Officer of the Servicer containing, among other things, (i) all information necessary (including whether a Termination Event has occurred) to enable the Indenture Trustee to make any withdrawal and deposit required by Section 5.03(a) of the Indenture, to give any notice required by Section 7.02 of the Indenture and make the distributions required by Section 5.03(b) of the Indenture, (ii) all information necessary to enable the Indenture Trustee to send the statements to Noteholders required by Section 5.05 of the Indenture, (iii) a listing of each Receivable which became a Defaulted Receivable during the related Collection Period, identified by account number, and (iv) a certification that all Receivables are Eligible Receivables, that the Collateral Test has been met, and that the Issuer is in compliance with Section 3.15 of the Indenture (it being understood that if the Backup Servicer is acting as successor Servicer, this clause (iv) shall require only a certification that the Collateral Test has been met). In addition to the information set forth in the preceding sentence, the Monthly Servicer Report shall also contain the following information: (i) the Aggregate Receivables Balance, the Average Delinquency Ratio, the Average Default Ratio and the Excess Spread for such Determination Date; (ii) whether any Termination Event has occurred as of such Determination Date; and (iii) whether any Termination Event that may have occurred as of a prior Determination Date is deemed cured as of such Determination Date.

     (c) No later than 1:00 p.m. New York time, the Servicer shall deliver to the Indenture Trustee, the Backup Servicer and the Agent a Pre-Funding Servicer Report executed by a Responsible Officer of the Servicer in the form attached hereto as Exhibit H.

     Section 6.07. Annual Statement as to Compliance; Notice of Servicer Event of Default; Annual and Quarterly Financial Statements. (a) The Servicer shall deliver to the Indenture Trustee, the Agent, the Backup Servicer and the Issuer, on or before April 30^th of each year, an Officer’s Certificate signed by any Authorized Officer of the Servicer, for such fiscal year, stating that (i) a review of the activities of the Servicer during the preceding 12-month period (or such other period as shall have elapsed from the Closing Date to the date of the first such certificate) and of its performance under this Agreement has been made under such officer’s supervision, and (ii) to the best of such officer’s knowledge, based on such review, the Servicer has fulfilled all its obligations under this Agreement throughout such period, or, if there has been

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a default in the fulfillment of any such obligation, specifying each such default known to such officer and the nature and status thereof.

     (b) Each party hereto shall deliver to the other parties hereto and the Agent promptly (and in no event later than two (2) Business Days) after a Responsible Officer of such Person has obtained knowledge or notice thereof, written notice of any event which with the giving of notice or lapse of time, or both, would become a Servicer Event of Default under Section 10.01.

     (c) Bay View Acceptance will deliver to the Indenture Trustee, the Backup Servicer and the Agent, on or before April 30^th of each year, a copy of the consolidated balance sheet of Bay View Acceptance and its subsidiaries as at the end of such fiscal year, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with generally accepted accounting principles, audited and accompanied by a report and opinion of an independent certified public accountant of nationally recognized standing reasonably acceptable to the Agent, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit.

     (d) Bay View Acceptance shall deliver to the Indenture Trustee, the Backup Servicer and the Agent within forty-five (45) days after the end of each fiscal quarter, a consolidated balance sheet of Bay View Acceptance and its subsidiaries as at the end of such fiscal quarter, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal quarter and for the portion of such fiscal year then ended setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail and certified by an Authorized Officer of Bay View Acceptance as fairly presenting the financial condition, results of operations, shareholders’ equity and cash flows of Bay View Acceptance and its subsidiaries in accordance with generally accepted accounting principles, subject only to normal year-end audit adjustments and the absence of footnotes.

     Section 6.08. Annual Independent Accountants’ Report. (a) The Servicer shall cause, at its expense, the Independent Public Accountants to deliver to the Indenture Trustee, the Agent, and the Backup Servicer, on or before April 30^th of each year, with respect to such fiscal year, a statement (the “Accountant’s Report”) addressed to the Board of Directors of the Servicer, to the effect that such firm has audited the financial statements of the Servicer and issued its report thereon and that such audit: (i) was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as such firm considered necessary in the circumstances; (ii) included tests relating to the servicing of automobile installment sales contracts serviced for others in accordance with the requirements of the Uniform Single Attestation Program for Mortgage Bankers (the “Program”), to the extent the procedures in the Program are applicable to the servicing obligations set forth in this Agreement; (iii) included an examination of the delinquency and loss statistics relating to the Servicer’s portfolio of automobile installment sales contracts; and (iv) except as described in the statement, disclosed no exceptions or errors in the records relating to automobile, van, sport utility vehicle and light truck loans serviced for others that, in the firm’s opinion, generally

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accepted auditing standards requires such firm to report. The Accountants’ Report shall further state that: (1) a review in accordance with agreed upon procedures was made of three randomly selected Monthly Servicer Reports; (2) except as disclosed in the Accountants’ Report, no exceptions or errors in the Monthly Servicer Reports so examined were found; and (3) the delinquency and loss information relating to the Receivables contained in the Monthly Servicer Reports were found to be accurate.

     (b) Notwithstanding the foregoing, if the Backup Servicer is acting as successor Servicer, it shall only be required to deliver to the Indenture Trustee, the Agent and the Noteholders, on or before April 15^th of each year, with respect to the most recently ended fiscal year of the Backup Servicer, a copy of its annual SAS-70 and its audited financial statements for such fiscal year.

     Section 6.09. Access to Certain Documentation and Information Regarding Receivables. The Servicer shall provide to representatives of the Indenture Trustee, the Backup Servicer, the Agent and the Noteholders reasonable access to the documentation regarding the Receivables. Each of the Depositor, the Issuer and the Servicer will permit any authorized representative or agent designated by the Indenture Trustee, the Backup Servicer, the Agent or any Noteholder to visit and inspect any of the properties of the Depositor, the Issuer or Servicer, as the case may be, to examine the corporate books and financial records of the Depositor, the Issuer or Servicer, as the case may be, its records relating to the Receivables, and make copies thereof or extracts therefrom and to discuss the affairs, finances, and accounts of the Depositor, the Issuer or the Servicer, as the case may be, with its principal officers, as applicable, and its independent accountants. In each case, such access shall be afforded without charge but only upon reasonable request and during normal business hours. Nothing in this Section 6.09 shall derogate from the obligation of the Servicer to observe any applicable law prohibiting disclosure of information regarding the Obligors, and the failure of the Servicer to provide access as provided in this Section 6.09 as a result of such obligation shall not constitute a breach of this Section 6.09. Any Noteholder, by its acceptance of a Note (or by acquisition of its beneficial interest therein), shall be deemed to have agreed to keep confidential and not to use for its own benefit any information obtained by it pursuant to this Section 6.09, except as may be required by applicable law.

     Section 6.10. Recalculation of Monthly Servicer Report. (a) On or before each Determination Date, the Servicer will deliver to the Indenture Trustee, the Agent and the Backup Servicer the Monthly Servicer Report, and to the Backup Servicer a computer diskette (or other electronic transmission) in a format acceptable to the Backup Servicer containing such information with respect to the Receivables as of the close of business on the last day of the preceding Collection Period as is necessary for preparation of the Monthly Servicer Report. The Backup Servicer shall use such computer diskette (or other electronic transmission) to compare against the information specified in Section 6.10(b)(iii) contained in the Monthly Servicer Report delivered by the Servicer, and the Backup Servicer shall certify to the Agent that it has recalculated the Monthly Servicer Report in accordance with this Section 6.10 and shall notify the Servicer, the Agent and the Indenture Trustee of any discrepancies, in each case, on or before the related Payment Date. In the event that the Backup Servicer reports any discrepancies, the Servicer and the Backup Servicer shall attempt to reconcile such discrepancies prior to the related Payment Date, but in the absence of a reconciliation, the Monthly Servicer Report shall

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control for the purpose of calculations and payments with respect to the related Payment Date. In the event that the Backup Servicer and the Servicer are unable to reconcile discrepancies with respect to a Monthly Servicer Report by the related Payment Date, (i) the Backup Servicer will notify the Indenture Trustee, and (ii) the Servicer shall cause a firm of Independent Public Accountants, at the Servicer’s expense, to audit the Monthly Servicer Report and, prior to the fifth calendar day of the following month, reconcile the discrepancies. The effect, if any, of such reconciliation shall be reflected in the Monthly Servicer Report for such next succeeding Determination Date. In addition, the Servicer shall, if so requested by the Majority Holders, deliver to the Backup Servicer (i) within five (5) Business Days of demand therefor a computer tape containing as of the close of business on the date of demand all of the data maintained by the Servicer in computer format in connection with servicing the Receivables and (ii) within fifteen (15) Business Days of demand therefor a copy of such other information as is reasonably requested by the Majority Holders for the purpose of reconciling such discrepancies. Other than the duties specifically set forth in this Agreement, the Backup Servicer shall have no obligations hereunder, including, without limitation, to supervise, verify, monitor or administer the performance of the Servicer. The Backup Servicer shall have no liability for any actions taken or omitted by the Servicer. The duties and obligations of the Backup Servicer shall be determined solely by the express provisions of this Agreement and no implied covenants or obligations shall be read into this Agreement against the Backup Servicer.

     (b) The Backup Servicer shall review each Monthly Servicer Report delivered pursuant to Section 6.10(a) and shall, based upon the information provided from the Servicer under Section 6.10(a):

          (i) confirm that such Monthly Servicer Report is complete on its face;

          (ii) load or open the computer diskette or other electronic file (which shall be in a format acceptable to the Backup Servicer) received from the Servicer pursuant to Section 6.10(a) hereof, confirm that such computer diskette is in a readable form and compare the Receivable Balance of the Receivables on an aggregate basis to that set forth in such Monthly Servicer Report and give notice of any discrepancy to the Agent; and

          (iii) recalculate the Monthly Available Funds, the Principal Payment Amount, the Note Interest, the Backup Servicer Fee, the Servicing Fee, the Indenture Trustee Fee, and the amount on deposit in the Spread Account in the Monthly Servicer Report based solely on the balances and calculations specifically set forth in the Monthly Servicer Report, and compare such calculations to those set forth in the Monthly Servicer Report. To the extent of any discrepancy, the Backup Servicer shall give notice thereof to the Agent. The Backup Servicer’s obligation shall be limited to the mathematical recalculation of the amounts set forth in this Section 6.10(b)(iii) based on the Monthly Servicer Report.

     In addition, the Servicer shall, if so requested by the Backup Servicer, deliver to the Backup Servicer its Collection Records and its monthly records promptly after demand thereof, and a computer tape containing as of the close of business on the date of demand all of the data maintained by the Servicer in computer format in connection with servicing the Receivables.

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     Section 6.11. Fidelity Bond. The Servicer hereby represents and warrants that it has obtained and shall continue to maintain in full force and effect a fidelity bond in such form and amount as is customary for prudent servicers acting as custodian of funds and documents in respect of consumer contracts similar to the Receivables on behalf of institutional investors.

     Section 6.12. No Offset. Prior to the termination of this Agreement, the obligations of the Servicer under this Agreement shall not be subject to any defense, counterclaim or right of offset which the Servicer has or may have against the Issuer, whether in respect of this Agreement, any Receivable, or otherwise; provided, however, that no other claim, defense or right of the Servicer shall be limited by this Section 6.12.

     Section 6.13. Delivery of Backup Tapes to Backup Servicer. (a) In addition to the information to be delivered by the Servicer to the Backup Servicer on or before each Determination Date pursuant to Section 6.10(a), the Servicer shall deliver to the Backup Servicer, or its designated agent, a computer diskette (or other electronic transmission), in a format acceptable to the Backup Servicer or its designated agent, as the case may be, with the loan master file and history information in the form attached hereto as Exhibit F on or prior to the Closing Date in the case of the Initial Receivables, and on or prior to the related Funding Date in the case of Subsequent Receivables (or, if there are less than two Funding Dates during any calendar month, on each Determination Date and on the last calendar day of such month, or, if such day is not a Business Day, on the next succeeding Business Day), which loan master file and history information shall be sufficiently detailed to enable the Backup Servicer to maintain records sufficient to assume the role of successor Servicer pursuant to this Agreement.

     (b) In addition to the information required to be delivered by the Servicer to the Backup Servicer or its designated agent on or before each Determination Date pursuant to Section 6.10(a) and on or prior to the Closing Date and each Funding Date pursuant to Section 6.13(a), the Servicer shall deliver the loan master file and history information to the Backup Servicer or its designated agent on the Determination Date occurring in July, 2005 (with respect to the period from and including the Initial Cutoff Date to the last day of the related Collection Period) and on the Determination Date occurring every six months thereafter in the form attached hereto as Exhibit F in writing and on a computer diskette (or other electronic transmission) in a format acceptable to the Backup Servicer or its designated agent, as the case may be, and as at such other times as may be requested by the Agent or the Backup Servicer upon prior written notice to the Servicer, provided that the Backup Servicer or the Agent, as applicable, shall deliver a copy of any such notice by the Backup Servicer or the Agent to the Backup Servicer or the Agent simultaneously with its delivery of such notice to the Servicer. The Backup Servicer shall have no obligation to verify the information delivered to it pursuant to this Section 6.13(b); the Backup Servicer shall be responsible only for loading each computer diskette and confirming that each such computer diskette is in readable form.

     Section 6.14. Covenants of Servicer. The Servicer hereby makes the following covenants to the other parties hereto on which the Indenture Trustee shall rely in accepting the Receivables in trust. Except for a release to an insurer in exchange for insurance proceeds paid by such insurer resulting from a claim for the total insured value of a vehicle, the Servicer shall not (i) release the Financed Vehicle securing each such Receivable from the security interest granted by such Receivable in whole or in part except in the event of payment in full by or on

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behalf of the Obligor thereunder or repossession, (ii) impair the rights of the Noteholders in the Receivables, (iii) change the Annual Percentage Rate with respect to any Receivable, except as may be required by applicable law or as permitted by Section 7.01(b) or (iv) otherwise modify any Receivable except as permitted by this Agreement. In addition, the Servicer shall service the Receivables as required by the terms of this Agreement and in material compliance with its current servicing procedures for servicing all of its comparable motor vehicle contracts.

     Section 6.15. Purchase of Receivables upon Breach. The Servicer, the Depositor, the Issuer or the Indenture Trustee shall inform the other parties to this Agreement and the Agent promptly, in writing, upon the discovery of any breach of Section 6.01, 6.02, 6.03, 6.04, 6.11, 6.14 or 7.01 hereof; provided, however, that the failure to give such notice shall not affect any obligation of the Servicer hereunder. Unless the breach shall have been cured by the last day of the first full Collection Period following such actual knowledge or receipt of notice by an Authorized Officer of the Servicer, the Servicer shall purchase as of the Business Day preceding the Determination Date relating to the respective Collection Period any Receivable that is materially and adversely affected by such breach or which materially and adversely affects the interests of any Noteholder (which shall include any Receivable as to which a breach of Section 6.02 has occurred). In consideration of the purchase of such Receivable, the Servicer shall remit the Repurchase Price in the manner specified in Section 3.03(a) hereof. The Indenture Trustee shall have no duty to conduct any affirmative investigation as to the occurrence of any condition requiring the repurchase of any Receivable pursuant to this Section. The purchase obligation set forth in this Section shall, except as provided below, be the sole remedy of the Indenture Trustee, the Issuer and the Noteholders with respect to any of the aforementioned breaches by the applicable Servicer; provided, however, that the Servicer shall indemnify the Issuer, the Indenture Trustee, the Backup Servicer and the Noteholders and each of their respective officers, employees, directors, agents and representatives against all costs, expenses, losses, damages, claims and liabilities, including reasonable fees and expenses of counsel, which may be asserted against or incurred by any of them as a result of third party claims arising out of the events or facts giving rise to such breach. No predecessor or successor Servicer shall be responsible for the acts or omissions of such predecessor or successor Servicer. Upon receipt of the Repurchase Price and any related indemnity payments, the Indenture Trustee shall execute and deliver all instruments of transfer or assignment, without recourse, as are prepared by the Servicer and delivered to the Indenture Trustee and are necessary to vest in the Servicer or such designee the Issuer’s right, title and interest in the Receivable. Indemnification by the Servicer under this Section 6.15 shall survive the termination of this Agreement (or, in the case of indemnification of the Indenture Trustee or the Backup Servicer, shall survive the resignation or removal of the Indenture Trustee or Backup Servicer, respectively).

     If the Servicer fails to repurchase any Receivable or make any indemnity payment which it is so required to acquire or make pursuant to this Section by the date specified, the Indenture Trustee shall be obligated promptly to notify the Contributor and the Agent of such failure, and the Contributor shall be obligated to purchase the Receivable or make such payment within five (5) Business Days following such notification and to deposit the Repurchase Price into the Collection Account or make such payment.

     Section 6.16. Custodian Files. The Servicer hereby agrees to hold each Custodian File and each document part thereof in the Servicer’s possession at any time and for any reason in

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trust for the benefit of the Indenture Trustee and the Noteholders. The Servicer agrees to promptly deliver to the Custodian each Custodian File and each and every document part thereof when the Servicer’s need therefor in connection with its duties hereunder no longer exists, unless the associated Receivable has been liquidated and the Servicer has certified the same to the Custodian in accordance with the provisions of the Custodian Agreement. The Servicer agrees to hold the Custodian Files and documents contained therein that are in its possession in accordance with the same standards required of the Custodian under the Custodian Agreement. The Servicer agrees that all Custodian Files in its possession shall be held at its chief executive office as specified in Section 8.01(b)(x) hereof or at such other location identified from time to time to the Indenture Trustee and the Agent; provided, however, that the Servicer may temporarily move a Custodian File without such identification as necessary to conduct its servicing activities for a period not to exceed thirty (30) days. If the Backup Servicer is acting as the successor Servicer and performs any duties pursuant to this Section 6.16, it shall be reimbursed pursuant to Section 5.03(b) of the Indenture for any costs incurred by it in performing such duties.

Article VII

Collections

     Section 7.01. Collection of Receivable Payments; Modification and Amendment of Receivables. (a) Consistent with the standards, policies and procedures required by this Agreement, the Servicer shall collect all payments called for under the terms and provisions of the Receivables as and when the same shall become due, and shall follow such collection procedures as it follows with respect to all comparable automobile receivables that it services for itself or others and otherwise act with respect to the Receivables, the Dealer Agreements, the Insurance Policies and the rest of the Trust Estate in such manner as will, in the reasonable judgment of the Servicer, maximize the amount to be received by the Indenture Trustee with respect thereto (it being understood that if the Backup Servicer is acting as successor Servicer, it shall have no duty to enforce any Dealer Agreements). The Servicer is authorized in its discretion to waive any prepayment charge, late payment charge or any other similar fees that may be collected in the ordinary course of servicing any Receivable.

     (b) The Servicer may at any time agree to a modification or amendment of a Receivable in order to (i) change the Obligor’s regular due date to a date within thirty (30) days in which such due date occurs or (ii) re-amortize the scheduled payments on the Receivable following a partial prepayment of principal, but not to extend the final maturity of the Receivable. In no event shall the Servicer reduce the APR on any Receivable below 4%.

     (c) The Servicer may grant payment extensions on a Receivable (excluding those modifications permitted by Section 7.01(b)) in accordance with its customary procedures if the Servicer believes in good faith that such extension is necessary to avoid a default on such Receivable, will maximize the amount to be received with respect to such Receivable, and is otherwise in the best interests of the Noteholders; provided that in no event shall a Receivable be extended such that any payment thereon would be due after the month immediately following the month in which the Maturity Date occurs; provided, further, that no extensions may be granted by the Servicer until at least three consecutive Scheduled Obligor Payments have been received

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by Servicer under the related Receivables; provided, further, that no more than one extension per year shall be permitted on any Receivable and no more than 3 extensions total shall be permitted on any Receivable; provided, further, that no extension may be granted on any Receivable within 6 months following the date of origination thereof; and provided, further, that as of the last day of any Collection Period, the aggregate Receivable Balance of Receivables the term of which has been extended during the twelve month period ending on the last day of such Collection Period shall not exceed 3.0% of the Aggregate Receivable Balance (excluding any Holiday Pay Receivables extended under the Holiday Pay Receivables Program) measured as of the last day of such Collection Period.

     (d) The Servicer shall direct Obligors to make all payments on the Receivables to be made directly to one or more post office boxes established and maintained in the name of the Indenture Trustee on behalf of the Noteholders designated by the Servicer prior to the Closing Date and set forth on Exhibit G hereto (the “Post Office Boxes”) (or, if the Backup Servicer is acting as successor Servicer, to the Backup Servicer Lockbox); provided, however, that with respect to Obligors who have amounts debited from a bank account, payments shall be directed to a bank account set forth on Exhibit G hereto at the Local Bank (the “Local Bank Account”) (or, if the Backup Servicer is acting as successor Servicer, to the Backup Servicer Account). Until the occurrence of a Servicer Event of Default, or until a Termination Event shall have occurred and be continuing and the Majority Lenders elect to direct the Indenture Trustee that the Servicer shall no longer have access to the Post Office Boxes, the Indenture Trustee agrees that the Servicer shall have access to the Post Office Boxes at all times. The Servicer shall remove all payments on the Receivables from the Post Office Boxes on each Business Day and shall deposit such amounts in the Local Bank Account (or, if the Backup Servicer is acting as successor Servicer, for deposit into the Backup Servicer Account) by the end of each such Business Day; provided, that if the Servicer is unable to remove any such payments from the Post Office Boxes by 2:00 p.m. (Pacific time) on any Business Day because such payments have not been delivered by such time or the Post Office Boxes are inaccessible as a result of circumstance beyond the control of the Servicer, then the Servicer shall remove such payments and deposit them into the Local Bank Account (or the Backup Servicer Account, as applicable) prior to 2:00 p.m. (Pacific time) on the first Business Day upon which such payments were available for removal from the Post Office Boxes. The Servicer shall remit to the Local Bank Account (or, if the Backup Servicer is acting as successor Servicer, to the Backup Servicer Account) by the end of each Business Day on which the Servicer receives any other payments made by or on behalf of the Obligors with respect to a Receivable, including all Actual Payments, Insurance Proceeds, Recoveries, Principal Reduction Amounts, Repurchase Prices and all proceeds relating to the repossession or disposition of the Financed Vehicles (including recourse payments received from Dealers with respect to a breach of a representation or warranty of such Dealers under the Dealer’s Agreements and any State tax refunds), to the extent such payments are received by the Servicer by 2:00 p.m. (Pacific time), or by the end of the following Business Day, with respect to any such payments received after such time.

     (e) The Servicer shall cause to be deposited into the Collection Account all Collections in the Local Bank Account (or, if the Backup Servicer is acting as successor Servicer, in the Backup Servicer Account) that are cleared funds within two (2) Business Days of deposit therein.

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     (f) With respect to each Receivable (other than a Repurchased Receivable), payments actually received from or on behalf of the Obligor shall be applied hereunder: first, to interest and principal in accordance with the simple interest method to the extent necessary to bring such Receivable current; second, in connection with the redemption of a defaulted Receivable, to reimburse the Servicer for reasonable and customary out-of-pocket expenses incurred by the Servicer in connection with such Receivable; third, to Supplemental Servicing Fees; and fourth, to principal in accordance with the simple interest method.

     (g) On each Transfer Date, to the extent that Monthly Available Funds would not otherwise be sufficient to satisfy amounts through clause Thirteenth of Section 5.03(b) of the Indenture on the related Payment Date, the Servicer may, but will not be required to, advance and remit to the Indenture Trustee for deposit in the Collection Account, in such manner as will ensure that the Indenture Trustee will have immediately available funds on account thereof by 11:00 a.m. New York City time on the next succeeding Payment Date, an amount (a “Servicer Advance”) equal to any payment due under any Receivable during the prior Collection Period but unpaid during such Collection Period. In consideration of each Servicer Advance the Servicer will be entitled to retain any late payment fees recovered from the Obligor with respect to any Receivables payment covered by a Servicer Advance. In addition, the Servicer will be reimbursed for Servicer Advances from funds in the Collection Account in accordance with Section 5.03 of the Indenture.

Article VIII

Representations, Warranties and Covenants

     Section 8.01. Covenants, Representations and Warranties of the Servicer. The Servicer hereby makes the following representations, warranties and covenants to the Issuer, the Depositor, the Backup Servicer, the Agent and the Indenture Trustee and the Noteholders on which the Issuer and the Indenture Trustee rely in accepting the Receivables in trust and in connection with the performance by the Indenture Trustee and the Backup Servicer of their respective obligations hereunder. The representations and warranties speak as of the execution and delivery of this Agreement, on the Closing Date, and as of each Funding Date, but shall survive each sale of the Receivables to the Issuer and the subsequent pledge thereof to the Indenture Trustee pursuant to the Indenture:

     (a) The Servicer covenants that, except as expressly otherwise permitted pursuant to the terms of this Agreement:

     (i) Liens in Force. The Financed Vehicle securing each Receivable shall not be released in whole or in part from the security interest granted by the Receivable, except upon payment in full of the Receivable or as otherwise contemplated herein.

     (ii) No Impairment. The Servicer shall do nothing to impair the rights of the Indenture Trustee or the Noteholders in the Receivables, the Dealer Agreements, the Insurance Policies or any other part of the Trust Estate.

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     (iii) Liens. The Servicer shall not (A) create, incur or suffer to exist, or agree to create, incur or suffer to exist, or consent to or permit in the future (upon the occurrence of a contingency or otherwise) the creation, incurrence or existence of any Lien on or restriction on transferability of any Receivable (except for the Lien of the Indenture Trustee and the restrictions on transferability imposed by this Agreement and the Indenture) or (B) file or authorize the filing of any UCC financing statements with respect to the Receivables in any jurisdiction that names the Issuer as a debtor and any Person other than the Indenture Trustee as a secured party, or sign any security agreement authorizing any secured party thereunder to file any such financing statement with respect to the Receivables.

     (iv) Compliance with Law. The Servicer shall comply with all applicable laws in connection with performing its obligations hereunder.

     (v) Closing Date Certificates. The Servicer shall act in a manner that conforms with those representations and warranties contained in the Certificates executed by it and delivered to Patton Boggs LLP in connection with certain Opinions of Counsel with respect to certain bankruptcy law matters delivered on the Closing Date. The Indenture Trustee and the Agent, on behalf of the Noteholders, has received a certification that the weighted average loan-to-value of the Aggregate Receivable Balance in the Pool is less than 130% on the Closing Date.

     (b) The Servicer represents and warrants as follows:

     (i) Organization and Good Standing. The Servicer has been duly organized and is validly existing and in good standing under the laws of its jurisdiction of organization, with power, authority and legal right to own its properties and to conduct its business as such properties are currently owned and such business is currently conducted, and had at all relevant times, and now has, power, authority and legal right to enter into and perform its obligations under this Agreement.

     (ii) Due Qualification. The Servicer is duly qualified to do business as a foreign corporation in good standing, and has obtained all necessary licenses and approvals, in all jurisdictions in which the ownership or lease of property or the conduct of its business (including the servicing of the Receivables as required by this Agreement and the other Transaction Documents to which it is a party) requires or shall require such qualification.

     (iii) Power and Authority. The Servicer has the power and authority to execute and deliver this Agreement and the Transaction Documents to which the Servicer is a party and to carry out its terms and their terms, respectively, and the execution, delivery and performance of this Agreement and the Transaction Documents to which the Servicer is a party have been duly authorized by the Servicer by all necessary corporate action.

     (iv) Binding Obligation. This Agreement and the other Transaction Documents to which the Servicer is a party shall constitute legal, valid and binding obligations of the Servicer enforceable in accordance with their respective terms, except

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as enforceability may be limited by bankruptcy, insolvency, reorganization, or other similar laws affecting the enforcement of creditors’ rights generally and by equitable limitations on the availability of specific remedies, regardless of whether such enforceability is considered in a proceeding in equity or at law.

     (v) No Violation. The execution, delivery and performance by the Servicer of this Agreement, the consummation of the transactions contemplated by this Agreement and the other Transaction Documents to which the Servicer is a party, and the fulfillment of the terms of this Agreement and the Transaction Documents to which the Servicer is a party, shall not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, the articles of incorporation or bylaws of the Servicer, or any indenture, loan agreement, mortgage, deed of trust or other material instrument or agreement to which the Servicer is a party or by which it is bound or any of its properties are subject, or result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, loan agreement, mortgage, deed of trust or other material instrument or agreement or violate any law, order, rule or regulation applicable to the Servicer of any court or of any federal or State regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Servicer or any of its properties, or in any way materially adversely affect the interest of the Noteholders or the Indenture Trustee in any Receivable or any other asset included in the Trust Estate or adversely affect the Servicer’s ability to perform its obligations under this Agreement or any other Transaction Document to which it is a party.

     (vi) No Proceedings. There are no proceedings or investigations pending or, to the Servicer’s knowledge, threatened against the Servicer, before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality having jurisdiction over the Servicer or its properties (A) asserting the invalidity of this Agreement, any of the Transaction Documents or the Notes, (B) seeking to prevent the issuance of the Notes or the consummation of any of the transactions contemplated by this Agreement or any of the Transaction Documents, (C) seeking any determination or ruling that might materially and adversely affect the performance by the Servicer of its obligations under, or the validity or enforceability of, this Agreement or any of the Transaction Documents, (D) seeking to adversely affect the federal income tax or other federal, State or local tax attributes of the Notes or (E) that could have a material adverse effect on the Notes. To the Servicer’s knowledge, there are no proceedings or investigations pending or threatened against the Servicer, before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality having jurisdiction over the Servicer or its properties relating to the Servicer which might adversely affect the federal income tax or other federal, State or local tax attributes of the Notes.

     (vii) No Consents. The Servicer is not required to obtain the consent of any other party or any consent, license, approval or authorization, or registration or declaration with, any governmental authority, bureau or agency in connection with the execution, delivery, performance, validity or enforceability of this Agreement or the other Transaction Documents to which it is a party.

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     (viii) Approvals. The Servicer (i) is not in violation of any laws, ordinances, governmental rules or regulations to which it is subject, which violation materially and adversely affects the business or condition (financial or otherwise) of the Servicer and its subsidiaries, the Servicer’s ability to perform its obligations hereunder or under any other Transaction Document or any Receivable, (ii) has not failed to obtain any licenses, permits, franchises or other governmental authorizations necessary to the ownership of its property or to the conduct of its business which failure to obtain will materially and adversely affect the business or condition (financial or otherwise) of the Servicer and its subsidiaries, the Servicer’s ability to perform its obligations hereunder or under any other Transaction Document or any Receivable and (iii) is not in violation of any term of any agreement, charter instrument, bylaw or instrument to which it is a party or by which it may be bound, which violation or failure to obtain materially and adversely affect the business or condition (financial or otherwise) of the Servicer and its subsidiaries, the Servicer’s ability to perform its obligations hereunder or under any other Transaction Document or any Receivable.

     (ix) Investment Company. The Servicer is not an investment company which is required to register under the Investment Company Act of 1940, as amended.

     (x) Chief Executive Office; Jurisdiction of Organization. The chief executive office of the Servicer is located at 1840 Gateway Drive, Suite 300, San Mateo, California 94404 and its sole jurisdiction of organization is the State of Nevada. The Servicer has not had any other chief executive office during the five-year period immediately preceding the Closing Date. All books and records relating to the Receivables and the other assets included in the Trust Estate are located (and have been located for the five-year period immediately preceding the Closing Date) at the chief executive office of the Servicer.

     (xi) Taxes. The Servicer has filed on a timely basis all tax returns required to be filed by it and paid all taxes, to the extent that such taxes have become due.

     (xii) No Injunctions. There are no existing injunctions, writs, restraining orders or other similar orders which might adversely affect the performance by the Servicer or its obligations under, or the validity and enforceability of, this Agreement or any other Transaction Document to which it is a party.

     (xiii) Practices. The practices used or to be used by the Servicer, to monitor collections with respect to the Receivables and repossess and dispose of the Financed Vehicles related to the Receivables will be, in all material respects, in conformity with the requirements of all applicable federal and State laws, rules and regulations, and this Agreement. The Servicer is in possession of all State and local licenses (including all debt collection licenses) required for it to perform its services hereunder, and none of such licenses has been suspended, revoked or terminated.

     Section 8.02. Purchase of Receivables upon Breach of Representation and Warranty. (a) The Contributor, the Depositor, the Servicer, the Backup Servicer, the Issuer, the Agent or the Indenture Trustee, as the case may be, shall inform all such other Persons and other parties to

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this Agreement promptly, in writing, upon the discovery of any breach of the Servicer’s covenants or representations and warranties pursuant to Section 8.01; provided, however, that the failure to give any such notice shall not derogate from any obligation of the Servicer hereunder to repurchase any Receivable; further, provided, that the Issuer, the Indenture Trustee, the Agent and the Backup Servicer shall have no duty to inquire or to investigate the breach of any of such covenants or representations and warranties. Unless the breach shall have been cured by the last day of the first full calendar month following the discovery by or notice to the Servicer of the breach, the Servicer shall have an obligation, and the Indenture Trustee shall (provided that a Responsible Officer either has actual knowledge or has received written notice thereof) make demand upon the Servicer, to repurchase as of the Business Day preceding the Determination Date relating to the respective Collection Period any Receivable materially and adversely affected by the breach. In consideration of the purchase of the Receivable, the Servicer shall remit the Repurchase Price in the manner specified in Section 3.03(a) of the Contribution Agreement and Section 3.03(a) of this Agreement. The sole remedy (except as set forth in Section 8.02(b)) of the Indenture Trustee and the Noteholders with respect to a breach of the Servicer’s covenants or representations and warranties pursuant to Section 8.01 shall be the right to require the Servicer to repurchase Receivables pursuant to this Section 8.02 and to offset the purchase price against amounts owed to the Servicer hereunder.

     (b) In addition to the foregoing and notwithstanding whether the related Receivable shall have been purchased by the Servicer, the Servicer shall indemnify the Contributor, the Depositor, the Indenture Trustee, the Backup Servicer, the Issuer, the Owner Trustee (as such and in its individual capacity), the Agent, the Custodian and the Noteholders against all costs, expenses, losses, damages, claims and liabilities, including reasonable fees and expenses of counsel, which may be asserted against or incurred by any of them as a result of third party claims arising out of the events or facts giving rise to a breach of the covenants or representations and warranties set forth in Section 8.01. Indemnification by the Servicer under this Section 8.02(b) shall survive the termination of this Agreement (or, in the case of indemnification of the Indenture Trustee or the Backup Servicer, shall survive the resignation or removal of the Indenture Trustee or Backup Servicer, respectively).

     (c) Notwithstanding anything herein to the contrary, the Backup Servicer as successor Servicer shall have no duty to repurchase any Receivable pursuant to Section 8.02(a) or to make any indemnification provided for in Section 8.02(b) with respect to the covenant set forth in Section 8.01(a)(v) and the representation set forth in Section 8.01(b)(x).

     Section 8.03. Representations of Backup Servicer. The Backup Servicer makes the following representations and warranties to the Issuer, the Servicer and the Agent, on which the Issuer relies in accepting the Receivables in trust, and the Servicer relies in connection with the performance of its obligations hereunder. The representations and warranties speak as of the execution and delivery of this Agreement, on the Closing Date, and as of each Funding Date, but shall survive each sale of the Receivables to the Issuer and the subsequent pledge thereof to the Indenture Trustee pursuant to the Indenture:

     (a) The Backup Servicer has been duly organized and is validly existing and in good standing under the laws of the State of Delaware, with power and authority to

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own its properties and to conduct its business as such properties shall be currently owned and such business is presently conducted.

     (b) The Backup Servicer has the power and authority to execute and deliver this Agreement and to carry out its terms; and the execution, delivery, and performance of this Agreement shall have been duly authorized by the Backup Servicer by all necessary corporate action.

     (c) This Agreement shall constitute a legal, valid, and binding obligation of the Backup Servicer enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, or other similar laws affecting the enforcement of creditors’ rights in general and by general principles of equity, regardless of whether such enforceability shall be considered in a proceeding in equity or at law.

     (d) The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms thereof shall not conflict with, result in any breach of any of the terms and provisions of, nor constitute (with or without notice or lapse of time) a default under, the articles of association or by-laws of the Backup Servicer, or any material indenture, agreement, or other instrument to which the Backup Servicer is a party or by which it shall be bound; nor result in the creation or imposition of any lien upon any of its properties pursuant to the terms of any such indenture, agreement, or other instrument; nor violate any law or any order, rule, or regulation applicable to the Backup Servicer of any court or of any federal or State regulatory body, administrative agency, or other governmental instrumentality having jurisdiction over the Backup Servicer or its properties.

     (e) There are no proceedings or investigations pending or, to the Backup Servicer’s best knowledge, threatened before any court, regulatory body, administrative agency, or other governmental instrumentality having jurisdiction over the Backup Servicer or its properties (i) asserting the invalidity of this Agreement, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement, (iii) seeking any determination or ruling that might materially and adversely affect the performance by the Backup Servicer of its obligations under, or the validity or enforceability of, this Agreement.

Article IX

The Servicer and Backup Servicer

     Section 9.01. Liability of Servicer; Indemnities. (a) The Servicer shall be liable hereunder only to the extent of the obligations in this Agreement and the other Transaction Documents to which it is a party specifically undertaken by the Servicer and the representations made by the Servicer.

     (b) The Servicer shall defend, indemnify and hold harmless the Issuer, the Owner Trustee (as such and in its individual capacity), the Depositor, the Indenture Trustee, the Backup

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Servicer, the Agent, their respective officers, directors, agents and employees and the Noteholders from and against any and all costs, expenses, losses, damages, claims and liabilities, including reasonable fees and expenses of counsel and expenses of litigation arising out of or resulting from the use, ownership or operation by the Servicer or any Affiliate thereof of any Financed Vehicle.

     (c) The Servicer shall indemnify, defend and hold harmless the Issuer, the Owner Trustee (as such and in its individual capacity), the Depositor, the Indenture Trustee, the Backup Servicer, the Agent, their respective officers, directors, agents and employees and the Noteholders from and against any and all costs, expenses, losses, claims, damages, and liabilities to the extent that such cost, expense, loss, claim, damage, or liability arose out of, or was imposed upon such parties through (i) the breach by the Servicer of its obligations under this Agreement or any other Transaction Document to which the Servicer is a party in its capacity as Servicer, or (ii) the negligence, willful misfeasance, or bad faith of the Servicer in the performance of its duties under this Agreement or any other Transaction Document to which the Servicer is a party in its capacity as Servicer.

     (d) The Servicer shall indemnify, defend, and hold harmless the Issuer, the Owner Trustee (as such and in its individual capacity), the Depositor, the Indenture Trustee, the Backup Servicer, the Agent and their respective officers, directors, agents and employees and the Noteholders from and against any taxes (other than income or capital gains taxes related to the sale of the Notes) that may at any time be asserted against the Indenture Trustee, the Owner Trustee (as such and in its individual capacity), or the Issuer with respect to the transactions contemplated herein, including, without limitation, any sales, gross receipts, general corporation, tangible personal property, privilege, franchise, or license taxes (but, in the case of the Issuer, not including any taxes asserted with respect to, and as of the date of, the sale of the Receivables to the Issuer or the issuance and original sale of the Notes, or asserted with respect to ownership of the Receivables, or federal or other income taxes arising out of the transactions contemplated by this Agreement) and costs and expenses in defending against the same.

     (e) The Servicer shall indemnify, defend and hold harmless the Indenture Trustee and the Backup Servicer and their respective officers, directors, employees and agents, from and against any and all costs, expenses, losses, claims, damages and liabilities (including attorneys fees and expenses), arising out of or incurred in connection with the acceptance or performance of the trusts and duties herein, under the Indenture and any related Transaction Documents; provided, however, that the Servicer shall not be liable to the Indenture Trustee or the Backup Servicer for any portion of any such amount resulting from the willful misconduct, bad faith or negligence of the Indenture Trustee or the Backup Servicer, respectively.

     (f) The Servicer shall indemnify, defend and hold harmless the Owner Trustee, its officers, directors, employees and agents, from and against any and all costs, expenses, losses, claims, damages and liabilities (including attorneys fees and expenses), arising out of or incurred in connection with, from and against, any and all liabilities, obligations, losses, damages, taxes, claims, actions and suits, and any and all reasonable costs, expenses and disbursements which may at any time be imposed on, incurred by, or asserted against the Owner Trustee in any way relating to or arising out of this Agreement, the other Transaction Documents, the Trust Estate, the administration of the Trust Estate or the action or inaction of the Owner Trustee hereunder,

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provided, however, that the Servicer shall not be liable to the Owner Trustee for any portion of any such amount resulting from the willful misconduct, bad faith or gross negligence of the Owner Trustee.

     (g) For purposes of this Section 9.01, in the event of the termination of the rights and obligations of the Servicer (or any successor thereto pursuant to Section 9.02) as Servicer pursuant to Section 10.01, a non-extension of the servicing term referred to in Section 6.01(a) or a resignation by such Servicer pursuant to this Agreement, such Servicer shall remain the Servicer until a successor Servicer has accepted its appointment pursuant to Section 10.03. The provisions of this Section 9.01(g) shall in no way affect the survival pursuant to Section 9.01(h) of the indemnification by the Servicer provided by Sections 9.01(b), (c), (d), (e) and (f).

     (h) Notwithstanding anything herein to the contrary, indemnification by the Servicer under Sections 9.01(d), (e) and (f) shall not apply to the Backup Servicer in its capacity as successor Servicer. Indemnification under this Article shall survive the termination of this Agreement (or, in the case of indemnification of the Indenture Trustee or the Backup Servicer, shall survive the resignation or removal of the Indenture Trustee or Backup Servicer, respectively) and shall include reasonable fees and expenses of counsel and expenses of litigation. If the Servicer shall have made any indemnity payments pursuant to this Article and the recipient thereafter collects any of such amounts from others, the recipient shall promptly repay such amounts collected to the Servicer, without interest.

     (i) Notwithstanding any other provision of this Agreement, the obligations of the Servicer described in this Section shall not terminate or be deemed released upon the resignation or termination of the Servicer and shall survive any termination of this Agreement to the extent that such obligations arise from the Servicer’s actions hereunder while acting as Servicer.

     Section 9.02. Merger or Consolidation of, or Assumption of the Obligations of, the Servicer and Backup Servicer. (a) The Servicer shall not merge or consolidate with any other Person or permit any other Person to become the successor to the Servicer’s business without the written consent of the Majority Holders. The Servicer shall not merge or consolidate with any other Person, convey or transfer substantially all its assets as an entirety to another Person, or permit any other Person to become the successor to the Servicer’s business unless, after the merger, consolidation, conveyance, transfer or succession, the successor or surviving entity shall be an Eligible Servicer and shall be capable of fulfilling the duties of the Servicer contained in this Agreement. Any Person (i) into which the Servicer may be merged or consolidated, (ii) resulting from any merger or consolidation to which the Servicer shall be a party, (iii) which acquires by conveyance or transfer substantially all of the assets of the Servicer, or (iv) succeeding to the business of the Servicer, in any of the foregoing cases shall execute an agreement of assumption acceptable to the Majority Holders to perform every obligation of the Servicer under this Agreement and the other Transaction Documents to which it is a party and, whether or not such assumption agreement is executed, shall be the successor to the Servicer under this Agreement and the other Transaction Documents to which it is a party without the execution or filing of any paper or any further act on the part of any of the parties to this Agreement, anything in this Agreement to the contrary notwithstanding. The Servicer shall provide written notice of any merger, consolidation or succession pursuant to this Section 9.02(a) to the Issuer, the Owner Trustee, the Depositor, the Noteholders, the Agent and the Indenture

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Trustee. Notwithstanding the foregoing, as a condition to the consummation of the transactions referred to in clauses (i), (ii), (iii) and (iv) above, (w) immediately after giving effect to such transaction, no representation or warranty made pursuant to Section 8.01 shall have been breached (for purposes hereof, such representations and warranties shall speak as of the date of the consummation of such transaction), no Servicer Event of Default and no event which, after notice or lapse of time or both, would become a Servicer Event of Default, shall have occurred and be continuing, (x) the Servicer shall have delivered to the Indenture Trustee and the Agent an Officer’s Certificate and an Opinion of Counsel each stating that such consolidation, merger or succession and such agreement of assumption comply with this Section 9.02(a) and that all conditions precedent, if any, provided for in this Agreement and the other Transaction Documents to which it is a party relating to such transaction have been complied with, and (y) the Servicer shall have delivered to the Agent and the Indenture Trustee an Opinion of Counsel either (A) stating that, in the opinion of such counsel, all financing statements and continuation statements and amendments thereto have been executed and filed (or listing which such documents will need to be executed and filed) that are necessary fully to preserve and protect the interest of the Issuer and the Indenture Trustee in the Receivables, and reciting the details of such filings, or (B) stating that, in the opinion of such counsel, no such action shall be necessary to preserve and protect such interest. The Opinion of Counsel required by this Section shall be an expense of the Servicer.

     (b) Any Person (i) into which the Backup Servicer may be merged or consolidated, (ii) which may result from any merger or consolidation to which the Backup Servicer shall be a party, or (iii) which may succeed to the properties and assets of the Backup Servicer substantially as a whole, which Person in any of the foregoing cases executes an agreement of assumption to perform every obligation of the Backup Servicer hereunder, shall be the successor to the Backup Servicer under this Agreement without further act on the part of any of the parties to this Agreement; provided, however, that nothing herein shall be deemed to release the Backup Servicer from any obligation hereunder. In the event that the resulting entity does not meet the eligibility requirements for the Indenture Trustee set forth in the Indenture, the Backup Servicer, upon the written request of the Majority Holders, shall resign from its obligations and duties under this Agreement.

     Section 9.03. Limitation on Liability of Servicer, the Backup Servicer and Others. (a) Neither the Servicer nor any of the directors or officers or employees or agents of the Servicer shall be under any liability to the Contributor, the Depositor, the Issuer, the Noteholders or the Agent, except as provided in this Agreement, for any action taken or for refraining from the taking of any action pursuant to this Agreement in the good faith business judgment of the Servicer; provided, however, that this provision shall not protect the Servicer against any liability that would otherwise be imposed by reason of bad faith, willful misconduct in the performance of duties, or by reason of negligence in the performance of its duties or by reason of reckless disregard of its obligations and duties under this Agreement or any other Transaction Document to which it is a party. The Servicer and any director, officer, employee or agent of the Servicer may rely in good faith on the written advice of counsel or on any document of any kind prima facie properly executed and submitted by the Agent, the Noteholders, the Indenture Trustee and the Backup Servicer respecting any matters arising under this Agreement and any such written advice of counsel shall be full and complete authorization for any action taken or omitted by the Servicer in reliance in good faith and in accordance with such advice.

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     (b) The Backup Servicer (i) shall not be liable for its actions or omissions hereunder except for its negligence or willful misconduct, (ii) shall not be responsible for any recitals, statements, representations, or warranties made herein, except those expressly made by it as Backup Servicer and (iii) may conclusively rely upon, and shall be fully protected in acting or refraining from acting in reliance upon, any document, certificate, instrument, opinion, certificate, report, notice, statement, consent, resolution, entitlement order, approval or conversation believed by it to be genuine and made by the proper person and upon opinions of counsel or other experts reasonably selected by it. The Backup Servicer shall not be liable for an error of judgment made in good faith by a Responsible Officer of the Backup Servicer, unless it shall be proven that the Backup Servicer was negligent in ascertaining the pertinent facts with respect to such error of judgment.

     (c) The Backup Servicer shall not be required to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if the repayment of such funds or adequate written indemnity satisfactory to it against such risk or liability is not reasonably assured to it prior to the expenditure or risk of such funds or incurring of financial liability.

     (d) The Backup Servicer shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, entitlement order, approval or other paper or document.

     (e) The Backup Servicer may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians or nominees appointed with due care, and shall not be responsible for any willful misconduct or negligence on the part of any agent, attorney, custodian or nominee so appointed.

     (f) To the extent that the Backup Servicer is required to be indemnified by the Depositor pursuant to Sections 5.09 hereof, such amounts shall be reimbursable from the Collection Account pursuant to Section 5.03(b) of the Indenture. To the extent that the Backup Servicer is required to be indemnified by the Servicer pursuant to 9.01 hereof and does not receive payment for the applicable indemnified amount from the Servicer, such amounts shall be reimbursable from the Collection Account pursuant to Section 5.03(b) of the Indenture.

     Section 9.04. Delegation of Duties. The Servicer may delegate duties under this Agreement with the prior written consent of the Majority Holders. The Servicer may at any time perform the specific duty of repossession of Financed Vehicles through sub-contractors who are in the business of servicing automotive receivables and may perform other specific duties through such sub-contractors; provided however, that no such delegation or subcontracting duties by the Servicer shall relieve the Servicer of its responsibility with respect to such duties.

     Section 9.05. Servicer and Backup Servicer Not to Resign. Subject to the provisions of Section 9.02, neither the Servicer nor the Backup Servicer shall resign from the obligations and duties imposed on it by this Agreement as Servicer or Backup Servicer except upon a determination that by reason of a change in legal requirements, the performance of its duties under this Agreement would cause it to be in violation of such legal requirements in a manner which would result in a material adverse effect on the Servicer or the Backup Servicer, as the

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case may be, and the Majority Holders do not elect to waive the obligations of the Servicer or the Backup Servicer, as the case may be, to perform the duties which render it legally unable to act or to delegate those duties to another Person. Any such determination permitting the resignation of the Servicer or Backup Servicer shall be evidenced by an Opinion of Counsel to such effect delivered and acceptable to the Majority Holders. No resignation of the Servicer shall become effective until the Backup Servicer or a successor Servicer acceptable to the Majority Holders that is an Eligible Servicer shall have assumed the responsibilities and obligations of the Servicer. No resignation of the Backup Servicer shall become effective until a Person acceptable to the Majority Holders that is an Eligible Servicer shall have assumed the responsibilities and obligations of the Backup Servicer; provided, however, that in the event a successor Backup Servicer is not appointed within sixty (60) days after the Backup Servicer has given notice of its resignation as permitted by this Section 9.05, the Backup Servicer may petition a court of competent jurisdiction for the appointment of a successor. Notwithstanding anything else herein to the contrary, in no event shall the Indenture Trustee be liable for any transition expenses, servicing fee or for any differential in the amount of the servicer fee paid hereunder and the amount necessary to induce any successor Servicer to act as successor Servicer under this Sale and Servicing Agreement and the transactions set forth or provided for herein or be liable for or be required to make any servicer advances, nor shall the Indenture Trustee be required to act as successor Servicer or perform any duties of the successor Servicer hereunder.

     Section 9.06. Backup Servicer’s Reliance; Liability; Errors. (a) The Backup Servicer may reasonably rely on any records and documentation provided, produced or supplied by the Servicer. The Backup Servicer shall have no liability in connection with the malfeasance or nonfeasance of the Servicer or the inaccuracy of any data provided, produced or supplied by the Servicer. The Backup Servicer shall have no liability for any errors perpetuated by it in the performance of its duties hereunder or under the Transaction Documents as a result of a latent defect in any underlying records or data provided to it by the Servicer except for such latent defects that remain undiscovered or uncorrected as a result of the willful misconduct, bad faith or negligence of the Backup Servicer in the performance of its duties hereunder or under the Transaction Documents.

     (b) The Backup Servicer may accept and reasonably rely on all accounting and servicing records and other documentation provided to the Backup Servicer, including documents prepared or maintained by the Servicer, or any party providing services related to the Receivables (each, a “third party”). The Backup Servicer shall have no duty, responsibility, obligation or liability (collectively “liability”) for the acts or omissions of any third party. If any error, inaccuracy or omission (collectively “error”) exists in any information provided to the Backup Servicer and such error causes or materially contributes to the Backup Servicer making or continuing any error (a “continuing error”), the Backup Servicer shall have no liability for such continuing error; provided, however, that this provision shall not protect the Backup Servicer against any liability arising from its willful misconduct, bad faith or negligence in discovering or correcting or failing to discover or correct any error or in the performance of its duties contemplated herein.

     (c) If the Backup Servicer becomes aware of any error or continuing error which in the opinion of the Backup Servicer impairs its ability to perform its services hereunder the Backup Servicer may undertake such data or records reconstruction as it deems appropriate to

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correct any such error or continuing error and to prevent future continuing error. To the extent it is not otherwise reimbursed under this Agreement, the Backup Servicer shall be entitled to recover its costs incurred in correcting any such error or continuing error from the Servicer; provided, however, that the Backup Servicer shall not be entitled to recover any such costs unless it shall have received the written consent of the Indenture Trustee prior to taking any such corrective action pertaining to the error.

Article X

Servicer Events of Default

     Section 10.01. Servicer Event of Default. For purposes of this Agreement, any of the following shall constitute a “Servicer Event of Default”:

     (a) Any failure by the Servicer to deposit, or deliver to the Indenture Trustee for deposit, to the Local Bank Account (or, if the Backup Servicer is acting as successor Servicer, the Backup Servicer Account), the Collection Account or the Spread Account any amount required to be so deposited or delivered therein or any proceeds or payment required to be so delivered under the terms of this Agreement (including deposits of the Repurchase Price pursuant to Section 7.01) that continues unremedied for a period of two (2) Business Days after such deposit, delivery or payment is required to be made by the Servicer;

     (b) Failure by the Servicer to deliver to the Indenture Trustee and the Agent the Monthly Servicer Report required by Section 6.06 within two (2) Business Days after the applicable Determination Date, or any statement required by Section 6.07 or any report required by Section 6.08 shall not have been delivered within five (5) days after the date such statement or report, as the case may be, is required to be delivered;

     (c) Failure on the part of the Servicer (so long as the Backup Servicer is not acting as successor Servicer), or failure on the part of the Depositor or the Contributor, as the case may be, to repurchase a Receivable in accordance with Section 3.03(a), Section 6.15 or Section 8.02 hereof and, in the case of the Contributor pursuant to Section 3.03(a) of the Contribution Agreement, as the case may be, which failure shall continue unremedied for a period of two (2) Business Days after the same is required to be repurchased in accordance with such Sections;

     (d) Failure on the part of the Servicer to observe its covenants and agreements set forth in Section 9.02 or, failure on the part of the Depositor to observe its covenants and agreements in Section 5.10;

     (e) Failure on the part of the Servicer, or failure on the part of the Depositor or the Contributor duly to observe or perform any other covenants or agreements of the Servicer, the Contributor or the Depositor, as the case may be, set forth in this Agreement or any other Transaction Document which failure (i) materially and adversely affects the rights of the Noteholders, and (ii) continues unremedied for a period of twenty (20) days after (A) the date on which written notice of such failure, requiring the same to be

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remedied, shall have been given to the Servicer, the Contributor or the Depositor, as the case may be, by the Indenture Trustee, the Issuer or the Backup Servicer or (B) discovery by a Responsible Officer of the Servicer;

     (f) The entry of a decree or order for relief by a court or regulatory authority having jurisdiction in respect of the Contributor or the Servicer (or, so long as the Contributor is obligated to perform as the Servicer, the Depositor or any other Affiliate of the Servicer, if the Servicer’s ability to service the Receivables is adversely affected thereby) in an involuntary case under the federal bankruptcy laws, as now or hereafter in effect, or another present or future, federal or State, bankruptcy, insolvency or similar law, or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Contributor, the Servicer (or the Depositor or any other Affiliate of the Servicer, if applicable) or of any substantial part of their respective properties or ordering the winding up or liquidation of the affairs of the Contributor, the Servicer (or the Depositor or any other Affiliate of the Servicer, if applicable) and the continuance of any such decree or order unstayed and in effect for a period of sixty (60) consecutive days or the commencement of an involuntary case under the federal bankruptcy laws, as now or hereinafter in effect, or another present or future federal or State bankruptcy, insolvency or similar law and such case is not dismissed within sixty (60) days;

     (g) The commencement by the Contributor or the Servicer (or, so long as the Contributor is obligated to perform as the Servicer, the Depositor or any other Affiliate of the Servicer, if the Servicer’s ability to service the Receivables is adversely affected thereby) of a voluntary case under the federal bankruptcy laws, as now or hereafter in effect, or any other present or future, federal or State, bankruptcy, insolvency or similar law, or the consent by the Contributor or the Servicer (or the Depositor or any other Affiliate of the Servicer, if applicable) to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Contributor or the Servicer (or the Depositor or any other Affiliate of the Servicer, if applicable) or of any substantial part of their respective property or the making by Contributor or the Servicer (or the Depositor or any other Affiliate of the Servicer, if applicable) of an assignment for the benefit of creditors or the failure by the Contributor or the Servicer (or the Depositor or any other Affiliate of the Servicer, if applicable) generally to pay its debts as such debts become due or the taking of corporate action by Contributor or the Servicer (or the Depositor or any other Affiliate of the Servicer, if applicable) in furtherance of any of the foregoing;

     (h) Any representation, warranty or statement of the Servicer, and for so long as the Contributor is obligated to perform as the Servicer, the Depositor or the Contributor, made in this Agreement or with respect to the Contributor or the Depositor, made in the Contribution Agreement or, in each case, any certificate, report or other writing delivered pursuant hereto shall prove to be incorrect in any material respect as of the time when the same shall have been made, and the incorrectness of such representation, warranty or statement has a material adverse effect on the Trust Estate or any Noteholder and, within twenty (20) days after written notice thereof shall have been given to the Servicer, the Contributor or the Depositor (as the case may be) by the Indenture Trustee, the Issuer, the Backup Servicer or the Agent, the circumstances or

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condition in respect of which such representation, warranty or statement was incorrect shall not have been eliminated or otherwise cured;

     (i) Failure on the part of the Servicer to be legally qualified to service the Receivables;

     (j) Any material change made by the Servicer to its Collection Policy with respect to the Receivables without prior written consent of the Agent;

     (k) The occurrence of a Termination Event or Event of Default which has not been waived by the Majority Holders;

     (l) The Agent shall have delivered a Servicer Termination Notice pursuant to Section 6.01(a) or for any reason, Bay View Acceptance ceases to act as Servicer hereunder;

     (m) Tangible Net Worth of the Servicer is at any time less than $35,000,000;

     (n) Failure on the part of the Servicer to have paid-in capital of $50 million or greater;

     (o) Failure on the part of the Servicer to maintain monthly “Minimum Liquidity” (available cash and borrowing capacity for working capital purposes) of $5 million or greater;

     (p) The occurrence of a “Servicer Event of Default” under and as defined in any sale and servicing agreement, pooling and servicing agreement or any similar agreement (a “Similar Servicing Agreement”) with respect to which the Contributor or any of its Affiliates is designated as servicer, subservicer, master servicer or any similar capacity (irrespective of whether it is then acting in such capacity) unless such “Servicer Event of Default” has been permanently waived and (i) none of the Contributor or any of its applicable Affiliates has been terminated as servicer, subservicer, master servicer or other similar capacity under such Similar Servicing Agreement as a result of such Servicer Event of Default and (ii) the Contributor or any applicable Affiliate of the Contributor that acts as servicer, subservicer, master servicer or any similar capacity under such Similar Servicing Agreement retains its right (if any) thereunder to access each collections of receivables thereunder without the prior written consent of third parties, unless such rights are terminated by the Servicer independent of such Servicer Event of Default; or

     (q) If the Backup Servicer is acting as successor Servicer, the failure of the Backup Servicer to be controlled by or under the common control of JPMorgan Chase Bank, N.A.

     Section 10.02. Consequences of a Servicer Event of Default. If a Servicer Event of Default shall occur and be continuing, the Indenture Trustee shall, at the written direction of the Majority Holders or the Agent, by notice given in writing to the Servicer and Backup Servicer, terminate all of the rights and obligations of the Servicer under this Agreement; provided,

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however, that the Backup Servicer, acting as successor Servicer, may not be terminated pursuant to this Section 10.02 for a Servicer Event of Default set forth in Section 10.01(c), (d), (k), (l), (m), (n), (o) or (p); provided, further, however, that the Backup Servicer, acting as successor Servicer, may be terminated pursuant to clause (p) above if it is also the servicer under the agreements referenced therein with respect to which Bay View Acceptance is the contributor. On or after the receipt by the Servicer of such written notice (unless otherwise directed by the Majority Holders or the Agent and subject to Section 10.03(a)), unless otherwise excluded or modified herein all authority, power, obligations and responsibilities of the Servicer under this Agreement, whether with respect to the Notes or the Trust Estate or otherwise, automatically shall pass to, be vested in and become obligations and responsibilities of the Backup Servicer; provided, however, that the Backup Servicer shall have no liability with respect to any obligation which was required to be performed by the prior Servicer prior to the date that the Backup Servicer becomes the Servicer or any claim of a third party based on any alleged action or inaction of the prior Servicer; and provided further, that the Backup Servicer shall have no obligation to assume the responsibilities of Servicer with fewer than 30 days prior written notice. The Backup Servicer is authorized and empowered by this Agreement to execute and deliver, on behalf of the prior Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such notice of termination, whether to complete the transfer and endorsement of the Receivables and the rest of the Trust Estate and related documents or otherwise. The prior Servicer agrees, if so directed by the Majority Holders or by the Agent, to continue to act as Servicer until the successor Servicer assumes the responsibilities of Servicer, and agrees to cooperate with the Backup Servicer in effecting the termination of the responsibilities and rights of the prior Servicer under this Agreement, including, without limitation, the execution of one or more specific powers of attorney pursuant to Section 10.03(g) at the request of the successor Servicer and the transfer to the Backup Servicer for administration by it of all cash amounts that shall at the time be held by the prior Servicer for deposit, or have been deposited by the prior Servicer, in the Collection Account or thereafter received with respect to the Receivables and the delivery to the Backup Servicer or the Custodian, as applicable, of all Custodian Files and Collection Records and a computer tape in readable form containing all information necessary to enable the Backup Servicer or another successor Servicer to service the Receivables and the rest of the Trust Estate. The Servicer agrees that the Indenture Trustee and the Backup Servicer shall eliminate the Servicer’s access to all Post Office Boxes in accordance with certain instructions to be executed by the Servicer giving the Indenture Trustee and Backup Servicer access to the Post Office Boxes, provided that the Indenture Trustee shall not be liable for any access gained by the Servicer to the Post Office Boxes after the Indenture Trustee has used its best efforts to prohibit such access. All reasonable costs and expenses (including attorneys’ fees) incurred in connection with transferring the Custodian Files to the successor Servicer and amending this Agreement to reflect such succession as Servicer pursuant to this Section 10.02 shall be paid by the prior Servicer upon presentation of reasonable documentation of such costs and expense s. In addition, any successor Servicer shall be entitled to payment from the immediate predecessor Servicer for reasonable transition expenses incurred in connection with acting as successor Servicer. The prior Servicer shall grant the Depositor, the Indenture Trustee, the Backup Servicer and the Agent reasonable access to the prior Servicer’s premises, computer files, personnel, records and equipment at the prior Servicer’s expense. If requested by the Majority Holders, the Backup Servicer or any other successor Servicer shall terminate any arrangements

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relating to the Local Bank Account with the Local Bank or the Post Office Boxes, and direct the Obligors to make all payments under the Receivables directly to the successor Servicer at the prior Servicer’s expense (in which event the successor Servicer shall process such payments directly or through a lock-box account established in accordance with the instructions of the Agent or the Majority Holders or, if the Backup Servicer is acting as successor Servicer, through the Backup Servicer Lockbox). The Indenture Trustee shall send copies of all notices given pursuant to this Section 10.02 to the Noteholders and the Agent. The Indenture Trustee and the Backup Servicer may set off and deduct any amounts owed by the terminated Servicer from any amounts payable to the terminated Servicer. When the Trustee or the Backup Servicer incurs expenses after the occurrence of a Servicer Event of Default specified in Section 10.01, the expenses are intended to constitute expenses of administration under Title 11 of the United States Code or any other applicable federal or State bankruptcy, insolvency or similar law.

     Section 10.03. Appointment of Successor. (a) Upon the Servicer’s receipt of a notice of termination pursuant to Section 10.02, or upon the resignation of the Servicer pursuant to Section 9.05, unless the Majority Holders direct otherwise, the Backup Servicer shall be the successor in all respects to the Servicer in its capacity as servicer under this Agreement and the transactions set forth or provided for in this Agreement, and shall be subject to all the responsibilities, restrictions, duties, liabilities and termination provisions relating thereto placed on the Servicer by the terms and provisions of this Agreement; provided, however that the Backup Servicer shall not be liable for any acts, omissions or obligations of the Servicer prior to such succession or for any breach by the Servicer of any of its representations and warranties contained in this Agreement or in any related document or agreement. The Indenture Trustee and such successor shall take such action reasonably requested by the parties hereto, consistent with this Agreement, as shall be necessary to effectuate any such succession.

     (b) Notwithstanding the above, if the Backup Servicer shall be legally unable to act as Servicer, the Indenture Trustee, at the written direction of the Majority Holders, shall appoint any Eligible Servicer as the successor to, the Servicer. Pending such appointment, the outgoing Servicer shall continue to act as Servicer until a successor has been appointed and accepted such appointment. Subject to Section 9.05, no provision of this Agreement shall be construed as relieving the Backup Servicer of its obligation to succeed as successor Servicer upon the termination of the Servicer pursuant to Section 10.02, or the resignation of the Servicer pursuant to Section 9.05.

     (c) Any successor Servicer other than the Backup Servicer shall be entitled to such compensation (whether payable out of the Collection Account or otherwise) as the Servicer would have been entitled to under the Agreement if the Servicer had not resigned or been terminated hereunder. The Backup Servicer shall be entitled to the applicable Backup Servicing Fees owing to it in accordance with Schedule II hereto.

     (d) Any successor Servicer may accept and reasonably rely on all accounting and servicing records and other documentation provided to such successor Servicer in connection with succession to Servicer duties, including documents prepared or maintained by the Contributor, the Depositor or the prior Servicer, or any party providing services related to the Receivables (each, a “Third Party”). The Contributor, in its capacity as Servicer, shall indemnify and hold harmless the successor Servicer and its officers, directors, employees and

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agents, the Issuer, the Indenture Trustee, the Owner Trustee (as such and in its individual capacity), the Noteholders and the Agent against any and all claims, losses, penalties, fines, forfeitures, legal fees and related costs, judgments, and any other costs, fees and expenses that the successor Servicer, the Issuer, the Indenture Trustee, the Owner Trustee (as such and in its individual capacity), the Noteholders and the Agent may sustain in any way (i) solely related to the negligence or misconduct of the Servicer or any such Third Party based upon any matter related to or arising out of this Agreement except for any claims, losses, penalties, fines, forfeitures, legal fees, and related costs and judgments arising from such successor Servicer’s own negligence or willful misconduct; or (ii) solely related to the conduct of such successor Servicer undertaken at the direction of any party hereto or which result from the transfer of servicing to the successor Servicer. The successor Servicer shall have no duty, responsibility, obligation or liability (collectively “liability”) for the acts or omissions of any Third Party. If any error, inaccuracy or omission (collectively “error”) exists in any information provided to a successor Servicer and such error causes or materially contributes to such successor Servicer making or continuing any error (a “continuing error”), such successor Servicer shall have no liability for such continuing error; provided, however, that this provision shall not protect such successor Servicer against any liability arising from its willful misconduct, bad faith or gross negligence in discovering or correcting or failing to discover or correct any error or in the performance of its duties contemplated herein.

     (e) Notwithstanding any other provision of the Agreement to the contrary, any successor Servicer shall not inherit any of the indemnification obligations of any prior servicer including the original servicer.

     (f) Any successor Servicer shall have (1) no obligation to perform any repurchase or advancing obligations, if any, of the prior Servicer, (2) no obligation to pay any taxes required to be paid by the prior Servicer, (3) no obligation to pay any of the fees and expenses of any other party in this transaction and (4) no obligation to pay any fees, expenses or indemnities under Sections 8.02(b) or Section 9.01(d), (e) or (f).

     (g) In order to permit the successor Servicer to more effectively perform its duties and obligations under Section 6.04(b) of this Agreement, the Servicer hereby makes, constitutes and appoints the successor Servicer, acting by or through any one or more of its officers or employees, as the true and lawful attorney-in-fact for the Servicer and in the name place and stead of the Servicer, and for the use and benefit of the Servicer, to take any actions necessary to fulfill the successor Servicer’s obligations under Section 6.04(b), including without limitation, the preparation, execution and/or delivery to the relevant governmental authorities of any filings, notations of release or discharge, termination statements, Certificates of Title, affidavits, releases, satisfactions of lien, certificates and other documents, instruments or showings as may be required to cause the Certificate of Title relating to such Financed Vehicles to be issued to reflect the security interest of the Indenture Trustee in such Financed Vehicles.

     Section 10.04. Notification. Upon any termination of, or appointment of a successor to, the Servicer pursuant to this Article, the Indenture Trustee shall give prompt written notice thereof to the Noteholders at their respective addresses appearing in the Note Register, and to the Agent.

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     Section 10.05. Waiver of Past Defaults. The Supermajority Holders may waive any default by the Servicer in the performance of its obligations hereunder and its consequences, except an event resulting from the failure to make any required deposits to, or payments from, the Collection Account in accordance with this Agreement. Upon any such waiver of a past default, such default shall cease to exist, and any Servicer Event of Default arising therefrom shall be deemed to have been remedied for every purpose of this Agreement. No such waiver shall extend to any subsequent or other default or impair any right consequent thereon.

Article XI

Administration of Trust Duties

     Section 11.01. Administrative Duties.

     (a) Administrative Duties with Respect to the Transaction Documents. The Contributor shall perform all its duties and, unless otherwise specified, the administrative duties of the Issuer under the Transaction Documents. In addition, the Contributor shall consult with the Owner Trustee, the Indenture Trustee and the Agent, as the Contributor deems appropriate regarding the duties of the Issuer under the Transaction Documents. The Contributor shall monitor the performance of the Issuer and shall advise the Owner Trustee, the Indenture Trustee and the Agent, when action is necessary to comply with the Issuer’s duties under the Transaction Documents.

     (b) Duties with Respect to the Issuer. (i) In addition to the duties of the Servicer set forth in this Agreement or any of the other Transaction Documents, the Contributor shall perform such calculations and shall prepare for execution by the Issuer, or shall cause the preparation by other appropriate Persons of all such documents, reports, filings, instruments, certificates and opinions as it shall be the duty of the Issuer to prepare, file or deliver pursuant to this Agreement or any of the other Transaction Documents or under State or federal tax or securities laws and shall take all appropriate action that it is the duty of the Issuer to take pursuant to this Agreement or any of the Transaction Documents, including, without limitation, pursuant to Section 5.1 (with respect to the preparation and filing of tax returns) of the Issuer Trust Agreement.

     (ii) In carrying out the foregoing duties or any of its other obligations under this Agreement, the Contributor may enter into transactions with or otherwise deal with any of its Affiliates; provided, however, that the terms of any such transaction or dealings shall be in accordance with any directions received from the Issuer and shall be, in the Contributor’s good faith business judgment, no less favorable to the Issuer in any material respect.

     (c) Records. The Contributor shall maintain appropriate books of account and records relating to its duties performed under Section 11.01(a) and (b) hereof, which books of account and records shall be accessible for inspection by the Owner Trustee, the Indenture Trustee and the Agent at any time during normal business hours.

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Article XII

Termination of Agreement

     Section 12.01. Term. This Sale and Servicing Agreement shall remain in effect until termination of the Indenture in accordance with its terms.

     Section 12.02. Effect of Termination. Upon termination of this Sale and Servicing Agreement in accordance with its terms, the Servicer shall, at the direction of the Issuer, promptly return all files and any related files and correspondence in its possession as are related to the management of the Receivables and the services provided hereunder. If the Backup Servicer is acting as the successor Servicer, it shall be reimbursed pursuant to Section 5.03(b) of the Indenture for any costs incurred by it in performing its duties pursuant to this Section 12.02.

Article XIII

Miscellaneous Provisions

     Section 13.01. Amendment. This Agreement may only be amended by mutual written consent of the parties hereto and with the prior written consent of the Majority Holders; provided, however, that, no such amendment shall (a) increase or reduce in any manner the amount of, or accelerate or delay the timing of, or change the allocation or priority of, collections of payments on the Receivables or payments that shall be required to be made on any Note without the consent of each Noteholder affected thereby, or (b) reduce the percentage of Noteholders, if any, required to consent to any such amendment, without the consent of the Holder of all Notes then outstanding or eliminate the right of the Noteholders to consent to any change described in clause (a) affecting the Noteholders without the consent of the Noteholders; provided, further, that no such amendment shall amend or modify any provision of Section 3.02(a) hereof without the consent of the Supermajority Holders. No amendment made to the Transaction Documents to which the Servicer has duties thereunder without the Servicer’s written consent, shall be effective as to the Servicer, to the extent such amendment is disadvantageous in any respect to the Servicer.

     Section 13.02. Waivers. The provisions of this Agreement may only be waived by written consent of the Majority Holders and the Issuer, the Depositor, the Contributor and/or the Servicer, if any such party is adversely affected thereby. The failure of any party hereto at any time to require performance by any other party hereto of any provision of this Agreement shall in no way affect that party’s right to enforce such provision, nor shall the waiver by any party of any breach of any provision of this Agreement be taken or held to be a waiver of any further breach of the same provision or any other provision.

     Section 13.03. Notices. All notices, requests, consents and other communications hereunder shall be in writing and shall be delivered personally or mailed by first-class registered or certified mail, postage prepaid, or by telephonic facsimile transmission and overnight delivery service, postage prepaid, in any case addressed as follows:

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To the Servicer:	Bay View Acceptance Corporation 1840 Gateway Drive, Suite 300
	San Mateo, California 94404
	Attention: Counsel
	Phone: (650) 312-6807
	Fax: (650) 573-6381
To the Backup Servicer:	Systems & Services Technologies, Inc.
	4315 Pickett Road
	St. Joseph, Missouri 64503
	Attention: John Chappell, President
	Phone: (816) 671-2022
	Attention: Joseph Booz, Executive Vice
	President and General Counsel
	Phone: (816) 671-2028
	Fax: (816) 671-2029
To the Administrative Agent:	JP Morgan Chase Bank, N.A.
	Asset Backed Finance
	Suite IL1-0594
	1 Bank One Plaza
	Chicago, Illinois 60670-0079
	Fax: (312) 732-1844
	Harris Nesbitt Corp.
	Address: 115 S. LaSalle St., Floor 13W
	Chicago, IL 60603
	Attn: Conduit Administration
	Phone: 312-461-5640
	Fax: 312-461-3189
	Email: fundingdesk@harrisnesbitt.com
To the Initial Purchasers:	Falcon Asset Securitization
	Asset Backed Finance
	Suite IL1-0079
	1 Bank One Plaza
	Chicago, IL 60670-0079
	Fax: 314-732-3600
	Fairway Finance Company, LLC
	Address: c/o Lord Securities Corporation
	48 Wall Street, 27th Floor
	New York, New York 10005

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	Attn: Orlando Figueroa
	Phone: (212) 346-9007
	Fax: (212) 346-9012
	Email: of@lordspv.com
	Copy to:
	Harris Nesbitt Corp.
	Address: 115 S. LaSalle St., Floor 13W
	Chicago, IL 60603
	Attn: Conduit Administration
	Phone: 312-461-5640
	Fax: 312-461-3189
	Email: fundingdesk@harrisnesbitt.com
To the Indenture Trustee	JPMorgan Chase Bank, N.A.
	600 Travis St., 9th Floor
	Houston, Texas 77002
	Attn: Structured Finance – Bay View 2005
	Phone: (713) 216-3682
	Fax: (713) 216-4880
To the Issuer:	Bay View 2005 Warehouse Trust
	c/o Wilmington Trust Company
	Rodney Square North
	1100 North Market Street
	Wilmington, Delaware 19890-0001
	Attention: Corporate Trust Administration
	Phone: (302) 636-6119
	Fax: (302) 636-4148
	With a copy to:
	Bay View Acceptance Corporation
	1840 Gateway Drive, Suite 300
	San Mateo, CA 94404
	Attention: Counsel
	Phone: (650) 312-6807
	Fax: (650) 573-6381

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To the Depositor:	Bay View Warehouse Corporation 1840 Gateway Drive, Suite 401
	San Mateo, CA 94404
	Attention: Counsel
	Phone: (650) 312-6807
	Fax: (650) 573-6381
	With a copy to:
	Bay View Acceptance Corporation
	1840 Gateway Drive, Suite 300
	San Mateo, CA 94404
	Attention: Counsel
	Phone: (650) 312-6807
	Fax: (650) 573-6381

     Notices to each of the Noteholders shall be sent to the address specified for such Person in the Indenture or the Note Purchase Agreement. Such notice, request, consent or other communication shall be deemed given when so delivered.

     Section 13.04. Severability of Provisions. If one or more of the provisions of this Agreement shall be held invalid for any reason, such provisions shall be deemed severable from the remaining provisions of this Agreement and shall in no way affect the validity or enforceability of such remaining provisions. To the extent permitted by law, the parties hereto hereby waive any law which renders any provision of this Agreement prohibited or unenforceable.

     Section 13.05. Rights Cumulative. All rights and remedies under this Agreement are cumulative, and none is intended to be exclusive of another. No delay or omission in insisting upon the strict observance or performance of any provision of this Agreement, or in exercising any right or remedy, shall be construed as a waiver or relinquishment of such provision, nor shall it impair such right or remedy. Every right and remedy may be exercised from time to time and as often as deemed expedient.

     Section 13.06. No Offset. Prior to the termination of this Agreement, the obligations of the Depositor and the Servicer under this Agreement shall not be subject to any defense, counterclaim or right of offset which such Person may have against the Issuer, the Contributor, the Depositor, the Servicer, any Noteholder, the Agent or the Indenture Trustee, whether in respect of this Agreement, any Receivable or otherwise.

     Section 13.07. Powers of Attorney. The Issuer shall, from time to time, provide to the employees of the Servicer, the Backup Servicer and the Indenture Trustee limited, revocable powers of attorney or other such written authorizations as may be appropriate to enable the Servicer, the Backup Servicer and the Indenture Trustee to perform its respective obligations under this Agreement and the Indenture; provided, however, that the Issuer shall not be required

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to provide such powers with respect to any matter for which the Issuer does not have authority to perform itself.

     Section 13.08. Assignment and Binding Effect. Except with respect to the grant of this Agreement by the Issuer to the Indenture Trustee under the Indenture and as expressly provided herein, this Agreement may be assigned only with the written consent of the parties hereto and the Majority Holders; however, in the event of an assignment, all provisions of this Agreement shall be binding upon and inure to the benefit of the respective successors and assigns of the parties hereto.

     Section 13.09. Captions. The article, paragraph and other headings contained in this Agreement are for reference purposes only, and shall not limit or otherwise affect the meaning hereof.

     Section 13.10. Legal Holidays. In the case where the date on which any action required to be taken, document required to be delivered or payment required to be made is not a Business Day, such action, delivery or payment need not be made on that date, but may be made on the next succeeding Business Day.

     Section 13.11. Counterparts. This Agreement may be executed simultaneously in any number of counterparts including by facsimile or other electronic means, each of which counterparts shall be deemed to be an original, and such counterparts shall constitute but one and the same instrument.

     Section 13.12. Governing Law. This Agreement shall be deemed entered into with and shall be governed by and interpreted in accordance with the laws of the State of New York (including New York General Obligations Law Sections 5-1401 and 5-1402 but otherwise without regard to the conflict of laws principles thereof).

     Section 13.13. Consent to Jurisdiction. (a) To the fullest extent permitted by applicable law, the parties hereto hereby irrevocably submit to the jurisdiction of the United States District Court for the Southern District of New York and any court in the State of New York located in the City and County of New York, and any appellate court from any thereof, in any action, suit or proceeding brought against it and to or in connection with any of the Transaction Documents or the transaction or for recognition or enforcement of any judgment, and the parties hereto hereby irrevocably and unconditionally agree that all claims in respect of any such action or proceeding may be heard or determined in such New York State Court or in such federal court. The parties hereto agree that a final judgment in any such action, suit or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. To the extent permitted by applicable law, the parties hereto hereby waive and agree not to assert by way of motion, as a defense or otherwise in any such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such courts, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit,

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action or proceeding is improper or that the related documents or the subject matter thereof may not be litigated in or by such courts.

     (b) To the extent permitted by applicable law, the parties hereto shall not seek and hereby waive the right to any review of the judgment of any such court by any court of any other nation or jurisdiction which may be called upon to grant an enforcement of such judgment.

     (c) Each of the Issuer, the Contributor, the Servicer, and the Depositor agrees that until such time as the Notes have been paid in full, each of the Issuer, the Contributor, the Servicer, and the Depositor shall have appointed, with prior written notice to the Agent, an agent registered with the Secretary of State of the State of New York, with an office in the County of New York in the State of New York, as its true and lawful attorney and duly authorized agent for acceptance of service of legal process (which as of the date of this Agreement is Registered Agent Solutions located at 1773 Western Avenue, Albany, NY 12203). Each of the Issuer, the Contributor, the Servicer, and the Depositor agrees that service of such process upon such Person shall constitute personal service of such process upon it. The Backup Servicer has appointed an agent registered with the Secretary of State of the State of New York, with an office in the County of New York in the State of New York, as its true and lawful attorney and duly authorized agent for acceptance of service of legal process (which as of the date of this Agreement is National Corporate Research, Ltd. located at 225 West 34^th Street, New York, NY 10122). The Backup Servicer agrees that service of such process upon such Person shall constitute personal service of such process upon it.

     Section 13.14. Trial by Jury Waived. Each party hereto hereby waives, to the fullest extent permitted by law, any right to a trial by jury in respect of any litigation arising directly or indirectly out of, under or in connection with any of the Transaction Documents or the transaction. Each party hereto (a) certifies that no representative, agent or attorney of any party hereto has represented, expressly or otherwise, that it would not, in the event of litigation, seek to enforce the foregoing waiver and (b) acknowledges that it has been induced to enter into the Transaction Documents to which it is a party by, among other things, this waiver.

     Section 13.15. Parties. Except as set forth in Section 13.18 hereof, this Agreement shall inure solely to the benefit of and shall be binding upon the parties hereto, and their respective successors, legal representatives and assigns, and no other person shall have or be construed to have any equitable right, remedy or claim under or in respect of or by virtue of this Agreement or any provision contained herein.

     Section 13.16. Relationship of the Parties. The relationship of the parties to this Agreement is that of independent contractors. Neither this Agreement nor any of the activities contemplated hereby shall be deemed to create any partnership, joint venture, agency or employer/employee relationship among the Servicer and the Issuer.

     Section 13.17. No Bankruptcy Petition Against the Issuer or the Depositor. The parties hereto agree that, prior to the date that is one year and one day after the payment in full of all Outstanding Notes, none of them will institute against the Issuer, the Depositor or any

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Noteholder or join any other Person in instituting against the Issuer, the Depositor or any Noteholder any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other proceedings under the laws of the United States or any State of the United States. This Section 13.17 shall survive the termination of this Agreement.

     Section 13.18. Third Party Beneficiaries. This Agreement shall inure to the benefit of the Agent and the Indenture Trustee on behalf of the Noteholders, the Agent and the Financial Institutions and their respective successors and assigns. Without limiting the generality of the foregoing, all covenants and agreements in this Agreement which expressly confer rights upon the Issuer, any Noteholder, the Agent or the Indenture Trustee shall be for the benefit of and run directly to such Noteholder, the Agent and the Indenture Trustee, and such Noteholder, the Agent and the Indenture Trustee shall be entitled to rely on and enforce such covenants to the same extent as if it or they were a party hereto. Except as expressly stated otherwise herein or in the other Transaction Documents, any right of the Agent or the Majority Holders to direct, appoint, consent to, approve of, or take any action under this Agreement, shall be a right exercised by the Agent or the Majority Holders in its or their sole and absolute discretion.

     Section 13.19. Reports to Holders. Any report, notice or financial statement delivered pursuant to this Agreement by the Servicer to the Noteholders shall be provided by such Persons to each Noteholder at the address last provided to the Servicer by the Indenture Trustee or such Noteholder.

     Section 13.20. Obligations of Depositor. The obligations of the Depositor under this Agreement shall not be affected by reason of any invalidity, illegality or irregularity of any Receivable.

     Section 13.21. Subsequent Pledge. The Depositor acknowledges that (i) the Issuer will grant the Receivables and related Deposited Assets along with the Issuer’s rights and benefits under this Agreement to the Indenture Trustee pursuant to the terms of the Indenture and (ii) the terms and provisions hereof are intended to benefit the Noteholders. The Depositor hereby consents to such grant. The parties hereto hereby acknowledge that the representations and warranties contained in this Agreement and the rights of the Issuer under this Agreement are intended to benefit the Indenture Trustee on behalf of the Noteholders, the Agent and the Financial Institutions. The Depositor acknowledges that the Indenture Trustee on behalf of the Noteholders, the Agent and the Financial Institutions, as assignees of the Issuer’s rights hereunder may directly enforce, without making any prior demand on the Issuer, all the rights of the Issuer hereunder, including, without limitation, the rights under Section 3.03(a) hereof.

     Section 13.22. Protection of Title to Trust. (a) Neither the Issuer, the Contributor nor the Depositor shall change its name, identity, jurisdiction of organization or corporate structure in any manner that would, could, or might make any financing statement or continuation statement filed by the Issuer, the Depositor or the Contributor in accordance with paragraph (a) above seriously misleading within the meaning of §9-506 of the UCC, unless it shall have given the Indenture Trustee, the Noteholders and the Agent at least sixty (60) days’ prior written notice thereof and shall have promptly filed appropriate amendments to all previously filed financing statements or continuation statements and shall have delivered an Opinion of Counsel (A) stating that, in the opinion of such counsel, all amendments to all previously filed financing statements

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and continuation statements have been executed and filed that are necessary fully to preserve and protect the interest of the Issuer and the Indenture Trustee in the Receivables and the other items of the Trust Estate, and reciting the details of such filings or (B) stating that, in the opinion of such counsel, no such action shall be necessary to preserve and protect such interest. Neither the Issuer, the Contributor nor the Depositor shall become or seek to become organized under the laws of more than one jurisdiction.

     (b) Each of the Issuer, the Depositor and the Contributor shall give the Indenture Trustee and the Agent at least sixty (60) days’ prior written notice of any relocation of its principal executive office or State of incorporation and shall promptly file any amendment of any previously filed financing or continuation statement or any new financing statement necessary or desirable to continue the perfection of the Depositor’s, the Issuer’s or the Indenture Trustee’s interests in the Receivables and the rest of the Trust Estate and shall have delivered an Opinion of Counsel (A) stating that, in the opinion of such counsel, all amendments to all previously filed financing statements and continuation statements have been executed and filed that are necessary fully to preserve and protect the interest of the Indenture Trustee in the Receivables and the other items of the Trust Estate, and reciting the details of such filings or (B) stating that, in the opinion of such counsel, no such action shall be necessary to preserve and protect such interest. The Servicer shall at all times maintain each office from which it shall service Receivables, its principal executive office and its jurisdiction of incorporation, within the United States of America.

     (c) The Servicer shall maintain accounts and records as to each Receivable accurately and in sufficient detail to permit (i) the reader thereof to know at any time the status of such Receivable, including payments and recoveries made and payments owing (and the nature of each) and (ii) reconciliation between payments or recoveries on (or with respect to) each Receivable and the amounts from time to time deposited in the Collection Account in respect of such Receivable.

     (d) The Servicer shall maintain its computer systems so that, from and after the time of sale under this Agreement of the Receivables and Deposited Assets to the Issuer, the Servicer’s master computer records (including any back-up archives) that refer to a Receivable and Deposited Assets shall indicate clearly (including by means of tagging the Issuer) the interest of the Issuer in such Receivable and that such Receivable is owned by the Issuer. Indication of the Issuer’s ownership of a Receivable shall be deleted from or modified on the Servicer’s computer systems when, and only when, the Receivable shall have been paid in full or repurchased.

     (e) If at any time the Contributor or the Depositor or the Servicer shall propose to sell, grant a security interest in, or otherwise transfer any interest in automotive receivables to any prospective purchaser, lender, or other transferee, the Servicer shall give to such prospective purchaser, lender, or other transferee computer tapes, records, or print-outs (including any restored from back-up archives) that, if they shall refer in any manner whatsoever to any Receivable, shall indicate clearly (including by means of tagging) that such Receivable has been sold and is owned by the Issuer.

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     (f) The Servicer shall permit the Indenture Trustee, the Agent and their respective agents at any time during normal business hours to inspect, audit, and make copies of and abstracts from the Servicer’s records regarding any Receivable. If the Backup Servicer is acting as successor Servicer, the Indenture Trustee and the Agent shall give reasonable notice of any such audit or inspection and such inspection shall be conducted in a manner that does not cause undue disruption or interference with the Backup Servicer’s business.

     (g) Upon request, the Servicer shall furnish to the Indenture Trustee and the Agent, within two (2) Business Days, a list of all Receivables (by account number and name of Obligor) then held as part of the Trust Estate, together with a reconciliation of such list to the schedule of Receivables attached to each Depositor Assignment as Schedule I and to each of the Monthly Servicer Reports furnished before such request indicating removal of Receivables from the Trust Estate.

     (h) The Servicer shall deliver to the Indenture Trustee and the Agent:

     (1) upon the execution and delivery of this Agreement, each Depositor Assignment and each amendment to any such document, an Opinion of Counsel either (A) stating that, in the opinion of such counsel, all financing statements (and releases of financing statements) and continuation statements have been executed that are necessary fully to preserve and protect the interest of the Indenture Trustee in the Receivables and the rest of the Trust Estate, and reciting the details of the expected filings thereof or referring to prior Opinions of Counsel in which such details are given, or (B) stating that, in the opinion of such counsel, no such action shall be necessary to preserve and protect such interest; and

     (2) within ninety (90) days after the beginning of each calendar year beginning with calendar year 2006, an Opinion of Counsel, dated as of a date during such 90-day period, either (A) stating that, in the opinion of such Counsel, all financing statements and continuation statements have been filed that are necessary fully to preserve and protect the interest of the Indenture Trustee in the Receivables and the rest of the Trust Estate, and reciting the details of such filings or referring to prior Opinions of Counsel in which such details are given, or (B) stating that, in the opinion of such Counsel, no such action shall be necessary to preserve and protect such interest. Such Opinion of Counsel shall also describe the filing of any financing statements and continuation statements that will, in the opinion of such counsel, be required to preserve and protect the interest of the Indenture Trustee in the Receivables, until March 31 in the following calendar year.

     (i) If the Backup Servicer is acting as the successor Servicer, it shall be reimbursed pursuant to Section 5.03(b) of the Indenture for any costs incurred by it in performing its duties pursuant to this Section.

     Section 13.23. Limitation of Liability. Notwithstanding any other provision herein or elsewhere, this Agreement has been executed and delivered by Wilmington Trust Company, not in its individual capacity, but solely in its capacity as Owner Trustee of the Issuer under the Issuer Trust Agreement, and in no event shall Wilmington Trust Company or the Owner Trustee

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have any liability in respect of the representations, warranties, or obligations of the Issuer hereunder (or under any other Transaction Document), as to all of which recourse shall be had solely to the assets of the Issuer, and for all purposes of this Agreement and each other Transaction Document, the Owner Trustee and Wilmington Trust Company shall be entitled to the benefits of the Issuer Trust Agreement.

     Section 13.24. Integration. This Agreement and each other Transaction Document contain the final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire agreement among the parties hereto with respect to the subject matter hereof superseding all prior oral or written understandings.

     Section 13.25. Limitation on Recourse. Notwithstanding any provision herein to the contrary, the obligations of the Depositor and the Issuer shall not be a general obligation of, or construed as permitting recourse to, such entity; it being understood that the sole recourse of any party with respect to the payment obligations of the Depositor or the Issuer shall be the Monthly Available Funds and such obligations shall be paid in accordance with the priority of payments set forth in Section 5.03(b) of the Indenture.

     Section 13.26. Repurchase Option. The Depositor may, within the 10-day period immediately following the securitization of a portion of the Pool, repurchase Delinquent Receivables from the Pool in an amount not to exceed the aggregate amount of Receivables securitized/sold out of the Pool in connection with the securitization/whole loan sale multiplied by the lesser of: (a) the amount of Delinquent Receivables in the Pool immediately prior to such securitization divided by the aggregate amount of Receivables in the Pool immediately prior to such securitization, and (b) two percent (2%) of the Receivables in the Pool at the time of such repurchase.

     Section 13.27. Amendment and Restatement. This Agreement is an amendment and restatement of the Prior Agreement. On and after the Effective Date of this Agreement, each reference in the other Transaction Documents to the “Sale and Servicing Agreement,” “thereunder,” “thereof,” “therein” or any other expression of like import referring to the Prior Agreement shall mean and be a reference to this Agreement. The amendment and restatement of the Prior Agreement shall not constitute a novation or termination of the Transaction Documents and all obligations thereunder are in all respects continuing with only the terms thereof being modified as provided herein or in any other amended, restated, supplement or otherwise modified Transaction Document.

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     In Witness Whereof, the Issuer, the Depositor, the Indenture Trustee and the Servicer and the Backup Servicer have caused this Sale and Servicing Agreement to be duly executed by their respective authorized officers as of the date and year first above written.

Bay View 2005 Warehouse Trust, as Issuer
By:	Wilmington Trust Company,
	not in its individual capacity but solely
	as Owner Trustee on behalf of the Issuer
By:
	Name:
	Title:

Signature Page to Sale and Servicing Agreement

Bay View Warehouse Corporation, as Depositor
By:
	Name:
	Title:

2

JPMorgan Chase Bank, N.A., as Indenture Trustee
By:
	Name:
	Title:

3

Systems & Services Technologies, Inc., as Backup Servicer
By:
	Name:
	Title:

4

Bay View Acceptance Corporation, as Servicer and as Contributor
By:
	Name:
	Title:

5

Exhibit A
Form of Assignment

     This Assignment and Assumption Agreement (“Assignment”) is made as of                     , 200___ (the “Deposit Date”), by and between Bay View Warehouse Corporation, a Delaware corporation (“Assignor”), and Bay View 2005 Warehouse Trust, a Delaware statutory trust (“Assignee”), with reference to the following facts:

Recitals:

     A. In connection with the deposit of certain receivables and related assets of Assignor in conjunction with the issuance on the Closing Date of variable funding notes (the “Notes”) by the Assignee, Assignee and the Assignor have executed the Sale and Servicing Agreement dated as of June 20, 2005 (the “Sale and Servicing Agreement”).

     B. In connection with the Sale and Servicing Agreement, the Assignor desires to assign and transfer to Assignee all of Assignor’s right, title and interest in and to each of the Receivables listed in Schedule I hereto and the related Deposited Assets (the “Assets”).

     C. Assignee desires to accept the Assignment and transfer of the Assets on the Deposit Date.

     D. Terms used but not defined herein have the meanings ascribed to them in the Sale and Servicing Agreement.

     Now Therefore, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and in consideration of the mutual covenants set forth herein, the Assignor and Assignee hereby agree as follows:

     1. Assignment. The Assignor hereby assigns, conveys, grants and transfers, without recourse except as provided in the Sale and Servicing Agreement, to Assignee (and the successors and assigns of Assignee) the following property:

     1.1. The Assignor’s right, title and interest in and to the Receivables described and listed on Schedule I hereto and related Financed Vehicles and Deposited Assets.

     1.2. All of Assignor’s right, title and interest in and to the Financed Vehicles.

     1.3. All of Assignor’s rights, title and interest in the other Deposited Assets relating to each such Receivable.

     2. Further Assurances. The Assignor and Assignee each hereby agree to provide such further assurances and to execute and deliver such documents and to perform all such other acts as are necessary or appropriate to consummate and effectuate this Assignment, including, without limitation, those set forth in Section 5.01 of the Sale and Servicing Agreement.

     3. Distinct Entities. The Assignor and Assignee hereby acknowledge that for all purposes the Assignor and Assignee are each separate and distinct legal entities. Accordingly,

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the Assignor shall not be liable to any third party for the debts, obligations and liabilities of the Assignee; and Assignee shall not be liable to any third party for the debts, obligations and liabilities of the Assignor.

     4. Governing Law. This Assignment shall be governed by and interpreted in accordance with the laws of the State of New York including Sections 5-1401 and 5-1402 of the New York General Obligations Law but otherwise without regard to the conflicts of law principles thereof.

     5. Authority. The Assignor and Assignee each hereby represent respectively that they have full power and authority to enter into this Assignment.

     6. Counterparts. This Assignment may be executed in multiple counterparts, each of which shall be deemed an original but all of which, taken together, shall constitute one and the same instrument.

     7. Successors and Assigns. The Assignor and Assignee each agree that this Assignment will be binding and will inure to the benefit of the Assignor and its successors and assigns and the Assignee and its successors and assigns.

     8. Third Party Beneficiaries. This Assignment shall inure to the benefit of the Indenture Trustee on behalf of the Noteholders and their respective successors and assigns.

     9. Limitation of Liability. Notwithstanding any other provision herein or elsewhere, this Assignment has been executed and delivered by Wilmington Trust Company, not in its individual capacity, but solely in its capacity as Owner Trustee of the Issuer under the Issuer Trust Agreement, and in no event shall Wilmington Trust Company or the Owner Trustee have any liability in respect of the representations, warranties, or obligations of the Issuer hereunder or under any Transaction Document, as to all of which recourse shall be had solely to the assets of the Issuer, and for all purposes of this Agreement and each other Transaction Document, the Owner Trustee and Wilmington Trust Company shall be entitled to the benefits of the Issuer Trust Agreement.

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     In Witness Whereof, this Assignment has been executed as of the date first above written.

Bay View Warehouse Corporation, Assignor
By:
	Name:
	Title:
Bay View 2005 Warehouse Trust, Assignee
By:	Wilmington Trust Company, not in its individual capacity but solely as Owner Trustee on behalf of the Issuer
By:
	Name:
	Title:

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Schedule I

Loan Schedule

Schedule II

Backup Servicing Fees

I. FEES

A.	Standby Servicing (2)
	1.	One-Time Setup Fee		$5,000
	2.	Monthly Fee		$3,000 per month
B.	Successor Servicing (3)
	1.	One Time Boarding Fee		$5.00 per loan
	2.	Monthly Fee (4) (5)	the greater of	100 bsp or
				$5.00 per month
	3.	Minimum Monthly Fee		$3,000

II. EXPENSES

A. Standby Servicing and Transfer Expenses

SST shall be reimbursed for all costs and expenses incurred in connection with its Standby Servicing duties and the transfer of contracts to SST for successor servicing. Such costs and expenses include, but are not limited to, those related to travel, obligor mailings, freight and file shipping.

B. Successor Servicing Expenses ⁽³⁾

SST shall be reimbursed for all out-of-pocket expenses including, but not limited to, those associated with asset recovery, liquidation, sales, travel, lodging, legal proceedings related to replevin actions or obligor bankruptcies, statement and mailing costs, title processing, bank charges, field calls, and insurance tracking, if any. Additionally, SST shall receive an administrative fee amounting to 8% of the funds advanced by SST to cover any such expenses during any monthly collection period. In order to avoid this administrative fee, Bank One (or another party, as appropriate) may at any time during the term establish and fund an advance account to be utilized by SST to cover all such expenses and costs provided in this section for any monthly collection period. Any such advance account must be fully funded on a monthly basis in an amount sufficient to cover the out-of-pocket expenses projected by SST for each subsequent monthly collection period.

III. MISCELLANEOUS ⁽³⁾

A. Claim Filing Costs

In the event SST files insurance claims in connection with any contract serviced by SST, SST shall receive $25.00 per filing.

B. Administrative Fees/Servicing Charges

SST shall receive all administrative fees, including extension processing fees, NSF fees and late charges received by SST during any monthly collection period.

C. Deficiency Collections

Under separate agreement, SST may provide deficiency collections services on a contingency fee basis.

D. Legal Fees and Expenses At Cost

(2)	Standby services limited to: (i) monthly receipt of an electronic loan data transmission, including all relevant obligor contact information including address and phone numbers, loan balance, payment information, and comment histories (ii) receipt of and verification some information supplied on the month-end servicer statement.
(3)	These items shall only apply to SST’s performance of successor servicing duties.
(4)	Basis points are annualized (i.e., applicable basis points/12) and shall be based on beginning of month outstanding principal balance of each individual Active Contract, as defined below.
(5)	SST shall receive this fee for all “Active Contracts” for any full or partial month where it functions as the Servicer. Active Contract is defined as any contract other than: (i) prepaid, fully satisfied contracts; (ii) contracts in which the asset has been liquidated and SST has posted the liquidation proceeds or any other anticipated proceeds (e.g., credit enhancement insurance); or (iii) contracts in which SST has completed all work in connection with processing and receiving insurance payoffs. There shall be a $0.50 monthly servicing fee for each contract that is not an Active Contract until such time as SST is duly instructed to write the obligor’s balance down to $0.00.

Exhibit B

Form of Contract

Exhibit C

Contributor’s Underwriting Guidelines

Exhibit D

Monthly Servicer Report

Exhibit E

Bay View Acceptance Corporation’s Collection Policy

Exhibit F

Form of Loan Master File
and History Information

Exhibit G

Weekly Servicer Report

Weekly Report
Bay View 2005 Warehouse Trust

As reported on

For the Week Ending Thursday

A. RECEIVABLE BALANCE RECONCILIATION (excluding Pre-Funded Rec.)

				Aggregate
				Receivables Balance
1		Principal Receivables Balance of Eligible Receivables (A4 from previous Weekly Report)
2		Subsequent Transfers of Receivables on the Weekly Funding Date
3		Principal Collections (on or prior to last day of the weekly period)		0.00
3	a		Collections (Regular Payments / Scheduled Principal)
3	b		Collections (Principal Payoffs / Prepaid Principal)
3	c		Repurchased Receivables
3	d		Cram-down Losses
3	e		Principal portion of Insurance Proceeds
3	f		Full Charge Offs (Receivable Balance of Defaulted Receivables charged-off but not sold)
3	g		Partial Charge-offs (Charged-off portion of Receivable Balance of Defaulted Receivables sold)
3	h		Repayments related to term securitizations or whole loan sales
4		Principal Receivables Balance (as of end of Weekly Report Period)		0.00

B. RECEIVABLES AVAILABILITY (excl. Pre-Funded Receivables)

	Principal Receivables Balance (as of end of Weekly Report Period)				0.00
		less: Delinquent Accounts (> 60 dpd) (H3)	0.00
1	Aggregate Eligible Receivables Balance				0.00
2	a	1 — 97% multiplied by the Aggregate Eligible Receivables Balance	—
2	b	Current Peak Note Percentage Reserve Amount (D.1 d from most recent Monthly Report)
2		less: Current Peak Note Percentage Reserve Amount (the greater of 2a or 2b)		—
		Amount of principal collections on deposit in the Collection Acct
3	Receivables Available for Funding (B1-B2)				0.00
4	a	less: Current Note Principal Balance related to Receivables (B7 from previous Weekly Report)
4	b	Additional Receivables Available for Funding			0.00
4	c	Requested Additional Note Principal Advance related to Receivables		In Compliance
5	a	Current balance of draws under the Pre-Funding Account (B4 from most recent Pre-Funding Report)
5	b	Amount of Note Principal Balance to be converted from Pre-Funding Advance to a Receivables			0.00
5	c	New balance of draws under the Pre-Funding Account			0.00
6		Actual dollars funded to BVAC			0.00
7		Ending Note Principal Balance related to Receivables			0.00
C. PRE-FUNDING ACCOUNT COLLATERAL
	Current balance of Pre-Funded Receivables (any untagged receivables)
		multiplied by Pre-Funding Advance Percentage (D6 from most recent Monthly Report)
1	Pre-Funded Receivables Balance					—
2	Amount on deposit in the Pre-Funding Account (A4 from the most recent Pre-Funding Report)
3	Current Pre-Funded Collateral (Lower of 1) $15MM or 2) C2					—
D. PRE-FUNDING NOTE PRINCIPAL BALANCE
1	a	Current Note Principal Balance associated with Pre-Funding Advances
1	b	less: Amount of Note Principal Balance to be converted from Pre-Funding Advance to a Receivables Advance	—
1	c	Revised Note Principal Balance relating to Pre-Funding Advances				0.00
2	a	Estimated Weekly Fundings
3	a	Difference between $15MM and amount on deposit in Pre-Funding Acct	15,000,000.00
3	b	Difference between $15MM and Revised Note Principal Balance	15,000,000.00
3	c	Maximum Note Principal Balance available for Pre-Funding Advances (lower of D 3a and D3b)				15,000,000.00
3	d	Request Note Principal Balance Advance related to Pre-Funding Advances
3	e	Does requested Advance exceed Maximum available?		In Compliance
4	Ending Note Principal Balance related to Pre-Funding Advances				0.00

E. NOTE PRINCIPAL AVAILABILITY

1	a	Ending Note Principal Balance related to Receivables		—
1	b	Ending Note Principal Balance related to Pre-Funding Advances		—
1	c	Total Ending Note Principal Balance			—
2	a	Receivables Available for Funding (B3)		0.00
2	b	Pre-Funding Receivables Advance (C7)		0.00
2	Receivables Advance Amount (2a +2b)				0.00
3	Collateral Excess/ (Deficiency)			—
In Compliance with Collateral Test Amount?					In Compliance
4	Maximum Outstanding Note Amount			450,000,000.00
In Compliance with Maximum Outstanding Note Amount?					In Compliance
F. PRO-FORMA NOTE PRINCIPAL AVAILABILITY
1	a	Beginning Note Principal Balance		—
1	b	New Ending Note Principal Balance		0.00
1	Total Funding Request (E 1b ³ E1a)				0.00
2	a	Amount to be wired to BVAC		0.00
2	b	Amount to be deposited into the Pre-Funding Account		0.00
3	Ending Note Principal Balance				0.00
			New Fundings	Ending Balance
		Falcon Asset Securitization Corporation	—	—
		Fairway Finance Company, LLC	—	—
G. PRO-FORMA COLLATERAL TEST
1	a	Aggregate Receivables Balance		0.00
1	b	Less: Delinquent Accounts (³ 60 dpd)		—
1	c	Less: Current Peak Note Percentage Reserve Amount (from most recent Monthly Report)		—
1	d	Plus: Amount of principal collections on deposit in the Collection Acct		—
1	Receivables Available for Funding (G1a - G1b - G1c +G1d)				-
2		Pro-forma Pre-Funded Collateral		0.00
3	Receivables Advance Amount				0.00
4	Note Receivables Principal Balance				0.00
5		Collateral Excess/ (Deficiency)			0.00

H. RECEIVABLES DELINQUENCY

	Delinquency Buckets (do not include Defaulted Receivables)	# Loans	Balance
1	61-90
2	91-119
3	120+ (Defaulted but not sold)
4	Total	—	—

I. HEDGE SUMMARY

			Notional Amount
1	a	Previous Aggregate Hedge Notional Amount
1	b	Hedges Purchased
1	c	Hedges Sold
1	d	Cash collateral for purchase of hedge/ cap
1	e	Coresponding Notional Amount of hedge/ cap that cash
		collateral could support purchase of
1	Ending Hedge Notional Amount			—
2	Required Hedge Amount			—
3	Compliance with Required Hedge Notional Amount			NO
4	a	Weighted average strike price
4	b	Required Strike Price (M. 4b from the most recent Monthly Report)
4	Compliance with Interest Rate Hedge Cap Strike Price			NO

J. COVENANTS

Covenant	Compliance?
BVAC, as Servicer, represents and verifies that all Receivables included in the Aggregate Receivables Balance are Eligible Receivables, as so defined in the Indenture (signature below signifies acceptance of this statement)
BVAC, as Servicer, represents and verifies that no Event of Default or Termination Event has occurred (signature below signifies acceptance of this statement)
BVAC, as Servicer, represents and verifies that a hedge equal to at least the Required Hedge Amount is in effect. (signature below signifies acceptance of this statement)

PARED BY:	/s/ Lisa Staab	APPROVED BY:	/s/ John Okubo
	Lisa Staab		John Okubo
	VP, Controller		Executive VP and CFO
	Bay View Acceptance Corp		Bay View Capital Corp

Exhibit H

Pre-Funding Servicer Report

Pre-Funding Servicer Report

Bay View 2005 Warehouse Trust

For Determination Date:

A. PRE-FUNDING ACCOUNT BALANCE

					Balance
	Beginning Amount on deposit in the Pre-funding Account
		+	Pre-Funded Amount Advances (fundings received from cp issuance)
		-	Pre-Funded Requested Advances (funds delivered to Bay View)	—
1	Ending Pre-Funding Account Balance				—

B. OUTSTANDING ADVANCES

1	Total balance of outstanding draws
2	less: Paydown from Pre-Funded Receivables converted to a Receivables Advance	—
3	plus: Today’s draw amount	—
4	Ending balance of outstanding draws	—

C. PRE-FUNDED RECEIVABLES (Receivables not “tagged”)

			Amount
1	Beginning aggregate balance of Pre-Funded Receivables (C5 from last Pre-Funding Report)
2	+	New Pre-Funded Receivables (as listed in the attached schedule)
3	-	Pre-Funded Receivables that have been Certified (Tagged Rec)
4	-	Collections/ discrepancies in previous Pre-Funded Receivables
5	Ending aggregate balance of Pre-Funded Receivables			0.00

D. PRE-FUNDING ACCOUNT ADVANCE

1	Ending aggregate balance of Pre-Funded Receivables				0.00
2	multiplied by Pre-Funding Advance Percentage
3	Pre-Funding Account Calculated Advance				—
4	Maximum Draw Amount Available under the Pre-Funding Account (lesser of 1 and 3)					—
5	-	Requested Additional Pre-Funded Advance Amount
			Overfunded?	No
6	Pro-forma Ending Balance in the Pre-Funding Account					—
7	Pre-Funding Collateral (Lower of 1) $15MM and 2) A4 + C3)					—

EX-11

EXHIBIT 11

BAY VIEW CAPITAL CORPORATION
COMPUTATION OF PER SHARE EARNINGS (LOSS)

	For the Year			For the Year			For the Three			For the Nine		For the Year
	Ended			Ended			Months Ended			Months Ended		Ended
	December 31,			December 31,			December 31,			September 30,		December 31,
	2005			2004			2003			2002		2001
	(Amounts in thousands, except per share amounts)
Basic earnings (loss) per share:(1)
Net earnings (loss) available to common stockholders	$	(34,450	)	$	(3,912	)	$	(673	)	$	71,661	$	(101,170	)
Weighted-average shares outstanding		6,596			6,585			6,419			6,272		5,087
Basic earnings (loss) per share	$	(5.22	)	$	(0.59	)	$	(0.10	)	$	11.43	$	(19.89	)
Diluted earnings (loss) per share:(1)
Net earnings (loss) available to common stockholders	$	(34,450	)	$	(3,912	)	$	(673	)	$	71,661	$	(101,170	)
Weighted-average shares outstanding		6,596			6,585			6,419			6,272		5,087
Dilutive potential common shares		—			—			—			41		—
Diluted weighted-average shares outstanding		6,596			6,585			6,419			6,313		5,087
Diluted earnings (loss) per share	$	(5.22	)	$	(0.59	)	$	(0.10	)	$	11.35	$	(19.89	)

⁽¹⁾ Computation of per share earnings (loss) only applies to periods reported under the going concern basis of accounting.

EX-12

EXHIBIT 12

BAY VIEW CAPITAL CORPORATION
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES

	For the Year Ended
	December 31,
	2005			2004
	Going Concern Basis
Earnings Before Fixed Charges:
Loss before income tax benefit		(11,928	)		(6,438	)
Add:
Interest on warehouse credit facility and other short-term borrowings		10,167			7,488
Interest on securitization notes payable and other long-term borrowings		12,450			1,357
Interest component of rental expense		227			236
Earnings before fixed charges		10,916			2,643
Fixed Charges:
Interest on warehouse credit facility and other short-term borrowings		10,167			7,488
Interest on securitization notes payable and other long-term borrowings		12,450			1,357
Interest component of rental expense		227			236
Total fixed charges		22,844			9,081
Ratio of earnings to fixed charges		0.48			0.29

EX-14

EXHIBIT 14

CODE OF ETHICAL CONDUCT

Revised: September 2005

Bay View is firmly committed to high standards of business conduct and ethics as these represent the foundation upon which our business operates and upon which we develop and maintain relationships with the customers and communities that we serve. Bay View also strives to provide a work environment that is professional and dignified and where each employee can work free from unlawful harassment and discrimination. Maintaining appropriate conduct and ethical behavior are critical elements of every employee’s job responsibilities and performance expectations.

EMPLOYEE RESPONSIBILITIES FOR BUSINESS CONDUCT AND ETHICS

It is the policy of Bay View, including all its subsidiaries, to conduct its business according to the highest ethical standards and in compliance with all laws regulating the business conduct of financial institutions and their employees. Principles of professional ethics and federal law govern financial institutions and those working within them. Our Code of Ethical Conduct is intended to assist employees in understanding and meeting the requirements of both.

Every employee must act to protect our Company’s reputation as a responsible financial services organization that is trusted for its integrity and high ethical standards. This means that you must agree to understand and abide by the Code of Ethical Conduct at all times. Because no set of guidelines can anticipate or provide answers to every circumstance concerning conduct and ethical behavior, you are expected to seek guidance from Bay View’s Counsel or the on-site Human Resources Manager if you have any questions or if any part of the requirements established by the Code of Ethical Conduct is unclear. Other important responsibilities that you have for business conduct and ethics are outlined below.

• Reading, understanding and completing the Code of Ethical Conduct Certification at hire and once every year thereafter.

• Discussing questions that you have about ethical conduct with your manager, Bay View’s Counsel or the on-site Human Resources Manager.

• Consistently abiding by the Code of Ethical Conduct and Bay View’s policies prohibiting unlawful harassment and discrimination.

• Promptly reporting all conflicts of interest — whether they are actual conflicts or have the appearance of a conflict of interest.

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• Promptly reporting any suspected fraudulent or illegal activity to your manager, the on-site Human Resources Manager or Bay View’s Counsel.

In addition to the above, all employees are expected to fully cooperate with all internal or external investigations, audits or regulatory reviews. False or misleading statements to auditors or other investigators may be considered a breach of trust or falsification of records and could result in corrective action up to and including termination of employment.

REPORTING IMPROPRIETIES IN THE WORKPLACE

If you believe or suspect that unlawful or unethical activities are occurring in the workplace, it is your duty to promptly report these activities to the appropriate person at Bay View. Ordinarily, you would report the activity to your manager; however, you may also report the situation to Bay View’s Counsel or the on-site Human Resources Manager.

Bay View will not retaliate against you for good faith reports of fraudulent or illegal activity nor will it tolerate such retaliation by other employees. If you knowingly make a false report, or if you are involved in improper or criminal activity, you may be subject to corrective action up to and including the termination of employment.

WHISTLE BLOWING POLICY AND PROCEDURES

It is the policy of Bay View Capital Corporation and that of its Board of Directors that no employee shall be discharged or discriminated against with respect to compensation, terms, conditions or privileges of employment because the employee (or any person acting pursuant to the request of the employee) informs either management, the Board of Directors, the Securities and Exchange Commission, or the U. S. Attorney General regarding a possible violation of any law or regulation by the Company or any director, officer or employee, or for expressing any concerns about any questionable accounting, internal accounting controls or auditing matters.

In connection with the above, the Audit Committee of the Board of Directors has established the following procedures:

Under the Code of Ethical Conduct, employees are encouraged to discuss any concerns they have regarding compliance with laws and regulations or other violations of the Code of Ethical Conduct, directly with their manager or, in the alternative, with Bay View’s Counsel, who acts as the Company’s ethics officer. However, employees may also submit at any time any concerns regarding questionable accounting, internal accounting controls or auditing matters, or any other possible violations of law, by submitting them anonymously in writing to “Executive Offices — Internal Communications”, 1840 Gateway Drive, San Mateo, California 94404. Communications addressed in this manner will be opened by the Company’s Assistant Secretary, who will discard the envelope without reading the contents and then forward the contents to the Corporate Secretary. The Corporate Secretary will review the contents and report on them directly to the Audit Committee of the Board of Directors.

In the alternative, employees or third parties who wish to express any concerns directly to the Board of Directors may do so by sending them in writing addressed to “Non-management Directors”, care of the Corporate Secretary at the Company’s headquarters at 1840 Gateway Drive, San Mateo, California 94404.

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The Corporate Secretary will document and retain all complaints or concerns expressed by employees or third parties regarding possible violations of law or questionable accounting, internal accounting controls or auditing matters and shall report such complaints or concerns directly to the Audit Committee of the Board of Directors.

CONFLICTS OF INTEREST

In order to maintain the trust and confidence of our customers, you must avoid all actual or perceived conflicts of interest. Generally, a conflict of interest is a situation where your private or outside interests interfere with your duties and responsibilities to Bay View or create a reasonable question that there could be such an interference. It’s important to remember that the appearance of a conflict of interest can be as harmful to Bay View as an actual conflict of interest. For these reasons, you may not engage in outside employment or certain types of outside business activities without prior written disclosure to and the approval of your manager and Bay View’s Counsel.

At the time of employment, and annually thereafter, all employees are required to complete the Code of Ethical Conduct Certification and disclose any possible conflicts of interest. This allows Bay View to assess and prevent any actual or potential conflicts of interest from arising.

Although it is not possible to specify every action or activity that might create a conflict of interest, the following are some examples of outside employment or business activities that Bay View can not approve under any circumstance. For additional information, please refer to the Code of Ethical Conduct or consult with your manager, Bay View’s Counsel or the on-site Human Resources Manager.

• Working for a company or engaging in a business activity that competes with Bay View’s business interests.

• Work that involves the preparation, audit or certification of statements or documents that Bay View may rely on to make business decisions.

• Outside work that involves the use of Bay View’s equipment, supplies or facilities.

• Outside work as an insurance, securities or loan broker, agent or representative.

• Outside work that suggests that Bay View sponsors or supports your other employer.

• Outside work for a customer of Bay View or for another Bay View employee with whom you have a close or direct relationship (i.e., supervision, processing or audit of work, reliance upon for information).

Personal and Family Relationships At Work
All employees are expected to exercise good judgment and appropriate discretion regarding their business and personal relationships with co-workers and subordinates. Family relationships, romantic personal relationships, and close or unique social

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relationships can create conflicts of interest, the appearance of favoritism and even place the company at risk. If a relationship creates the appearance of a conflict of interest or favoritism, you must notify your manager or the on-site Human Resources Manager for assistance in addressing the situation. Additional details about this policy may be found in the section titled, “Employment of Family and Household Members” in Chapter 2 of the Employee Handbook.

GIVING ADVICE TO CUSTOMERS

If you are asked by a customer to recommend products or services that are not normally available through Bay View’s own referral sources—for example, legal or tax advice or alternate lending services—you should explain that such referrals are generally not provided. However, in the interest of customer service, and with the approval of your division manager, you may provide a list of several qualifying sources without indicating any preference. If you are providing this type of information to a customer, you also should explain that Bay View does not endorse or recommend the providers of the products or services.

Loan Applications and Credit Decisions
If you are aware of a customer whose application for credit was denied by Bay View, you may not refer this customer to another credit source in return for a commission, or present the customer’s credit application to another lender, whether or not you receive a commission. You also may not offer to advance credit to the customer on your own. You may provide the customer with a list of qualifying referral sources as described above.

ACCEPTING GIFTS AND HOSPITALITY

The principal rule to remember regarding gifts and hospitality is that they must not influence, or appear to influence the recipient’s judgment. In general, employees and their immediate family members are not permitted to solicit or accept gifts or hospitality from any current or prospective customers or suppliers except as provided below, and only if there is no reasonable likelihood of improper influence. Hospitality is generally defined as meals, refreshments and entertainment. Gifts include anything of value other than hospitality. Gifts of cash or cash equivalents (e.g., gift certificates) in any amount may never be accepted. This policy applies to all employees, officers and Directors of Bay View.

The following summary information is provided to assist employees in understanding this policy’s key provisions.

• Certain non-cash gifts may be accepted if the value of the gift does not exceed the dollar limit designated for the employee’s job level and the gift represents an expression of friendship or gratitude that does not create the appearance of improper influence. The applicable dollar limit for SVP’s and above and Directors is $250.00; FVP’s, VP’s and AVP’s $100.00 and all other employees $25.00.

• Gifts or hospitality based on obvious family or personal relationships that are clearly the result of the relationship and not the business may be accepted.

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• Unsolicited advertising or promotional material of reasonable value such as pens, pencils, note pads, key chains, calendars and similar items may be accepted.

• Awards of reasonable value from civic, charitable, educational or religious organizations for recognition of service and accomplishment may be accepted.

• Discounts or rebates on merchandise or service may be accepted if they do not exceed those available to other customers.

Bay View’s Counsel is designated as the Company’s Compliance Officer for the Code of Ethical Conduct. Any questions regarding the Code, its interpretation or application should be directed to Counsel’s office.

SOLICITATION AND DISTRIBUTION

Approaching fellow employees or customers in the workplace regarding activities, organizations or causes, regardless of how worthwhile or important can create unnecessary pressure and work disruption for others. For this reason, Bay View restricts solicitation and distribution of literature during work time and in work areas. Solicitation includes activities such as requests for signatures, contributions for charities, support for political or organizing activities, the purchase of merchandise and requests for donations. Managers are not to solicit employees under their supervision for any reason. Work time does not include rest breaks, meal periods and time before and after work.

CONFIDENTIAL AND PROPRIETARY INFORMATION

All Bay View employees share in a commitment to preserve in strictest confidence all proprietary and confidential information about the Company and its customers. Confidential and/or proprietary information includes, but is not limited to customer lists and account information, documents, notes, files, records, business plans and strategies, personnel or payroll records, or any other document or information regarding Bay View’s customers, operations, systems, procedures or practices that are not prepared for public distribution. Confidential information is considered the property of Bay View and may not be removed from your work site or disclosed to any outside party without permission from your division manager.

Safeguarding confidential information about our current and/or former customers is essential to maintaining their trust and is required not only by state and federal law, but also by Bay View’s Privacy Policy. Each employee is expected to understand the importance of customer confidentiality and to follow the provisions of our Privacy Policy at all times. Bay View restricts access to confidential customer information to those employees who need this information to perform their jobs. Confidential customer information must never be discussed or disclosed with anyone outside of the Company and only those within the Company with a legitimate business need to know, unless you have approval of your division manager.

Confidential information obtained during employment with Bay View may not be used by any employee for the purpose of furthering current or future outside employment or activities or for obtaining personal gain or profit. If you leave Bay View, you may not keep any copies of any confidential information that was available to you during your

5

employment and you will be expected to return this information to your manager prior to your departure. Bay View reserves the right to use all legal or equitable remedies to prevent unauthorized use of confidential information and to recover damages incurred as a result of such use. Your obligations under this policy are ongoing and continue even after termination from employment.

ACCURACY AND RETENTION OF COMPANY RECORDS

All Company records must be accurate and consistent with Bay View’s established accounting standards and Company policies. If you or any employee have information or knowledge of any unrecorded fund, asset, liability or any prohibited act (i.e., one that involves theft, dishonesty, breach of trust, etc.), it must be reported promptly to your manager, Bay View’s Counsel or the on-site Human Resources Manager. In addition, you or any employee must not engage in any activity which results in false or misleading entries in any of Bay View’s records or which serves to conceal or hide funds, assets or liabilities.

Some Company records are subject to certain minimum requirements for retention either by law, or by Bay View policy. Other records may be needed for anticipated or pending legal cases. In either case, destruction of these records could place Bay View at risk. Before you destroy Company documents or records, check with your manager for the appropriateness of doing so.

OUTSIDE ACTIVITIES

Bay View encourages the active interest of its employees in political, civic and community activities. If you are involved in, or are interested in becoming involved in outside activities such as these, you need to be aware of certain requirements related to your participation.

Political Activities
All employees who choose to participate in political activities must understand that they do so separate from their official job responsibilities and that they do so as individuals, not as representatives of Bay View. If you want to run for elected office or accept an appointment to public office, you must first obtain clearance by Bay View’s Chief Executive Officer. Employees may not solicit campaign funds on Company premises or engage in any other type of election activities using Bay View’s name, property or resources. Although you may make a personal political contribution to a party or a candidate of your choice, it is illegal for a person on behalf of Bay View to make a cash donation or a gift from the Company’s resources to any public office holder or candidate for federal office.

Civic and Community Activities
Employees are encouraged to support community activities and other worthwhile causes. If you choose to participate in a civic organization or function, you must do so as an individual and not as a representative of Bay View. You must also ensure that your participation does not interfere with your job in any way, and that it does not create a conflict of interest.

6

Directorships
If you are asked or wish to serve as a director of another company or organization (for profit or nonprofit), you must obtain the approval of Bay View’s Chief Executive Officer prior to accepting the appointment. Directorships of companies or organizations closely held by the employee’s family, as well as those of nonprofit, social, civic, religious or philanthropic organizations will normally be approved. When you serve as a Director, you may not participate in, approve or control any transaction between Bay View and the other organization.

INSIDER TRADING

Bay View forbids any employee, officer, director or person associated with Bay View from trading on material nonpublic information or communicating material nonpublic information to others in violation of the law. Information is considered nonpublic until it has been communicated to the marketplace at large and may include, by way of example, information such as dividend changes, earnings estimates, changes in previously released earnings estimates, significant merger or acquisition proposals, major litigation and extraordinary management developments. This type of prohibited conduct is commonly referred to as “insider trading” and is considered a possible violation of federal securities laws. As a guideline to help you avoid violations of these laws, you should always hold in strict confidence all material nonpublic information about Bay View and any of its customers and consult with Bay View’s Counsel before trading in Bay View stock. Similarly, if you have material nonpublic information about any other company that you acquired through your employment with Bay View, you should not trade in that company’s stock until the information is made public.

FAVORED TREATMENT AND FAIR COMPETITION

Bay View and in some cases federal and state laws, prohibit bribes, kickbacks, extraordinary commissions or other means of obtaining favored treatment by government representatives, other businesses, vendors, customers or individuals. You must immediately report any such requests or approaches to your manager. Services selected by Bay View are chosen on the basis of qualifications, quality, service, price and benefit to the Company and not merely on personal or client relationships.

You are expected to be fair and ethical in dealing with Bay View’s competitors. Employees are prohibited from involving Bay View in arrangements with its competitors, which provide for setting or controlling of rates, prices or marketing policies. Making disparaging remarks regarding competitors is considered inappropriate, unethical and may be unlawful.

PERSONAL FINANCES

Bay View’s business, as a financial institution, depends on the confidence that our customers place in us. Although Bay View considers your personal finances to be private in most cases, it is important for all employees to manage their personal financial affairs in a manner consistent with this confidence.

Personal Transactions
You are not allowed to handle or approve your own transactions or those of any family member or transactions on accounts over which you have any ownership interest, control, signing authority or which would create a potential conflict of interest. Both monetary and non-monetary personal transactions, including payments, changes of address or

7

limits, and fee waivers must be processed by another staff member. You can not request that an employee that you directly or indirectly supervise approve a personal transaction.

Borrowing
You may not borrow from or lend personal funds to current customers of Bay View, unless the customer is a recognized lending institution and the loan is made at the prevailing rate of interest and is free from favored treatment of any kind. You should also not borrow significant amounts of money from, or lend significant amounts of money to other Bay View employees who are in direct or indirect reporting, reviewing or auditing relationships with you.

Fiduciary Appointments
You may act as an executor, trustee, guardian or in other fiduciary capacities only in those situations involving members of your immediate family. You may keep compensation received for fiduciary appointments and relationships with your family. You may not accept fees for serving as a co-fiduciary with Bay View on any account.

Wills, Estates or Trusts
You may witness a customer’s will only if the customer’s attorney is present. You may not accept an inheritance under a will from a customer, unless the customer is a member of your family. Any benefit from the estate or trust of a customer must be disclosed to and approved by Bay View’s Counsel.

PUBLIC AND MEDIA RELATIONS

To ensure that confidential or proprietary information is not released to the media and to prevent potential misstatements or confusion, all media inquiries and contacts of any kind must be directed to Bay View’s Counsel. In addition, if you write an article or story about Bay View for publication outside of the Company, Bay View’s Counsel must review it prior to publication.

CODE OF ETHICAL CONDUCT FOR SENIOR FINANCIAL OFFICERS

Because Bay View’s equity and debt securities are publicly traded, senior financial officers are held to an especially high set of ethical standards. Senior financial officers include the Chief Executive Officer, Chief Financial Officer, Controller or any person serving in an equivalent position. In addition to complying with the other provisions of this Code of Ethical Conduct, senior financial officers must establish procedures and financial accounting controls that are appropriate to ensure the full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the Securities and Exchange Commission, and in other public communications made by the Company. Any employee supplying information or analyses known to be relied upon by a senior financial officer for inclusion in any report or communication supplied to the SEC, or the public shall certify in writing that, to the best of such employee’s knowledge, such information is complete and accurate in all material respects. Senior financial officers shall also establish procedures that ensure that the business transactions of the Company are recorded on the Company’s books in accordance with Generally Accepted Accounting Principles, established Company policy, and/or appropriate regulatory rules and guidelines, and otherwise ensure that the Company complies with applicable laws, rules and regulations. As with other provisions

8

of this Code of Ethical Conduct, any employee who knows of or suspects a violation of these provisions must promptly report such violation to the on-site Human Resources Manager or Counsel. Bay View will not retaliate against any employee for a good faith report of known or suspected violations. Any senior financial officer who does not comply with this code of ethical conduct will be subject to disciplinary action, up to and including termination of employment.

POLICY AGAINST HARASSMENT

It is Bay View’s policy and commitment to provide a work environment that is free from unlawful harassment based on race, color, national origin, ancestry, religion, creed, physical or mental disability, marital status, medical condition, sexual orientation, age or any other basis that is protected by federal, state or local law. Each employee is responsible for contributing to a professional and dignified workplace that is free from unlawful harassment.

Harassment is defined as unwelcome or unsolicited verbal or physical conduct that creates an intimidating, hostile or offensive work environment; unreasonably interferes with an employee’s job performance; or adversely affects the terms or conditions of employment or is used as a basis for employment decisions. Harassment can include a range of subtle and not so subtle behaviors and may involve individuals of the same or of different genders. It is not unlawful harassment for managers to enforce Bay View’s policies or job performance and conduct standards in a consistent manner. Examples of harassment can be found in Bay View’s policy against harassment set forth in the Employee Handbook. Employees are responsible for becoming familiar with and complying with Bay View’s complete policy against harassment which is set forth in the Employee Handbook.

Employees should report every instance of unlawful discrimination or harassment to their manager or the on-site Human Resources Manager. Bay View will then conduct a timely investigation and take appropriate corrective action if it is determined that prohibited conduct occurred. Bay View will not retaliate against employees for submitting a good faith report of discrimination or harassment or for cooperating with any investigation.

Any employee who is found to have engaged in prohibited harassment is subject to corrective action, up to and including immediate termination from employment. In addition, any manager or supervisor who knew about the harassment and took no action to stop it or failed to report it may be subject to corrective action up to and including immediate termination of employment.

USE OF COMPANY RESOURCES AND TECHNOLOGY

The Company’s technical resources — including fax machines, copiers, telephones, personal computers, Internet access, e-mail and voice mail — are provided to employees for use in the pursuit of Company business. However, Bay View also recognizes the need for employees to occasionally use these Company resources for personal reasons on a limited basis. If you have any doubt about the level of personal use that is permitted, please ask your manager or the on-site Human Resources Manager.

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The Company reserves the right to monitor electronic and voice messages, documents and systems. Any and all communications and files created, received or maintained using Company resources are considered Company property. The Company reserves the right to inspect or search its property at anytime, without the presence of any particular employee. Improper use of Company resources may result in corrective action. Employees are responsible for becoming familiar with and complying with the Company Resources and Technology policy as set forth in Chapter 5 of the Employee Handbook.

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CODE OF ETHICAL CONDUCT

CERTIFICATION FORM

I have received, read and understand the Bay View Capital Corporation Code of Ethical Conduct. I agree to abide by its provisions at all times. Within its meaning, expressed and implied, I am not aware of any circumstances or activity of a personal or family nature which would potentially conflict with the interest of Bay View Capital Corporation except as noted below.

If nothing to report, please write “None”.

Signature:

Name (please print):

Department:

Date:

Circumstance or Activity

Return this Form to:

Counsel/Ethics Code of Compliance Officer
San Mateo/Metro — Legal Department

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EX-21

EXHIBIT 21

SUBSIDIARIES OF THE REGISTRANT

		Percentage
		of
Parent (at December 31, 2005)	Subsidiary	Ownership
Bay View Capital Corporation	Bay View Acceptance Corporation		100	%
Bay View Capital Corporation	Bay View Securitization Corporation		100	%
Bay View Capital Corporation	Bay View Capital I (1) (2)		100	%
Bay View Capital Corporation	FMAC 2000-A Holding Company (1)		100	%
Bay View Capital Corporation	FMAC Franchise Receivables Corporation (1)		100	%
Bay View Capital Corporation	Bay View Commercial Finance Group (1)		100	%
Bay View Capital Corporation	MoneyCare, Inc. (1)		100	%
Bay View Acceptance Corporation	Bay View Receivables Corporation		100	%
Bay View Acceptance Corporation	Bay View Transaction Corporation		100	%
Bay View Acceptance Corporation	Bay View Deposit Corporation		100	%
Bay View Acceptance Corporation	Bay View Warehouse Corporation		100	%

(1)	Inactive subsidiaries.
(2)	Deconsolidated based on FIN 46.

The financial statements of the Registrant are consolidated with those of its subsidiaries.

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have issued our reports dated March 21, 2006, accompanying the consolidated financial statements and management’s assessment of the effectiveness of internal control over financial reporting included in the Annual Report of Bay View Capital Corporation and subsidiaries on Form 10-K for the year ended December 31, 2005. We hereby consent to the incorporation by reference of said reports in the previously filed Registration Statements of Bay View Capital Corporation and subsidiaries on Forms S-8 (33-30602, 33-30603, 33-36161, 33-41924, 33-95724, 33-95726, 333-37027, 333-37029, 333-37031, 333-92637, 333-70372 and 333-70362) and on Forms S-3 (333-29757 and 333-64877).

/s/ Grant Thornton LLP

San Francisco, CA

March 21, 2006

EX-23.2

EXHIBIT 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statements Nos. 33-30602, 33-30603, 33-36161, 33-41924, 33-41926, 33-95724, 33-95726, 333-37027, 333-37029, 333-37031, 333-92637, 333-70372 and 333-70362 on Form S-8 and in Registration Statements Nos. 333-29757 and 333-64877 on Form S-3 of our report dated March 12, 2004, relating to the 2003 consolidated financial statements of Bay View Capital Corporation and Subsidiaries (which report expresses an unqualified opinion and includes an explanatory paragraph relating to the change in the basis of accounting on October 1, 2003), appearing in this Annual Report on Form 10-K of Bay View Capital Corporation for the year ended December 31, 2005.

/s/ Deloitte & Touche LLP

San Francisco, California
March 21, 2006

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO RULES 13a-14 AND 15d-14,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Charles G. Cooper, certify that:

1.	I have reviewed this annual report on Form 10-K of Bay View Capital Corporation for the year ended December 31, 2005;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 21, 2006

/s/ Charles G. Cooper  

Charles G. Cooper 

President and Chief Executive Officer 

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO RULES 13a-14 AND 15d-14,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John Okubo, certify that:

1.	I have reviewed this annual report on Form 10-K of Bay View Capital Corporation for the year ended December 31, 2005;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 21, 2006

/s/ John Okubo

John Okubo

Executive Vice President and
Chief Financial Officer 

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with the Annual Report of Bay View Capital Corporation (the “Company”) on Form 10-K for the year ended December 31, 2005 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Charles G. Cooper, President and Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1.	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein.

Date: March 21, 2006

/s/ Charles G. Cooper

Charles G. Cooper 

President and Chief Executive Officer

     A signed original of this written statement required by Section 906 has been provided to Bay View Capital Corporation and will be retained by Bay View Capital Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with the Annual Report of Bay View Capital Corporation (the “Company”) on Form 10-K for the year ended December 31, 2005 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John Okubo, Executive Vice President and Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1.	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein.

Date: March 21, 2006

/s/ John Okubo

John Okubo

Executive Vice President and
Chief Financial Officer

     A signed original of this written statement required by Section 906 has been provided to Bay View Capital Corporation and will be retained by Bay View Capital Corporation and furnished to the Securities and Exchange Commission or its staff upon request.