Exhibit 10.4



 





Exhibit 10.4



EXECUTION VERSION



SANTANDER 2007-3 LIMITED GUARANTY




     This Limited Guaranty (this “Guaranty”) is entered into as of October 18, 2007, by
Banco Santander, S.A. (the “Guarantor”), in favor of Santander Drive Auto Receivables Trust
2007-3 (the “Issuer”), Wells Fargo Bank, National Association, as Indenture Trustee under
the Indenture referred to below (in such capacity, the “Indenture Trustee”), U.S. Bank
Trust National Association, as Owner Trustee under the Trust Agreement (the “Owner
Trustee”) and Financial Guaranty Insurance Company (the “Note Insurer”).



     WHEREAS, Santander Consumer USA Inc., as transferor (the “Transferor”), and Santander Drive
Auto Receivables LLC (the “Depositor”), as purchaser, are parties to that certain Contribution
Agreement dated as of even date herewith (as amended, modified or supplemented from time to time,
the “Contribution Agreement”); and



     WHEREAS, the Issuer, the Transferor, the Depositor and the Indenture Trustee are parties to
that certain Sale and Servicing Agreement dated as of even date herewith (as amended, modified or
supplemented from time to time, the “Sale and Servicing Agreement”); and



     WHEREAS, the Issuer, the Transferor, the Owner Trustee and the Indenture Trustee are parties
to that certain Administration Agreement dated as of even date herewith (as amended, modified or
supplemented from time to time, the “Administration Agreement”); and



     WHEREAS, the Issuer and Indenture Trustee are parties to that certain Indenture dated as of
even date herewith (as amended, modified or supplemented from time to time, the
“Indenture”) pursuant to which the Issuer has issued the Notes; and



     WHEREAS, the Note Insurer, the Transferor, the Depositor, the Issuer, the Owner Trustee and
the Indenture Trustee are parties to that certain Insurance Agreement dated as of even date
herewith (the “Insurance Agreement”); and



     WHEREAS, the Note Insurer issued its Note Guaranty Insurance Policy (the “Note Insurance
Policy”) on October 18, 2007, guaranteeing certain payments due under the Notes as fully set
forth in the Note Insurance Policy; and



     WHEREAS, it is a condition precedent to the Note Insurer’s issuance of the Note Insurance
Policy that the Guarantor enter into this Guaranty;



     WHEREAS, the Guarantor will receive substantial direct and indirect benefits from the
consummation of the transactions contemplated by the Contribution Agreement, the Sale and Servicing
Agreement, the Administration Agreement and the Indenture; and



     NOW, THEREFORE, in consideration of the premises and the mutual covenants set forth herein,
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the Guarantor, the parties hereto agree as follows:



     Section 1. Definitions. Unless otherwise defined in this Guaranty, all defined terms used in
this Guaranty shall have the meanings ascribed to such terms in Appendix A to the Sale and
Servicing Agreement.



Limited Guaranty




 









 








     Section 2. Guaranty of Obligations.



     (a) The Guarantor hereby absolutely, irrevocably and unconditionally guarantees for the
benefit of the Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders and the Note
Insurer, the due and punctual performance by the Transferor (as servicer, custodian, if applicable,
and/or in its individual capacity) of its covenants, agreements and obligations contained in (i)
the Contribution Agreement; (ii) the Sale and Servicing Agreement, (iii) the Insurance Agreement
and (iv) the Administration Agreement (together, the “Obligations”).



     (b) For the avoidance of doubt, the Guarantor shall have no obligation to guaranty (and does
not guaranty) any obligations of the Obligors under the Receivables or any obligation of the Issuer
under the Indenture.



     Section 3. Unconditionality; Irrevocability. (a) This is an absolute, unconditional and
continuing guaranty of payment and performance of all Obligations, and the Guarantor agrees that
its obligations under this Guaranty shall be irrevocable. The dissolution, insolvency or
adjudication of bankruptcy of the Guarantor shall not revoke this Guaranty.



     (a) No act or thing need occur to establish the liability or obligation of the Guarantor
hereunder, and no act or thing, except full payment, discharge and performance of all Obligations,
shall in any way exonerate the Guarantor hereunder or modify, reduce, limit or release the
liability of Guarantor hereunder. None of Issuer, the Indenture Trustee or the Note Insurer shall
be required first to resort to payment of the Obligations by the Transferor or other Person, or
their properties, before enforcing this Guaranty. Until payment in full of the Obligations, the
Obligations of the Guarantor under this Guaranty shall not be affected, modified or impaired upon
the happening from time to time of any event, including, without limitation, the events described
in Section 4 herein, whether or not with notice to or the consent of the Guarantor.



     (b) The Guarantor further agrees that, if any payment applied hereunder to the Obligations is
thereafter set aside, recovered, rescinded or required to be returned for any reason (including,
without limitation, the bankruptcy, insolvency or reorganization of the Transferor or any other
obligor) or declared to be fraudulent or preferential, the Obligations to which such payment was
applied shall for the purpose of this Guaranty be deemed to have continued in existence,
notwithstanding such payment, and this Guaranty shall be enforceable as to such Obligations as
fully as if such payment had never been made. The provisions of this Section 3(c) hereof
shall survive any termination of this Guaranty.



     Section 4. Continuation and Validity of Obligations. The liability of the Guarantor shall not
be affected or impaired by any of the following events: (a) the validity, enforceability,
discharge, disaffirmance, settlement or compromise (by any Person, including any trustee in
bankruptcy or other similar official) of the Obligations or of the Transaction Documents, (b) the
absence of any attempt to collect the Obligations from the Transferor or any guarantor or other
Person, (c) the waiver or consent by the Issuer, the Indenture Trustee, the Note Insurer, or any
other Person with respect to any provision of any instrument or agreement evidencing the
Obligations, any delay or lack of diligence in the enforcement of the Obligations, or any failure
to institute proceedings, file a claim, give any required notices or otherwise protect the



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Obligations, (d) any change of the time, manner or place of payment or performance, or any
other term of any of the Obligations, (e) any law, regulation or order of any jurisdiction
affecting any term of any of the Obligations or rights of the Issuer, the Indenture Trustee or the
Note Insurer with respect thereto, (f) the failure by the Indenture Trustee to take any steps to
perfect and maintain perfected its interest in the Receivables, Financed Vehicles or other property
acquired from the Issuer or any security or collateral related to the Obligations, (g) the
commencement of any bankruptcy, insolvency or similar proceeding with respect to the Transferor,
the Issuer or the Depositor or any other affiliate of the Transferor, (h) any full or partial
release of, compromise or settlement with, or agreement not to sue, the Transferor or any guarantor
or other person liable in respect of any Obligations, (i) any release, surrender, cancellation or
other discharge of any evidence of the Obligations or the acceptance of any instrument in renewal
or substitution thereof, (j) any collection, sale, lease or disposition of, or any other
enforcement of or realization on, any Receivable or Financed Vehicle, (k) any assignment, pledge or
other transfer of the Obligations or any evidence thereof, (l) any acceptance of collateral
security, guarantors, accommodation parties or sureties for any or all Obligations, (m) any change
in the existing relationship between the Guarantor and the Transferor including, without
limitation, any sale or other transfer of the stock of the Transferor by the Guarantor or (n) any
legal or equitable discharge or defense of the Guarantor. The Guarantor waives any and all
defenses and discharges available to a surety, guarantor or accommodation co-obligor.



     Section 5. Representations and Warranties. The Guarantor hereby makes the following
representations and warranties as of the date hereof on which the Issuer, the Indenture Trustee and
the Note Insurer will be deemed to have relied in acquiring the Transferred Assets or the pledge of
the Collateral (as defined in the Indenture), as the case may be or, in the case of the Note
Insurer, in issuing the Note Insurance Policy:



     (a) Existence and Power. The Guarantor is a corporation duly incorporated, validly existing
and in good standing under the laws of the Kingdom of Spain and has all power and authority
required to carry on its business as it is presently conducted and to execute, deliver and perform
this Guaranty. The Guarantor has obtained all necessary licenses and approvals, in all
jurisdictions where the failure to do so would materially and adversely affect the financial
condition, business or operations of the Guarantor, taken as a whole.



     (b) Corporate Authorization and No Contravention. The execution, delivery and performance by
the Guarantor of this Guaranty has been duly authorized by all necessary corporate action and does
not contravene or constitute a default under (i) any applicable law, rule or regulation, (ii) its
organizational documents or (iii) any material agreement, material contract, order or other
material instrument to which it is a party or its property is subject, except where such
contravention or default would not have a material adverse effect on the enforceability or
collectibility of the Receivables or the financial condition, business or operations of the
Guarantor, taken as a whole.



     (c) No Consent Required. No approval or authorization by, or filing with, any (a) Federal,
state, municipal, foreign or other governmental entity, board, bureau, agency or instrumentality,
(b) administrative or regulatory authority (including any central bank or similar authority) or (c)
court or judicial authority is required in connection with the execution, delivery



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and performance by the Guarantor of this Guaranty other than (i) approvals and authorizations
that have previously been obtained and filings that have previously been made or approvals,
authorizations or filings which will be made on a timely basis and (ii) approval, authorizations or
filings which, if not obtained or made, would not have a material adverse effect on the financial
condition, business or operations of the Guarantor, taken as a whole.



     (d) Binding Effect. This Guaranty constitutes the legal, valid and binding obligation of the
Guarantor enforceable against the Guarantor in accordance with its terms, except as limited by
bankruptcy, insolvency, or other similar laws of general application relating to or affecting the
enforcement of creditors’ rights generally and subject to general principles of equity.



     (e) No Proceedings. There are no actions, suits or proceedings pending or, to the knowledge
of the Guarantor, threatened against the Guarantor before or by any Governmental Authority that (i)
assert the invalidity or unenforceability of this Guaranty, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Guaranty, (iii) seeking any
determination or ruling that would materially and adversely affect the performance by the Guarantor
of its obligations under this Guaranty or (iv) seeking any determination or ruling that would
adversely affect the validity or enforceability of this Guaranty.



     (f) Benefits. The Guarantor has a direct and substantial economic interest in the Transferor
and expects to derive substantial benefits therefrom and from the transaction described in the
Transaction Documents, any loans, credit transactions, financial accommodations, discounts,
purchases of property and other transactions and events resulting in the creation of Obligations
and the other obligations guaranteed hereby, and this Guaranty shall be effective and enforceable
by the Issuer, the Indenture Trustee and the Note Insurer without regard to the receipt, nature or
value of any such benefits.



     (g) Solvency. The Guarantor is not insolvent nor will it be rendered insolvent by virtue of
entering into or carrying out this Guaranty.



     Section 6. Independent Obligations. The obligations of the Guarantor hereunder are undertaken
as primary obligor and independently of the obligations of the Transferor, or any other obligor,
guarantor or Person, and action or actions may be brought or prosecuted directly against the
Guarantor whether or not action is brought first or at all against the Transferor, the Depositor or
any other obligor, guarantor or Person, against any collateral security or any other circumstance
whatsoever, and whether or not the Transferor or any other obligor, guarantor or Person is joined
in any such action or actions, or any claims or demands are made or are not made, or any action is
taken on or against the Transferor, any other obligor, guarantor or Person or any collateral
security or otherwise.



     Section 7. Waivers. The Guarantor waives any and all defenses, claims, setoffs and discharges
of the Transferor, or any other obligor, pertaining to the Obligations. Without limiting the
generality of the foregoing or any other provision hereof, to the fullest extent permitted by
applicable law, the Guarantor hereby waives: (a) any defense arising by reason of any invalidity or
unenforceability of the Transferor’s obligations in respect of the Transaction Documents, any
manner in which the Issuer, the Indenture Trustee or the Note Insurer have



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exercised (or not exercised) any rights and remedies under the Transaction Documents or the
Notes, or any cessation from any cause whatsoever of the liability of any obligor, guarantor or
Person; (b) all presentments, demands for performance, notices of nonperformance, protests, notices
of protest, notices of dishonor and notices of acceptance of the Transaction Documents (including
this Guaranty); (c) any release of any of the Collateral (as defined in the Indenture) provided
under the Indenture or other Transaction Documents; (d) notice of any indulgences, extensions,
consents or waivers given to the Transferor or any other obligor, guarantor or Person, notice of
any Servicer Termination Event under the Sale and Servicing Agreement, any Default or Event of
Default under the Indenture or default or event of default under any of the other Transaction
Documents or other notice of any kind whatsoever; (e) any right or claim of right to cause the
Indenture Trustee or the Note Insurer to proceed against the Transferor or any other obligor,
guarantor or Person in any particular order, to proceed against or exhaust any collateral security
held by the Issuer, the Indenture Trustee or the Note Insurer at any time or to pursue any other
right or remedy whatsoever at any time; (f) any requirement of diligence or promptness on the
Issuer’s, the Indenture Trustee’s or the Note Insurer’s part in (X) making any claim or demand on
or commencing suit against the Transferor or any other obligor, guarantor or Person, and (Y)
otherwise enforcing the Issuer’s, the Indenture Trustee’s or the Note Insurer’s rights in respect
of the Indenture or the other Transaction Documents; (g) any defense of waiver, release, discharge
in bankruptcy, statute of limitations, res judicata, statute of frauds, anti-deficiency statute,
fraud, usury, illegality or unenforceability which may be available to any person liable in respect
of any Obligations, or any setoff available against, the Issuer, the Indenture Trustee or the Note
Insurer to the Transferor or any other such person, whether or not on account of a related
transaction; and (h) any duty of the Issuer, the Indenture Trustee or the Note Insurer to advise
the Guarantor of any information known to the Issuer, the Indenture Trustee or the Note Insurer
regarding the financial condition of the Transferor or any other circumstance, it being agreed that
the Guarantor assumes responsibility for being and keeping informed of such condition or any such
circumstance.



     Without limiting the generality of the foregoing, to the fullest extent permitted by
applicable law, the Guarantor specifically waives all defenses the Guarantor may have based upon
any election of remedies by the Issuer, the Indenture Trustee or the Note Insurer which destroys
the Guarantor’s rights to proceed against the Transferor or any other obligor, guarantor or Person
for reimbursement, contribution or otherwise, including any loss of rights that it may suffer by
reason of any rights, powers, remedies or defenses of the Transferor in connection with any laws
limiting, qualifying or discharging indebtedness of or remedies against the Transferor, and the
Guarantor hereby agrees not to exercise or pursue, so long as any of the Obligations remain
unsatisfied, any right to reimbursement, subrogation, or contribution from the Transferor in
respect of payments hereunder.



     Section 8. Significance of Waivers. The Guarantor represents, warrants and agrees that each
of the waivers set forth herein are made with the Guarantor’s full knowledge of its significance
and consequences, with the understanding that events giving rise to any defense waived may
diminish, destroy or otherwise adversely affect rights which the Guarantor otherwise may have
against the Transferor or any other obligor, guarantor or Person, or against collateral, and that
under the circumstances the waivers are reasonable.



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     Section 9. Reimbursement. The Guarantor shall pay or reimburse all costs and expenses
(including reasonable attorneys’ fees and legal expenses) incurred by the Owner Trustee, the
Indenture Trustee or the Note Insurer in connection with the protection, defense or enforcement of
this Guaranty in any litigation or bankruptcy or insolvency proceedings.



     Section 10. Cumulative Liability. The liability of the Guarantor under this Guaranty is in
addition to and shall be cumulative with all other liabilities of the Guarantor as Guarantor,
surety, endorser, accommodation co-obligor or otherwise of any Obligations or obligation of the
Transferor, without any limitation as to amount.



     Section 11. Nonpetition Covenant. Each party hereto agrees that, prior to the date which is
one year and one day after payment in full of all obligations of each Bankruptcy Remote Party in
respect of all securities issued by any Bankruptcy Remote Party (i) such party shall not authorize
any Bankruptcy Remote Party to commence a voluntary winding up or other voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to such Bankruptcy
Remote Party or its debts under any bankruptcy, insolvency or other similar law now or hereafter in
effect in any jurisdiction or seeking the appointment of an administrator, a trustee, receiver,
liquidator, custodian, or other similar official with respect to such Bankruptcy Remote Party or
any substantial part of its property or to consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other proceeding commenced against
such Bankruptcy Remote Party, or to make a general assignment for the benefit of, its creditors
generally, any party hereto or any other creditor of such Bankruptcy Remote Party, and (ii) none of
the parties hereto shall commence or join with any other Person in commencing any proceeding
against such Bankruptcy Remote Party under any bankruptcy, reorganization, liquidation or
insolvency law or statute now or hereafter in effect in any jurisdiction.



     Section 12. Amendments. This Guaranty may not be waived, modified, amended, terminated,
released or otherwise changed except by a writing signed by the Guarantor, the Issuer, the Note
Insurer and the Indenture Trustee. The Guarantor may not assign its obligations hereunder without
the prior written consent of the Note Insurer, the Issuer and the Indenture Trustee.



     Section 13. Governing Law. THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL, SUBSTANTIVE LAWS OF THE STATE OF NEW YORK INCLUDING SECTIONS 5-1401 AND 5-1402
OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING TO THE MAXIMUM EXTENT PERMITTED BY LAW ALL
OTHER RULES THEREOF RELATING TO CONFLICTS OF LAW AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.



     Section 14. Submission to Jurisdiction. Each of the parties hereto hereby irrevocably and
unconditionally:



     (a) submits for itself and its property in any legal action or proceeding relating to this
Guaranty or any documents executed and delivered in connection herewith, or for recognition and
enforcement of any judgment in respect thereof, to the nonexclusive general jurisdiction of



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the courts of the State of New York, the courts of the United States of America for the
Southern District of New York and appellate courts from any thereof;



     (b) consents that any such action or proceeding may be brought in such courts and waives any
objection that it may now or hereafter have to the venue of such action or proceeding in any such
court or that such action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same; and



     (c) agrees that nothing herein shall affect the right to effect service of process in any
manner permitted by law or shall limit the right to sue in any other jurisdiction.



     Section 15. Counterparts. This Guaranty 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 16. Severability of Provisions. If any one or more of the covenants, agreements,
provisions or terms of this Guaranty shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Guaranty and shall in no way affect the validity or
enforceability of the other provisions of this Guaranty.



     Section 17. Benefits; Third-party Beneficiary. This Guaranty shall be effective as of the
date hereof, without further act, condition or acceptance by the Issuer, the Indenture Trustee or
the Note Insurer, shall be binding upon the Guarantor and the successors and assigns of the
Guarantor and shall inure to the benefit of the Issuer, the Indenture Trustee and the Note Insurer
and their respective participants, successors and assigns.



     Section 18. Termination. This Guaranty shall terminate upon the payment in full of the
principal balance of the Notes plus any accrued interest thereon and payment in full of all amounts
owed to the Note Insurer pursuant to the terms of the Insurance Agreement; provided, however, that
the provisions of Section 3(c) hereof shall survive any termination of this Guaranty.



     Section 19. Limitation of Liability. Notwithstanding anything contained herein to the
contrary, this Guaranty has been executed and delivered by U.S. Bank Trust National Association,
not in its individual capacity but solely as Owner Trustee and in no event shall it have any
liability for the representation, warranties, covenants agreements or other obligations of the
Issuer hereunder or under the Notes or any of the other Transaction Documents or in any of the
certificates, notices or agreements delivered pursuant thereto, as to all of which recourse shall
be had solely to the assets of the Issuer. Under no circumstances shall the Owner Trustee be
personally liable for the payment of any indebtedness or expense of the Issuer or be liable for the
breach or failure of any obligation, representation, warranty or covenant made or undertaken by the
Issuer under the Transaction Documents. For the purposes of this Guaranty, in the performance of
its duties or obligations hereunder, the Owner Trustee shall be subject to, and entitled to the
benefits of, the terms and provisions of Articles VI, VII and VIII of the
Trust Agreement.



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     IN WITNESS WHEREOF, this Guaranty has been duly executed by the parties hereto as of the date
and year first above written.



	 	 	 	 	 
	 	BANCO SANTANDER, S.A., as Guarantor

 	 
	 	By:  	
/s/ Jorge Saavedra 	 
	 	 	Name: Jorge Saavedra	 
	 	 	Title:   Executive Director	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	ACKNOWLEDGED:



WELLS FARGO BANK, NATIONAL ASSOCIATION, not in its
individual capacity, but solely as Indenture Trustee

 	 
	 	By:  	/s/
Marianna Stershic 	 
	 	 	Name: Marianna C. Stershic	 
	 	 	Title:   Vice President	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	SANTANDER DRIVE AUTO RECEIVABLES TRUST 2007-3



By: U.S. BANK TRUST NATIONAL ASSOCIATION, 
       not in its individual capacity, but
solely as Owner Trustee

 	 
	 	By:  	
/s/ Annette Morgan 	 
	 	 	Name: Annette E. Morgan	 
	 	 	Title:   Trust Officer	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	U.S. BANK TRUST NATIONAL ASSOCIATION, not in its
individual capacity, but solely as Owner Trustee

 	 
	 	By:  	
/s/ Annette Morgan 	 
	 	 	Name: Annette E. Morgan	 
	 	 	Title:   Trust Officer	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	FINANCIAL GUARANTY INSURANCE COMPANY

 	 
	 	By:  	
/s/ Matthew Fanelli 	 
	 	 	Name: Matthew Fanelli	 
	 	 	Title:   Director