Exhibit 10.2



 





Exhibit 10.2


EXECUTION VERSION




SALE AND SERVICING AGREEMENT




by and among




SANTANDER DRIVE AUTO RECEIVABLES TRUST 2007-3,

as Issuer




SANTANDER DRIVE AUTO RECEIVABLES LLC,

as Seller




SANTANDER CONSUMER USA INC.,

as Servicer




and




WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Indenture Trustee




Dated as of October 18, 2007









 









 











TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	ARTICLE I DEFINITIONS AND USAGE
	 	 	1	 
	SECTION 1.1 Definitions
	 	 	1	 
	SECTION 1.2 Other Interpretive Provisions
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II CONVEYANCE OF TRANSFERRED ASSETS
	 	 	1	 
	SECTION 2.1 Conveyance of Transferred Assets
	 	 	1	 
	SECTION 2.2 Representations and Warranties of the Seller as to each Contract
	 	 	4	 
	SECTION 2.3 Repurchase upon Breach
	 	 	4	 
	SECTION 2.4 Custody of Contract Files
	 	 	5	 
	SECTION 2.5 Funding Events
	 	 	5	 
	 
	 	 	 	 
	ARTICLE III ADMINISTRATION AND SERVICING OF CONTRACTS AND TRUST PROPERTY
	 	 	6	 
	SECTION 3.1 Duties of Servicer
	 	 	6	 
	SECTION 3.2 Collection and Application of Contract Payments
	 	 	7	 
	SECTION 3.3 Realization Upon Contracts
	 	 	8	 
	SECTION 3.4 Maintenance of Security Interests in Financed Vehicles
	 	 	8	 
	SECTION 3.5 Covenants of Servicer
	 	 	8	 
	SECTION 3.6 Purchase of Contracts Upon Breach
	 	 	9	 
	SECTION 3.7 Servicing Fee
	 	 	9	 
	SECTION 3.8 Servicer’s Certificate
	 	 	10	 
	SECTION 3.9 Annual Officer’s Certificate; Notice of Servicer Termination Event
	 	 	11	 
	SECTION 3.10 Annual Servicing Report of Independent Public Accountants
	 	 	12	 
	SECTION 3.11 Servicer Expenses
	 	 	12	 
	SECTION 3.12 Fidelity Bond
	 	 	12	 
	SECTION 3.13 1934 Act Filings
	 	 	12	 
	SECTION 3.14 Access to Certain Documentation and Information Regarding Contracts
	 	 	12	 
	 
	 	 	 	 
	ARTICLE IV DISTRIBUTIONS; ACCOUNTS STATEMENTS TO THE RESIDUAL INTERESTHOLDERS AND THE NOTEHOLDERS
	 	 	12	 
	SECTION 4.1 Establishment of Accounts
	 	 	12	 
	SECTION 4.2 Remittances
	 	 	15	 
	SECTION 4.3 Additional Deposits and Payments
	 	 	15	 
	SECTION 4.4 Distributions
	 	 	18	 
	SECTION 4.5 Replacement of Reserve Account Letters of Credit
	 	 	19	 






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TABLE OF CONTENTS
(continued)




	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	SECTION 4.6 Statements to Noteholders and Residual Interestholders
	 	 	20	 
	SECTION 4.7 No Duty to Confirm
	 	 	21	 
	SECTION 4.8 Claims Under Reserve Account Letters of Credit
	 	 	21	 
	SECTION 4.9 Interest Rate Swap Agreement
	 	 	22	 
	 
	 	 	 	 
	ARTICLE V THE SELLER
	 	 	23	 
	SECTION 5.1 Representations of Seller
	 	 	23	 
	SECTION 5.2 Liability of the Seller; Indemnities
	 	 	25	 
	SECTION 5.3 Merger or Consolidation of, or Assumption of the Obligations of, Seller
	 	 	26	 
	SECTION 5.4 Limitation on Liability of Seller and Others
	 	 	26	 
	SECTION 5.5 The Seller May Own Notes
	 	 	26	 
	SECTION 5.6 Sarbanes-Oxley Act Requirements
	 	 	26	 
	SECTION 5.7 Compliance with Organizational Documents
	 	 	27	 
	 
	 	 	 	 
	ARTICLE VI THE SERVICER
	 	 	27	 
	SECTION 6.1 Representations of Servicer
	 	 	27	 
	SECTION 6.2 Indemnities of Servicer
	 	 	28	 
	SECTION 6.3 Merger or Consolidation of, or Assumption of the Obligations of, Servicer
	 	 	29	 
	SECTION 6.4 Limitation on Liability of Servicer and Others
	 	 	29	 
	SECTION 6.5 Delegation of Duties
	 	 	30	 
	SECTION 6.6 Santander Consumer Not to Resign as Servicer
	 	 	30	 
	SECTION 6.7 The Backup Servicer
	 	 	30	 
	SECTION 6.8 Servicer May Own Notes
	 	 	31	 
	 
	 	 	 	 
	ARTICLE VII TERMINATION OF SERVICER
	 	 	32	 
	SECTION 7.1 Termination of Servicer
	 	 	32	 
	SECTION 7.2 Notification to Noteholders and Residual Interestholders
	 	 	33	 
	SECTION 7.3 Waiver of Past Defaults
	 	 	33	 
	 
	 	 	 	 
	ARTICLE VIII OPTIONAL PURCHASE
	 	 	34	 
	SECTION 8.1 Optional Purchase of Trust Estate
	 	 	34	 
	 
	 	 	 	 
	ARTICLE IX THE NOTE POLICY
	 	 	34	 
	SECTION 9.1 Claims Under the Note Policy
	 	 	34	 
	SECTION 9.2 Surrender of Note Policy
	 	 	35	 






-ii- 









 




TABLE OF CONTENTS
(continued)





	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	ARTICLE X MISCELLANEOUS PROVISIONS
	 	 	36	 
	SECTION 10.1 Amendment
	 	 	36	 
	SECTION 10.2 Protection of Title to Trust
	 	 	37	 
	SECTION 10.3 Other Liens or Interests
	 	 	38	 
	SECTION 10.4 Transfers Intended as Sale; Security Interest
	 	 	39	 
	SECTION 10.5 Notices, Etc
	 	 	39	 
	SECTION 10.6 Choice of Law
	 	 	40	 
	SECTION 10.7 Headings
	 	 	40	 
	SECTION 10.8 Counterparts
	 	 	40	 
	SECTION 10.9 Waivers
	 	 	40	 
	SECTION 10.10 Entire Agreement
	 	 	40	 
	SECTION 10.11 Severability of Provisions
	 	 	40	 
	SECTION 10.12 Binding Effect
	 	 	40	 
	SECTION 10.13 Acknowledgment and Agreement
	 	 	40	 
	SECTION 10.14 Cumulative Remedies
	 	 	41	 
	SECTION 10.15 Nonpetition Covenant
	 	 	41	 
	SECTION 10.16 Submission to Jurisdiction; Waiver of Jury Trial
	 	 	41	 
	SECTION 10.17 Limitation of Liability
	 	 	41	 
	SECTION 10.18 Third-Party Beneficiaries
	 	 	42	 
	SECTION 10.19 Limitation of Rights
	 	 	42	 
	SECTION 10.20 Information Requests
	 	 	43	 
	SECTION 10.21 Regulation AB
	 	 	43	 
	SECTION 10.22 Information to Be Provided by the Indenture Trustee
	 	 	43	 
	SECTION 10.23 Assignment
	 	 	44	 
	SECTION 10.24 Further Assurances
	 	 	44	 






	 	 	 
	Schedule I
	 	Representations and Warranties

	Schedule II
	 	Notice of Addresses

	Schedule III
	 	Custodial Fees

	 	 	 

	Exhibit A
	 	Form of Notice of Funding Date

	Exhibit B
	 	Form of Joint Officer’s Certificate

	Exhibit C
	 	Form of Assignment pursuant to Sale and Servicing Agreement

	Exhibit D
	 	Form of Servicer’s Certificate

	Exhibit E
	 	Form of Indenture Trustee’s Acknowledgement

	Exhibit F
	 	Form of Servicing Criteria Report

	Exhibit G
	 	Form of Sarbanes Certification







-iii- 









 




TABLE OF CONTENTS
(continued)




	 	 	 	 	 
	 	 	Page	 







	 	 	 
	Exhibit H
	 	Form of Charge-Off Policy

	Exhibit I
	 	Form of Dealer Agreement

	 
	Appendix A
	 	Definitions








-iv- 











 





     SALE AND SERVICING AGREEMENT, dated as of October 18, 2007 as amended, supplemented or
otherwise modified and in effect from time to time, this “Agreement”), by and among
SANTANDER DRIVE AUTO RECEIVABLES TRUST 2007-3, a Delaware statutory trust (the “Issuer”),
SANTANDER DRIVE AUTO RECEIVABLES LLC, a Delaware limited liability company, as seller (the
“Seller”), SANTANDER CONSUMER USA INC., an Illinois corporation (“Santander
Consumer”), as servicer (in such capacity, the “Servicer”), WELLS FARGO BANK, NATIONAL
ASSOCIATION, as indenture trustee (the “Indenture Trustee”).



     WHEREAS, the Issuer desires to purchase from the Seller a portfolio of non-prime motor vehicle
retail installment sale contracts secured by new and used automobiles, light-duty trucks, vans and
mini-vans.



     WHEREAS, the Seller is willing to sell such portfolio of contracts and related property to the
Issuer; and



     WHEREAS, Santander Consumer is willing to service such contracts and related property on
behalf of the Issuer;



     NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained,
and other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound, agree as follows:



ARTICLE I

DEFINITIONS AND USAGE




     SECTION 1.1 Definitions. Except as otherwise specified herein or as the context may
otherwise require, capitalized terms used but not otherwise defined herein are defined in
Appendix A hereto, which also contains rules as to usage that are applicable herein.



     SECTION 1.2 Other Interpretive Provisions. For purposes of this Agreement, unless the
context otherwise requires: (a) accounting terms not otherwise defined in this Agreement, and
accounting terms partly defined in this Agreement to the extent not defined, shall have the
respective meanings given to them under generally accepted accounting principles; (b) terms defined
in Article 9 of the UCC as in effect in the relevant jurisdiction and not otherwise defined in this
Agreement are used as defined in that Article; (c) the words “hereof,” “herein” and “hereunder” and
words of similar import refer to this Agreement as a whole and not to any particular provision of
this Agreement; (d) references to any Article, Section, Schedule, Appendix or Exhibit are
references to Articles, Sections, Schedules, Appendices and Exhibits in or to this Agreement and
references to any paragraph, subsection, clause or other subdivision within any Section or
definition refer to such paragraph, subsection, clause or other subdivision of such Section or
definition; (e) the term “including” means “including without limitation”; (f) except as otherwise
expressly provided herein, references to any law or regulation refer to that law or regulation as
amended from time to time and include any successor law or regulation; (g) references to any Person
include that Person’s successors and assigns; and (h) headings are for purposes of reference only
and shall not otherwise affect the meaning or interpretation of any provision hereof.



ARTICLE II

CONVEYANCE OF TRANSFERRED ASSETS




     SECTION 2.1 Conveyance of Transferred Assets. (a) In consideration of the Issuer’s
sale and delivery to, or upon the order of, the Seller of all of the Notes and the Residual
Interest on the Closing Date, the Seller does hereby irrevocably sell, transfer, assign and
otherwise convey to the Issuer without



 









 




recourse (subject to the obligations herein) all right, title and interest of the Seller,
whether now owned or hereafter acquired, in, to and under the Initial Transferred Assets,
identified in an Assignment substantially in the form of Exhibit C delivered on the Closing
Date. The sale, transfer, assignment and conveyance made hereunder does not constitute and is not
intended to result in an assumption by the Issuer of any obligation of the Seller or the Originator
to the Obligors, the Dealers or any other Person in connection with the Contracts or the other
assets and properties conveyed hereunder or any agreement, document or instrument related thereto.
Such sale pursuant to this Section 2.1(a) shall be effective as of the Closing Date.




     (b) In consideration of the payment of the Contracts Purchase Price from the Pre-Funding
Account, on each Funding Date the Seller does hereby sell, transfer, assign, and otherwise convey
to the Issuer without recourse (subject to the obligations herein) all right, title and interest of
the Seller, whether now owned or hereafter acquired, in, to and under the Subsequent Transferred
Assets, identified in an Assignment substantially in the form of Exhibit C delivered on
such Funding Date. The purchase of the Subsequent Transferred Assets on each Funding Date shall be
made in accordance with the Contribution Agreement and this Agreement. The sale, transfer,
assignment and conveyance made hereunder does not constitute and is not intended to result in an
assumption by the Issuer of any obligation of the Seller or the Originator to the Obligors, the
Dealers or any other Person in connection with the Contracts or the other assets and properties
conveyed hereunder or any agreement, document or instrument related thereto. Each such sale
pursuant to this Section 2.1(b) shall be effective as of the related Funding Date.



     (c) The Seller shall transfer to the Issuer the Subsequent Contracts and the other property
and rights related thereto described in Section 2.1(b) only upon the satisfaction of each
of the following conditions on or prior to the related Funding Date:




     (i) the Seller shall have provided the Indenture Trustee, the Owner Trustee, the
Insurer and the Rating Agencies with a Notice of Funding not later than five (5) Business
Days prior to such Funding Date and shall have provided any information reasonably requested
by any of the foregoing with respect to the Subsequent Contracts;




     (ii) the Seller shall have delivered to the Owner Trustee and the Indenture Trustee a
duly executed Assignment with a list of all Subsequent Contracts to be transferred on such
Funding Date;




     (iii) as of each Funding Date, (A) the Seller shall not be insolvent and shall not
become insolvent as a result of the transfer of Subsequent Contracts on such Funding Date,
(B) the Seller shall not intend to incur or believe that it shall incur debts that would be
beyond its ability to pay as such debts mature, (C) such transfer shall not have been made
with actual intent to hinder, delay or defraud any Person and (D) the assets of the Seller
shall not constitute unreasonably small capital to carry out its business as conducted;




     (iv) the Funding Period shall not have terminated;




     (v) after giving effect to any transfer of Subsequent Contracts on a Funding Date, the
Contracts transferred to the Issuer pursuant hereto shall meet the following criteria (based
on the characteristics of the Initial Contracts on the Initial Cut-Off Date and the
Subsequent Contracts on the related Subsequent Cut-Off Dates) as such information is
provided to the Indenture Trustee by the Servicer: (A) the weighted average APR of all
Contracts transferred to the Issuer shall not be less than [not applicable]%, unless, with
the prior consent of the Rating Agencies and the Insurer, the Seller increases the related
Subsequent Reserve Amount (and therefore the Specified Reserve Amount) with respect to such
Subsequent Contracts by the amount required by the Insurer; (B)



2









 







the weighted average original term to scheduled maturity of the Contracts shall not be
greater than [not applicable] months; (C) the weighted average overall loan to value
percentage of the Contracts shall not be greater than [not applicable]%; (D) the percentage
of Contracts (based on the Principal Balance of the Contracts) originated and entered into
in the State of Texas shall not exceed [not applicable]% of the total Contracts in the
Issuer; and (E) the percentage of Contracts (based on the Principal Balance of the
Contracts):




     with no Credit Bureau Score shall not exceed not applicable]%;




     with Credit Bureau Scores from 1 through 450 shall not exceed [not applicable]%;




     with Credit Bureau Scores from 451 through 475 shall not exceed [not applicable]%;




     with Credit Bureau Scores from 476 through 500 shall not exceed [not applicable]%;




     with Credit Bureau Scores from 501 through 525 shall not exceed [not applicable]%;




     with Credit Bureau Scores from 526 through 550 shall not exceed [not applicable]%;




     with Credit Bureau Scores from 551through 575 shall not exceed [not applicable]%;
and




     with Credit Bureau Scores equal to 576 or higher shall be at least 20%;




     (vi) each of the representations and warranties made by the Seller pursuant to
Schedule I hereto with respect to the Subsequent Contracts to be transferred on such
Funding Date shall be true and correct as of the related Funding Date, and the Seller shall
have performed all obligations to be performed by it hereunder on or prior to such Funding
Date;




     (vii) the Seller shall, at its own expense, on or prior to the Funding Date indicate in
its computer files that the Subsequent Contracts have been sold to the Issuer pursuant to
this Agreement;




     (viii) the Seller shall have taken any action required to maintain the first priority
perfected ownership interest of the Issuer in the Trust Estate and the first priority
perfected security interest of the Indenture Trustee in the Collateral;




     (ix) no selection procedures adverse to the interests of the Noteholders or the Insurer
shall have been utilized in selecting the Subsequent Contracts;




     (x) the addition of any such Subsequent Contracts shall not result in a material
adverse tax consequence to the Issuer or the Noteholders;




     (xi) the Seller shall have delivered to the Rating Agencies, the Insurer and the
Indenture Trustee an Opinion of Counsel with respect to the transfer of such Subsequent
Contracts substantially in the form of the Opinion of Counsel delivered to the Rating
Agencies, the Insurer and the Indenture Trustee on the Closing Date (which Opinion of
Counsel may be included in the Opinion of Counsel delivered on the Closing Date);




     (xii) no Insurer Event of Default shall have occurred and be continuing;




     (xiii) the Insurer, in its absolute and sole discretion, shall have approved the
transfer in writing of such Subsequent Contracts to the Issuer and the Insurer shall have
been reimbursed for any fees and expenses incurred by the Insurer in connection with the
granting of such approval;




     (xiv) the Seller shall simultaneously cause the Reserve Amount to be increased by the
Subsequent Reserve Amount with respect to the Subsequent Contracts transferred on such
Funding Date;



3









 






     (xv) the Seller shall have delivered to the Insurer, the Owner Trustee and the
Indenture Trustee an Officers’ Certificate confirming the satisfaction of each condition
precedent specified in this paragraph (c);




     (xvi) no such Subsequent Contract shall have an APR less than [not applicable]%; and




     (xvii) the Seller shall have deposited into the Collection Account to the extent
required by Section 4.2, all Collections in respect of the related Subsequent
Contracts since the applicable Subsequent Cut-Off Date.



     The Seller covenants that in the event any of the foregoing conditions precedent are not
satisfied with respect to any Subsequent Contract on the date required as specified above, the
Seller will immediately repurchase such Subsequent Contract from the Trust, at a price equal to the
Repurchase Amount thereof, in the manner specified in Section 2.3.



     SECTION 2.2 Representations and Warranties of the Seller as to each Contract. On the
date hereof, with respect to the Initial Contracts, or on each Funding Date, with respect to the
Subsequent Contracts, the Seller hereby makes the representations and warranties set forth on
Schedule I hereto to the Issuer, the Insurer and the Indenture Trustee as to the Initial
Contracts and Subsequent Contracts, as applicable, sold, transferred, assigned, and otherwise
conveyed to the Issuer under this Agreement and each Assignment on which such representations and
warranties the Issuer relies in acquiring the Contracts and the Insurer relies on issuing the Note
Policy. The representations and warranties as to each Contract shall survive the sale, transfer
and assignment to the Issuer and the Grant of the Contracts by the Issuer to the Indenture Trustee
pursuant to the Indenture. Notwithstanding any statement to the contrary contained herein or in
any other Transaction Document, the Seller shall not be required to notify any insurer with respect
to any Insurance Policy obtained by an Obligor.



     SECTION 2.3 Repurchase upon Breach. Upon discovery by any party hereto of a breach of
any of the representations and warranties set forth in Section 2.2 with respect to any
Contract (regardless of any knowledge limitation) at the time such representations and warranties
were made which materially and adversely affects the interests of the Issuer, the Insurer or the
Noteholders in such Contract, the party discovering such breach shall give prompt written notice
thereof to the other parties hereto and the Insurer; provided, that delivery of the Servicer’s
Certificate shall be deemed to constitute prompt notice by the Servicer and the Issuer of such
breach; provided, further, that the failure to give such notice shall not affect any obligation of
the Seller hereunder. If the breach materially and adversely affects the interests of the Issuer,
the Insurer or the Noteholders in such Contract, then the Seller shall either (a) correct or cure
such breach or (b) repurchase such Contract from the Issuer, in either case on or before the
Determination Date following the end of the first full Collection Period after the date the Seller
became aware or was notified of such breach. Any such breach of the representation set forth in
clause (a)(vii) of Schedule I shall be deemed to automatically, materially and adversely
affect the interests of the Insurer. Any such purchase by the Seller shall be at a price equal to
the Repurchase Price. In consideration for such repurchase, the Seller shall make (or shall cause
to be made) a payment to the Issuer equal to the Repurchase Price by depositing such amount into
the Collection Account prior to noon, New York City time on such date of repurchase. Upon payment
of such Repurchase Price by the Seller, the Indenture Trustee, on behalf of the Indenture Secured
Parties, and the Issuer shall release and shall execute and deliver such instruments of release,
transfer or assignment, in each case without recourse or representation, as may be reasonably
requested by the Seller to evidence such release, transfer or assignment or more effectively vest
in the Seller or its designee all of the Issuer’s and Indenture Trustee’s rights in any Contract
and related Transferred Assets repurchased pursuant to this Section 2.3. It is understood
and agreed that, unless the Seller fails to repurchase (or fails to enforce the obligation of the
Originator under the Contribution Agreement to repurchase) any Contract as described above, the
right to



4









 




cause the Seller to repurchase (or to enforce the obligations of the Originator under the
Contribution Agreement to repurchase) any Contract as described above shall constitute the sole
remedy respecting such breach available to the Issuer, the Insurer and the Indenture Trustee.
Neither the Owner Trustee nor the Indenture Trustee will have any duty to conduct an affirmative
investigation as to the occurrence of any condition requiring the repurchase of any Contract
pursuant to this Section 2.3.




     SECTION 2.4 Custody of Contract Files.



     The Indenture Trustee shall hold each Contract File under this Agreement except as described
in this Section. On or prior to the Closing Date, and each Funding Date, as applicable, the
Indenture Trustee shall provide an Acknowledgment substantially in the form of Exhibit E
hereto dated as of the Closing Date and each Funding Date, as applicable, to the Owner Trustee and
the Insurer confirming that the Indenture Trustee has received and is in possession of the original
of each Contract listed on the Schedule of Contracts. The Indenture Trustee, in its capacity as
custodian, shall receive compensation from Santander Consumer USA Inc. for its custodial duties as
detailed on Schedule III hereof.



     To assure uniform quality in servicing the Contracts and to reduce administrative costs, the
Issuer hereby revocably appoints the Servicer and the Servicer hereby accepts such appointment, to
act as the agent of the Issuer and the Indenture Trustee as custodian of the original Certificates
of Title for each Financed Vehicle evidencing the security interest of the Indenture Trustee in the
Financed Vehicles which are hereby constructively delivered to the Indenture Trustee as of the
Closing Date and each Funding Date. The Servicer shall maintain such Certificates of Title
physically segregated from other titles of automotive receivables owned or serviced by it at its
principal place of business located at 8585 North Stemmons Freeway, Suite 1100 N, Dallas, Texas
75247. The Insurer shall have the right, in the exercise of its sole discretion, to direct the
Servicer to transfer the Certificates of Title for the Financed Vehicles to the Indenture Trustee
as custodian of such Certificates of Title and the Indenture Trustee shall accept and hold such
Certificates of Title together with the balance of the Contract Files.



     SECTION 2.5 Funding Events.



     (a) A funding event (each, a “Funding Event”) shall occur upon a Funding Date and in
accordance with the requirements of this Section.



     (b) During the Funding Period, the Issuer shall, on the Funding Dates, (i) acquire Subsequent
Transferred Assets from the Seller pursuant to Section 2.1(b) (and the Seller shall acquire
such Subsequent Transferred Assets from the Originator pursuant to the Contribution Agreement) and
(ii) Grant all of the Issuer’s right, title and interest in, to and under such Subsequent
Transferred Assets to the Indenture Trustee for the benefit of the Indenture Secured Parties. Such
Subsequent Transferred Assets shall be acquired at the option of the Issuer upon instruction from
the Servicer; provided that such Subsequent Transferred Assets may not be acquired through the
Pre-Funding Account without the consent of the Insurer.



     (c) The following procedures shall be followed to effect a Funding Event:




     (i) Santander Consumer will package and forward or cause to be packaged and forwarded
to the Servicer (in the event that Santander Consumer is not the Servicer) the Contract File
(except for the Certificate of Title or application for the Certificate of Title which it
will retain possession of pursuant to Section 2.4) with respect to each Subsequent
Contract.



5









 






     (ii) At least five (5) Business Days prior to the Funding Date, the Issuer shall
deliver, or cause to be delivered, to the Indenture Trustee, the Insurer and the Servicer
and a Notice of Funding Date (substantially in the form of Exhibit A hereto); and




     (iii) On or prior to the Funding Date, the Issuer shall deliver, or cause to be
delivered, to the Indenture Trustee, the Insurer and the Servicer the following:




     (1) the Schedule of Contracts delivered by the Seller for such Funding Date;
and




     (2) a Joint Officer’s Certificate of Santander Consumer, the Seller and the
Issuer (substantially in the form of Exhibit B hereto).



     (d) Upon satisfaction of the above requirements, the Indenture Trustee will, on the applicable
Funding Date, withdraw from the Pre-Funding Account an amount equal to the Contracts Purchase Price
for the Subsequent Contracts acquired on such Funding Date and shall forward such funds to the
Seller or its designee, in cash by federal wire transfer funds, pursuant to the written directions
provided to the Indenture Trustee in the Notice of Funding Date. On such Funding Date, the Seller
shall increase the Reserve Amount by an amount equal to the Subsequent Reserve Amount in accordance
with Section 4.3(g) hereof.



ARTICLE III

ADMINISTRATION AND SERVICING OF

CONTRACTS AND TRUST PROPERTY




     SECTION 3.1 Duties of Servicer.



     (a) The Servicer is hereby appointed by the Issuer and authorized to act as agent for the
Issuer and in such capacity shall manage, service, administer and make collections on the
Contracts, and perform the other actions required by the Servicer under this Agreement. The
Servicer agrees that its servicing of the Contracts will be carried out with reasonable care, using
that degree of skill and attention that the servicers in the retail automotive financing industry
exercise with respect to all comparable receivables that they service for themselves. The
Servicer’s duties shall include collection and posting of all payments, responding to inquiries of
Obligors on such Contracts, investigating delinquencies, sending payment statements or coupons to
Obligors, reporting tax information to Obligors, accounting for collections and furnishing monthly
and annual statements to the Indenture Trustee and the Insurer with respect to distributions. The
Servicer shall follow prudent standards, policies, and procedures in performing its duties as
Servicer and shall comply with the Charge-Off Policy.



     (b) Without limiting the generality of the foregoing, the Servicer is hereby granted a limited
power of attorney by the Indenture Trustee to execute and deliver, on behalf of itself, the Issuer,
the Noteholders, the Indenture Trustee or any of them, any and all instruments of satisfaction or
cancellation, or partial or full release or discharge, and all other comparable instruments with
respect to such Contracts or to the Financed Vehicles securing such Contracts in accordance with
the terms of this Agreement. If the Servicer shall commence a legal proceeding to enforce a
Contract, the Indenture Trustee (in the case of a Contract other than a Repurchased Contract) shall
thereupon be deemed to have automatically assigned, solely for the purpose of collection, such
Contract to the Servicer. If in any enforcement suit or legal proceeding it shall be held that the
Servicer may not enforce a Contract on the ground that it shall not be a real party in interest or
a holder entitled to enforce the Contract, the Indenture Trustee shall be deemed to have
automatically assigned such Contract to the Servicer, solely for the purpose of collection. The
Indenture Trustee shall furnish the Servicer with any powers of attorney and other documents



6









 




reasonably necessary or appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder. The Servicer, at its expense, shall obtain on behalf of the Trust
all licenses, if any, required by the laws of any jurisdiction to be held by the Trust in
connection with ownership of the Contracts, and shall make all filings and pay all fees as may be
required in connection therewith during the term hereof.




     (c) The Servicer hereby agrees that upon its resignation and the appointment of a successor
Servicer hereunder, the Servicer will terminate its activities as Servicer hereunder in accordance
with Section 7.1, and, in any case, in a manner which the Controlling Party or the
Indenture Trustee with the consent of the Controlling Party reasonably determines will facilitate
the transition of the performance of such activities to such successor Servicer, and the Servicer
shall cooperate with and assist such successor Servicer.



     (d) So long as no Insurer Event of Default has occurred and is continuing, the Servicer shall
not change its customary servicing procedures without the consent of the Insurer if the Servicer
determines that such a change would have a material adverse effect on the interests of the Insurer
or the Noteholders.



     (e) All services, duties and responsibilities of the Servicer under this Agreement shall be
performed and carried out by the Servicer as an independent contractor for the benefit of the Trust
and the Insurer, and none of the provisions of this Agreement shall be deemed to make, authorize or
appoint the Servicer as agent or representative of the Seller, the Indenture Trustee, the Issuer,
the Insurer or any Noteholder except as provided in Section 2.4. Without limiting the
generality of the foregoing, the Servicer is authorized to sell Charged-Off Contracts (the proceeds
thereof to be considered Liquidation Proceeds) and the Indenture Trustee is authorized to release
the Contract Files related to any Charged-Off Contracts sold and to release any and all security
interests and liens granted by the Issuer to the Indenture Trustee in and to any Charged-Off
Contracts sold and the Contract Files related thereto.



     SECTION 3.2 Collection and Application of Contract Payments. The Servicer shall make
reasonable efforts to collect all payments called for under the terms and provisions of the
Contracts as and when the same shall become due and shall follow such collection procedures as it
follows with respect to all comparable receivables that it services for itself and, in any event,
with no less degree of skill and care than would be exercised by a prudent servicer of similar
non-prime motor vehicle retail installment sales contracts. The Servicer may, in its discretion
and in accordance with its customary servicing procedures, grant extensions, rebates or adjustments
on a Contract, and amend or modify any Contract which shall not modify the APR, the number or
amount of the Contract Scheduled Payment; provided, that in no event shall a Contract be extended
such that any payment thereon would be due after October 15, 2014; provided further that no
extensions may be granted by the Servicer until at least six Contract Scheduled Payments have been
received by the Servicer under the related Contract and thereafter only one extension not to exceed
one month may be granted each 12 months for one of the following reasons: major repair, major
medical or other major events or catastrophes such as house fire, flood, hurricane or tornado
damage or similar occurrences; provided, however, that no more than four extensions shall be
permitted on any Contract. The Servicer may in its discretion waive any late payment charge or any
other fees, not including interest on the outstanding Principal Balance, that may be collected in
the ordinary course of servicing a Contract. Notwithstanding anything in this Agreement to the
contrary, the Servicer may refinance any Contract that would cause the average Extension Ratio for
any three consecutive Collection Periods to exceed 4.0% by accepting a new promissory note from the
related Obligor and depositing the full outstanding Principal Balance of such Contract into the
Collection Account. The receivable created by such refinancing shall not be the property of the
Issuer.



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     SECTION 3.3 Realization Upon Contracts. On behalf of the Issuer and the Insurer, the
Servicer shall use reasonable efforts, consistent with prudent servicing procedures, to repossess
or otherwise convert the ownership of the Financed Vehicle securing any Contract as to which the
Servicer shall have determined eventual payment in full is unlikely. The Servicer shall follow
such prudent practices and procedures as would be deemed prudent in the servicing of comparable
receivables, which may include reasonable efforts to realize upon any Dealer Recourse and selling
the Financed Vehicle at public or private sale. The foregoing shall be 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 the repair or the repossession of such Financed Vehicle unless it
shall determine that there is a reasonable likelihood that such repair and/or repossession will
increase the Liquidation Proceeds by an amount greater than the amount of such expenses. The
Servicer agrees that within 45 days from the Closing Date or the related Funding Date, as
applicable, it shall make such filings and effect such notices as are necessary under Section
9-324(b) and 9-324 (c) of the New York UCC (or comparable section of the UCC of any applicable
state) to preserve the Issuer’s interest (or security interest, as the case may be) in any
repossessed Financed Vehicles delivered for sale to Dealers.



     SECTION 3.4 Maintenance of Security Interests in Financed Vehicles.



     (a) The Servicer shall take such steps as are necessary to maintain perfection of the security
interest created by each Contract in the related Financed Vehicle. The Servicer shall take such
steps as are necessary to re-perfect such security interest on behalf of the Issuer and the
Indenture Trustee in the event of the relocation of a Financed Vehicle or for any other reason.



     (b) Upon the occurrence of a Trigger Event, the Servicer, at the written direction of the
Controlling Party, shall take or cause to be taken such action as may, in the opinion of counsel to
the Insurer, be necessary or desirable to perfect or re-perfect the security interests in the
Financed Vehicles securing the Contracts in the name of the Indenture Trustee on behalf of the
Indenture Secured Parties by amending the title documents of such Financed Vehicles or by such
other reasonable means as may, in the opinion of counsel to the Controlling Party, be necessary or
prudent and shall deliver to the Indenture Trustee any Contract File or portion thereof that is
currently in the possession of the Servicer, including the original Certificates of Title. The
Servicer hereby agrees to pay all costs and expenses related to such perfection or re-perfection
(the “Reliening Expenses”); provided, however, in the event the Backup Servicer appointed
pursuant to Section 6.7(a) is required to assume the duties of the Servicer, such Backup Servicer
shall not be liable for any such Reliening Expenses. The Controlling Party may pay such Reliening
Expenses and, if the Insurer is the Controlling Party, any such amounts paid by the Insurer shall
constitute part of the Reimbursement Obligations due to the Insurer.



     SECTION 3.5 Covenants of Servicer.



     (a) Lien in Force. 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 Financed
Vehicle, the Servicer shall not release any Financed Vehicle from the security interest granted by
the related Contract in whole or in part except in the event of payment in full by or on behalf of
the Obligor thereunder or repossession, nor shall the Servicer impair the rights of the Noteholders
or the Insurer in the Contracts, nor shall the Servicer change the APR with respect to any
Contract, except as may be required by applicable law.



     (b) No Impairment. The Servicer will do nothing to materially impair the rights of
the Issuer, the Indenture Trustee, the Insurer or the Noteholders in the Contracts or the Insurance
Policies except as otherwise expressly provided in the Transaction Documents.



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     (c) Restrictions on Liens. The Servicer will not (i) create, incur or suffer to
exist, or agree to create, incur or suffer to exist, or consent to cause or permit in the future
(upon the happening of a contingency or otherwise) the creation, incurrence or existence of any
Lien or restriction on transferability of the Contracts except for the lien in favor of the
Indenture Trustee for the benefit of the Indenture Secured Parties, and the restrictions on
transferability imposed by this Agreement or (ii) file or authorize for filing under the UCC of any
jurisdiction any financing statement which names the Servicer as a debtor, or sign any security
agreement authorizing any secured party thereunder to file such financing statement, with respect
to the Contracts, except in each case any such instrument solely securing the rights and preserving
the lien of the Indenture Trustee for the benefit of the Indenture Secured Parties.



     (d) Physical Damage Insurance. The Servicer, in accordance with prudent servicing
procedures, shall require that each Obligor shall have obtained physical damage insurance covering
the Financed Vehicle as of the date of execution of the Contract. The Servicer shall, in
accordance with its customary servicing procedures, monitor physical damage insurance coverage.



     SECTION 3.6 Purchase of Contracts Upon Breach. Upon discovery by any party hereto of
a breach of any of the obligations set forth in Section 3.2, 3.3, 3.4 or
3.5 which materially and adversely affects the interests of the Issuer, the Insurer, the
Indenture Trustee or the Noteholders in any Contract, the party discovering such breach shall give
prompt written notice thereof to the other parties hereto and the Insurer; provided, that the
delivery of the Servicer’s Certificate shall be deemed to constitute prompt notice by the Servicer
and the Issuer of any such breach that is described in such Servicer’s Certificate; provided,
further, that the failure to give such notice shall not affect any obligation of the Servicer under
this Section 3.6. If the breach materially and adversely affects the interests of the
Issuer, the Insurer or the Noteholders in such Contract, then the Servicer shall either (a) correct
or cure such breach or (b) purchase such Contract from the Issuer, in either case on or before one
Business Day prior to the Determination Date immediately following the end of the first full
Collection Period after the date the Servicer became aware or was notified of such breach. Any
such purchase by the Servicer shall be at a price equal to the Repurchase Price. In consideration
for such repurchase, the Servicer shall make (or shall cause to be made) a payment to the Issuer
equal to the Repurchase Price by depositing such amount into the Collection Account prior to noon,
New York City time on such date of repurchase. Upon payment of such Repurchase Price by the
Servicer, the Indenture Trustee, on behalf of the Indenture Secured Parties, and the Issuer shall
release and shall execute and deliver such instruments of release, transfer or assignment, in each
case without recourse or representation, as may be reasonably requested by the Seller to evidence
such release, transfer or assignment or more effectively vest in the Servicer or its designee all
of the Issuer’s and Indenture Trustee’s rights in any Contract and related Transferred Assets
repurchased pursuant to this Section 3.6. It is understood and agreed that, unless the
Servicer fails to purchase any Contract as described above, the obligation of the Servicer to
purchase any Contract as described above shall constitute the sole remedy respecting such breach
available to the Issuer, the Insurer, the Swap Counterparty and the Indenture Trustee; provided,
however, that the Servicer will indemnify the Issuer, the Insurer, the Owner Trustee, the Indenture
Trustee, the Swap Counterparty and the Noteholders from and 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. The indemnification provided pursuant to this section
will survive the removal or resignation of the Servicer and termination of this Agreement.



     SECTION 3.7 Servicing Fee. On each Payment Date, the Issuer shall pay to the Servicer
the Servicing Fee in accordance with Section 4.4 for the immediately preceding Collection
Period as compensation for its services. In addition, 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



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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 4.4(a)(2)
upon certification by the Servicer of such amounts and the provision of such information to the
Indenture Trustee and the Insurer as may be necessary in the opinion of the Insurer to verify the
accuracy of such certification; provided, however, that the Servicer must provide such
clarification within 12 months of such mistaken deposit, posting, or returned check. In the event
that the Indenture Trustee and the Insurer have not received evidence satisfactory to them of the
Servicer’s entitlement to reimbursement pursuant to this Section 3.7, the Insurer 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 4.4, or if the Servicer prior thereto has been reimbursed pursuant to
Section 4.4, the Indenture Trustee shall withhold such amounts from amounts otherwise
distributable to the Servicer on the next succeeding Payment Date. The amount to be reimbursed
hereunder shall be paid to the Servicer on the next succeeding Business Day out of collections on
Contracts to be remitted to the Collection Account to the extent the net amount to the Collection
Account is greater than zero.




     SECTION 3.8 Servicer’s Certificate.



     (a) By the Determination Date in each calendar month, the Servicer shall deliver to the
Indenture Trustee, the Rating Agencies, the Insurer, the Swap Counterparty and the Backup Servicer,
if any, a Servicer’s Certificate in the form of Exhibit D hereto containing all information
necessary to make the transfers, deposits and distributions pursuant to this Agreement and the
other Transaction Documents for the Collection Period immediately preceding the date of such
Servicer’s Certificate and as of the last day of such Collection Period, and all information
necessary (including whether a Trigger Event or Reserve Event has occurred) for the Indenture
Trustee to make available statements to Noteholders and the Insurer pursuant to Section
4.6. Contracts purchased by the Issuer shall be identified by the Servicer by the Obligor’s
account number and certain other information with respect to such Contract (as specified in
Schedule A to this Agreement). Other than as set forth in Section 3.8(c) and (e)
below, and subject to the provisions of any agreement governing the duties and responsibilities of
the Backup Servicer, if any, appointed after the date hereof, such Backup Servicer shall have no
obligation to supervise, monitor, verify or administer the performance of the Servicer and shall
have no liability for any action taken or omitted by the Servicer.



     (b) On the eighth day of each month (the “Servicer’s Data Date”), the Servicer shall
send to the Backup Servicer, if any, and the Insurer a Computer Tape, detailing the payments on the
Contracts during the prior Collection Period (the “Servicer’s Data File”). Such Computer
Tape shall be in the form and have the specifications as may be agreed to between the Servicer, the
Backup Servicer, if any, the Insurer and the Indenture Trustee from time to time.



     (c) Following the appointment of a Backup Servicer pursuant to Section 6.7(a), no
later than one Business Day prior to each Determination Date, provided that the Servicer shall have
furnished to such Backup Servicer the Servicer’s Certificate, such Backup Servicer shall review the
information contained in the Servicer’s Certificate against the information on the Servicer’s Data
File, on an aggregate basis. No later than one Business Day prior to each Payment Date, such
Backup Servicer shall notify the Servicer, the Insurer and the Indenture Trustee of any
inconsistencies between the Servicer’s Certificate and the Servicer’s Data File and such Backup
Servicer and the Servicer shall attempt to reconcile such inconsistencies; provided, however, in
the absence of a reconciliation, the Servicer’s Certificate shall control for the purpose of
calculations and distributions with respect to the related Payment Date. If such Backup Servicer
and the Servicer are unable to reconcile discrepancies with respect to a Servicer’s Certificate by
the related Payment Date, the Servicer shall cause a firm of independent certified public
accountants, at the Servicer’s expense, to audit the Servicer’s Certificate and, prior to the third
Business Day, but in no event later than the fifth calendar day, of the following month, reconcile
the discrepancies.



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The effect, if any, of such reconciliation shall be reflected in the Servicer’s Certificate
for such next Determination Date. Any Backup Servicer shall only review the information provided
by the Servicer in the Servicer’s Certificate and in the Servicer’s Data File and its obligation to
report any inconsistencies shall be limited to those apparent from the Backup Servicer’s review
thereof. Such Backup Servicer and the Servicer shall attempt to reconcile any such material
inconsistencies and/or to furnish any such omitted information and the Servicer shall amend the
Servicer’s Certificate to reflect such Backup Servicer’s computations or to include the omitted
information. In no event shall any Backup Servicer be liable to the Servicer with respect to any
failure on its part to discover or detect any errors, inconsistencies or omissions by the Servicer
with respect to the Servicer’s Certificate and Servicer’s Data File except as specifically set
forth in this Section.



     (d) Following the appointment of a Backup Servicer pursuant to Section 6.7(a), the
Servicer shall provide to such Backup Servicer or its agent, monthly, or as frequently as may be
otherwise requested, information on the Contracts sufficient to enable such Backup Servicer to
assume the responsibilities as Successor Servicer and collect on the Contracts.



     (e) Except as provided in this Agreement, any Backup Servicer appointed pursuant to
Section 6.7(a) may accept and reasonably rely on all accounting, records and work of the
Servicer without audit, and such Backup Servicer shall have no liability for the acts or omissions
of the Servicer. If any error, inaccuracy or omission (collectively, “Errors”) exists in
any information received from the Servicer, and such Errors should cause or materially contribute
to such Backup Servicer making or continuing any Errors (collectively, “Continued Errors”),
the Backup Servicer shall have no liability for such Continued Errors; provided, however, that this
provision shall not protect any such Backup Servicer against any liability that would otherwise be
imposed by reason of willful misconduct, bad faith or gross negligence in discovering or correcting
any Error or in the performance of its or their duties hereunder or under this Agreement. In the
event such Backup Servicer becomes aware of Errors or Continued Errors, it shall, with the prior
consent of the Insurer, use its best efforts to reconstruct and reconcile such data as is
commercially reasonable to correct such Errors and Continued Errors and prevent future Continued
Errors. Any such Backup Servicer shall be entitled to recover its costs thereby expended from the
Servicer.



     (f) The Servicer shall indemnify any Backup Servicer appointed pursuant to Section
6.7(a) from and against all claims, damages, losses or expenses reasonably incurred by such
Backup Servicer (including reasonable attorneys’ fees) arising out of claims asserted against such
Backup Servicer by third parties on any matter arising out of this Agreement to the extent the act
or omission giving rise to the claim accrues before the date on which such Backup Servicer assumes
the duties of Servicer hereunder, except for any claims, damages, losses or expenses arising from
the Backup Servicer’s own gross negligence, bad faith or willful misconduct.



     SECTION 3.9 Annual Officer’s Certificate; Notice of Servicer Termination Event. (a)
The Servicer will deliver to the Rating Agencies, the Issuer, the Insurer, the Swap Counterparty
and the Indenture Trustee, on or before March 31 of each year, beginning on March 31, 2008, an
Officer’s Certificate of the Servicer (with appropriate insertions) providing such information as
is required under Item 1123 of Regulation AB.



     (b) The Servicer will deliver to the Issuer, the Insurer, the Swap Counterparty, the Indenture
Trustee and each Rating Agency promptly after having obtained knowledge thereof, but in no event
later than two (2) Business Days after having obtained such knowledge, written notice in an
Officer’s Certificate (with appropriate insertions) providing such information as is required under
Item 1123 of Regulation AB and of any event which with the giving of notice or lapse of time, or
both, would become a Servicer Termination Event or a Trigger Event.



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     (c) The Servicer will deliver to the Issuer and the Insurer, on or before March 31 of each
year, beginning on March 31, 2008, a report regarding the Servicer’s assessment of compliance with
the Servicing Criteria during the immediately preceding calendar year, as required under paragraph
(b) of Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB.



     SECTION 3.10 Annual Servicing Report of Independent Public Accountants. On or before
the 90th day following the end of each fiscal year, beginning with the fiscal year ending December
31, 2007, the Servicer shall cause a firm of nationally recognized independent public accountants
(who may also render other services to the Servicer, the Seller or their respective Affiliates)
acceptable to the Insurer to furnish to the Indenture Trustee, the Servicer, the Seller, the
Insurer, the Swap Counterparty and each Rating Agency each attestation report on assessments of
compliance with the Servicing Criteria with respect to the Servicer or any affiliate thereof during
the related fiscal year delivered by such accountants pursuant to paragraph (c) of Rule 13a-18 or
Rule 15d-18 of the Exchange Act and Item 1122 of Regulation AB.



     SECTION 3.11 Servicer Expenses. The Servicer shall be required to pay all expenses
incurred by it in connection with its activities hereunder, including fees and disbursements of
independent accountants, taxes imposed on the Servicer and expenses incurred in connection with
distributions and reports to Noteholders, the Insurer and the Residual Interestholders and with
administering the duties of the Issuer.



     SECTION 3.12 Fidelity Bond. The Servicer hereby represents and covenants that the
Servicer has obtained, and shall continue to maintain in full force and effect, a fidelity bond and
errors and omissions policy covering the Servicer of a type and in such amount as is customary for
prudent servicers engaged in the business of servicing prime, sub-prime and non-prime motor vehicle
retail installment sales contracts similar to the Contracts.



     SECTION 3.13 1934 Act Filings. The Issuer hereby authorizes the Servicer and the
Seller, or either of them, to prepare, sign, certify and file any and all reports, statements and
information respecting the Issuer and/or the Notes required to be filed pursuant to the Exchange
Act, and the rules thereunder.



     SECTION 3.14 Access to Certain Documentation and Information Regarding Contracts. The
Servicer shall provide to each Noteholder and the Insurer access to its records pertaining to the
Contracts. Access shall be afforded without charge, but only upon reasonable request and during
the normal business hours at the offices of the Servicer. Nothing in this Section 3.14
shall affect 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 to
information as a result of such obligation shall not constitute a breach of this Section
3.14.



ARTICLE IV

DISTRIBUTIONS; ACCOUNTS

STATEMENTS TO THE RESIDUAL INTERESTHOLDERS

AND THE NOTEHOLDERS




     SECTION 4.1 Establishment of Accounts.



     (a) The Servicer shall cause to be established:




     (i) for the benefit of the Indenture Secured Parties in the name of the Indenture
Trustee, an Eligible Account (the “Collection Account”), bearing a designation
clearly indicating that the funds deposited therein are held for the benefit of the
Indenture Secured Parties, which



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Eligible Account shall be established by and maintained with the Indenture Trustee or
its designee;




     (ii) for the benefit of the Indenture Secured Parties, in the name of the Indenture
Trustee, an Eligible Account (the “Note Distribution Account”), bearing a
designation clearly indicating that the funds deposited therein are held for the benefit of
the Indenture Secured Parties, which Eligible Account shall be established by and maintained
with the Indenture Trustee or its designee;




     (iii) for the benefit of the Indenture Secured Parties, in the name of the Indenture
Trustee, an Eligible Account (the “Reserve Account”), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the Indenture
Secured Parties, which Eligible Account shall be established by and maintained with the
Indenture Trustee or its designee;




     (iv) for the benefit of the Indenture Secured Parties, in the name of the Indenture
Trustee, 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 Secured Parties, which Eligible Account shall, if pre-funding is utilized, be
established by and maintained with the Indenture Trustee or its designee;




     (v) for the benefit of the Indenture Secured Parties, in the name of the Indenture
Trustee, an Eligible Account (the “Capitalized Interest Account”), bearing a
designation clearly indicating that the funds deposited therein are held for the benefit of
the Indenture Secured Parties, which Eligible Account shall, if pre-funding is utilized, be
established by and maintained with the Indenture Trustee or its designee; and




     (vi) for the benefit of the Residual Interestholder, in the name of the Indenture
Trustee, an Eligible Account (the “Residual Interest Account”), bearing a
designation clearly indicating that the funds deposited therein are held for the benefit of
the Residual Interestholder, which Eligible Account shall be established by and maintained
with the Indenture Trustee or its designee.



     (b) Funds on deposit in the Collection Account, the Pre-Funding Account, the Swap Termination
Payment Account, the Reserve Account and the Capitalized Interest Account shall each be invested by
the Indenture Trustee (or any custodian with respect to funds on deposit in any such account) in
Eligible Investments selected in writing by the Servicer (pursuant to standing instructions or
otherwise), bearing interest or sold at a discount, and maturing, unless payable on demand, no
later than the Business Day immediately preceding the next Payment Date; provided, however, it is
understood and agreed that the Indenture Trustee shall not be liable for any loss arising from such
investment in Eligible Investments unless the Eligible Investment was a direct obligation of the
Indenture Trustee or unless such loss was caused by the Indenture Trustee’s negligence or willful
misconduct (it being understood and acknowledged that no loss on any such Eligible Investment which
was made in conformity with this Agreement and the instructions of the Servicer shall be considered
“caused by the Indenture Trustee’s negligence or willful misconduct”). All such Eligible
Investments shall be held by or on behalf of the Indenture Trustee for the benefit of the Indenture
Trustee on behalf of the Noteholders and the Insurer as their interests may appear. Funds
deposited in the Collection Account on the day immediately preceding a Payment Date upon the
maturity of any Eligible Investments are not required to be invested overnight. On each Payment
Date, all interest and investment income (net of investment losses and expenses) on funds on
deposit in the Collection Account and the Pre-Funding Account, as of the end of the Collection
Period shall be included in Available Funds; and all interest and other investment income (net of



13









 




investment losses and expenses) on funds on deposit in the Reserve Account shall be deposited
into the Reserve Account. If any Trust Account shall cease to be an Eligible Account, the
Servicer, with the consent of the Insurer so long as the Insurer is the Controlling Party, within
five (5) Business Days shall, cause such accounts to be moved to an institution so that such
account meets the definition of Eligible Account.




     (c) If (i) the Servicer shall have failed to give investment directions for any funds on
deposit in the Collection Account, the Pre-Funding Account or the Reserve Account to the Indenture
Trustee by 2:00 p.m. Eastern Time (or such other time as may be agreed by the Issuer and Indenture
Trustee) on any Business Day, (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
(iii) if the Notes shall have been declared due and payable following an Event of Default, but
amounts collected or receivable from the Trust Estate 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 Collection Account, the Pre-Funding Account or the Reserve Account, as the
case may be, in Eligible Investments described in clause (vi) of the definition thereof.



     (d) (i) Subject to the grant of the security interest pursuant to the Indenture in favor of
the Indenture Trustee, the Issuer shall possess all right, title and interest in all funds on
deposit from time to time in the Trust Accounts and in all proceeds thereof and all such funds,
investments, proceeds and income shall be part of the Trust Estate. Except as otherwise provided
herein, the Trust Accounts shall be under the sole dominion and control of the Indenture Trustee
for the benefit of the Indenture Secured Parties as their interests may appear.




     (ii) With respect to any Eligible Investments held from time to time in any Trust
Account, the Indenture Trustee agrees that:




     (A) any Eligible Investment that is held in deposit accounts shall be, except
as otherwise provided herein, 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 Eligible Investment that constitutes Physical Property shall be
delivered to the Indenture Trustee in accordance with paragraph (a) 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 Eligible Investment 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 (b) of the definition of “Delivery” and shall be
maintained by the Indenture Trustee, pending maturity or disposition, through
continued book-entry registration of such Eligible Investment as described in such
paragraph; and




     (D) any Eligible Investment 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 (c) 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.



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     (e) The Servicer shall have the power, revocable by the Insurer (so long as the Insurer is the
Controlling Party and prior to the Termination Date), or by the Indenture Trustee, or the Owner
Trustee, each with the prior written consent of the Insurer (so long as the Insurer is the
Controlling Party and prior to the Termination Date) and the Indenture Trustee (after the
Termination Date), to instruct the Indenture Trustee to make withdrawals and payments from the
Trust Accounts for the purpose of permitting the Servicer and the Indenture Trustee to carry out
its respective duties hereunder.



     SECTION 4.2 Remittances. The Servicer shall deposit an amount equal to all
collections into the Collection Account within two Business Days after receipt; provided, however,
that if the Monthly Remittance Condition is satisfied, then the Servicer shall be required to
deposit into the Collection Account an amount equal to the collections received during any
Collection Period before noon, New York time, on the second Business Day prior to the related
Payment Date. The “Monthly Remittance Condition” shall be deemed to be satisfied if (i) Santander
Consumer is the Servicer, (ii) no Servicer Termination Event has occurred, (iii) the Controlling
Party consents and (iv) the Limited Guaranty is in full force and effect and Banco Santander, S.A.
has a short-term unsecured debt rating of at least “Prime-1” from Moody’s and “A-1” from S&P.
Pending deposit into the Collection Account, collections may be commingled and used by the Servicer
at its own risk and are not required to be segregated from its own funds.



     SECTION 4.3 Additional Deposits and Payments.



     (a) On the date of a repurchase of a Contract by the Seller pursuant to Section 2.1 or
Section 2.3, or the purchase of a Contract by the Servicer pursuant to Section 3.6,
as applicable, the Servicer or the Seller, as applicable, will deposit into the Collection Account
the aggregate Repurchase Price with respect to Repurchased Contracts purchased by the Servicer or
the Seller on such date and the Servicer will deposit into the Collection Account all amounts to be
paid under Section 8.1. All such deposits with respect to any such date which is a Payment
Date will be made, in immediately available funds by noon, New York City time, on such Payment Date
related to such Collection Period.



     (b) With respect to any Payment Date, after giving effect to amounts on deposit in the
Collection Account, if any, if (i) there are insufficient funds available to make the required
payments under clauses first through fifth and seventh of Section 4.4(a), (ii) the Note
Balance of the Class A Notes (after taking into account all distributions of principal to be made
on that Payment Date) exceeds the sum of the Pool Balance and the amount on deposit in the
Pre-Funding Account or (iii) the current Payment Date is the Final Scheduled Payment Date for any
Class of Notes and there are insufficient funds to pay the outstanding principal balance of such
Class of Notes (after taking into account all distributions of principal on that Payment Date);
then in each such case the Indenture Trustee shall (X) withdraw from the Reserve Account all
amounts on deposit therein necessary to pay (after taking into account all distributions of
principal on that Payment Date) the amounts described above and (Y) if necessary after giving
effect to clause (X), make a draw on the Reserve Account Letter or Letters of Credit pursuant to
Section 4.8 equal to the remaining amount of such deficiency by presenting a signed credit
demand certifying the amount to be drawn at each Reserve Account Letter of Credit Bank’s offices,
and deposit such amount in the Collection Account to be used solely for the payments described
above, as applicable. In addition, after the occurrence of a Trigger Event, the Indenture Trustee
shall, if the Insurer so directs, use the amounts available in the Reserve Account and shall make a
draw under all Reserve Account Letters of Credit for the full amounts available under such Reserve
Account Letters of Credit (after giving effect to any withdrawals from the Reserve Account and/or
draws on any Reserve Account Letters of Credit required under clause (i) of this paragraph (b)) to
make the payments described under clause eleventh in Section 4.4(a).



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     (c) If there are multiple Reserve Account Letters of Credit, the Indenture Trustee shall make
a draw on each Reserve Account Letter of Credit in an amount equal to its pro rata share of the
shortfall, and if a Reserve Account Letter of Credit Bank fails to honor a draw request presented
to it by the Indenture Trustee, the Indenture Trustee shall make a draw on each remaining Reserve
Account Letter of Credit in an amount equal to the lesser of: (i) the related Reserve Account
Letter of Credit Bank’s pro rata share of the shortfall (taking into account only the
non-defaulting Reserve Account Letter of Credit Banks) and (ii) the face amount of such Reserve
Account Letter of Credit. The Indenture Trustee shall deposit the proceeds of such draws in the
Collection Account for distribution as provided in Section 4.3(b).



     (d) If, on any Payment Date, so long as there has not been an occurrence of a Reserve Event
which is not Deemed Cured, the Reserve Amount (after giving effect to all other additions thereto
and reductions thereof made on such Payment Date, including with respect to Section 4.3(b)
and Section 4.3(c)) exceeds the Specified Reserve Amount on such Payment Date, the
Indenture Trustee shall, upon the direction of the Servicer, reduce the cash balance of the Reserve
Account by the amount, if any, by which the Reserve Amount (after giving effect to all other
additions thereto and reductions thereto made on such Payment Date) exceeds the Specified Reserve
Amount by withdrawing such amount from the Reserve Account and depositing it into the Residual
Interest Account; provided, however, that in no event shall the amount on deposit in the Reserve
Account be less than zero after giving effect to such distribution. To the extent that the Reserve
Amount (after giving effect to all other additions thereto and reductions thereto made on such
Payment Date) exceeds the Specified Reserve Amount after the withdrawal of the amount of cash
specified by the Servicer in the preceding sentence, if any, the Indenture Trustee shall, upon the
direction of the Servicer and notice to the Insurer, authorize the Reserve Account Letter of Credit
Bank or any other bank that has issued a Reserve Account Letter of Credit to decrease the stated
amount of such Reserve Account Letter of Credit by an amount equal to such excess.



     (e) The Indenture Trustee will, on the Payment Date relating to each Collection Period,
withdraw from the Pre-Funding Account the investment income accrued during such Collection Period
from the investment of funds in the Pre-Funding Account and deposit such amount in the Collection
Account.



     (f) On the Closing Date, the Seller will cause the Reserve Amount to equal the Initial Reserve
Amount either through (i) a cash deposit to the Reserve Account, (ii) causing a Reserve Account
Letter of Credit Bank to issue a Reserve Account Letter of Credit or (iii) any combination thereof.



     (g) On each Funding Date, the Seller will increase the Reserve Amount by the Subsequent
Reserve Amount for such Funding Date, through (i) a cash deposit to the Reserve Account from the
Pre-Funding Account in accordance with Section 4.3(j)(i), (ii) causing the Reserve Account
Letter of Credit Banks to issue additional Reserve Account Letters of Credit or to increase the
face amount of available Reserve Account Letters of Credit, or (iii) any combination thereof.



     (h) On the Closing Date the Seller shall deposit from the proceeds of the offering of the
Notes an amount equal to the Capitalized Interest Account Deposit into the Capitalized Interest
Account.



(i) (i) On the Payment Dates occurring in November 2007, December 2007, January 2008,
February 2008, March 2008 and April 2008, the Indenture Trustee shall withdraw, in
immediately available funds, from the Capitalized Interest Account the Monthly Capitalized
Interest Amount for such Payment Date and deposit such amount in the Collection Account as
Available Funds for distribution on such Payment Date pursuant to Section 4.4(a).



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     (ii) On the Payment Dates occurring in November 2007, December 2007, January 2008,
February 2008, March 2008 and April 2008, the Servicer shall instruct the Indenture Trustee
in writing to withdraw from the Capitalized Interest Account and pay to the Seller on such
Payment Date an amount equal to the Overfunded Capitalized Interest Amount for such Payment
Date. Any amounts remaining in the Capitalized Interest Account on the Payment Date which
immediately follows the end of the Funding Period after taking into account the transfer
pursuant to Section 4.3(i)(i) shall be remitted by the Indenture Trustee to the
Seller. Upon any such distributions to the Seller, the Noteholders, the Residual
Interestholders and the Insurer will have no further rights in, or claims to, such amounts.



     (j) On the Closing Date, the Seller shall deposit from the proceeds of the offering of the
Notes an amount equal to $0 into the Pre-Funding Account.




     (i) On each Funding Date, the Servicer may instruct the Indenture Trustee in writing to
deduct from the Contracts Purchase Price to be paid to the Seller on such Funding Date and
withdraw from the Pre-Funding Account, at the direction of the Issuer, amounts in respect of
a portion or all of the Subsequent Reserve Amount for such Funding Date and to deposit such
amounts in the Reserve Account upon satisfaction of the conditions set forth in this
Agreement with respect to such transfer.




     (ii) On the first Payment Date following the termination of the Funding Period, the
Indenture Trustee shall, based on the information set forth in the related Servicer’s
Certificate, withdraw any remaining funds on deposit in the Pre-Funding Account (excluding
investment earnings or income) and deposit those amounts in the Note Distribution Account
for distribution as principal to the Noteholders in an amount equal to the amount of such
funds as follows: (A) if the aggregate amount of such funds is greater than $100,000, to
the Noteholders, their pro rata portion of such funds (based on the Initial Note Balance of
each Class of Notes as a fraction of the Initial Note Balance of all Classes of Notes); or
(B) if the aggregate amount of such funds is less than or equal to $100,000, to the
Noteholders, the portion of such funds in sequential order of priority beginning with the
Class A-1 Notes.



     (k) On or prior to the third Business Day preceding each Determination Date, the Indenture
Trustee shall send a written notice to the Servicer stating the amount of investment income earned,
if any, during the related Collection Period on each Trust Account maintained at the Indenture
Trustee.



     (l) The Indenture Trustee will promptly, but in no event later than noon (New York City time)
on the related Payment Date, deposit into the Collection Account all Net Swap Receipts received by
it under the Interest Rate Swap Agreement in immediately available funds.



     (m) On any Payment Date, the Seller may, upon five (5) days prior written notice to the
Insurer and subject to the prior written consent of the Insurer (which consent shall not be
unreasonably withheld), the Indenture Trustee, the Backup Servicer, if any, and the Owner Trustee,
either (i) increase the face amount of an existing Reserve Account Letter of Credit or (ii)
substitute a Reserve Account Letter of Credit for amounts currently on deposit in the Reserve
Account. Upon such increase or substitution, the Indenture Trustee shall withdraw from the Reserve
Account an amount equal to the amount of such increase (in the case of clause (i)) or the face
amount of the substitute Reserve Account Letter of Credit (in the case of clause (ii)) and allocate
such amount in the manner directed by the Seller.



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     SECTION 4.4 Distributions.



     (a) Prior to any acceleration of the Notes pursuant to Section 5.2 of the Indenture,
on each Payment Date, the Indenture Trustee (based on information contained in the Servicer’s
Certificate delivered on or before the related Determination Date pursuant to Section 3.8)
shall make the following deposits and distributions, to the extent of Available Funds on deposit in
the Reserve Account (if required by Section 4.3(b)) and the Collection Account for such
Payment Date, in the following order of priority:




     (1) first, to the Backup Servicer, if any, the Indenture Trustee and the Owner
Trustee, the Backup Servicing Fee, the Indenture Trustee Fee, the Owner Trustee Fee
and expenses and indemnities payable to each such party, respectively, to the extent
such fees, expenses or indemnities have not previously been paid, and to any
Successor Servicer, any unreimbursed Transition Expenses up to $100,000; provided,
however, that the expenses and indemnities payable under this clause (1) shall not
exceed (i) in the case of the Owner Trustee, $100,000 per annum and (ii) in the case
of the Indenture Trustee and the Backup Servicer, if any, $100,000 in the aggregate
per annum.




     (2) second, to the Servicer, the Servicing Fee, or to any Successor Servicer,
the Successor Servicing Fee (including any Servicing Fees and Successor Servicing
Fees not previously paid);




     (3) third, to the Swap Counterparty, the Net Swap Payment;




     (4) fourth, to the Note Distribution Account for distribution to the
Noteholders pro rata, the Accrued Note Interest due and accrued for the related
Interest Period;




     (5) fifth, to the Insurer, the Premium pursuant to the Insurance Agreement;




     (6) sixth, to the Note Distribution Account, for distribution to the
Noteholders on a sequential pay basis, the Noteholder Principal Distributable
Amount;




     (7) seventh, to the Insurer, the Reimbursement Obligations pursuant to the
Insurance Agreement;




     (8) eighth, at the Insurer’s discretion, to the Note Distribution Account if a
Trigger Event has occurred on or before such Payment Date, the amount of Available
Funds remaining after payment of clauses first through seventh above, for
distribution to the Noteholders on a sequential pay basis until the Note Balance of
each Class has been reduced to zero;




     (9) ninth, to the Reserve Account, any additional amounts required to reinstate
the Reserve Amount (after giving effect to all other additions thereto and reduction
thereof made on such Payment Date) up to the Specified Reserve Amount;




     (10) tenth, pro rata (i) to the Swap Counterparty, any Swap Termination
Payments and (ii) to the Insurer, any reimbursement of payments made by the Insurer
under the Swap Policy in respect of Swap Termination Payments;




     (11) eleventh, at the Insurer’s discretion if a Trigger Event has occurred on
or before such Payment Date, from the Reserve Amount, to the Note Distribution
Account



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for distribution to each Class of Class A Notes, on a sequential pay basis,
until the Note Balance of such Class of Notes has been reduced to zero;




     (12) twelfth, to the Backup Servicer, if any, the Indenture Trustee and the
Owner Trustee, any expenses and indemnities not previously paid; and




     (13) thirteenth, any remaining funds will be distributed to the Residual
Interestholder.


Notwithstanding any other provision of this Section 4.4, following the occurrence and
during the continuation of an Event of Default which has resulted in an acceleration of the Notes,
the Indenture Trustee shall apply all amounts on deposit in the Collection Account pursuant to
Section 5.4(b) of the Indenture.



In addition, on any Payment Date occurring after the end of the Funding Period, if the remaining
Available Funds after the payments under clauses first through sixth above would be sufficient to
pay in full the Note Balance of the outstanding Notes, then the Indenture Trustee will, if
instructed by the Servicer, use such amounts to pay in full the Note Balance of all outstanding
Notes.




     (b) After the payment in full of the Notes, all amounts payable to the Insurer under the
Transaction Documents, all amounts payable to the Swap Counterparty under the Interest Rate Swap
Agreement and all other amounts payable under Section 4.4(a), all Collections shall be paid
to or in accordance with the instructions provided from time to time by the Residual
Interestholder.



     (c) 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 Servicer’s Certificate (but such authorization shall not prevent the Indenture Trustee
from contesting at the expense of the Seller any such withholding tax in appropriate proceedings,
and withholding payment of withholding such 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 Issuer 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-U.S. Noteholder), the
Indenture Trustee may in its sole discretion withhold such amounts in accordance with this clause
(c). 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.
The Note Policy does not cover any shortfalls relating to withholding taxes.



     SECTION 4.5 Replacement of Reserve Account Letters of Credit. If (i) as of any date
that is 30 days prior to the stated expiration date of any Reserve Account Letter of Credit, either
(A) the expiring Reserve Account Letter of Credit has not been renewed or extended or (B) a letter
of credit acceptable to the Insurer in its sole discretion and in at least the same amount as the
amount then available or required for drawing under the expiring Reserve Account Letter of Credit
has not been delivered to the Indenture Trustee, (ii) the Indenture Trustee receives notice from
the Insurer that a Reserve Account Letter of Credit Bank has merged with, been consolidated into,
or acquired by an entity not approved by the Insurer in its sole discretion or (iii) 30 days have
elapsed since the Indenture Trustee shall have received notice from the Insurer that the credit
rating on the short-term unsecured debt of a Reserve Account Letter of Credit Bank has been
downgraded below either “A-l+” by S&P or “Prime-1” by Moody’s or that the long-term



19









 




credit rating of a Reserve Account Letter of Credit Bank has been downgraded below either “A”
by S&P or “A2” by Moody’s (unless, in either case, the Indenture Trustee receives notice from the
Insurer that such ratings have been reinstated above such level prior to the expiration of such
30-day period); then the Indenture Trustee shall, on the next Business Day cause to be presented to
the applicable Reserve Account Letter of Credit Bank a drawing certificate in proper form for
payment thereunder and otherwise in conformity with the terms thereof for an amount equal to the
maximum amount then available under such Reserve Account Letter of Credit and deposit the proceeds
of such drawing in the Reserve Account.




     SECTION 4.6 Statements to Noteholders and Residual Interestholders. On or before each
Determination Date, the Servicer shall provide to the Residual Interestholders and to the Indenture
Trustee (with a copy to each Rating Agency, the Insurer, the Swap Counterparty and the Issuer) for
the Indenture Trustee to forward or otherwise make available to each Noteholder of record as of the
most recent Record Date, a statement setting forth for the Collection Period and Payment Date
relating to such Determination Date the following information (to the extent applicable):



     (a) the aggregate amount being paid on such Payment Date in respect of interest on and
principal of each Class of Notes;



     (b) the Class A-1 Note Balance, the Class A-2-A Note Balance, the Class A-2-B Note Balance,
the Class A-3 Note Balance, the Class A-4-A Note Balance, the Class A-4-B Note Balance and the Note
Factor with respect to each Class of Notes, in each case after giving effect to payments on such
Payment Date;



     (c) (i) the amount on deposit in the Reserve Account and available under all Reserve Account
Letters of Credit and the Reserve Amount, each as of the beginning and end of the related
Collection Period, (ii) the amount deposited in the Reserve Account in respect of such Payment
Date, if any, (iii) the amount withdrawn from the Reserve Account or drawn under all Reserve
Account Letters of Credit on such Payment Date, (iv) the amount deposited to the Residual Interest
Account pursuant to Section 4.3(d), if any, on such Payment Date, (v) the balance on
deposit in the Reserve Account on such Payment Date after giving effect to withdrawals therefrom
and deposits thereto in respect of such Payment Date and (vi) the change in such balance from the
immediately preceding Payment Date;



     (d) the Noteholder Principal Distributable Amount and any Principal Carryover Shortfall for
such Payment Date;



     (e) the Pool Balance and the Pool Factor as of the close of business on the last day of the
preceding Collection Period;



     (f) the amount of the Servicing Fee to be paid to the Servicer or the amount of the Successor
Servicing Fee to be paid to the Successor Servicer, as applicable, with respect to the related
Collection Period and the amount of any unpaid Servicing Fees or Successor Servicing Fees and the
change in such amount from that of the prior Payment Date;



     (g) the amount of the Interest Carryover Shortfall, if any, on such Payment Date and the
change in such amount from the preceding Payment Date;



     (h) the aggregate Repurchase Price with respect to Repurchased Contracts paid by (i) the
Servicer and (ii) the Seller with respect to the related Collection Period;



     (i) the amount on deposit in the Pre-Funding Account (until the termination of the Funding
Period) and the amount released from such account to (A) purchase Subsequent Contracts during the



20









 




related Collection Period and (B) deposit to the Reserve Account in respect of any Subsequent
Reserve Amount;




     (j) the amount on deposit in the Capitalized Interest Account, the Monthly Capitalized
Interest Amount and the Overfunded Capitalized Interest Amount to be released from the Capitalized
Interest Account on the related Payment Date and the amount on deposit in the Capitalized Interest
Account after taking into account such withdrawals (until the termination of the Funding Period) ;



     (k) the amount of fees, expenses and unpaid indemnities to be paid to the Indenture Trustee
and the Owner Trustee with respect to the related Payment Date and the amount of any unpaid fees,
expenses and unpaid indemnities to the Indenture Trustee and the Owner Trustee and the change in
such amount from that of the prior Payment Date;



     (l) the Deficiency Amount, if any;



     (m) the Delinquency Ratio (as defined in the Insurance Agreement) as of such Determination
Date;



     (n) the Cumulative Net Loss Ratio (as defined in the Insurance Agreement) as of such
Determination Date; and



     (o) the Net Swap Receipts and the Net Swap Payment, if any.



Each amount set forth pursuant to clause (a) or (g) above relating to the Notes shall be
expressed as a dollar amount per $1,000 of the Initial Note Balance of the Notes (or Class
thereof).



     The Indenture Trustee may make available via the Indenture Trustee’s internet website all
reports or notices required to be provided by the Indenture Trustee under this Section 4.6.
Any information that is disseminated in accordance with the provisions of this Section 4.6
shall not be required to be disseminated in any other form or manner. The Indenture Trustee will
make no representations or warranties as to the accuracy or completeness of such documents and will
assume no responsibility therefor.



     The Indenture Trustee’s internet website shall be initially located at “www.CTSLink.com” or at
such other address as shall be specified by the Indenture Trustee from time to time in writing to
the Noteholders, the Insurer, the Servicer, the Issuer and any Paying Agent. In connection with
providing access to the Indenture Trustee’s internet website, the Indenture Trustee may require
registration and the acceptance of a disclaimer. The Indenture Trustee shall not be liable for the
dissemination of information in accordance with this Agreement.



     SECTION 4.7 No Duty to Confirm. The Indenture Trustee shall have no duty or
obligation to confirm or verify the contents of any reports or certificates delivered to the
Indenture Trustee pursuant to this Agreement believed by the Indenture Trustee to be genuine and to
have been signed or presented by the proper party or parties.



     SECTION 4.8 Claims Under Reserve Account Letters of Credit.



     (a) In the event that the Indenture Trustee is required to make a claim under any Reserve
Account Letter of Credit pursuant to this Agreement, the Indenture Trustee shall make a demand
under such Reserve Account Letter of Credit in accordance with its terms at least four (4) Business
Days prior to the related Payment Date. The Indenture Trustee shall deposit all amounts paid to it
under such



21









 




Reserve Account Letter of Credit into the Collection Account on the day of receipt of such
amounts. Any payment made by a Reserve Account Letter of Credit Bank under a Reserve Account
Letter of Credit shall be applied solely to the payment of the Notes and for such other purposes as
set forth in Section 4.3(b) hereof.




     (b) [Reserved].



     (c) The Indenture Trustee shall keep a complete and accurate record of all funds disbursed
under each Reserve Account Letter of Credit and deposited into the Collection Account and the
allocation of such funds pursuant to Section 4.3(b) hereof.



     SECTION 4.9 Interest Rate Swap Agreement.



     (a) The Issuer shall enter into the Initial Interest Rate Swap Agreement with the Initial Swap
Counterparty. Subject to the requirements of this Section 4.9, the Issuer may from time to
time enter into one or more Replacement Interest Rate Swap Agreements in the event that the Initial
Interest Rate Swap Agreement is terminated due to any “Termination Event” or “Event of Default”
(each as defined in the Initial Interest Rate Swap Agreement) prior to its scheduled expiration and
in accordance with the terms of such Interest Rate Swap Agreement. Other than any Replacement
Interest Rate Swap Agreement entered into pursuant to this Section 4.9(a), the Issuer may
not enter into any additional interest rate swap agreements.



     (b) In the event of any early termination of any Interest Rate Swap Agreement, (i) the
Indenture Trustee shall establish the Swap Termination Payment Account (the “Swap Termination
Payment Account”) over which the Indenture Trustee shall have exclusive control and the sole
right of withdrawal, and in which no Person other than the Indenture Trustee, the Noteholders and
the Insurer shall have any legal or beneficial interest, (ii) any Swap Termination Payments
received from the Swap Counterparty will be remitted to the Swap Termination Payment Account and
(iii) any Swap Replacement Proceeds received from a Replacement Swap Counterparty will be remitted
directly to the Swap Counterparty; provided, that any such remittance to the Swap Counterparty
shall not exceed the amounts, if any, owed to the Swap Counterparty under the Interest Rate Swap
Agreement; provided, further that the Swap Counterparty shall only receive Swap Replacement
Proceeds if all Swap Termination Payments due from the Swap Counterparty to the Issuer have been
paid in full and if such amounts have not been paid in full then the amount of Swap Replacement
Proceeds necessary to make up any deficiency shall be remitted to the Swap Termination Payment
Account.



     (c) The Issuer shall promptly, following the early termination of any Initial Interest Rate
Swap Agreement due to an “Event of Default” or “Termination Event” (each as defined in the Initial
Interest Rate Swap Agreement) and in accordance with the terms of such Interest Rate Swap
Agreement, enter into a Replacement Interest Rate Swap Agreement to the extent possible and
practicable through application of funds available in the Swap Termination Payment Account unless
(i) the Insurer (so long as the Insurer is the Controlling Party) does not consent or (ii) entering
into such Replacement Interest Rate Swap Agreement will cause the Rating Agency Condition not to be
satisfied.



     (d) To the extent that (i) the funds available in the Swap Termination Payment Account exceed
the costs of entering into a Replacement Interest Rate Swap Agreement or (ii) the Issuer determines
with the consent of the Insurer (so long as the Insurer is the Controlling Party) not to replace
the Initial Interest Rate Swap Agreement and the Rating Agency Condition is met with respect to
such determination, the amounts in the Swap Termination Payment Account (other than funds used to
pay the costs of entering into a Replacement Interest Rate Swap Agreement, if applicable) shall be
included in Available Funds and allocated in accordance with the order of priority specified in
Section 4.4(a) on the



22









 







following Payment Date. In any other situation, amounts on deposit in the Swap Termination
Payment Account at any time shall be invested pursuant to Section 4.1(b) and on each
Payment Date after the creation of a Swap Termination Payment Account, the funds therein shall be
used to cover any shortfalls in the amounts payable under Section 4.4(a)(1) through (8)
provided that in no event will the amount withdrawn from the Swap Termination Payment Account on
such Payment Date exceed the amount of Net Swap Receipts that would have been required to be paid
on such Payment Date under the terminated Interest Rate Swap Transaction had there been no
termination of such transaction. Any amounts remaining in the Swap Termination Payment Account
after payment in full of the Class A-4-A and Class A-4-B Notes shall be included in Available Funds
and allocated in accordance with the order of priority specified in Section 4.4(a) on the
following Payment Date.



     (e) If the Swap Counterparty is required to post collateral under the terms of the Interest
Rate Swap Agreement, the Indenture Trustee shall establish the Swap Collateral Account (the
“Swap Collateral Account”) over which the Indenture Trustee shall have exclusive control
and the sole right of withdrawal, and in which no Person other than the Indenture Trustee, the
Noteholders and the Insurer shall have any legal or beneficial interest. The Indenture Trustee
shall deposit all collateral received from the Swap Counterparty under the Interest Rate Swap
Agreement into the Swap Collateral Account. Any and all funds at any time on deposit in, or
otherwise to the credit of, the Swap Collateral Account shall be held in trust by the Indenture
Trustee for the benefit of the Noteholders and the Insurer. The only permitted withdrawal from or
application of funds on deposit in, or otherwise to the credit of, the Swap Collateral Account
shall be (i) for application to obligations of the Swap Counterparty to the Issuer under the
Interest Rate Swap Agreement in accordance with the terms of the Interest Rate Swap Agreement or
(ii) to return collateral to the Swap Counterparty when and as required by the Interest Rate Swap
Agreement.



     (f) If at any time the Interest Rate Swap Agreement becomes subject to early termination due
to the occurrence of an “Event of Default” or “Termination Event” (as defined in the Interest Rate
Swap Agreement), the Issuer and the Indenture Trustee shall use reasonable efforts (following the
expiration of any applicable grace period) to enforce the rights of the Issuer thereunder as may be
permitted by the terms of the Interest Rate Swap Agreement and consistent with the terms hereof and
subject to any rights of the Insurer herein or under the Interest Rate Swap Agreement. To the
extent not fully paid from Swap Replacement Proceeds, any Swap Termination Payment owed by the
Issuer to the Swap Counterparty under the Interest Rate Swap Agreement shall be payable to the Swap
Counterparty in installments made on each following Payment Date until paid in full in accordance
with the order of priority specified in Section 4.4(a). To the extent that the Swap
Replacement Proceeds exceed any such Swap Termination Payments (or if there are no Swap Termination
Payments due to the Swap Counterparty), the Swap Replacement Proceeds in excess of such Swap
Termination Payments, if any, shall be included in Available Funds and allocated and applied in
accordance with the order of priority specified in Section 4.4(a) on the following Payment
Date.



ARTICLE V

THE SELLER




     SECTION 5.1 Representations of Seller. On the Closing Date and on each Funding Date,
the Seller makes the following representations on which the Issuer and the Indenture Trustee shall
rely in accepting the Contracts in trust and in connection with the performance by the Indenture
Trustee of its obligations hereunder and the Insurer relied in issuing the Note Policy. The
representations speak as of the execution and delivery of this Agreement on the Closing Date and on
each Funding Date but shall survive the sale of the Contracts to the Issuer and the subsequent
pledge thereof to the Indenture Trustee pursuant to the Indenture:



23









 





     (a) Organization and Good Standing. The Seller is duly formed and validly existing as
a limited liability company 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 presently conducted, and has and had at all relevant times, full power,
authority and legal right to acquire and own the Contracts.



     (b) Due Qualification. The Seller is duly qualified to do business as a foreign
limited liability company 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
requires such qualifications.



     (c) Power and Authority. The Seller 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
their respective terms. The Seller has full power and authority to sell and assign the property to
be sold and assigned to and deposited with the Trust and has duly authorized such sale and
assignment to the Trust by all necessary action; 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 Seller by all necessary action.



     (d) Valid Sale; Binding Obligations. This Agreement evidences a valid sale, transfer
and assignment of the Trust Estate, enforceable against creditors of and purchasers from the
Seller; and a legal, valid and binding obligation of the Seller enforceable in accordance with its
terms, subject to the effects of bankruptcy, insolvency, reorganization, or other similar laws
affecting the enforcement of creditors’ rights generally and to general principles of equity.



     (e) 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 hereof
and thereof does 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 Seller’s limited
liability company agreement, or any indenture, agreement or other instrument to which the Seller is
a party or by which it is 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; or
violate any law or, to the best of the Seller’s knowledge, any order, rule or regulation applicable
to the Seller of any court or of any federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Seller or its properties.



     (f) No Proceedings. There are no proceedings or investigations pending, or to the
Seller’s best knowledge threatened, before any court, regulatory body, administrative agency, or
other governmental instrumentality having jurisdiction over the Seller or its properties: (A)
asserting the invalidity of this Agreement, any other Transaction Document to which it is a party
or the Securities; (B) seeking to prevent the issuance of the Securities or the consummation of any
of the transactions contemplated by this Agreement 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 Seller of its obligations under, or the validity or enforceability of, this
Agreement, any other Transaction Document to which it is a party or the Securities; or (D) relating
to the Seller and which might adversely affect the federal income tax attributes of the Securities.



     (g) Principal Place of Business; Jurisdiction of Organization. The principal place of
business of the Seller is located in Texas. The Seller is formed under the laws of Delaware as a
limited liability company. “Santander Drive Auto Receivables LLC” is the correct legal name of the
Seller indicated on the public records of the Seller’s jurisdiction of formation which shows it to
be organized. Prior to



24









 







February 20, 2007 and since the date of the Seller’s formation (which date is less than five
(5) years prior to February 20, 2007), the Seller’s correct legal name was “Drive Auto Receivables
LLC”, a limited liability company formed under the laws of Delaware.



     (h) Investment Company Act. The Seller is not an “investment company” that is
registered or required to be registered under, or otherwise subject to the restrictions of, the
Investment Company Act of 1940, as amended.



     SECTION 5.2 Liability of the Seller; Indemnities. The Seller shall be liable in
accordance herewith only to the extent of the obligations specifically undertaken by the Seller
under this Agreement (provided that this provision shall not protect the Seller against any
liability that would otherwise be imposed by reason of willful misconduct or negligence in the
performance of its duties under this Agreement), and hereby agrees to the following:



     (a) The Seller shall indemnify, defend, and hold harmless the Issuer, the Owner Trustee, the
Indenture Trustee, the Insurer, the Noteholders and the Residual Interestholder from and against
any loss, liability or expense incurred by reason of the Seller’s violation of federal or State
securities laws in connection with the registration or the sale of the Notes.



     (b) The Seller will pay any and all taxes levied or assessed upon the Issuer or upon all or
any part of the Trust Estate.



     (c) Indemnification under this Section 5.2 will survive the resignation or removal of
the Owner Trustee or the Indenture Trustee and the termination of this Agreement and will include,
without limitation, reasonable fees and expenses of counsel and expenses of litigation. If the
Seller has made any indemnity payments pursuant to this Section 5.2 and the Person to or on
behalf of whom such payments are made thereafter collects any of such amounts from others, such
Person will promptly repay such amounts to the Seller, without interest.



     (d) The Seller’s obligations under this Section 5.2 are obligations solely of the
Seller and will not constitute a claim against the Seller to the extent that the Seller does not
have funds sufficient to make payment of such obligations. In furtherance of and not in derogation
of the foregoing, the Issuer, the Servicer, the Indenture Trustee, the Insurer and the Owner
Trustee, by entering into or accepting this Agreement, acknowledge and agree that they have no
right, title or interest in or to the Other Assets of the Seller. To the extent that,
notwithstanding the agreements and provisions contained in the preceding sentence, the Issuer, the
Servicer, the Insurer, the Indenture Trustee or the Owner Trustee either (i) asserts an interest or
claim to, or benefit from, Other Assets, or (ii) is deemed to have any such interest, claim to, or
benefit in or from Other Assets, whether by operation of law, legal process, pursuant to applicable
provisions of insolvency laws or otherwise (including by virtue of Section 1111(b) of the
Bankruptcy Code or any successor provision having similar effect under the Bankruptcy Code), then
the Issuer, the Servicer, the Insurer, the Indenture Trustee or the Owner Trustee further
acknowledges and agrees that any such interest, claim or benefit in or from Other Assets is and
will be expressly subordinated to the indefeasible payment in full, which, under the terms of the
relevant documents relating to the securitization or conveyance of such Other Assets, are entitled
to be paid from, entitled to the benefits of, or otherwise secured by such Other Assets (whether or
not any such entitlement or security interest is legally perfected or otherwise entitled to a
priority of distributions or application under applicable law, including insolvency laws, and
whether or not asserted against the Seller), including the payment of post-petition interest on
such other obligations and liabilities. This subordination agreement will be deemed a
subordination agreement within the meaning of Section 510(a) of the Bankruptcy Code. The Issuer,
the Servicer, the Insurer, the Indenture Trustee and the Owner Trustee each further acknowledges
and agrees that no adequate remedy at law exists for a breach of this Section 5.2(d) and
the terms of this Section 



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5.2(d) may be enforced by an action for specific performance. The provisions of this
Section 5.2(d) will be for the third party benefit of those entitled to rely thereon and
will survive the termination of this Agreement.




     SECTION 5.3 Merger or Consolidation of, or Assumption of the Obligations of, Seller.
Any Person (i) into which the Seller may be merged or consolidated, (ii) resulting from any merger,
conversion, or consolidation to which the Seller shall be a party, (iii) succeeding to the business
of the Seller or (iv) exercising control directly or indirectly of the Seller, which Person in any
of the foregoing cases executes an agreement of assumption acceptable to the Controlling Party to
perform every obligation of the Seller under this Agreement and the other Transaction Documents to
which the Seller is a party, will be the successor to the Seller 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 (x) the Seller shall have delivered to the Indenture Trustee and
the Insurer 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 5.3 and that all conditions precedent, if any, provided for in this Agreement
relating to such transaction have been complied with and (y) the Seller shall have delivered to the
Insurer 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 that are necessary fully to preserve and protect the interest of the Issuer in
the Contracts, 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 and (z) the
Rating Agency Condition shall have been satisfied. The Seller shall provide notice of any merger,
consolidation, conversion, or succession pursuant to this Section 5.3 to the Insurer and
the Rating Agencies then providing a rating for the Notes. Notwithstanding anything herein to the
contrary, the execution of the foregoing agreement of assumption and compliance with clauses
(x), (y) and (z) above shall be conditions to the consummation of the transactions referred to
in clauses (i), (ii), (iii) or (iv) above.



     SECTION 5.4 Limitation on Liability of Seller and Others. The Seller and any officer
or employee or agent of the Seller may rely in good faith on the advice of counsel or on any
document of any kind, prima facie properly executed and submitted by any Person respecting any
matters arising hereunder. The Seller will not be under any obligation to appear in, prosecute, or
defend any legal action that is not incidental to its obligations under this Agreement, and that in
its opinion may involve it in any expense or liability.



     SECTION 5.5 The Seller May Own Notes. The Seller, and any Affiliate of the Seller,
may in its individual or any other capacity become the owner or pledgee of Notes with the same
rights as it would have if it were not the Seller or an Affiliate thereof, except as otherwise
expressly provided herein or in the other Transaction Documents. Except as set forth herein or in
the other Transaction Documents, Notes so owned by the Seller or any such Affiliate will have an
equal and proportionate benefit under the provisions of this Agreement and the other Transaction
Documents, without preference, priority, or distinction as among all of the Notes. Unless all
Notes are owned by the Issuer, the Seller, the Servicer, the Administrator or any of their
respective Affiliates, any Notes owned by the Issuer, the Seller, the Servicer, the Administrator
or any of their respective Affiliates shall be disregarded with respect to the determination of any
request, demand, authorization, direction, notice, consent, vote or waiver hereunder or under any
other Transaction Document.



     SECTION 5.6 Sarbanes-Oxley Act Requirements. To the extent any documents are required
to be filed or any certification is required to be made with respect to the Issuer or the Notes
pursuant to the Sarbanes-Oxley Act, the Issuer hereby authorizes the Servicer and the Seller, or
either of them, to prepare, sign, certify and file any such documents or certifications.



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     SECTION 5.7 Compliance with Organizational Documents. The Seller shall comply with
its limited liability company agreement and other organizational documents.



ARTICLE VI

THE SERVICER




     SECTION 6.1 Representations of Servicer. On the Closing Date and on each Funding
Date, the Servicer makes the following representations on which the Issuer and the Indenture
Trustee shall rely in accepting the Contracts in trust and in connection with the performance by
the Indenture Trustee of its obligations hereunder and the Insurer relies in issuing the Note
Policy. The representations speak as of the execution and delivery of this Agreement on the
Closing Date and on each Funding Date but shall survive the sale of the Contracts to the Issuer:



     (a) Organization and Good Standing. The Servicer is duly formed and is validly
existing as a corporation in good standing under the laws of the State of Illinois, with power and
authority to own its properties and to conduct its business as such properties are currently owned
and such business is presently conducted, and has and had at all relevant times, full power,
authority and legal right to acquire, own, sell and service the Contracts;



     (b) 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 in
servicing of the Contracts as required by this Agreement requires such qualifications except where
such failure will not have a material adverse effect or the Servicer’s ability to service the
Contracts as required by this Agreement;



     (c) Power and Authority. The Servicer 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
their respective terms; 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 Servicer by all
necessary action;



     (d) Binding Obligations. This Agreement and the other Transaction Documents to which
it is a party constitute legal, valid, and binding obligations of the Servicer enforceable in
accordance with their respective terms, subject to the effects of bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors’ rights generally and
to general principles of equity;



     (e) 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 hereof
and thereof do 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 Servicer’s certificate of
incorporation, or any indenture, agreement or other instrument to which the Servicer is a party or
by which it may 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 (other than
this Agreement); nor, to the best of the Servicer’s knowledge, violate any law applicable to the
Servicer or any 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 its properties; and



     (f) No Proceedings. There are no proceedings or investigations pending, or, to the
Servicer’s best knowledge, threatened, before any court, regulatory body, administrative agency, or
other governmental instrumentality having jurisdiction over the Servicer or its properties (A)
asserting the invalidity of this Agreement, any of the other Transaction Documents to which it is a
party or the



27









 




Securities, (B) seeking to prevent the issuance of the Securities or the consummation of any
of the transactions contemplated by this Agreement or any of the other Transaction Documents to
which it is a party, (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, any of the other Transaction Documents to which it is a party or the Securities
or (D) relating to the Servicer and which might adversely affect the federal income tax attributes
of the Securities.




     SECTION 6.2 Indemnities of Servicer. The Servicer will be liable in accordance
herewith only to the extent of the obligations specifically undertaken by the Servicer under this
Agreement and the other Transaction Documents to which it is a party, and hereby agrees to the
following:



     (a) The Servicer shall defend, indemnify, and hold harmless the Indenture Trustee, the Insurer
and the Owner Trustee and their respective officers, directors, employees and agents, and the
Issuer from and against any and all costs, expenses, losses, damages, claims and liabilities
arising out of or resulting from the use, ownership or operation by the Servicer, any Affiliate
thereof or any sub-contractor appointed by the Servicer or any Affiliate thereof of a Financed
Vehicle.



     (b) The Servicer shall indemnify, defend and hold harmless the Indenture Trustee, the Owner
Trustee, the Issuer, the Insurer and their respective officers, directors, agents and employees
from and against any taxes (other than net income, gross receipts, franchise or other similar
taxes) that may at any time be asserted against the Indenture Trustee, the Owner Trustee, the
Insurer or the Issuer, with respect to the transactions contemplated herein, including, without
limitation, any sales, general corporation, tangible personal property, privilege, or license taxes
and costs and expenses in defending against the same.



     (c) The Servicer shall indemnify, defend, and hold harmless the Issuer, the Owner Trustee, the
Indenture Trustee, the Insurer 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 the Issuer, the Owner Trustee, the Insurer or the
Noteholders through the negligence, willful misconduct or bad faith of the Servicer in the
performance of its duties under this Agreement or any other Transaction Document to which it is a
party.



     (d) The Servicer shall indemnify, defend, and hold harmless the Owner Trustee, the Indenture
Trustee, the Insurer and each of their respective officers, directors, employees and agents from
and against all costs, expenses, losses, claims, damages, and liabilities arising out of or
incurred in connection with the acceptance or performance of the trusts and duties herein
contained, except to the extent that such cost, expense, loss, claim, damage or liability: (i)
shall be due to the willful misconduct, bad faith, or negligence of the Indenture Trustee, (ii)
shall arise from the Indenture Trustee’s breach of any of its representations or warranties in any
material respect set forth in the Indenture or (iii) shall arise out of or be incurred in
connection with the performance by the Indenture Trustee of the duties of Successor Servicer
hereunder.



     (e) The Servicer shall indemnify, defend, and hold harmless, the Indenture Trustee, the Owner
Trustee, the Insurer and each of their respective officers, directors, employees and agents from
and against all costs, expenses, losses, claims, damages and liabilities arising out of or incurred
in connection with the acceptance or performance of the trusts and duties contained in the Trust
Agreement, except to the extent that such cost, expense, loss, claim, damage or liability (i) shall
be due to the willful misconduct, bad faith or negligence of the Owner Trustee or (ii) shall arise
from the Owner Trustee’s breach of any of its representations or warranties set forth in the Trust
Agreement. Santander Consumer USA Inc. hereby agrees to provide the indemnity to the Owner Trustee
set forth in Section 8.2 of the Trust Agreement, the provisions of which are incorporated
by reference herein.



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     (f) The Servicer shall indemnify, defend, and hold harmless, the Backup Servicer, if any, and
its officers, directors, employees and agents from and against all costs, expenses, losses, claims,
damages, and liabilities to the extent that such cost, expense, claim, damage, or liability arose
out of, or was imposed upon such Backup Servicer resulting from the acts or omissions of the
Servicer in the performance of its duties in its capacity as Servicer under this Agreement or any
other Transaction Document to which it is a party.



     (g) Indemnification under this Section 6.2 by the Servicer, with respect to the period
such Person was (or was deemed to be) the Servicer, shall survive the termination of such Person as
Servicer or a resignation by such Person as Servicer as well as the termination of this Agreement
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 Section 6.2 and the
recipient thereafter collects any of such amounts from others, the recipient shall promptly repay
such amounts to the Servicer, without interest.



     SECTION 6.3 Merger or Consolidation of, or Assumption of the Obligations of, Servicer.
Any Person (i) into which the Servicer may be merged or consolidated, (ii) resulting from any
merger, conversion, or consolidation to which the Servicer shall be a party or (iii) succeeding to
the business of the Servicer (or to substantially all of the Servicer’s business insofar as it
relates to the purchase of retail installment sales contracts from Dealers and the servicing of the
Contracts), which Person in any of the foregoing cases executes an agreement of assumption
acceptable to the Controlling Party to perform every obligation of the Servicer under this
Agreement and the other Transaction Documents to which it is a party, will 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; provided, however, that (x) the Servicer shall have delivered to the Insurer, the Owner
Trustee 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 of assumption comply
with this Section 6.3 and that all conditions precedent 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 Insurer, the Owner Trustee 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 that are necessary fully to preserve and protect the interest of the Issuer in the Contracts,
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 and (z) the Rating Agency
Condition shall have been satisfied. The Servicer shall provide notice of any merger, conversion,
consolidation or succession pursuant to this Section 6.3 to the Insurer and the Rating
Agencies then providing a rating for the Securities. The Indenture Trustee shall forward a copy of
each such notice to each Noteholder. Notwithstanding anything herein to the contrary, the
execution of the foregoing agreement of assumption and compliance with clauses (x), (y) and
(z) above shall be conditions to the consummation of the transactions referred to in
clauses (i), (ii), (iii) or (iv) above.



     SECTION 6.4 Limitation on Liability of Servicer and Others.



     (a) Neither the Servicer nor any of the directors or officers or employees or agents of the
Servicer will be under any liability to the Issuer, the Indenture Trustee, the Owner Trustee, the
Noteholders, the Insurer, the Swap Counterparty or the Residual Interestholders, except as provided
under this Agreement or the other Transaction Documents to which it is a party, for any action
taken or for refraining from the taking of any action pursuant to this Agreement or for errors in
judgment; provided, however, that this provision will not protect the Servicer or any such Person
against any liability that would otherwise be imposed by reason of willful misconduct, bad faith or
negligence in the performance of its duties under this Agreement. The Servicer and any director,
officer or employee or agent of the



29









 




Servicer may rely in good faith on any Opinion of Counsel or on any Officer’s Certificate of
the Seller or certificate of auditors believed to be genuine and to have been signed by the proper
party in respect of any matters arising under this Agreement.




     (b) Except as provided in this Agreement, the Servicer will not be under any obligation to
appear in, prosecute, or defend any legal action that is not incidental to its duties to service
the Contracts in accordance with this Agreement, and that in its opinion may involve it in any
expense or liability; provided, however, that the Servicer may undertake any reasonable action that
it may 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, the Insurer and the Residual
Interestholders under this Agreement. In such event, the legal expenses and costs of such action
and any liability resulting therefrom will be expenses, costs and liabilities of the Servicer.



     SECTION 6.5 Delegation of Duties. The Servicer may, at any time without notice or
consent, delegate any or all of its duties under the Transaction Documents to any sub-contractor
appointed with the written consent of the Controlling Party; provided, that no such delegation
shall relieve the Servicer of its responsibility with respect to such duties and the Servicer shall
remain obligated and liable to the Insurer, the Issuer and the Indenture Trustee for its duties
hereunder as if the Servicer alone were performing such duties.



     SECTION 6.6 Santander Consumer Not to Resign as Servicer. Subject to the provisions
of Section 6.3, the Servicer shall not resign from the obligations and duties hereby
imposed on it as Servicer under this Agreement except upon determination that the performance of
its duties under this Agreement shall no longer be permissible under applicable law. Notice of any
such determination permitting the resignation of the Servicer shall be communicated to the Insurer
and the Indenture Trustee within five (5) Business Days thereafter (and, if such communication is
not in writing, shall be confirmed in writing within five (5) Business Days thereafter) and any
such determination shall be evidenced by an Opinion of Counsel to such effect delivered to the
Insurer and the Indenture Trustee concurrently with or promptly after such notice. No such
resignation shall become effective until a Successor Servicer shall have taken the actions required
by Section 7.1(d) and shall have assumed the responsibilities and obligations of the
predecessor Servicer and the Controlling Party has indicated in writing that the Successor Servicer
is acceptable to it. The Indenture Trustee shall forward a copy of each notice so received to each
Noteholder and the Rating Agencies.



     SECTION 6.7 The Backup Servicer.



     (a) In the event that (i) a Servicer Termination Event has occurred and is continuing or (ii)
Banco Santander, S.A. fails to maintain (a) a credit rating on its short-term unsecured debt of at
least “A-1+” by S&P and at least “Prime-1” by Moody’s and (b) a long-term rating of at least “A-”
by S&P and “A3” by Moody’s, the Controlling Party may direct the Issuer to appoint a Backup
Servicer reasonably acceptable to the Controlling Party. If the Issuer shall fail to appoint a
Backup Servicer within thirty days of such direction, the Controlling Party may itself appoint the
Backup Servicer.



     (b) Prior to assuming any of the Servicer’s rights and obligations hereunder the Backup
Servicer shall only be responsible to perform those duties specifically imposed upon it by the
provisions hereof, in the Insurance Agreement and in a Backup Servicing Agreement. Such duties
generally relate to following the provisions herein which would permit the Backup Servicer to
assume some or all of the Servicer’s rights and obligations hereunder with reasonable dispatch,
following notice.



     The Backup Servicer, prior to assuming any of the Servicer’s duties hereunder, may not resign
hereunder unless (i) it arranges for a successor Backup Servicer acceptable to the Servicer, the
Seller and



30









 







the Controlling Party, and, if an Insurer Event of Default has occurred and is continuing or
the Termination Date has occurred, the Rating Agencies, with not less than 60 days’ notice
delivered to the Controlling Party, the Rating Agencies, the Servicer and the Seller and (ii) such
successor Backup Servicer has consented in writing to such appointment. Prior to its becoming
Successor Servicer, the Backup Servicer shall have only those duties and obligations imposed by it
under this Agreement and the other Transaction Document to which it became a party, and shall have
no obligations or duties under any agreement to which it is not a party, including the various
agreements named herein.



     (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 against
such risk or liability is not reasonably assured to it in writing prior to the expenditure or risk
of such funds or incurrence of financial liability. Notwithstanding any provision to the contrary,
the Backup Servicer, in its capacity as such, and not in its capacity as Successor Servicer, shall
not be liable for any obligation of the Servicer contained in this Agreement, and the parties shall
look only to the Servicer to perform such obligations.



     (d) The Servicer shall have no liability, direct or indirect, to any party, for the acts or
omissions of the Backup Servicer, whenever such acts or omissions occur whenever such liability is
imposed.



     (e) Notwithstanding anything to the contrary herein, so long as the Insurer is the Controlling
Party, the Insurer shall have the right to remove the Backup Servicer for cause at any time prior
to the Termination Date and replace the Backup Servicer.



     (f) The Backup Servicer may, with the prior consent of the Issuer, subservice any and all of
its duties and responsibilities hereunder, including but not limited to its duties as Successor
Servicer hereunder, should the Backup Servicer become the Successor Servicer; provided that no such
subservicing shall relieve the Backup Servicer in any such capacity of its responsibility with
respect to such duties and the Backup Servicer in each such capacity shall remain obligated and
liable to the Insurer, the Issuer and the Indenture Trustee for its duties hereunder as if the
Backup Servicer alone were performing such duties.



     (g) The indemnification obligations of the Backup Servicer, upon becoming a Successor Servicer
are expressly limited to those instances of negligence or willful misconduct of the Backup Servicer
in its role as Successor Servicer and as Backup Servicer prior to becoming Successor Servicer.



     (h) The Servicer shall promptly notify the Backup Servicer in writing of any material changes
which the Servicer makes to its servicing systems and provide sufficient detail with respect
thereto to the Backup Servicer as the Backup Servicer may require.



     (i) The Backup Servicer may consult with counsel, and the written advice or Opinion of Counsel
with respect to legal matters relating to the Transaction Documents shall be full and complete
authorization and protection from liability in respect to any action taken, omitted or suffered by
it hereunder in good faith and in accordance with the written advice or opinion of such counsel,
except any such action as may be attributable to the Backup Servicer’s willful misconduct,
negligence or bad faith.



     SECTION 6.8 Servicer May Own Notes. The Servicer, and any Affiliate of the Servicer,
may, in its individual or any other capacity, become the owner or pledgee of Notes with the same
rights as it would have if it were not the Servicer or an Affiliate thereof, except as otherwise
expressly provided herein or in the other Transaction Documents. Except as set forth herein or in
the other Transaction



31









 




Documents, Notes so owned by or pledged to the Servicer or such Affiliate will have an equal
and proportionate benefit under the provisions of this Agreement, without preference, priority or
distinction as among all of the Notes.




ARTICLE VII

TERMINATION OF SERVICER




     SECTION 7.1 Termination of Servicer.



     (a) If a Servicer Termination Event shall have occurred and be continuing, the Indenture
Trustee if so directed by the Controlling Party, by notice given to the Servicer, the Owner
Trustee, the Issuer, the Swap Counterparty, the Administrator, the Noteholders, the Insurer and
each Rating Agency, terminate the rights and obligations of the Servicer under this Agreement with
respect to the Contracts. Upon the Servicer’s receipt of notice of termination pursuant to this
Section 7.1(a) or the Servicer’s resignation in accordance with the terms of this
Agreement, the predecessor servicer shall continue to perform its functions as Servicer under this
Agreement, in the case of termination, only until the date on which the Backup Servicer, if any, or
another Successor Servicer is appointed and assumes the responsibilities of the Servicer pursuant
to this Section 7.1 and, in the case of resignation, until the later of (i) the date 30
days from the delivery to the Backup Servicer, if any, the Insurer and the Indenture Trustee of
written notice of such resignation (or the date of written confirmation of such notice prior to the
expiration of the 45 days) in accordance with the terms of this Agreement, (ii) the date upon which
the predecessor servicer shall become unable to act as Servicer, as specified in the notice of
resignation and accompanying Opinion of Counsel and (iii) the date on which the Backup Servicer, if
any, or another Successor Servicer is appointed and assumes the responsibilities of the Servicer
pursuant to this Section 7.1. In the event of the Servicer’s resignation or termination
hereunder, and, prior to the Termination Date, if the Insurer so directs (so long as the Insurer is
the Controlling Party), the Backup Servicer, if any, 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 herein and shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Servicer by the terms and provisions hereof; provided, however, that
such Backup Servicer shall not be liable for any actions of any 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. Notwithstanding the above, if such Backup
Servicer is legally unable to so act (as confirmed in an Opinion of Counsel for such Backup
Servicer) or, prior to the Termination Date, the Insurer otherwise directs (so long as the Insurer
is the Controlling Party), the Insurer may appoint a Successor Servicer, otherwise, the Indenture
Trustee shall appoint (after soliciting bids from potential servicers), or petition a court of
competent jurisdiction to appoint, a servicer as the Successor Servicer hereunder, in the
assumption of all or any part of the responsibilities, duties or liabilities of the outgoing
Servicer hereunder. In the event that any such Backup Servicer is so prohibited by law from acting
or, prior to the Termination Date, the Insurer otherwise directs (so long as the Insurer is the
Controlling Party), the outgoing Servicer shall continue to act as Servicer hereunder until a
Successor Servicer which, prior to the Termination Date, shall be acceptable to the Insurer (so
long as the Insurer is the Controlling Party) is appointed and assumes the obligations as Successor
Servicer. In the event such Backup Servicer assumes the responsibilities of the Servicer pursuant
to this Section 7.1, such Backup Servicer will make reasonable efforts consistent with
applicable law to become licensed, qualified and in good standing under the laws which require
licensing or qualification, in order to perform its obligations as Servicer hereunder or,
alternatively, shall retain an agent who is so licensed, qualified and in good standing.



     (b) Upon succeeding to the duties of the Servicer (in the case of the Backup Servicer, if any)
or upon appointment as Servicer (in the case of the Successor Servicer) pursuant to this Agreement,
the Backup Servicer, if any, or the Successor Servicer, as applicable, shall be the successor in
all respects to



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the predecessor servicer and shall be subject to all the responsibilities, duties, and
liabilities arising thereafter relating thereto placed on the predecessor servicer, and shall be
entitled to (to the extent arranged in accordance with the following paragraph) the Successor
Servicing Fee and all of the rights granted to the predecessor servicer, by the terms and
provisions of this Agreement; provided that neither the Backup Servicer, if any, nor the Successor
Servicer shall be liable for the acts or omissions of any predecessor servicer.



     (c) In connection with such succession of duties (in the case of the Backup Servicer, if any)
or appointment (in the case of a Successor Servicer), the Indenture Trustee may make such
arrangements for the compensation of such Successor Servicer (including Transition Expenses) out of
payments on Contracts as it, the Insurer (prior to the Termination Date and so long as the Insurer
is the Controlling Party) and such Successor Servicer shall agree; provided, however, that no such
compensation (excluding Transition Expenses) shall be in excess of the Successor Servicing Fee.
The Backup Servicer, if any, the Indenture Trustee and any such Successor Servicer shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any such succession.



     (d) The predecessor servicer shall cooperate with the Successor Servicer and the Backup
Servicer, if any, in effecting the termination of the responsibilities and rights of the
predecessor servicer under this Agreement, including the transfer to the Backup Servicer, if any,
or the Successor Servicer for administration by it of all cash amounts that shall at the time be
held by the predecessor servicer for deposit, or shall thereafter be received with respect to a
Contract, and the related accounts and records maintained by the Servicer. All reasonable costs
and expenses (including attorneys’ fees and disbursements) incurred in connection with transferring
the Contracts to the Successor Servicer, converting the Servicer’s data to the Successor Servicer’s
computer systems and amending this Agreement to reflect such succession as Servicer pursuant to
this Section shall be paid by the predecessor servicer upon presentation of reasonable
documentation of such costs and expenses (the “Transition Expenses”); provided, however,
that such Transition Expenses shall not exceed $100,000. If such Transition Expenses are not paid
to the Successor Servicer by the predecessor servicer, such Transition Expenses shall be paid under
Section 4.4(a)(1). In addition, the Insurer shall have the option to pay the Transition
Expenses. So long as the Insurer is the Controlling Party, if the Insurer elects to pay any such
Transition Expenses, the amount paid by the Insurer shall constitute part of the Reimbursement
Obligations due to the Insurer.



     SECTION 7.2 Notification to Noteholders and Residual Interestholders. Upon any
termination of, or appointment of a successor to, the Servicer pursuant to this Article
VII, the Indenture Trustee will give prompt written notice thereof to the Owner Trustee, the
Issuer, the Insurer, the Administrator, each Rating Agency and to the Noteholders and the Residual
Interestholders at their respective addresses of record.



     SECTION 7.3 Waiver of Past Defaults. So long as the Insurer is the Controlling Party,
the Insurer, may, on behalf of all Noteholders and the Residual Interestholders, waive any Trigger
Event or default by the Servicer or the Seller in the performance of its obligations hereunder and
its consequences, except a default in making any required deposits to or payments from a Trust
Account in accordance with this Agreement. Upon any such waiver of a past default, such default
shall cease to exist, and any Servicer Termination Event arising therefrom shall be deemed to have
been remedied for every purpose of this Agreement. No such waiver shall extend to any subsequent
Trigger Event or other default or impair any right consequent thereon.



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ARTICLE VIII

OPTIONAL PURCHASE




     SECTION 8.1 Optional Purchase of Trust Estate. (a) The Seller and the Servicer shall
each have the right at its option (the “Optional Purchase”) to purchase the Trust Estate
from the Issuer on any Payment Date if, either before or after giving effect to any payment of
principal required to be made on such Payment Date, the aggregate Pool Balance is less than or
equal to 15% of the Original Pool Balance and the aggregate Principal Balances of the Subsequent
Contracts conveyed to the Issuer as of the related Funding Date. The purchase price for the Trust
Estate shall equal the Redemption Price (the “Optional Purchase Price”), which amount shall
be deposited by the Seller or the Servicer into the Collection Account on the Redemption Date. If
the Seller or the Servicer exercises the Optional Purchase, the Notes shall be redeemed and in each
case in whole but not in part on the related Payment Date for the Redemption Price.



     (b) Notice of any termination of the Trust shall be given by the Servicer to the Owner
Trustee, the Indenture Trustee, the Insurer and the Rating Agencies as soon as practicable after
the Servicer has received notice of the occurrence of an event of termination under Section
9.1 of the Trust Agreement.



ARTICLE IX

THE NOTE POLICY




     SECTION 9.1 Claims Under the Note Policy.



     (a) In the event that the Servicer’s Certificate with respect to any Determination Date states
that there is a Deficiency Amount, or in the event that the Indenture Trustee has received a
certified copy of a final, nonappealable order of a court having competent jurisdiction with
respect to any Preference Amount, the Indenture Trustee shall furnish to the Insurer no later than
noon, New York City time, on the first Business Day following the Indenture Trustee’s receipt of
such Servicer’s Certificate or certified copy, as applicable, a complete notice substantially in
the form of Exhibit A to the Note Policy (a “Notice”) specifying the amount of the
Deficiency Amount; provided, that if such Notice is received after noon, New York City time, on
such Business Day, it will be deemed to be received on the following Business Day. If any such
Notice is not in proper form or is otherwise insufficient for the purpose of making a claim under
the Note Policy, such Notice will be deemed not to have been received for purposes of making such
claim, and the Insurer will promptly so advise the Indenture Trustee and the Indenture Trustee may
submit an amended Notice.



     (b) The Indenture Trustee shall establish and maintain an Eligible Account for the benefit of
the Noteholders for the exclusive use as an account into which to deposit any proceeds of the Note
Insurance Policy (the “Insurance Account”). Upon receipt of an Insured Payment from the Insurer,
the Indenture Trustee shall deposit such Insured Payment in the Insurance Account. All amounts on
deposit in the Insurance Account shall remain uninvested. On each Payment Date, the Indenture
Trustee shall return any money in the Insurance Account which does not constitute an Insured
Payment (as defined in the Note Policy) to the Insurer. The Indenture Trustee shall distribute on
each Payment Date, to the Noteholders, the Insured Payment for such Payment Date from the Insurance
Account in accordance with the Note Policy.



     (c) The Indenture Trustee will (i) receive as attorney-in-fact of each Noteholder any Insured
Payment from the Insurer and (ii) distribute such Insured Payment as set forth in Section
9.1(b). Any and all Insured Payments disbursed by the Indenture Trustee shall not be
considered payment by the Issuer with respect to the Notes, and shall not discharge the obligations
of the Issuer with respect thereto. The



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Insurer shall, upon any payment pursuant to the Note Policy, in furtherance and not in
limitation of its equitable right of subrogation and its rights under the Insurance Agreement, to
the extent it makes any payment with respect to the Notes, become subrogated to the rights of any
Noteholder to receive any and all amounts due in respect of the Notes as to which such payment was
made. The Insurer shall be a co-beneficiary of the Indenture Trustee’s lien under the Indenture.
Subject to and conditioned upon any payment with respect to the Notes by or on behalf of the
Insurer, the Indenture Trustee shall assign to the Insurer all rights to the payment of interest or
principal with respect to the Notes which are then due for payment to the extent of all payments
made by the Insurer, and the Insurer may exercise any option, vote, right, power or the like with
respect to the Notes to the extent that it has made payment pursuant to the Note Policy. The
foregoing subrogation will in all cases be subject to the rights of the Noteholders to receive all
Insured Payments (as defined in the Note Policy) in respect of the Notes.




     (d) The Indenture Trustee will promptly notify the Insurer of any proceeding or the
institution of any action (of which a Responsible Officer of the Indenture Trustee has actual
knowledge) seeking the avoidance as a preferential transfer under applicable bankruptcy,
insolvency, receivership, rehabilitation or similar law (a “Note Preference Claim”) of any payment
made to a Noteholder that has been deemed a preferential transfer and recoverable, or theretofore
recovered, from such Noteholder pursuant to Title 11 of the United States Code in accordance with
an order of an appropriate court or other body. Each Noteholder, by its purchase of Notes, and the
Indenture Trustee hereby agree that so long as the Insurer is the Controlling Party, the Insurer
may at any time during the continuation of any proceeding relating to a Note Preference Claim
direct all matters relating to such Note Preference Claim, including (i) the direction of any
appeal of any order relating to any Note Preference Claim and (ii) the posting of any surety,
supersedeas or performance bond pending any such appeal at the expense of the Insurer, but subject
to reimbursement as provided in the Insurance Agreement. In addition, and without limitation of
the foregoing, as set forth in Section 9.1(c), the Insurer will be subrogated to, and each
Noteholder and the Indenture Trustee hereby delegate and assign, to the fullest extent permitted by
law, the rights of the Indenture Trustee and each Noteholder in the conduct of any proceeding with
respect to a Note Preference Claim, including all rights of any party to an adversary proceeding
action with respect to any court order issued in connection with any such Note Preference Claim.



     (e) In the event that the Indenture Trustee has received a certified copy of a final
nonappealable order of a court having competent jurisdiction holding that any Insured Payment paid
on a Note has been avoided in whole or in part as a preference payment under applicable bankruptcy
law, the Indenture Trustee shall so notify the Insurer, shall comply with the provisions of the
Note Policy to obtain payment by the Insurer of such avoided payment, and shall, at the time it
provides notice to the Insurer, notify Holders of the Notes by mail that, in the event that any
Noteholder’s payment is so recoverable, such Noteholder shall be entitled to payment pursuant to
the terms of the Note Policy. Pursuant to the terms of the Note Policy, the Insurer will make such
payment on behalf of the Noteholder to the receiver, conservator, debtor-in-possession or trustee
in bankruptcy named in the “Final Order” (as such term is defined in the Note Policy) and not to
the Indenture Trustee or to any Noteholder directly (unless such Noteholder has previously paid
such payment to the receiver, conservator, debtor-in-possession or trustee in bankruptcy, in which
case the Insurer will make such payment to the Indenture Trustee for payment, in accordance with
instructions to be provided by the Insurer, to such Noteholder upon proof of such payment
reasonably satisfactory to the Insurer.



     SECTION 9.2 Surrender of Note Policy. The Indenture Trustee shall surrender the Note
Policy to the Insurer for cancellation upon the expiration of the Note Policy in accordance with
the terms of the Note Policy.



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ARTICLE X

MISCELLANEOUS PROVISIONS




     SECTION 10.1 Amendment. This Agreement may be amended by the Seller, the Servicer,
the Backup Servicer, if any, and the Indenture Trustee, without the consent of any of the
Noteholders, the Swap Counterparty or any of the Residual Interestholders, but with the prior
written consent of the Insurer (so long as the Insurer is the Controlling Party), to (i) cure any
ambiguity, to correct or supplement any provisions in this Agreement, or to add any other
provisions with respect to matters or questions arising under this Agreement that shall not be
inconsistent with the provisions of this Agreement, or (ii) reflect the succession of a successor
Servicer; provided, however, that in connection with any amendment pursuant to clause (i)
above, the action referred to therein shall not, as evidenced by an Opinion of Counsel, adversely
affect in any material respect the interests of any Noteholder; and provided, further, that in
connection with any amendment pursuant to clause (ii) above, the Rating Agency Condition
shall have been satisfied; provided, further, that such amendment shall not materially and
adversely affect the rights or obligations of the Swap Counterparty under this Sale and Servicing
Agreement unless (i) the Swap Counterparty shall have consented in writing to such amendment (and
such consent shall be deemed to have been given if the Swap Counterparty does not object in writing
within ten (10) Business Days after receipt of a written request for such consent) and (ii) the
Rating Agency Condition is satisfied with respect to such amendment; provided further, however, if
any party to this Agreement is unable to sign any amendment due to its dissolution, winding up or
comparable circumstances, then the consent of the other parties hereto and the Insurer shall be
sufficient to amend this Agreement without such party’s signature.



     This Agreement may also be amended from time to time by the Seller, the Servicer, the Backup
Servicer, if any, and the Indenture Trustee with the written consent of the Insurer (so long as the
Insurer is the Controlling Party) and the Holders of Notes voting as a single class (which consent
of any Holder of a Note given pursuant to this Section or pursuant to any other provision of this
Agreement shall be conclusive and binding on such Holder and on all future Holders of such Note and
of any Note issued upon the registration of transfer thereof or in exchange thereof or in lieu
thereof whether or not notation of such consent is made upon the Note), evidencing not less than a
majority of the then Outstanding Note Balance for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement, or of modifying in
any manner the rights of the Noteholders or the Insurer; provided, however, that no such amendment
shall (a) increase or reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on Contracts or distributions that shall be required to be made on any Note
or change the Interest Rate of any Class of Notes or the Note Principal Distributable Amount or (b)
reduce the aforesaid percentage required to consent to any such amendment, without the consent of
the Holders of all Notes then outstanding; provided further, however, if any party to this
Agreement is unable to sign any amendment due to its dissolution, winding up or comparable
circumstances, then the consent of the Noteholders representing not less than a majority of the
Outstanding Note Balance and the consent of the Insurer (so long as the Insurer is the Controlling
Party) shall be sufficient to amend this Agreement without such party’s signature.



     If an Insurer Event of Default has occurred and is continuing, no amendment to this Agreement
shall materially and adversely affect the interests of the Insurer without the prior written
consent of the Insurer.



     Prior to the execution of any such amendment or consent, the Servicer will provide and the
Indenture Trustee shall distribute written notification of the substance of such amendment or
consent to each Rating Agency then rating the Notes and the Insurer. Promptly after the execution
of any such amendment or consent, the Indenture Trustee shall furnish written notification of the
substance of such amendment or consent to each Noteholder. It shall not be necessary for the
consent of Noteholders



36









 




pursuant to this Section to approve the particular form of any proposed amendment or consent,
but it shall be sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents (and any other consents of Noteholders provided for in this Agreement) and
of evidencing the authorization of the execution thereof by Noteholders shall be subject to such
reasonable requirements as the Indenture Trustee may prescribe. Prior to the execution of any
amendment to this Agreement, the Indenture Trustee and the Insurer shall be entitled to receive and
rely upon an Opinion of Counsel stating that the execution of such amendment is authorized or
permitted by this Agreement and the Opinion of Counsel referred to in Section 10.2(i)(1).
The Indenture Trustee may, but shall not be obligated to, enter into any such amendment which
affects the Indenture Trustee’s own rights, duties or immunities under this Agreement or otherwise.




     SECTION 10.2 Protection of Title to Trust.



     (a) The Seller shall file such financing statements and cause to be filed such continuation
statements, all in such manner and in such places as may be required by law fully to preserve,
maintain, and protect the interest of the Indenture Secured Parties in the Contracts and in the
proceeds thereof and the sale of accounts and chattel paper. The Seller shall deliver (or cause to
be delivered) to the Indenture Trustee and the Insurer file-stamped copies of, or filing receipts
for, any document filed as provided above, as soon as available following such filing.



     (b) None of the Issuer, the Seller or the Servicer shall change its name, identity, State of
incorporation or formation or corporate structure in any manner that would, could, or might make
any financing statement or continuation statement filed by the Seller in accordance with
Section 10.2(a) seriously misleading within the meaning of Section 9-506, Section 9-507 and
Section 9-508 of the UCC, unless it shall have given the Indenture Trustee and the Insurer at least
five days’ prior written notice thereof and shall have promptly filed appropriate amendments to all
previously filed financing statements or continuation statements.



     (c) The Seller, the Issuer and the Servicer shall give the Indenture Trustee and the Insurer
at least 60 days’ prior written notice of any relocation of its principal executive office or
change of its State of incorporation or formation if, as a result of any such change, the
applicable provisions of 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 promptly file any
such amendment. The Servicer shall at all times maintain each office from which it shall service
Contracts, and its principal executive office, within the United States (other than the State of
Louisiana).



     (d) The Servicer shall maintain accounts and records as to each Contract accurately and in
sufficient detail to permit (i) the reader thereof to know at any time the status of such Contract,
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 Contract and the amounts
from time to time deposited in the Collection Account in respect of such Contract.



     (e) The Servicer shall maintain its computer systems so that, from and after the time of sale
under this Agreement of the Contracts to the Issuer, the Servicer’s master computer records
(including any back-up archives) that refer to a Contract shall indicate clearly (including by
means of tagging) the interest of the Issuer in such Contract and that such Contract is owned by
the Issuer. Indication of the Trust’s ownership of a Contract shall be deleted from or modified on
the Servicer’s computer systems when, and only when, the Contract shall have been paid in full or
repurchased.



     (f) If at any time the Seller 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



37









 




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 Contract, shall indicate clearly (including by means of
tagging) that such Contract has been sold and is owned by the Issuer.




     (g) The Servicer shall permit the Indenture Trustee, the Insurer 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 Contract.



     (h) Upon request, the Servicer shall furnish to the Indenture Trustee and the Insurer, within
20 Business Days, a list of all Contracts (by contract number and name of Obligor) then held as
part of the Trust Estate , together with a reconciliation of such list to the Schedule of Contracts
and to each of the Servicer’s Certificates furnished before such request indicating removal of
Contracts from the Trust Estate.



     (i) The Seller shall deliver to the Indenture Trustee and the Insurer:




     (1) upon the execution and delivery of this Agreement and of each amendment
thereto, 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 Contracts, 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 90 days after the beginning of each calendar year beginning with the
first calendar year beginning more than three months after the Initial Cut-off Date,
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 executed and filed that are necessary fully to
preserve and protect the interest of the Indenture Trustee in the Contracts, 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 execution and 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
Contracts, until January 30 in the following calendar year.


Each Opinion of Counsel referred to in clauses (i)(1) or (i)(2) above shall specify
any action necessary (as of the date of such opinion) to be taken in the following year to preserve
and protect such interest.




     SECTION 10.3 Other Liens or Interests. Except for the conveyances and grants of
security interests pursuant to this Agreement and the other Transaction Documents, the Seller shall
not sell, pledge, assign or transfer the Contracts or other property transferred to the Issuer to
any other Person, or grant, create, incur, assume or suffer to exist any Lien on any interest
therein, and the Seller shall defend the right, title and interest of the Issuer in, to and under
such Contracts and other property transferred to the Issuer against all claims of third parties
claiming through or under the Seller.



38









 





     SECTION 10.4 Transfers Intended as Sale; Security Interest.



     (a) Each of the parties hereto expressly intends and agrees that the transfers contemplated
and effected under this Agreement are complete and absolute sales and transfers rather than pledges
or assignments of only a security interest and shall be given effect as such for all purposes. It
is further the intention of the parties hereto that the Contracts and related Transferred Assets
shall not be part of the Seller’s estate in the event of a bankruptcy or insolvency of the Seller.
The sales and transfers by the Seller of Contracts and related Transferred Assets hereunder are and
shall be without recourse to, or representation or warranty (express or implied) by, the Seller,
except as otherwise specifically provided herein. The limited rights of recourse specified herein
against the Seller are intended to provide a remedy for breach of representations and warranties
relating to the condition of the property sold, rather than to the collectibility of the Contracts.



     (b) Notwithstanding the foregoing, in the event that the Contracts and other Transferred
Assets are held to be property of the Seller, or if for any reason this Agreement is held or deemed
to create indebtedness or a security interest in the Contracts and other Transferred Assets, then
it is intended that:




     (i) This Agreement shall be deemed to be a security agreement within the meaning of
Articles 8 and 9 of the New York Uniform Commercial Code and the Uniform Commercial Code of
any other applicable jurisdiction;




     (ii) The conveyance provided for in Section 2.1 shall be deemed to be a grant
by the Seller, and the Seller hereby grants, to the Issuer of a security interest in all of
its right (including the power to convey title thereto), title and interest, whether now
owned or hereafter acquired, in and to the Contracts and other Transferred Assets, to secure
such indebtedness and the performance of the obligations of the Seller hereunder;




     (iii) The possession by the Issuer, or the Servicer as the Issuer’s agent, of the
Contract Files and any other property as constitute instruments, money, negotiable documents
or chattel paper shall be deemed to be “possession by the secured party” or possession by
the purchaser or a person designated by such purchaser, for purposes of perfecting the
security interest pursuant to the New York Uniform Commercial Code and the Uniform
Commercial Code of any other applicable jurisdiction; and




     (iv) Notifications to persons holding such property, and acknowledgments, receipts or
confirmations from persons holding such property, shall be deemed to be notifications to, or
acknowledgments, receipts or confirmations from, bailees or agents (as applicable) of the
Issuer for the purpose of perfecting such security interest under applicable law.



     SECTION 10.5 Notices, Etc. All demands, notices and communications hereunder shall be
in writing and shall be delivered or mailed by registered or certified first-class United States
mail, postage prepaid, hand delivery, prepaid courier service, or by facsimile, and addressed in
each case as set forth on Schedule II or at such other address as shall be designated in a
written notice to the other parties hereto. Any notice required or permitted to be mailed to a
Noteholder shall be given by first class mail, postage prepaid, at the address of such Noteholder
as shown in the Note Register. Delivery shall occur only upon receipt or reported tender of such
communication by an officer of the recipient entitled to receive such notices located at the
address of such recipient for notices hereunder; provided, however, that any notice to a Noteholder
mailed within the time prescribed in this Agreement shall be conclusively presumed to have been
duly given, whether or not the Noteholder shall receive such notice.



39









 





     SECTION 10.6 Choice of Law. THIS AGREEMENT 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 10.7 Headings. The section headings hereof have been inserted for convenience
of reference only and shall not be construed to affect the meaning, construction or effect of this
Agreement.



     SECTION 10.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but all of such
counterparts shall together constitute but one and the same instrument.



     SECTION 10.9 Waivers. No failure or delay on the part of the Servicer, the Seller,
the Insurer, the Issuer or the Indenture Trustee in exercising any power or right hereunder (to the
extent such Person has any power or right hereunder) shall operate as a waiver thereof, nor shall
any single or partial exercise of any such power or right preclude any other or further exercise
thereof or the exercise of any other power or right. No notice to or demand on any party hereto in
any case shall entitle it to any notice or demand in similar or other circumstances. No waiver or
approval by any party hereto under this Agreement shall, except as may otherwise be stated in such
waiver or approval, be applicable to subsequent events or transactions. No waiver or approval
under this Agreement shall require any similar or dissimilar waiver or approval thereafter to be
granted hereunder.



     SECTION 10.10 Entire Agreement. The Transaction Documents contain a final and
complete integration of all prior expressions by the parties hereto with respect to the subject
matter thereof and shall constitute the entire agreement among the parties hereto with respect to
the subject matter thereof, superseding all prior oral or written understandings. There are no
unwritten agreements among the parties.



     SECTION 10.11 Severability of Provisions. If any one or more of the covenants,
agreements, provisions or terms of this Agreement 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 Agreement and shall in no way affect the
validity or enforceability of the other provisions of this Agreement, the Securities or the rights
of the holders thereof or of the Insurer.



     SECTION 10.12 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted assigns. This
Agreement shall create and constitute the continuing obligations of the parties hereto in
accordance with its terms, and shall remain in full force and effect until such time as the parties
hereto shall agree.



     SECTION 10.13 Acknowledgment and Agreement. By execution below, the Seller expressly
acknowledges and consents to the pledge, assignment and grant of a security interest in the
Contracts and the other Transferred Assets by the Issuer to the Indenture Trustee on behalf of the
Indenture Secured Parties pursuant to the Indenture for the benefit of the Indenture Secured
Parties. In addition, the Seller hereby acknowledges and agrees that for so long as the Notes are
outstanding, the Indenture Trustee will have the right to exercise all powers, privileges and
claims of the Issuer under this Agreement.



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     SECTION 10.14 Cumulative Remedies. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.



     SECTION 10.15 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. This Section shall
survive the termination of this Agreement.



     SECTION 10.16 Submission to Jurisdiction; Waiver of Jury Trial. 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
Agreement 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 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;



     (c) agrees that service of process in any such action or proceeding may be effected by mailing
a copy thereof by registered or certified mail (or any substantially similar form of mail), postage
prepaid, to such Person at its address determined in accordance with Section 10.5 of this
Agreement;



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



     (e) to the extent permitted by applicable law, each party hereto irrevocably waives all right
of trial by jury in any action, proceeding or counterclaim based on, or arising out of, under or in
connection with this Agreement, any other Transaction Document, or any matter arising hereunder or
thereunder.



     SECTION 10.17 Limitation of Liability. Neither the Indenture Trustee nor any of its
directors, officers or employees shall be liable for any action taken or omitted to be taken by it
or them hereunder, or in connection herewith, except that the Indenture Trustee shall be liable for
its negligence, bad faith or willful misconduct; nor shall the Indenture Trustee be responsible for
the validity, effectiveness, value, sufficiency or enforceability against the Issuer of this
Agreement or any of the Trust Estate (or any part thereof). Notwithstanding any term or provision
of this Agreement, the Indenture



41









 




Trustee shall incur no liability to the Issuer for any action taken or omitted by the
Indenture Trustee in connection with the Trust Estate, except for the negligence, bad faith or
willful misconduct on the part of the Indenture Trustee, and, further, shall incur no liability to
the Issuer except for negligence, bad faith or willful misconduct in carrying out its duties to the
Issuer. The Indenture Trustee shall be protected and shall incur no liability to any such party in
relying upon the accuracy, acting in reliance upon the contents, and assuming the genuineness of
any notice, demand, certificate, signature, instrument or other document reasonably believed by the
Indenture Trustee to be genuine and to have been duly executed by the appropriate signatory, and
(absent actual knowledge of a Responsible Officer of the Indenture Trustee to the contrary) the
Indenture Trustee shall not be required to make any independent investigation with respect thereto.
The Indenture Trustee shall at all times be free independently to establish to its reasonable
satisfaction, but shall have no duty to independently verify, the existence or nonexistence of
facts that are a condition to the exercise or enforcement of any right or remedy hereunder or under
any of the other Transaction Documents. The Indenture Trustee may consult with independent
counsel, and shall not be liable for any action taken or omitted to be taken by it hereunder in
good faith and in accordance with the written advice of such counsel.




     SECTION 10.18 Third-Party Beneficiaries. This Agreement shall inure to the benefit of
and be binding upon the parties hereto, the Noteholders and the Residual Interestholders and their
respective successors and permitted assigns and each of the Owner Trustee, the Swap Counterparty
and the Insurer shall be express third party beneficiaries hereof and may enforce the provisions
hereof as if it were a party hereto. Except as otherwise provided in this Section, no other Person
will have any right hereunder.



     SECTION 10.19 Limitation of Rights.



     (a) All of the rights of the Insurer in, to and under this Agreement (including, but not
limited to, all of the Insurer’s rights as a third party beneficiary of this Agreement and all of
the Insurer’s rights to receive notice of any action hereunder and to give or withhold consent to
any action hereunder) shall terminate upon the termination of the Insurance Agreement in accordance
with the terms thereof and the payment in full of all amounts owing to the Insurer.



     (b) All of the rights of the Swap Counterparty in, to and under this Agreement (including, but
not limited to, all of the Swap Counterparty’s rights as a third party beneficiary of this
Agreement and all of the Swap Counterparty’s rights to receive notice of any action hereunder and
to give or withhold consent to any action hereunder) shall terminate upon the termination of the
Interest Rate Swap Agreement in accordance with the terms thereof and the payment in full of all
amounts owing to the Swap Counterparty.



     (c) No Noteholder shall have any right to vote (except as provided in this Agreement) or in
any manner otherwise control the operation and management of the Trust, or the obligations of the
parties to this Agreement, nor shall anything in this Agreement set forth, or contained in the
terms of the Notes be construed so as to constitute the Noteholders from time to time as partners
or members of an association; nor shall any Noteholder be under any liability to any third Person
by reason of any action taken pursuant to any provision of this Agreement.



     No Noteholder shall have any right by virtue or by availing itself of any provisions of this
Agreement to institute any suit, action, or proceeding in equity or at law upon or under or with
respect to this Agreement, unless, prior to the Termination Date (so long as the Insurer is the
Controlling Party), the Insurer has given its prior written consent and such Holder previously
shall have given to the Indenture Trustee a written notice of default and of the continuance
thereof, and unless also (i) the default arises from the Seller’s or the Servicer’s failure to
remit payments when due hereunder or (ii) the Majority Noteholders shall have made written request
upon the Indenture Trustee to institute such action, suit or



42









 




proceeding in its own name as Indenture Trustee under this Agreement and such Holder shall
have offered to the Indenture Trustee such reasonable indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby, and the Indenture Trustee, for
30 days after its receipt of such notice, request, and offer of indemnity, shall have neglected or
refused to institute any such action, suit or proceeding and during such 30-day period no request
or waiver inconsistent with such written request has been given to the Indenture Trustee pursuant
to this Section or Section 7.3. No one or more Holders of Notes or Residual Interests
shall have any right in any manner whatever by virtue or by availing itself or themselves of any
provisions of this Agreement to affect, disturb or prejudice the rights of the Holders of any other
of the Notes or the Residual Interests, or to obtain or seek to obtain priority over or preference
to any other such Holder, or to enforce any right, under this Agreement except in the manner
provided in this Agreement and for the equal, ratable and common benefit of all Noteholders and all
Residual Interestholders. For the protection and enforcement of the provisions of this Section,
each Noteholder, each Residual Interestholder and the Indenture Trustee shall be entitled to such
relief as can be given either at law or in equity.




     In the event the Indenture Trustee shall receive conflicting or inconsistent requests and
indemnity from two or more groups of Holders of Securities, each representing less than the
required amount of the Securities, the Indenture Trustee in its sole discretion may determine what
action, if any, shall be taken, notwithstanding any other provisions of this Agreement.



     SECTION 10.20 Information Requests. The parties hereto shall provide any information
available and deliverable without undue expense as requested by the Servicer, the Issuer, the
Seller or any of their Affiliates, in order to comply with or obtain more favorable treatment under
any current or future law, rule, regulation, accounting rule or principle.



     SECTION 10.21 Regulation AB. The Seller and the Servicer acknowledge and agree that
the purpose of this Section 10.21 is to facilitate compliance by the Seller with the
provisions of Regulation AB and related rules and regulations of the Commission. The Seller shall
not exercise its right to request delivery of information or other performance under these
provisions other than in good faith, or for purposes other than compliance with the Securities Act,
the Exchange Act and the rules and regulations of the Commission under the Securities Act and the
Exchange Act. The Servicer acknowledges that interpretations of the requirements of Regulation AB
may change over time, whether due to interpretive guidance provided by the Commission or its staff,
consensus among participants in the asset-backed securities markets, advice of counsel, or
otherwise, and agrees to comply with requests made by the Seller in good faith for delivery of
information under these provisions on the basis of evolving interpretations of Regulation AB. The
Servicer shall cooperate fully with the Seller and the Issuer to deliver to the Seller and the
Issuer (including any of its assignees or designees) any and all statements, reports,
certifications, records and any other information necessary in the good faith determination of the
Seller or the Issuer to permit the Seller to comply with the provisions of Regulation AB, together
with such disclosures relating to the Servicer and the Contracts, or the servicing of the
Contracts, reasonably believed by the Servicer to be necessary in order to effect such compliance.



     SECTION 10.22 Information to Be Provided by the Indenture Trustee.



     (a) For so long as the Issuer is required to report under the Exchange Act, the Indenture
Trustee shall (i) on or before the fifth Business Day of each month, provide to the Seller, in
writing, such information regarding the Indenture Trustee as is requested by the Seller for the
purpose of compliance with Item 1117 of Regulation AB; provided, however, that the Indenture
Trustee shall not be required to provide such information in the event that there has been no
change to the information previously provided by the Indenture Trustee to Seller, and (ii) as
promptly as practicable following notice to or



43









 




discovery by a Responsible Officer of the Indenture Trustee of any changes to such
information, provide to the Seller, in writing, such updated information.




     (b) As soon as available but no later than March 15 of each calendar year for so long as the
Issuer is required to report under the Exchange Act, commencing in 2008, the Indenture Trustee
shall:




     (i) deliver to the Seller a report regarding the Indenture Trustee’s assessment of
compliance with the Servicing Criteria during the immediately preceding calendar year, as
required under paragraph (b) of Rule 13a-18, Rule 15d-18 of the Exchange Act and Item 1122
of Regulation AB. Such report shall be signed by an authorized officer of the Indenture
Trustee, and shall address each of the Servicing Criteria specified in Exhibit F or
such criteria as mutually agreed upon by the Seller and the Indenture Trustee;




     (ii) deliver to the Seller a report of a registered public accounting firm reasonably
acceptable to the Seller that attests to, and reports on, the assessment of compliance made
by the Indenture Trustee and delivered pursuant to the preceding paragraph. Such
attestation shall be in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under
the Securities Act and the Exchange Act;




     (iii) to the extent the Seller is relying on the Indenture Trustee for information
provided by the Indenture Trustee, deliver to the Seller and any other Person that will be
responsible for signing the certification (a “Sarbanes Certification”) required by
Rules 13a-14(d) and 15d-14(d) under the Exchange Act (pursuant to Section 302 of the
Sarbanes-Oxley Act) on behalf of the Issuer or the Seller a certification substantially in
the form attached hereto as Exhibit G or such form as mutually agreed upon by the
Seller and the Indenture Trustee; and




     (iv) Wells Fargo Bank, National Association acknowledges, in its capacity as Indenture
Trustee under this Agreement and in its capacity as Indenture Trustee under the Transaction
Documents, that to the extent it is deemed to be participating in the servicing function
pursuant to Item 1122 of Regulation AB, it will take any action reasonably requested by the
Servicer to ensure compliance with the requirements of Sections 10.22(b)(i) and
10.22(b)(ii) hereof and with Item 1122 of Regulation AB.


The Indenture Trustee acknowledges that the parties identified in clause (b)(iii) above may
rely on the certification provided by the Indenture Trustee pursuant to such clause in signing a
Sarbanes Certification and filing such with the Commission.




     SECTION 10.23 Assignment. Notwithstanding anything to the contrary contained herein,
except as provided in Section 5.3 and Section 6.3 and as provided in the provisions
of this Agreement concerning the resignation of the Servicer, this Agreement may not be assigned by
the Seller or the Servicer without the prior written consent of the Indenture Trustee and the
Insurer (so long as the Insurer is the Controlling Party).



     SECTION 10.24 Further Assurances. The Seller and the Servicer agree 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 Insurer more fully to effect the
purposes of this Agreement and the other Transaction Documents, including, without limitation, the
execution of any financing statements or continuation statements relating to the Contracts for
filing under the provisions of the UCC of any applicable jurisdiction.



[SIGNATURES FOLLOW]




44









 





     IN WITNESS WHEREOF, the parties have caused this Sale and Servicing Agreement to be duly
executed by their respective officers thereunto duly authorized as of the day and year first above
written.



	 	 	 	 	 
	 	Santander Drive Auto Receivables LLC, as Seller

 	 
	 	By:  	
/s/ Jim W. Moore 	 
	 	 	Name: Jim W. Moore	 
	 	 	Title:   Vice President	 

	 




	 	 	 	 	 
	 

	 	S-1
	 	Sale and Servicing Agreement (2007-3)






 









 













	 	 	 	 	 
	 	SANTANDER DRIVE AUTO RECEIVABLES TRUST 2007-3, as Issuer

	 
	 	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	 

	 




	 	 	 	 	 
	 

	 	S-2
	 	Sale and Servicing Agreement (2007-3)





 









 





	 	 	 	 	 
	 	SANTANDER CONSUMER USA INC., as Servicer

 	 
	 	By:  	
/s/ Jim W. Moore 	 
	 	 	Name: Jim W. Moore	 
	 	 	Title:   Vice President	 





	 	 	 	 	 
	 

	 	S-3
	 	Sale and Servicing Agreement (2007-3)















 






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

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




	 	 	 	 	 
	 

	 	S-4
	 	Sale and Servicing Agreement (2007-3)















 








SCHEDULE I




REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE CONTRACTS





     (a) Characteristics of Contracts.




     (i) Each Contract has been originated in the United States by a Dealer for the retail
sale of a Financed Vehicle in the ordinary course of such Dealer’s business, has been fully
and properly executed by the parties thereto, has been validly assigned by such Dealer to
the Originator, and validly assigned to the Seller by Santander Consumer pursuant to the
Contribution Agreement in accordance with its terms;




     (ii) each Contract creates a valid, subsisting, and enforceable first priority security
interest for the benefit of the Originator in the Financed Vehicle, which security interest
has been, in turn, assigned by Santander Consumer to the Seller and assigned by the Seller
to the Issuer;




     (iii) each Contract contains customary and enforceable provisions such that the rights
and remedies of the holder thereof shall be adequate for realization against the collateral
of the benefits of the security;




     (iv) each Contract provides for level monthly payments (provided that the payment in
the first or last month in the life of the Contract may be minimally different from the
level payment) that fully amortize the Amount Financed by maturity and yield interest at the
APR over an original term of no less than 24 months and no greater than 72 months;
provided, however, that no more than 2% of the Contracts (based upon the
Principal Balance of the Contracts) shall have an original term to maturity between 24 and
35 months;




     (v) each Contract provides for, in the event that such Contract is prepaid in full, a
prepayment that fully pays the Principal Balance;




     (vi) each Contract is a Simple Interest Contract; and




     (vii) no Obligor has defaulted and no Obligor will default, in each case, on any
portion of the first Contract Scheduled Payment due on the related Contract.



     (b) Schedule of Contracts. The information with respect to a Contract transferred on
the Closing Date or Funding Date, as applicable, as set forth in the Schedule of Contracts for such
date is true and correct in all material respects as of the close of business on the Initial
Cut-Off Date and on each Subsequent Cut-Off Date, and no selection procedures adverse to the
Noteholders or the Insurer have been utilized in selecting the Contracts.



     (c) Compliance with Law. Each Contract and the sale of the related Financed Vehicle
complied at the time it was originated or made and complies at the execution of this Agreement, in
all material respects with 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 Reporting Act, the Fair Debt Collection
Practices Act, the Federal Trade Commission Act, the Magnuson-Moss Warranty Act, the Federal
Reserve Board’s Regulations B and Z, 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.



     (d) Binding Obligation. Each Contract represents the genuine, legal, valid, and
binding payment obligation in writing of the Obligor, enforceable by the holder thereof in
accordance with its terms subject to the effect of bankruptcy, insolvency, reorganization or other
similar laws affecting the



I-1









 




enforcement of creditors rights generally and to general principles of equity and no Obligor
has any right of action against the Seller, the Servicer or the Issuer or any right to any offset,
counterclaim or rescission.




     (e) No Government or Corporate Obligor. None of the Contracts is due from the United
States or any State or from any agency, department, or instrumentality of the United States or any
State. None of the Contracts is due from any Person that is not a natural person.



     (f) Obligor Bankruptcy. To the knowledge of the Seller, at the applicable Cut-Off
Date, no Obligor was the subject of a bankruptcy proceeding since origination.



     (g) Security Interest in Financed Vehicle. Immediately prior to the sale, assignment
and transfer thereof pursuant to Section 2.1 hereof, each Contract was secured by a validly
perfected first priority security interest in the Financed Vehicle for the benefit of the
Originator as secured party or all necessary and appropriate actions had been commenced (including
the filing of the related applications for Certificates of Title with the related department of
motor vehicles) that would result in the valid perfection of a first priority security interest in
the Financed Vehicle in favor of the Indenture Trustee for the benefit of the Originator as secured
party. Immediately after the sale, assignment and transfer thereof to the Issuer, although the
related Certificates of Title will not indicate the Issuer or Owner Trustee as secured party, each
Contract will be secured by an enforceable and perfected security interest in the Financed Vehicle
in favor of the Indenture Trustee as secured party for the benefit of the Indenture Secured Parties
which security interest is prior to all other Liens in such Financed Vehicle. Either Santander
Consumer USA Inc. or its predecessor is noted as lienholder on each certificate of title



     (h) Contracts in Force. No Contract has been satisfied, subordinated, or rescinded,
nor has any Financed Vehicle been released from the Lien granted by the related Contract in whole
or in part.



     (i) No Waiver. No provision of a Contract has been waived.



     (j) No Liens. To the best of the Seller’s knowledge, no liens or claims have been
filed for work, labor, materials, taxes or liens that arise out of operation of law relating to a
Financed Vehicle that are prior to, or equal or coordinate with, the security interest in the
Financed Vehicle granted by the Contract.



     (k) No Default. Except for delinquencies continuing for a period of not more than 30
days as of the applicable Cut-Off Date, no default, breach, violation or event permitting
acceleration under the terms of any Contract has occurred and there was no material
misrepresentation by any Obligor on such Obligor’s credit application; and no continuing condition
existed that with notice or the lapse of time would constitute a default, breach, violation or
event permitting acceleration under the terms of any Contract has arisen.



     (l) Insurance. The Seller, in accordance with its customary procedures, has
determined that the Obligor has obtained physical damage insurance covering the Financed Vehicle or
has applied for such insurance: (i) in an amount at least equal to the lesser of (A) the actual
cash value of the related Financed Vehicle or (B) the unpaid Principal Balance of such Contract;
(ii) naming the Originator as loss payee; and (iii) insuring against loss and damage due to fire,
theft, transportation, collision and other risks generally covered by comprehensive and collision
damage.



     (m) Title. It is the intention of the Seller that the transfer and assignment herein
contemplated constitute a sale of the Contracts from the Seller to the Issuer and that the interest
in and title to the Contracts not be part of the Seller’s estate in the event of the filing of a
bankruptcy petition by or against



I-2









 




the Seller under any bankruptcy law. No Contract has been sold, transferred, assigned, or
pledged by the Seller to any Person other than the Issuer and the Indenture Trustee. Immediately
prior to the transfer and assignment of each Contract herein contemplated, the Seller had good and
marketable title to such Contract free and clear of all Liens and rights of others and, immediately
upon the transfer thereof, the Issuer shall have good and marketable title to such Contract, free
and clear of all Liens and rights of others other than the pledge to the Indenture Trustee; and
each such transfer and pledge has been perfected under the UCC.




     (n) Lawful Assignment. No Contract has been originated in, or is subject to the laws
of, any jurisdiction under which the sale, transfer and assignment of such Contract under this
Agreement or pursuant to transfers of the Contracts shall be unlawful, void or voidable.



     (o) All Filings Made. All filings (including, without limitation, UCC filings)
necessary in any jurisdiction to give the Issuer and the Indenture Trustee a first priority
perfected ownership interest in the Contracts have been made.



     (p) Chattel Paper. Each Contract (A) constitutes “tangible chattel paper” or a
“payment intangible,” each as defined in the UCC and (B) if such Contract is “tangible chattel
paper,” shall be maintained in its original “tangible” form, unless the Insurer has consented in
writing to such chattel paper being maintained in another form or medium.



     (q) Maturity of Contracts. Each Contract in the Trust Estate has a remaining term to
maturity of not less than 1 month as of the applicable Cut-Off Date.



     (r) One Original. There is only one original executed copy of each Contract and such
original has been delivered to the Indenture Trustee.



     (s) U.S. Resident. Each Contract is payable in U.S. Dollars and to the best of the
Seller’s knowledge, the Obligor thereon is an individual who is a U.S. resident.



     (t) Final Contract Scheduled Payment. Each Contract has a final Scheduled Contract
Payment at least six months prior to the Final Scheduled Payment Date of the Class A-4-A Notes and
the Class A-4-B Notes.



     (u) Payments Due. The weighted average of the number of Contract Scheduled Payments
that have been due under the Contracts since origination is at least 1.



     (v) Original Principal Balance. Each Contract has a Principal Balance of at least
$1,000 and not greater than $75,000 as of the applicable Cut-Off Date.



     (w) No Advances. No advances were made on behalf of the Obligor to satisfy any of the
representations and warranties set forth herein with respect to the related Contract.



     (x) Repossession. No Financed Vehicle was repossessed on or prior to the applicable
Cut-Off Date.



     (y) Credit and Collection Policy. Each Contract satisfies in all material respects
the requirements under the Credit and Collection Policy that was in effect at the time as of the
Closing Date or the Funding Date. Each Contract originated by a Dealer was underwritten by the
Originator pursuant to agreed upon and well-articulated underwriting and documentation standards.
The collection practices used with respect to each Contract have been in all respects legal,
proper, prudent and customary in the



I-3









 




motor vehicle financing and servicing business. The Originator and the Servicer will not
amend or modify the Credit and Collection Policy in any material respect without the prior written
consent of the Controlling Party, such consent not to be unreasonably withheld. The Originator and
the Servicer will notify the Insurer of all amendments of the Credit and Collection Policy and send
copies of such amendments to the Insurer.




     (z) No Proceedings. There are no proceedings pending, or to the best of the Seller’s
knowledge, threatened, wherein the Obligor or any governmental agency has alleged that any Contract
is illegal or unenforceable.



     (aa) Origination. The Seller has duly fulfilled all obligations to be fulfilled on
the lender’s part under or in connection with the origination, acquisition and assignment of the
Contracts and the related Trust Estate, including, without limitation, giving any notices or
consents necessary to effect the acquisition of the Contracts and the related Trust Estate by the
Issuer, and has done nothing to impair the rights of the Issuer, the Insurer or the Noteholders in
payments with respect thereto.



     (bb) Tax Liens. The sale, transfer, assignment and conveyance of the Contracts and
the related Trust Estate by the Seller hereunder is not subject to and will not result in any
Transfer Taxes other than Transfer Taxes which have or will be paid by the Seller as due. In the
event that the Issuer or the Indenture Trustee receives actual notice of any Transfer Taxes arising
out of the transfer, assignment and conveyance of the Contracts and the related Trust Estate, on
written demand by the Issuer or the Indenture Trustee, or upon the Seller’s otherwise being given
notice thereof by the Issuer or the Indenture Trustee, the Seller shall pay, and otherwise
indemnify and hold the Issuer, the Insurer and the Indenture Trustee harmless, on an after-tax
basis, from and against any and all such Transfer Taxes (it being understood that the Noteholders,
the Indenture Trustee, the Insurer and the Issuer shall have no obligation to pay such Transfer
Taxes).



     (cc) Dealers. Each Dealer that originated a Contract for sale to the Originator has
been selected by the Originator based on the Originator’s underwriting criteria, its financial and
operating history and record of compliance with requirements of applicable federal and state law.
Each Dealer from whom the Originator purchases Contracts directly has entered into an agreement
with the Originator providing for the sale of motor vehicle loans from time to time by such Dealer
to the Originator and is authorized to originate Contracts for sale to the Originator under the
Originator’s underwriting guidelines. To the best of the Seller’s knowledge, no Dealer has engaged
in any conduct constituting fraud or misrepresentation with respect to the Contracts or the related
Trust Estate.



     (dd) Adverse Selection. The Seller used no selection procedures that identified the
Contracts as being less desirable or valuable than other comparable motor vehicle loans originated
or acquired by the Seller.



     (ee) Computer Tape. The computer tape made available to the Insurer by the Seller on
the Closing Date or the Funding Date, as applicable, was complete and accurate as of the applicable
Cut-Off Date and includes a description of the same Contracts that are described on the related
Schedule of Contracts.



     (ff) Delinquent Taxes. With respect to each Initial Contract, as of the Closing Date,
there is no lien against any related Financed Vehicle for delinquent taxes. With respect to each
Subsequent Contract, as of the related Funding Date, there is no lien against any related Financed
Vehicle for delinquent taxes.



I-4









 





     (gg) Proceeds. At the time of origination of each Contract, the proceeds of such
Contract were fully disbursed. There is no requirement for future advances thereunder, and all
fees and expenses in connection with the origination of such Contract have been paid.



     (hh) Obligor History. No Contract is due from an Obligor who has defaulted under a
previous contract with the Seller or the Originator.



     (ii) Dealer Agreements. The Dealer that sold each Contract to the Originator has
entered into a Dealer Agreement and such Dealer Agreement constitutes the entire agreement between
the Originator and the related Dealer with respect to the sale of such Contract to the Originator.
Each such Dealer Agreement is in full force and effect and is the legal, valid and binding
obligation of such Dealer, there have been no material defaults by such Dealer or by the Originator
under such Dealer Agreement; the Originator has fully performed all of its obligations under such
Dealer Agreement; the Originator has not made any statements or representations to such Dealer
(whether written or oral) inconsistent with any term of such Dealer Agreement; the purchase price
(as specified in the applicable Dealer Agreement, if any) for such Contract has been paid in full
by the Originator; there is no other payment due to such Dealer from the Originator for the
purchase of such Contract; such Dealer has no right, title or interest in or to any Contract; there
is no prior course of dealing between such Dealer and the Originator which will affect the terms of
such Dealer Agreement; any payment owed to such Dealer by the Originator is a corporate obligation
of the Originator in the nature of a bonus for amounts collected by the Originator in excess of the
purchase price for a Contract.



     (jj) Risk of Loss. Each Contract contains provisions requiring the Obligor to assume
all risk of loss or malfunction of the related Financed Vehicle and to maintain liability insurance
with respect thereto, requiring the Obligor to pay all sales, use, property, excise and other
similar taxes imposed on or with respect to the related Financed Vehicle and making the Obligor
liable for all payments required to be made thereunder, without any setoff, counterclaim or defense
for any reason whatsoever, subject only to the Obligor’s right of quiet enjoyment.



     (kk) No Substitution. No Contract provides for the substitution, exchange or addition
of any Financed Vehicle subject to such Contract.



     (ll) Assignment. The rights with respect to each Contract are assignable by the
Seller without the consent of any Person other than consents which will have been obtained on or
before the transfer to the Issuer.



     (mm) Consumer. To the best of the Seller’s knowledge, no Obligor is a Person involved
in the business of leasing or selling equipment of a type similar to the Financed Vehicles.



     (nn) No Defects. Each Financed Vehicle was properly delivered to the Obligor in good
repair, without defects and in satisfactory order. Each Financed Vehicle was accepted by the
Obligor after reasonable opportunity to inspect and test such Financed Vehicle and no Obligor has
informed the Seller of any defect therein.



     (oo) Certificate of Title. The Servicer, in its capacity as agent of the Issuer and
the Indenture Trustee, holds the Certificate of Title or the application for a Certificate of Title
for each of the Financed Vehicles as of the date on which the related Contract is transferred to
the Issuer and will obtain within 180 days of such date Certificates of Title with respect to each
Financed Vehicle as to which the Servicer holds only such application.



I-5









 





     (pp) No Extensions; Modifications. No Contract has been extended, rewritten or is
subject to any forbearance, or any other such modified payment plan other than in accordance with
the Originator’s Credit and Collection Policy (of which Indenture Trustee retains a copy and which
is available from such Indenture Trustee upon request) as in effect on the Closing Date or the
Funding Date, as applicable.


Notwithstanding anything in this Section to the contrary, the Seller makes no representation or
warranty whether any Contract is or could become subject to the Servicemembers Civil Relief Act.





I-6









 








SCHEDULE II




NOTICE ADDRESSES




If to the Issuer:

Santander Drive Auto Receivables Trust 2007-3

c/o U.S. Bank Trust National Association

300 Delaware Avenue, 9th Floor

Wilmington, DE 19801

Facsimile: (302) 576-3717




If to Santander Consumer, the Servicer and the Administrator:

Attention: Santander Consumer USA Inc.

8585 North Stemmons Freeway

Suite 1100-N

Dallas, Texas 75247

Facsimile: (214) 237-3570




If to the Seller:

Attention: Santander Drive Auto Receivables LLC

8585 North Stemmons Freeway

Suite 1100-N

Dallas, Texas 75247

Facsimile: (214) 237-3570




If to the Indenture Trustee:

Wells Fargo Bank, National Association

MAC #9311-161

Sixth and Marquette Avenue

Minneapolis, Minnesota 55479

Facsimile: (612) 667-3464




If to the Owner Trustee:

U.S. Bank Trust National Association

300 Delaware Avenue, 9th Floor

Wilmington, DE 19801

Facsimile: (302) 576-3717




If to Moody’s:

Moody’s Investors Service, Inc.

Asset Finance Group, 25h Floor

7 World Trade Center

250 Greenwich Street

New York, New York 10007

Facsimile: (212) 298-7139




If to S&P:

Standard & Poor’s Ratings Services

55 Water Street, 40th Floor

New York, New York 10014

Facsimile: (212) 438-2664




II-1









 





If to the Insurer:

Financial Guaranty Insurance Company

125 Park Avenue

New York, NY 10017

Attention: Structured Finance Surveillance

Santander Drive Auto Receivables Trust 2007-3

Facsimile: (212) 312-3220

Confirmation: (800) 352-0001

Email: SFSurveillance@fgic.com




If to the Initial Swap Counterparty:

Banco Santander, S.A., Madrid

Ciudad Grupo Santander Edificio Marisma, Planta Baja

28660 Boadilla del Monte, Madrid, Spain

Attention: Swaps Administration

Facsimile: 011 (3491) 2571228

Telex: 42362 / 45928 BADER E

Swift: BSCHESMM

Tel.: 011 (3491) 2893116





II-2









 








SCHEDULE III




CUSTODIAL FEES





III-1









 








EXHIBIT A




NOTICE OF FUNDING DATE




     In accordance with the Indenture dated as of October 18, 2007 (as amended or supplemented from
time to time, the “Indenture”) by and between Santander Drive Auto Receivables Trust 2007-3
(the “Issuer”), and Wells Fargo Bank, National Association, as indenture trustee (the
“Indenture Trustee”), the undersigned hereby gives notice of the Funding Date to occur on
or before [                 ], 2007 for each of the Contracts listed on the Schedule of Contracts
to be delivered to you on or prior to such Funding Date. Unless otherwise defined herein,
capitalized terms have the meanings set forth in Appendix A to the Sale and Servicing
Agreement dated as of October 18, 2007 by and among the Issuer, the Indenture Trustee, Santander
Consumer USA Inc. and Santander Drive Auto Receivables LLC, as Seller (the “Seller”).



     Such Subsequent Contracts represent the following amounts:



	 	 	 	 	 
	Aggregate Principal Balance of Subsequent Contracts as of the Subsequent Cut-Off Date:
	 	$	                    	 
	Amount to be wired to or at the direction of the Seller in payment for such Subsequent Contracts:
	 	$	                    	 






Subsequent Cut-Off Date:                     , 2007




     The undersigned hereby certifies that, in connection with the Funding Date specified above,
the undersigned has complied with all terms and provisions specified in Section 2.1 and
Section 2.5 of the Sale and Servicing Agreement, including, but not limited to, delivery of
the Officer’s Certificate, as specified therein.





	 	 	 	 	 
	 	Date:                     , 2007

	 
	 	SANTANDER DRIVE AUTO RECEIVABLES TRUST 2007-3

	 
	 	By:  	SANTANDER CONSUMER USA INC., as Administrator
 	 
	 	By:  	 	 




A-1









 








EXHIBIT B




JOINT OFFICER’S CERTIFICATE




re: Funding Date




SANTANDER CONSUMER USA INC.

SANTANDER DRIVE AUTO RECEIVABLES LLC

SANTANDER DRIVE AUTO RECEIVABLES TRUST 2007-3





     This Officer’s Certificate is being delivered in accordance with Section 2.5 of that
certain Sale and Servicing Agreement dated as of October 18, 2007 (as amended, modified or
supplemented from time to time, the “Sale and Servicing Agreement”) by and among Santander
Drive Auto Receivables Trust 2007-3 (the “Issuer”), Santander Drive Auto Receivables LLC
(the “Seller”), Santander Consumer USA Inc. (the “Servicer”) and Wells Fargo Bank,
National Association, as indenture trustee (the “Indenture Trustee”). Terms not otherwise
defined herein shall have the meanings ascribed thereto in the Appendix A to the Sale and
Servicing Agreement. Reference is hereby made to the Funding Date to occur on _________, 2007
(the “Subject Funding Date”).



     By his or her signature below, each of the undersigned officers on behalf of the Servicer, the
Seller, and the Issuer, as the case may be, certify to the Indenture Trustee and the Insurer that:



     (a) the representations and warranties of the Seller contained in Section 2.2 of the
Sale and Servicing Agreement and of the Originator contained in Section 3.2 of the
Contribution Agreement with respect to the Subsequent Contracts to be acquired on the Subject
Funding Date (which are listed on the attached Schedule of Contracts) are true and correct as of
the applicable date set forth on Schedule I to the Sale and Servicing Agreement and the
Contribution Agreement, as applicable;



     (b) the representations of the Seller contained in Section 5.1 of the Sale and
Servicing Agreement are true and correct as of the date hereof;



     (c) the representations of the Servicer set forth in Section 6.1 of the Sale and
Servicing Agreement are true and correct as of the date hereof;



     (d) the representations of the Originator set forth in Section 3.1 of the Contribution
Agreement are true and correct of the date hereof;



     (e) the requirements stated in Section 2.1 and Section 2.5 of the Sale and
Servicing Agreement and Section 2.5 of the Contribution Agreement regarding the Subsequent
Contracts to be acquired on the Subject Funding Date have been met.




	 	 	 	 	 
	 	Date:                     , 2007

	 
	 	SANTANDER DRIVE AUTO RECEIVABLES TRUST 2007-3

	 
	 	By:  	SANTANDER CONSUMER USA INC., as Administrator
 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




B-1









 





	 	 	 	 	 
	 	SANTANDER CONSUMER USA INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	SANTANDER DRIVE AUTO RECEIVABLES LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



B-2









 






SCHEDULE OF CONTRACTS





B-3









 








EXHIBIT C




ASSIGNMENT PURSUANT TO SALE AND SERVICING AGREEMENT




[Date]





     For value received, in accordance with the Sale and Servicing Agreement (the “Agreement”),
dated as of October 18, 2007, by and among Santander Drive Auto Receivables Trust 2007-3, a
Delaware statutory trust (the “Issuer”), Santander Drive Auto Receivables LLC, a Delaware limited
liability company (the “Seller”), Santander Consumer USA Inc., an Illinois corporation
(“Santander Consumer”) and Wells Fargo Bank, National Association, as indenture trustee
(the “Indenture Trustee”), on the terms and subject to the conditions set forth in the
Agreement, the Seller does hereby irrevocably sell, transfer, assign and otherwise convey to the
Issuer without recourse (subject to the obligations in the Agreement) on the date hereof, all
right, title and interest of the Seller, whether now owned or hereafter acquired, in, to and under
the Contracts set forth on the schedule of Contracts delivered by the Seller to the Issuer on the
date hereof (such schedule, together with any other schedule of Contracts delivered by Seller to
the Issuer pursuant to the Agreement, the “Schedule of Contracts”), and the collections
after the related Cut-Off Date and (i) all right, title, and interest of the Seller in and to the
Contracts and all monies due thereunder after the applicable Cut-Off Date; (ii) the interest of the
Seller in the security interests in the Financed Vehicles granted by Obligors pursuant to the
Contracts and any accessions thereto; (iii) the interest of the Seller in any proceeds from claims
on any physical damage, credit life or disability, or other insurance policies maintained by the
Obligors thereon covering the Financed Vehicles or the Obligors relating to the Contracts and any
proceeds from the liquidation of Contracts or the related Financed Vehicles; (iv) the interest of
the Seller in any Dealer Recourse relating to the Contracts; (v) the interest of the Seller in
certain rebates of premiums and other amounts relating to insurance policies and other items
financed under the Contracts in effect after the applicable Cut-Off Date; (vi) all rights of the
Seller, if any, in the Trust Accounts and all funds on deposit from time to time therein; (vii) the
related Contract Files; and (viii) the proceeds of any and all of the foregoing relating thereto,
together with all of Seller’s rights, title and interest (but not the obligations) under the
Contribution Agreement, the Agreement and the Limited Guaranty and all proceeds of the foregoing,
which sale shall be effective as of such Cut-Off Date.



     The foregoing sale does not constitute and is not intended to result in an assumption by the
Issuer of any obligation of the Seller or the Originator to the Obligors, the Dealers, insurers or
any other Person in connection with the Contracts or the other assets and properties conveyed
hereunder or any agreement, document or instrument related thereto.



     This assignment is made pursuant to and upon the representations, warranties and agreements on
the part of the undersigned contained in the Agreement and is governed by the Agreement.



     Capitalized terms used herein and not otherwise defined shall have the meaning assigned to
them in the Agreement.



     IN WITNESS HEREOF, the undersigned has caused this assignment to be duly executed as of the
date first above written.



	 	 	 	 	 
	 	SANTANDER DRIVE AUTO RECEIVABLES LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




C-1









 








EXHIBIT D




FORM OF SERVICER’S CERTIFICATE





D-1









 








EXHIBIT E




FORM OF INDENTURE TRUSTEE’S ACKNOWLEDGEMENT





     Wells Fargo Bank, National Association, in its capacity as Indenture Trustee (the “Indenture
Trustee”), under the Sale and Servicing Agreement, dated as of October 18, 2007, by and among
Santander Drive Auto Receivables Trust 2007-3, a Delaware statutory trust (the “Issuer”), Santander
Drive Auto Receivables LLC, a Delaware limited liability company (the “Seller”), Santander
Consumer USA Inc., an Illinois corporation (“Santander Consumer”) and the Indenture
Trustee, pursuant to which the Indenture Trustee, in its capacity as custodian, holds on behalf of
the Noteholders and the Insurer certain “Contract Files,” as described in the Sale and Servicing
Agreement, hereby acknowledges receipt of the Contract File for each Contract listed on the
Schedule of Contracts delivered by the Seller [on the Closing Date] [on the [___] Funding Date]
except as noted in the Exception list attached as Schedule I hereto.



     Capitalized terms used herein that are not otherwise defined shall have the meanings ascribed
thereto in the Sale and Servicing Agreement.



     IN WITNESS WHEREOF, Wells Fargo Bank, National Association has caused this acknowledgment to
be executed by its duly authorized officer as of this
____________day of _________, 20__.



	 	 	 	 	 
	 	WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Indenture
Trustee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




E-1









 





EXHIBIT F




SERVICING CRITERIA TO BE ADDRESSED IN




INDENTURE TRUSTEE’S ASSESSMENT OF COMPLIANCE




     The assessment of compliance to be delivered by the Indenture Trustee shall address, at a
minimum, the criteria identified below as “Applicable Servicing Criteria”:



	 	 	 	 	 
	 	 	 	 	Applicable
	Servicing Criteria	 	Servicing Criteria
	Reference	 	Criteria	 	 
	 	 	 
	 	 
	 	 	General Servicing Considerations
	 	 
	 	 	 
	 	 
	1122(d)(1)(i)
	 	Policies and procedures are instituted to monitor any performance or
other triggers and events of default in accordance with the
transaction agreements.
	 	 
	 	 	 
	 	 
	1122(d)(1)(ii)
	 	If any material servicing activities are outsourced to third
parties, policies and procedures are instituted to monitor the third
party’s performance and compliance with such servicing activities.
	 	 
	 	 	 
	 	 
	1122(d)(1)(iii)
	 	Any requirements in the transaction agreements to maintain a back-up
servicer for the pool assets are maintained.
	 	 
	 	 	 
	 	 
	1122(d)(1)(iv)
	 	A fidelity bond and errors and omissions policy is in effect on the
party participating in the servicing function throughout the
reporting period in the amount of coverage required by and otherwise
in accordance with the terms of the transaction agreements.
	 	 
	 	 	 
	 	 
	 	 	Cash Collection and Administration
	 	 
	 	 	 
	 	 
	1122(d)(2)(i)
	 	Payments on pool assets are deposited into the appropriate custodial
bank accounts and related bank clearing accounts no more than two
business days of receipt, or such other number of days specified in
the transaction agreements.

	 	ü1
	 	 	 
	 	 
	1122(d)(2)(ii)
	 	Disbursements made via wire transfer on behalf of an obligor or to
an investor are made only by authorized personnel.

	 	ü
	 	 	 
	 	 
	1122(d)(2)(iii)
	 	Advances of funds or guarantees regarding collections, cash flows or
distributions, and any interest or other fees charged for such
advances, are made, reviewed and approved as specified in the
transaction agreements.
	 	 
	 	 	 
	 	 
	1122(d)(2)(iv)
	 	The related accounts for the transaction, such as cash reserve
accounts or accounts established as a form of overcollateralization,
are separately maintained (e.g., with respect to commingling of
cash) as set forth in the transaction agreements.
	 	 
	 	 	 
	 	 
	1122(d)(2)(v)
	 	Each custodial account is maintained at a federally insured
depository institution as set forth in the transaction agreements.
For purposes of this criterion, “federally insured depository
institution” with respect to a foreign financial institution means a
foreign financial institution that meets the requirements of §
240.13k-1(b)(1) of the Securities Exchange Act.
	 	 








 




			
	1	 	Solely with regard to deposits made by the Indenture
Trustee.






F-1









 





	 	 	 	 	 
	 	 	 	 	Applicable
	Servicing Criteria	 	Servicing Criteria
	Reference	 	Criteria	 	 
	1122(d)(2)(vi)
	 	Unissued checks are safeguarded so as to prevent unauthorized access.
	 	 
	 	 	 
	 	 
	1122(d)(2)(vii)
	 	Reconciliations are prepared on a monthly basis for all asset-backed
securities related bank accounts, including custodial accounts and
related bank clearing accounts. These reconciliations are (A)
mathematically accurate; (B) prepared within 30 calendar days after
the bank statement cutoff date, or such other number of days
specified in the transaction agreements; (C) reviewed and approved
by someone other than the person who prepared the reconciliation;
and (D) contain explanations for reconciling items. These
reconciling items are resolved within 90 calendar days of their
original identification, or such other number of days specified in
the transaction agreements.
	 	 
	 	 	 
	 	 
	 	 	Investor Remittances and Reporting
	 	 
	 	 	 
	 	 
	1122(d)(3)(i)
	 	Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements. Specifically,
such reports (A) are prepared in accordance with timeframes and
other terms set forth in the transaction agreements; (B) provide
information calculated in accordance with the terms specified in the
transaction agreements; (C) are filed with the Commission as
required by its rules and regulations; and (D) agree with investors’
or the trustee’s records as to the total unpaid principal balance
and number of pool assets serviced by the Servicer.
	 	 
	 	 	 
	 	 
	1122(d)(3)(ii)
	 	Amounts due to investors are allocated and remitted in accordance
with timeframes, distribution priority and other terms set forth in
the transaction agreements.

	 	ü2
	 	 	 
	 	 
	1122(d)(3)(iii)
	 	Disbursements made to an investor are posted within two business
days to the Servicer’s investor records, or such other number of
days specified in the transaction agreements.

	 	ü
	 	 	 
	 	 
	1122(d)(3)(iv)
	 	Amounts remitted to investors per the investor reports agree with
cancelled checks, or other form of payment, or custodial bank
statements.

	 	ü
	 	 	 
	 	 
	 	 	Pool Asset Administration
	 	 
	 	 	 
	 	 
	1122(d)(4)(i)
	 	Collateral or security on pool assets is maintained as required by
the transaction agreements or related asset pool documents.
	 	 
	 	 	 
	 	 
	1122(d)(4)(ii)
	 	Pool assets and related documents are safeguarded as required by the
transaction agreements
	 	 
	 	 	 
	 	 
	1122(d)(4)(iii)
	 	Any additions, removals or substitutions to the asset pool are made,
reviewed and approved in accordance with any conditions or
requirements in the transaction agreements.
	 	 
	 	 	 
	 	 
	1122(d)(4)(iv)
	 	Payments on pool assets, including any payoffs, made in accordance
with the related pool asset documents are posted to the Servicer’s
obligor records maintained no more than two business days after
receipt, or such other number of











 




			
	2	 	Solely with regard to timeframes and that distributions
were made in accordance with the instructions of the Servicer.





	 	 	 	 	 
	 

	 	F-2
	 	Exhibit F to the

		Sale and Servicing Agreement






 









 





	 	 	 	 	 
	 	 	 	 	Applicable
	Servicing Criteria	 	Servicing Criteria
	Reference	 	Criteria	 	 
	 	 	days specified in the transaction
agreements, and allocated to principal, interest or other items
(e.g., escrow) in accordance with the related asset pool documents.
	 	 
	 	 	 
	 	 
	1122(d)(4)(v)
	 	The Servicer’s records regarding the pool assets agree with the
Servicer’s records with respect to an obligor’s unpaid principal
balance.
	 	 
	 	 	 
	 	 
	1122(d)(4)(vi)
	 	Changes with respect to the terms or status of an obligor’s pool
asset (e.g., loan modifications or re-agings) are made, reviewed and
approved by authorized personnel in accordance with the transaction
agreements and related pool asset documents.
	 	 
	 	 	 
	 	 
	1122(d)(4)(vii)
	 	Loss mitigation or recovery actions (e.g., forbearance plans,
modifications and deeds in lieu of foreclosure, foreclosures and
repossessions, as applicable) are initiated, conducted and concluded
in accordance with the timeframes or other requirements established
by the transaction agreements.
	 	 
	 	 	 
	 	 
	1122(d)(4)(viii)
	 	Records documenting collection efforts are maintained during the
period a pool asset is delinquent in accordance with the transaction
agreements. Such records are maintained on at least a monthly basis,
or such other period specified in the transaction agreements, and
describe the entity’s activities in monitoring delinquent pool
assets including, for example, phone calls, letters and payment
rescheduling plans in cases where delinquency is deemed temporary
(e.g., illness or unemployment).
	 	 
	 	 	 
	 	 
	1122(d)(4)(ix)
	 	Adjustments to interest rates or rates of return for pool assets
with variable rates are computed based on the related pool asset
documents.
	 	 
	 	 	 
	 	 
	1122(d)(4)(x)
	 	Regarding any funds held in trust for an obligor (such as escrow
accounts): (A) such funds are analyzed, in accordance with the
obligor’s pool asset documents, on at least an annual basis, or such
other period specified in the transaction agreements; (B) interest
on such funds is paid, or credited, to obligors in accordance with
applicable pool asset documents and state laws; and (C) such funds
are returned to the obligor within 30 calendar days of full
repayment of the related pool asset, or such other number of days
specified in the transaction agreements.
	 	 
	 	 	 
	 	 
	1122(d)(4)(xi)
	 	Payments made on behalf of an obligor (such as tax or insurance
payments) are made on or before the related penalty or expiration
dates, as indicated on the appropriate bills or notices for such
payments, provided that such support has been received by the
servicer at least 30 calendar days prior to these dates, or such
other number of days specified in the transaction agreements.
	 	 
	 	 	 
	 	 
	1122(d)(4)(xii)
	 	Any late payment penalties in connection with any payment to be made
on behalf of an obligor are paid from the servicer’s funds and not
charged to the obligor, unless the late payment was due to the
obligor’s error or omission.
	 	 
	 	 	 
	 	 
	1122(d)(4)(xiii)
	 	Disbursements made on behalf of an obligor are posted within two
business days to the obligor’s records maintained by the servicer,
or such other number of days specified in the transaction
agreements.
	 	 
	 	 	 
	 	 
	1122(d)(4)(xiv)
	 	Delinquencies, charge-offs and uncollectible accounts are recognized
and recorded in accordance with the transaction agreements.
	 	 
	 	 	 
	 	 
	1122(d)(4)(xv)
	 	Any external enhancement or other support, identified in Item
1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained
as set forth in the transaction agreements.
	 	 






	 	 	 	 	 
	 

	 	F-3
	 	Exhibit F to the

		Sale and Servicing Agreement







 









 








EXHIBIT G




SARBANES CERTIFICATION




Re: SANTANDER DRIVE AUTO RECEIVABLES TRUST 2007-3




          Wells Fargo Bank, National Association, not in its individual capacity but solely as indenture
trustee (the “Indenture Trustee”), certifies to Santander Drive Auto Receivables LLC (the
“Seller”), and its officers, with the knowledge and intent that they will rely upon this
certification, that:




          (1) It has reviewed the report on assessment of the Indenture Trustee’s compliance provided in
accordance with Rules 13a-18 and 15d-18 under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”) and Item 1122 of Regulation AB (the “Servicing Assessment”), and the registered
public accounting firm’s attestation report provided in accordance with Rules 13a-18 and 15d-18
under the Exchange Act and Section 1122(b) of Regulation AB (the “Attestation Report”) that were
delivered by the Indenture Trustee to the Seller pursuant to the Sale and Servicing Agreement (the
“Agreement”), dated as of October 18, 2007, by and between Santander Consumer USA Inc., the Seller,
the Indenture Trustee and Santander Drive Auto Receivables Trust 2007-3 (collectively, the
“Indenture Trustee Information”);




          (2) To the best of its knowledge, the Indenture Trustee Information, taken as a whole, does
not contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements made, in the light of the circumstances under which such statements were made,
not misleading with respect to the period of time covered by the Indenture Trustee Information; and




          (3) To the best of its knowledge, all of the Indenture Trustee Information required to be
provided by the Indenture Trustee under the Agreement has been provided to the Seller.




	 	 	 	 	 
	 	Wells Fargo Bank, National Association, not in its

individual capacity but solely As Indenture Trustee
 	 
	 	Date: 	
 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




G-1









 








EXHIBIT H




FORM OF CHARGE-OFF POLICY





H-1









 








APPENDIX A




DEFINITIONS





     The following terms have the meanings set forth, or referred to, below:



     “Accrued Note Interest” shall mean, with respect to any Payment Date, the sum of the
Noteholders’ Monthly Accrued Interest for such Payment Date and the Interest Carryover Shortfall
for such Payment Date.



     “Act” has the meaning set forth in Section 11.3(a) of the Indenture.



     “Administration Agreement” means the Administration Agreement, dated as of the Closing
Date, among the Administrator, the Issuer, the Indenture Trustee and the Owner Trustee, as the same
may be amended and supplemented from time to time.



     “Administrator” means Santander Consumer, or any successor Administrator under the
Administration Agreement.



     “Administrator Termination Event” has the meaning set forth in Section 8(c) of
the Administration Agreement.



     “Affiliate” means, for any specified Person, any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such specified Person and
“affiliated” has a meaning correlative to the foregoing. For purposes of this definition,
“control” means the power, directly or indirectly, to cause the direction of the management and
policies of a Person whether through the ownership of voting securities by contract or otherwise.



     “Amount Financed” means, with respect to a Contract, the amount advanced under the
Contract toward the purchase price of the related Financed Vehicle and any related costs, including
the cost of any insurance and warranties.



     “Applicable Tax State” shall mean, as of any date, each State as to which any of the
following is then applicable: (a) a State in which the Owner Trustee maintains its Corporate Trust
Office, (b) a State in which the Owner Trustee maintains its principal executive offices, and (c)
the States of Virginia and Texas.



     “APR” of a Contract means the annual rate of finance charges stated in the Contract.



     “Assignment” means an assignment from the Seller to the Issuer in the form of
Exhibit C to this Agreement of the Contracts and all Related Security to be transferred on
the Closing Date or a Funding Date, as applicable.



     “Authenticating Agent” means any Person authorized by the Indenture Trustee to act on
behalf of the Indenture Trustee to authenticate and deliver the Notes.



     “Authorized Newspaper” means a newspaper of general circulation in the City of New
York, printed in the English language and customarily published on each Business Day, whether or
not published on Saturdays, Sundays and holidays.



A-1









 





     “Authorized Officer” means (a) with respect to the Issuer, (i) any officer of the
Owner Trustee who is authorized to act for the Owner Trustee in matters relating to the Issuer and
who is identified on the list of Authorized Officers delivered by the Owner Trustee to the
Indenture Trustee and the Insurer on the Closing Date or (ii) so long as the Administration
Agreement is in effect, any officer of the Administrator who is authorized to act for the
Administrator in matters relating to the Issuer pursuant to the Administration Agreement and who is
identified on the list of Authorized Officers delivered by the Administrator to the Owner Trustee,
the Insurer and the Indenture Trustee on the Closing Date (as such list may be modified or
supplemented from time to time thereafter) and (b) with respect to the Owner Trustee, the Indenture
Trustee and the Servicer, any officer of the Owner Trustee, the Indenture Trustee or the Servicer,
as applicable, who is authorized to act for the Owner Trustee, the Indenture Trustee or the
Servicer, as applicable, in matters relating to the Owner Trustee, the Indenture Trustee or the
Servicer and who is identified on the list of Authorized Officers delivered by each of the Owner
Trustee, the Indenture Trustee and the Servicer to the Indenture Trustee and the Insurer on the
Closing Date (as such list may be modified or supplemented from time to time thereafter).



     “Available Funds” means, for any Payment Date and the related Collection Period, an
amount equal to the sum of the following amounts: (i) Contract Scheduled Payments (including
Modified Contract Scheduled Payments) received by the Servicer; partial and full prepayments
received by the Servicer; and Recoveries (including Liquidation Proceeds); (ii) the Reserve Amount;
(iii) amounts on deposit in the Collection Account (including amounts released from the Capitalized
Interest Account in accordance with the Sale and Servicing Agreement and amounts deposited by or on
behalf of the Seller or the Servicer in connection with an Optional Purchase); (iv) investment
earnings on funds held in the Reserve Account, Pre-Funding Account, Capitalized Interest Account
and the Collection Account, (v) Repurchase Amounts paid by or on behalf of the Servicer or the
Seller; (vi) the Net Swap Receipts (excluding Swap Termination Payments received from the Swap
Counterparty and deposited into the Swap Termination Payment Account); (vii) amounts on deposit in
the Swap Termination Payment Account that exceed the cost of entering into a Replacement Interest
Rate Swap Agreement or any amounts on deposit in the Swap Termination Payment Account if the Issuer
determines with the consent of the Insurer (so long as the Insurer is the Controlling Party) not to
replace the Initial Interest Rate Swap Agreement; (viii) the amount by which any amounts received
from a Replacement Swap Counterparty in consideration for entering into a Replacement Swap
Agreement exceeds the payments due to the Swap Counterparty due to the termination of the Interest
Rate Swap Agreement following an event of default or termination event under the interest rate swap
agreement; and (ix) proceeds from any insurance policies related to the Contracts or Financed
Vehicles.



     “Backup Servicer” means any backup servicer appointed pursuant to Section 6.7(a) of
this Agreement.



     “Backup Servicing Agreement” means any backup servicing agreement entered into with a
backup servicer appointed pursuant to Section 6.7(a) of this Agreement.



     “Backup Servicing Fee” means any backup servicing fees payable pursuant to any backup
servicing agreement entered into with a backup servicer appointed pursuant to Section 6.7(a) of
this Agreement; provided, however, that if the Backup Servicer becomes the Successor Servicer, such
fee shall no longer be paid.



     “Bankruptcy Code” means the United States Bankruptcy Code, 11 U.S.C. 101 et seq., as
amended.



     “Bankruptcy Event” means, with respect to any Person, (i) the filing of a decree or
order for relief by a court having jurisdiction in the premises in respect of such Person in an
involuntary case under any



A-2









 




applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of such Person, or ordering the winding-up or liquidation of such Person’s affairs, and
such decree or order shall remain unstayed and in effect for a period of 60 consecutive days or
(ii) the commencement by such Person of a voluntary case under any applicable federal or state
bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by such
Person to the entry of an order for relief in an involuntary case under any such law, or the
consent by such Person to the appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of such Person, or the making by such Person
of any general assignment for the benefit of creditors, or the failure by such Person generally to
pay its debts as such debts become due, or the taking of action by such Person in furtherance of
any of the foregoing.




     “Bankruptcy Remote Party” means each of the Seller and the Issuer.



     “Benefit Plan” means (i) any “employee benefit plan” as defined in Section 3(3) of
ERISA that is subject to ERISA, (ii) a “plan” described by Section 4975(e)(1) of the Code or (iii)
any entity deemed to hold the assets of any of the foregoing by reason of an employee benefit
plan’s or other plan’s investment in such entity.



     “Book-Entry Notes” means a beneficial interest in the Notes, ownership and transfers
of which shall be made through book entries by a Clearing Agency as described in Section
2.10 of the Indenture.



     “Business Day” means any day other than (i) a Saturday or a Sunday or (ii) a day on
which banking institutions or trust companies located in the States of California, Delaware,
Minnesota, Texas or New York are authorized or obligated by law, executive order, or governmental
decree to be closed.



     “Capitalized Interest Account” means the account designated as such, established and
maintained pursuant to Section 4.1 of the Sale and Servicing Agreement.



     “Capitalized Interest Account Deposit” means $0.



     “Certificate” means a certificate substantially in the form of Exhibit A to
the Trust Agreement evidencing the Residual Interest, as such Certificate may be issued pursuant to
the Trust Agreement at the request of the Residual Interestholder.



     “Certificate of Title” means, with respect to any Financed Vehicle, the certificate of
title or other documentary evidence of ownership of such Financed Vehicle as issued by the
department, agency or official of the jurisdiction (whether in paper or electronic form) in which
such Financed Vehicle is titled responsible for accepting applications for, and maintaining records
regarding, certificates of title and liens thereon.



     “Certificate of Trust” has the meaning set forth in the Trust Agreement.



     “Certificateholder” means any Holder of a Certificate.



     “Certificate Register” has the meaning set forth in Section 3.4 of the Trust
Agreement.



     “Certificate Registrar” has the meaning set forth in Section 3.4 of the Trust
Agreement.



     “Charge-Off Policy” means the Servicer’s Charge-Off Policy, as set forth in
Exhibit H hereto.



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     “Charged-Off Contract” means a Contract which has been charged off by the Servicer in
accordance with the Charge-Off Policy.



     “Class” means a group of Notes whose form is identical except for variation in
denomination, principal amount or owner, and references to “each Class” thus mean each of the Class
A-1 Notes, the Class A-2-A Notes, the Class A-2-B Notes, the Class A-3 Notes, the Class A-4-A Notes
and the Class A-4-B Notes.



     “Class A Notes” means the Class A-1 Notes, the Class A-2-A Notes, the Class A-2-B
Notes, the Class A-3 Notes, the Class A-4-A Notes and the Class A-4-B Notes, collectively.



     “Class A-1 Final Scheduled Payment Date” shall mean the Payment Date occurring on
October 15, 2008.



     “Class A-1 Interest Rate” means 5.33665% per annum (computed on the basis of the
actual number of days elapsed, but assuming a 360-day year).



     “Class A-1 Note Balance” means, at any time, the Initial Class A-1 Note Balance
reduced by all payments of principal made prior to such time on the Class A-1 Notes.



     “Class A-1 Noteholder” means the Person in whose name a Class A-1 Note is registered
on the Note Register.



     “Class A-1 Notes” means the Class of Auto Loan Asset Backed Notes designated as Class
A-1 Notes, issued in accordance with the Indenture.



     “Class A-2-A Final Scheduled Payment Date” shall mean the Payment Date occurring on
June 15, 2011.



     “Class A-2-A Interest Rate” means 5.42% per annum (computed on the basis of a 360-day
year of twelve 30-day months).



     “Class A-2-A Note Balance” means, at any time, the Initial Class A-2-A Note Balance
reduced by all payments of principal made prior to such time on the Class A-2-A Notes.



     “Class A-2-A Noteholder” means the Person in whose name a Class A-2-A Note is
registered on the Note Register.



     “Class A-2-A Notes” means the Class of Auto Loan Asset Backed Notes designated as
Class A-2—A Notes, issued in accordance with the Indenture.



     “Class A-2-B Final Scheduled Payment Date” shall mean the Payment Date occurring on
June 15, 2011.



     “Class A-2-B Interest Rate” means LIBOR + 0.55% per annum (computed on the basis of
the actual number of days elapsed, but assuming a 360-day year).



     “Class A-2-B Note Balance” means, at any time, the Initial Class A-2-B Note Balance
reduced by all payments of principal made prior to such time on the Class A-2-B Notes.



     “Class A-2-B Noteholder” means the Person in whose name a Class A-2-B Note is
registered on the Note Register.



A-4









 





     “Class A-2-B Notes” means the Class of Auto Loan Asset Backed Notes designated as
Class A-2-B Notes, issued in accordance with the Indenture.



     “Class A-3 Final Scheduled Payment Date” shall mean the Payment Date occurring on
August 15, 2012.



     “Class A-3 Interest Rate” means 5.42% per annum (computed on the basis of a 360-day
year of twelve 30-day months).



     “Class A-3 Note Balance” means, at any time, the Initial Class A-3 Note Balance
reduced by all payments of principal made prior to such time on the Class A-3 Notes.



     “Class A-3 Noteholder” shall mean the Person in whose name a Class A-3 Note is
registered on the Note Register.



     “Class A-3 Notes” means the Class of Auto Loan Asset Backed Notes designated as Class
A-3 Notes, issued in accordance with the Indenture.



     “Class A-4-A Final Scheduled Payment Date” shall mean the Payment Date occurring on
October 15, 2014.



     “Class A-4-A Interest Rate” means 5.52% per annum (computed on the basis of a 360-day
year of twelve 30-day months).



     “Class A-4-A Note Balance” means, at any time, the Initial Class A-4-A Note Balance
reduced by all payments of principal made prior to such time on the Class A-4-A Notes.



     “Class A-4-A Noteholder” shall mean the Person in whose name a Class A-4-A Note is
registered on the Note Register.



     “Class A-4-A Notes” means the Class of Auto Loan Asset Backed Notes designated as
Class A-4-A Notes, issued in accordance with the Indenture.



     “Class A-4-B Final Scheduled Payment Date” shall mean the Payment Date occurring on
October 15, 2014.



     “Class A-4-B Interest Rate” means LIBOR + 0.65% per annum (computed on the basis of
the actual number of days elapsed, but assuming a 360 day year).



     “Class A-4-B Note Balance” means, at any time, the Initial Class A-4-B Note Balance
reduced by all payments of principal made prior to such time on the Class A-4-B Notes.



     “Class A-4-B Noteholder” shall mean the Person in whose name a Class A-4-B Note is
registered on the Note Register.



     “Class A-4-B Notes” means the Class of Auto Loan Asset Backed Notes designated as
Class A-4-B Notes, issued in accordance with the Indenture.



     “Clearing Agency” means an organization registered as a “clearing agency” pursuant to
Section 17A of the Exchange Act and shall initially be DTC.



A-5









 





     “Clearing Agency Participant” means a broker, dealer, bank or other financial
institution or other Person for which from time to time a Clearing Agency effects book-entry
transfers and pledges of securities deposited with the Clearing Agency.



     “Closing Date” means October 18, 2007.



     “Code” means the Internal Revenue Code of 1986, as amended, modified or supplemented
from time to time, and any successor law thereto, and the regulations promulgated and the rulings
issued thereunder.



     “Collateral” has the meaning set forth in the Granting Clause of the Indenture.



     “Collection Account” means the trust account established and maintained pursuant to
Section 4.1 of the Sale and Servicing Agreement.



     “Collection Period” means, with respect to each Payment Date, the preceding calendar
month. Any amount stated “as of the close of business on the last day of a Collection Period”
shall give effect to all collections, charge-offs and other account activity during such Collection
Period.



     “Commission” means the U.S. Securities and Exchange Commission.



     “Computer Tape” means a computer tape or diskette (or other means of electronic
transmission acceptable to the Backup Servicer, if any, and the Insurer) in a format acceptable to
the Backup Servicer, if any, and the Insurer.



     “Continued Errors” has the meaning set forth in Section 3.8(e) of the Sale and
Servicing Agreement.



     “Contract” means any of the prime or non-prime motor vehicle retail installment sales
contracts (listed on any Schedule of Contracts delivered on the Closing Date or on any Funding
Date) which has not been released by the Indenture Trustee from the Issuer pursuant to the Sale and
Servicing Agreement, and all replacements and substitutions thereto, and all the rights thereunder.



     “Contract File” means each original Contract, together with any other documents
relating thereto which are held by the Indenture Trustee.



     “Contract Scheduled Payment” on a Contract means that portion of the payment required
to be made by the Obligor each month sufficient to amortize the Principal Balance under the simple
interest method over the term of the Contract and to provide interest at the APR.



     “Contracts Purchase Price” means, with respect to any Contract, 87.50% of the
aggregate Principal Balance of such Contract as of the related Cut-Off Date.



     “Contribution Agreement” means the Contribution Agreement, dated as of the Closing
Date, between Santander Consumer and the Seller, as amended, modified or supplemented from time to
time.



     “Controlling Party” means the Insurer, provided that if an Insurer Event of Default
has occurred and is continuing, then the Controlling Party shall be the Indenture Trustee acting at
the direction of the Noteholders evidencing not less than a majority of the Note Balance.



     “Conveyed Assets” has the meaning set forth in Section 2.2 of the Contribution
Agreement.



A-6









 





     “Corporate Trust Office” means, with respect to (i) the Owner Trustee, the principal
corporate trust office of the Owner Trustee, which at the time of execution of this Agreement is
300 Delaware Avenue, 9th Floor, Wilmington, Delaware 19801 and (ii) the Indenture
Trustee, the principal corporate trust office of the Indenture Trustee, which at the time of
execution of this Agreement is Mac#9311-161, Sixth and Marquette Avenue, Minneapolis, Minnesota
55479, Attention: Corporate Trust Services, Asset-Backed Administration — Santander Drive Auto
Receivables Trust 2007-3.



     “Cram Down Loss” means, for any Contract, if a court of appropriate jurisdiction in an
insolvency proceeding issued an order reducing the amount owed on the Contract or otherwise
modifying or restructuring the scheduled payments to be made on the Contract, an amount equal to
(i) the excess of the Contract’s Principal Balance immediately prior to the order over the
Contract’s Principal Balance as reduced and/or (ii) if the court issued an order reducing the
effective interest rate on the Contract, the excess of the Contract Principal Balance immediately
prior to the order over the Contract’s net present value, using as the discount rate the higher of
the APR on the Contract or the rate of interest, if any, specified by the court in the order of the
scheduled payments as so modified or restructured. A “Cram Down Loss” shall be deemed to have
occurred on the order’s issuance date.



     “Credit and Collection Policy” means the written credit and collection policies of the
Originator and the Servicer in effect on the date hereof, as amended or modified from time to time.



     “Credit Bureau Score” means, with respect to each Contract, for the related Obligor,
the score generated by a one of the following credit bureaus: TransUnion, Equifax or Experian.



     “Cumulative Net Loss Ratio” has the meaning specified in the Insurance Agreement.



     “Cut-Off Date” means, (i) with respect to any Contract transferred on the Closing
Date, the Initial Cut-Off Date and (ii) with respect to Contracts transferred on any Funding Date,
the applicable Subsequent Cut-Off Date.



     “Dealer Agreement” means each Dealer Agreement between the Originator and the related
Dealer substantially in the form of Exhibit I hereto.



     “Dealer Recourse” means, with respect to a Contract, all monies received in respect of
recourse rights against the Dealer which originated the Contract under the related Dealer Agreement
and any successor to such Dealer.



     “Dealers” means the dealers who sold the Financed Vehicles and who originated and
assigned the related Contracts to the Dealers or the Originator.



     “Deemed Cured” has the meaning set forth in the Insurance Agreement.



     “Default” means any occurrence that is, or with notice or lapse of time or both would
become, an Event of Default.



     “Defaulted Contract” means, with respect to any Payment Date, a Contract with respect
to which either of the following has occurred: (i) the related Obligor is contractually delinquent
on a Contract Scheduled Payment for greater than 60 days or (ii) the mandatory redemption period,
if any, has expired for a Contract with respect to which the related Financed Vehicle has been
repossessed.



     “Deficiency Amount” has the meaning specified in the Note Policy.



A-7









 





     “Definitive Note” means a definitive fully registered Note issued pursuant to
Section 2.12 of the Indenture.



     “Delivery”, when used with respect to property forming a part of a Trust Account,
means:



     (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 and are susceptible of physical delivery, transfer thereof 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, and, with respect to a certificated security (as defined in Section 8-102 of
the UCC) transfer thereof (i) by delivery of such certificated security to the Indenture Trustee or
by delivery of such certificated security to a securities intermediary indorsed to, or registered
in the name of, the Indenture Trustee or its nominee or indorsed in blank to a securities
intermediary (as defined in Section 8-102(a)(14) of the UCC) and the making by such securities
intermediary of entries on its books and records identifying such certificated securities as
belonging to the Indenture Trustee and the sending by such securities intermediary of a
confirmation of the purchase of such certificated security by the Indenture Trustee, or (ii) by
delivery thereof to a “clearing corporation” (as defined in Section 8-102(a)(5) of the UCC) and the
making by such clearing corporation of appropriate entries on its books reducing the appropriate
securities account of the originator and increasing the appropriate securities account of a
securities intermediary by the amount of such certificated security, the identification by the
clearing corporation of the certificated securities for the sole and exclusive account of the
securities intermediary, the maintenance of such certificated securities by such clearing
corporation or its nominee subject to the clearing corporation’s exclusive control, the sending of
a confirmation by the securities intermediary of the purchase by the Indenture Trustee of such
securities and the making by such securities intermediary of entries on its books and records
identifying such certificated securities as belonging to the Indenture Trustee (all of the
foregoing, “Physical Property”), and, in any event, any such Physical Property in
registered form shall be registered in the name of the Indenture Trustee or its nominee or endorsed
in blank; and such additional or alternative procedures as may hereafter become appropriate to
effect the complete transfer of ownership of any such Eligible Investment to the Indenture Trustee,
consistent with changes in applicable law or regulations or the interpretation thereof;



     (b) with respect to any security issued by the U.S. Treasury, the Federal Home Loan Mortgage
Corporation or by 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: book-entry registration of such Eligible Investment 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 Indenture Trustee of such book-entry securities; 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 indicating that such securities intermediary
holds such Eligible Investment solely as agent for the Indenture Trustee; and such additional or
alternative procedures as may hereafter become appropriate to effect complete transfer of ownership
of any such Eligible Investment to the Indenture Trustee, consistent with changes in applicable law
or regulations or the interpretation thereof; and



     (c) with respect to any Eligible Investment that is an uncertificated security under Article 8
of the UCC and that is not governed by clause (b) above, registration on the books and
records of the issuer thereof in the name of the Indenture Trustee or its nominee or the securities
intermediary, the sending of a confirmation by the securities intermediary of the purchase by the
Indenture Trustee or its



A-8









 




nominee of such uncertificated security, and the making by such securities intermediary of
entries on its books and records identifying such uncertificated certificates as belonging to the
Indenture Trustee.



In furtherance of the foregoing, any Eligible Investments held by the Indenture Trustee through a
securities intermediary shall be held only pursuant to a control agreement entered into among the
Seller, the Indenture Trustee and the securities intermediary, pursuant to which the securities
intermediary agrees to credit all financial assets (as defined in Section 8-102(a)(9) of the UCC)
purchased (as defined in Section 1-201(32) of the UCC) at the direction of the Indenture Trustee to
the securities account maintained by the securities intermediary for the benefit of the Indenture
Trustee and agrees to comply with entitlement orders (as defined in Section 8-102(a)(8) of the UCC)
of the Indenture Trustee without the further consent of the Seller and pursuant to which the
securities intermediary waives any prior lien on all financial assets credited to such securities
account to which it might otherwise be entitled. Such control agreement shall initially be
governed by Minnesota law and the Indenture Trustee shall not amend the initial control agreement
or enter into a control agreement with a successor securities intermediary which in either event
provides that the laws of a State other than Minnesota shall govern, without first obtaining a
continuation of perfection and priority opinion under the laws of such new State which is, prior to
the Termination Date, acceptable to the Insurer.




     “Depositor” means the Seller in its capacity as Depositor under the Trust Agreement.



     “Determination Date” means the fifth Business Day preceding the related Payment Date.



     “Dollar” and “$” mean lawful currency of the United States of America.



     “DTC” means The Depository Trust Company, and its successors.



     “Eligible Account” shall mean either (i) a segregated account or accounts maintained
with 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 “AA-”
or higher by S&P and “Aa2” or higher by Moody’s and in the highest short-term rating category by
each of the Rating Agencies, and which is (a) a federal savings and loan association duly
organized, validly existing and in good standing under the federal banking laws, (b) an institution
duly organized, validly existing and in good standing under the applicable banking laws of any
State, (c) a national banking association duly organized, validly existing and in good standing
under the federal banking laws, (d) a principal subsidiary of a bank holding company, or (e)
approved in writing by the Controlling Party and each of the Rating Agencies or (ii) a chartered
depository institution acceptable to each Rating Agency and the Controlling Party, having capital
and surplus of not less than $100,000,000, acting in its fiduciary capacity.



     “Eligible Institution” means a depository institution or trust company (other than any
Affiliate of Santander Consumer) (which may be the Owner Trustee, the Indenture Trustee or any of
their respective Affiliates) organized under the laws of the United States of America or any one of
the states thereof or the District of Columbia (or any domestic branch of a foreign bank) (a) which
at all times has either (i) a long-term senior unsecured debt rating of “Aa2” or better by Moody’s,
“AA-” or better by S&P and AA- or better by Fitch, if rated by Fitch or such other rating that is
acceptable to the Insurer and each Rating Agency, as evidenced by a letter from such Rating Agency
to the Issuer or the Indenture Trustee and the Insurer or (ii) a certificate of deposit rating of
“P-1” by Moody’s, “A-1+” by S&P and F1 by Fitch, if rated by Fitch or (iii) such other rating that
is acceptable to the Insurer and each Rating Agency, as evidenced by a letter from such Rating
Agency to the Issuer or the Indenture Trustee, and the Insurer (unless the Insurer is not the
Controlling Party) and (b) whose deposits are insured by the Federal Deposit Insurance Corporation.



A-9









 





     “Eligible Investments” mean any one or more of the following types of investments:




     (i) (a) direct interest-bearing obligations of, and interest-bearing obligations
guaranteed as to timely 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 (b) direct interest-bearing obligations of,
and interest-bearing obligations guaranteed as to timely 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 rated “AAA” by S&P and “Aaa” by
Moody’s;




     (ii) demand or time deposits in, certificates of deposit of, or bankers’ acceptances
issued by any depository institution or trust company organized under the laws of the United
States or any State and subject to supervision and examination by federal and/or state
banking authorities (including, if applicable, the Indenture Trustee or any agent of the
Indenture Trustee acting in their respective commercial capacities); provided that the
commercial paper or other short-term unsecured debt obligations of such depository
institution or trust company at the time of such investment, or contractual commitment
providing for such investment, are rated “A-1+” by S&P and “Prime-1” by Moody’s;




     (iii) repurchase obligations pursuant to a written agreement (a) with respect to any
obligation described in clause (i) above, where the Indenture Trustee has taken
actual or constructive delivery of such obligation, and (b) entered into with a depository
institution or trust company organized under the laws of the United States or any State
thereof, the deposits of which are insured by the Federal Deposit Insurance Corporation and
the short-term unsecured debt obligations of which are rated “A-1+” by S&P and “Prime-1” by
Moody’s (including, if applicable, the Indenture Trustee or any agent of the Indenture
Trustee acting in their respective commercial capacities);




     (iv) non-convertible debt securities bearing interest or sold at a discount issued by
any corporation incorporated under the laws of the United States or any State whose
long-term unsecured debt obligations are rated “AAA” by S&P and “Aaa” by Moody’s at the time
of such investment or contractual commitment providing for such investment; provided,
however, that securities issued by any particular corporation will not be Eligible
Investments to the extent that an investment therein will cause the then-outstanding
principal amount of securities issued by such corporation and held as part of the related
Trust Account to exceed 10% of the Eligible Investments held in the related Trust Account
(with Eligible Investments held in the related Trust Account valued at par);




     (v) commercial paper that (a) is payable in United States dollars and (b) is rated at
least “A-1+” by S&P and “Prime-1” by Moody’s;




     (vi) any money market fund that has been rated “Aaa” by Moody’s and “AAAm” or “AAAm-G”
by S&P and numerical gradations within such rating category (or the equivalent long-term
rating of such Rating Agency) for such money market funds; and




     (vii) any other demand or time deposit, obligation, security or investment as may be
acceptable to the Rating Agencies and, prior to the Termination Date, the Insurer.



     Any of the foregoing Eligible Investments may be purchased from, by or through the Owner
Trustee or the Indenture Trustee or any of their respective Affiliates.



A-10









 





     “Eligible Contract” means a Contract meeting all of the criteria set forth on
Schedule I of the Sale and Servicing Agreement and Schedule I of the Contribution
Agreement as of the Closing Date or the applicable Funding Date, as the case may be.



     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.



     “ERISA Affiliate” means at any time, with respect to any Person or entity, any member
of such Person’s or entity’s “controlled group,” within the meaning of Section 4001 of ERISA or
Section 414(b), (c), (m) or (o) of the Code.



     “Errors” has the meaning set forth in Section 3.8(e) of the Sale and Servicing
Agreement.



     “Event of Default” has the meaning set forth in Section 5.1 of the Indenture.



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



     “Expenses” has the meaning set forth in Section 8.2 of the Trust Agreement.



     “Extension Ratio” means the fraction (expressed as a percentage) calculated as of the
last day of the related Collection Period, the numerator of which is the aggregate number of
Contracts for which an extension or a payment deferment is in effect (whether granted by the
Servicer during the related Collection Period or an earlier Collection Period) in accordance with
the Servicer’s stated extension policy and the denominator of which is the aggregate number of
Contracts then held by the Issuer. “Extension,” for purposes of this definition, does not include
either (i) a change of an Obligor’s scheduled due date within a month (i.e., from the 10th of each
month to the 15th) or (ii) the Servicer’s treatment of an Obligor who makes at least one-half of
his scheduled payment as current (provided that such Obligor continues to make all Contract
Scheduled Payments which follow).



     “Final Scheduled Payment Date” means, with respect to (i) the Class A-1 Notes, the
Class A-1 Final Scheduled Payment Date, (ii) the Class A-2-A Notes and the Class A-2-B Notes, the
Class A-2-A and the Class A-2-B Final Scheduled Payment Date, (iii) the Class A-3 Notes and the
Class A-3 Final Schedule Payment Date and (iv) the Class A-4-A Notes and the Class A-4-B Notes and
the Class A-4-A and Class A-4-B Final Scheduled Payment Date.



     “Financed Vehicle” means a new or used automobile, light duty truck, van or mini-van,
together with all accessions thereto, securing an Obligor’s indebtedness under the related
Contract.



     “Funding Date” means a date occurring not more than once per calendar week during the
Funding Period and on which some or all of the Subsequent Contracts are transferred to the Issuer.



     “Funding Period” means the period beginning on the Closing Date and ending upon the
earliest to occur of (i) six full calendar months following the Closing Date, (ii) the first date
on which the amount on deposit in the Pre-Funding Account (after giving effect to any transfers
therefrom in connection with the transfer of Subsequent Contracts to the Issuer on such date) is
less than $100,000 or (iii) the date upon which an Event of Default or a Servicing Termination
Event has occurred and has not been cured within the applicable grace period.



     “GAAP” means generally accepted accounting principles in the USA, applied on a
materially consistent basis.



A-11









 





     “Governmental Authority” means 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.



     “Grant” means mortgage, pledge, bargain, sell, warrant, alienate, remise, release,
convey, assign, transfer, create, grant a lien upon and a security interest in and right of set-off
against, deposit, set over and confirm pursuant to the Indenture. A Grant of the Collateral or of
any other agreement or instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the immediate and continuing right to
claim for, collect, receive and give receipt for principal and interest payments in respect of the
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
that the Granting party is or may be entitled to do or receive thereunder or with respect thereto.
Other forms of the verb “to Grant” shall have correlative meanings.



     “Holder” means, as the context may require, the Certificateholder or a Noteholder or
both.



     “Indenture” means the Indenture, dated as of the Closing Date, between the Issuer and
Indenture Trustee, as the same may be amended and supplemented from time to time.



     “Indenture Secured Parties” shall mean the Noteholders, the Swap Counterparty and the
Insurer.



     “Indenture Trustee” means Wells Fargo Bank, National Association, a national banking
association, not in its individual capacity but as indenture trustee under the Indenture, or any
successor trustee under the Indenture.



     “Indenture Trustee Fee” means the greater of (A) the product of (i) 0.009% per annum
and the sum of the Pool Balance and the amount on deposit in the Pre-Funding Account as of the
first day of such Collection Period and (ii) $2,000 per month and (B) reasonable and necessary
expenses of maintaining the Collateral, provided that amounts payable under this clause (B) shall
be subject to the cap on expenses set forth in Section 4.4(a)(1) of this Agreement.



     “Independent” means, when used with respect to any specified Person, that such Person
(i) is in fact independent of the Issuer, any other obligor upon the Notes, the Administrator and
any Affiliate of any of the foregoing Persons, (ii) does not have any direct financial interest or
any material indirect financial interest in the Issuer, any such other obligor, the Administrator
or any Affiliate of any of the foregoing Persons and (iii) is not connected with the Issuer, any
such other obligor, the Administrator or any Affiliate of any of the foregoing Persons as an
officer, employee, promoter, underwriter, trustee, partner, director or Person performing similar
functions.



     “Independent Certificate” means a certificate or opinion to be delivered to the
Indenture Trustee and the Insurer under the circumstances described in, and otherwise complying
with, the applicable requirements of Section 11.1 of the Indenture, made by an Independent
appraiser or other expert appointed by an Issuer Order and approved by the Indenture Trustee and
the Insurer, and such opinion or certificate shall state that the signer has read the definition of
“Independent” in this Appendix A and that the signer is Independent within the meaning
thereof.



     “Initial Class A-1 Note Balance” means $77,000,000.



     “Initial Class A-2-A Note Balance” means $25,000,000.



A-12









 





     “Initial Class A-2-B Note Balance” means $111,000,000.



     “Initial Class A-3 Note Balance” means $119,000,000.



     “Initial Class A-4-A Note Balance” means $50,000,000.



     “Initial Class A-4-B Note Balance” means $118,000,000.



     “Initial Contracts” means the Contracts transferred by the Seller to the Issuer on the
Closing Date.



     “Initial Conveyed Assets” has the meaning set forth in Section 2.1 of the
Contribution Agreement.



     “Initial Cut-Off Date” means September 30, 2007.



     “Initial Interest Rate Swap Agreement” means the ISDA Master Agreement, dated as of
the Closing Date, between the Initial Swap Counterparty and the Issuer, the Schedule thereto, dated
as of the Closing Date, the Credit Support Annex, if applicable, and the Confirmations thereto,
dated as of the Closing Date and entered into pursuant to such ISDA Master Agreement, as the same
may be amended from time to time in accordance with the terms thereof.



     “Initial Note Balance” means, for any Class, the Initial Class A-1 Note Balance, the
Initial Class A-2-A Note Balance, the Initial Class A-2-B Note Balance, the Initial Class A-3 Note
Balance, the Initial Class A-4-A Note Balance, the Initial Class A-4-B Note Balance as applicable,
or with respect to the Notes generally, the sum of the foregoing.



     “Initial Pre-Funding Account Deposit Amount” means an amount equal to $0.



     “Initial Reserve Amount” means an amount equal to 8.75% of the Original Pool Balance
(such amount to be funded by one or more Reserve Account Letters of Credit and/or cash from the net
proceeds of the offering of the Notes, such cash portion to equal $0).



     “Initial Swap Counterparty” means Banco Santander, S.A., as the swap counterparty
under the Initial Interest Rate Swap Agreement.



     “Initial Transferred Assets” means (a) all of the Seller’s rights, title and interest
in the Initial Conveyed Assets, (b) all of the Seller’s rights under the Contribution Agreement,
the Sale and Servicing Agreement and the Limited Guaranty and (c) all proceeds of the foregoing.



     “Insurance Account” shall have the meaning specified in Section 9.1(b) of the
Sale and Servicing Agreement.



     “Insurance Agreement” means the Insurance Agreement dated as of the Closing Date
between the Insurer, the Issuer, the Seller, the Servicer, the Originator, the Owner Trustee and
the Indenture Trustee.



     “Insurance Policy” means (i) any theft and physical damage insurance policy maintained
by the Obligor under a Contract, providing coverage against loss or damage to or theft of the
related Financed Vehicle, and (ii) any credit life or credit disability insurance maintained by an
Obligor in connection with any Contract.



     “Insured Payment” has the meaning specified in the Note Policy.



A-13









 





     “Insurer” means Financial Guaranty Insurance Company, a New York stock insurance
company, and its successors and assigns.



     “Insurer Event of Default” shall mean any one of the following events shall have
occurred and be continuing:



     (a) the Insurer fails to make a payment required under the Note Policy in accordance with its
terms; or



     (b) the Insurer (1) files any petition or commences 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, (2) makes a general
assignment for the benefit of its creditors or (3) has an order for relief entered against it by a
court or agency having jurisdiction in respect of the Insurer 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, the New York State Insurance Department or other
competent regulatory authority enters a final and nonappealable order, judgment or decree (1)
appointing a custodian, trustee, agent or receiver for the Insurer or for all or substantially all
of its property or (2) authorizing the taking of possession by a custodian, trustee, agent or
receiver of the Insurer (or the taking of possession of all or substantially all of the property of
the Insurer).



     “Intercreditor Agreement” means the Intercreditor and Master Collection Account
Agreement, dated as of December 7, 2006, among Wells Fargo Bank, National Association, as the
collateral custodian under the Wachovia Warehouse Agreement, the Trust Collateral Agent under the
Securitizations, the Indenture Trustee under the Indentures, and master collection account agent
under the Intercreditor Agreement; Wachovia Capital Markets, LLC, in its capacity as the
administrative agent under the Wachovia Warehouse Agreement; Drive Consumer USA Inc., Drive
Receivables Corp. 6; Drive Receivables Corp. 7; Drive Receivables Corp. 8; Drive Receivables Corp.
9; Drive Receivables Corp. 10; Drive Receivables Corp. 11; Drive Receivables Corp. 12; Drive Auto
Receivables Trust 2003-2; Drive Auto Receivables Trust 2004-1; Drive Auto Receivables Trust 2005-1;
Drive Auto Receivables Trust 2005-2; Drive Auto Receivables Trust 2005-3; Drive Auto Receivables
Trust 2006-1; Drive Auto Receivables Trust 2006-2; the Issuer; MBIA Insurance Corporation, in its
capacity as the “Insurer” (or a term with substantially the same meaning as “Insurer”) under the
MBIA Securitizations and Financial Security Assurance, Inc., in its capacity as the “Insurer” (or a
term with substantially the same meaning as “Insurer”) under the FSA Securitizations, as the same
may be amended or supplemented from time to time, and the related Accession Agreement adding the
Seller, the Issuer and the Insurer as parties thereto.



     “Interest Carryover Shortfall” means, with respect to any Payment Date, the excess of
the sum of the Noteholders’ Monthly Accrued Interest for the preceding Payment Date and any
outstanding Interest Carryover Shortfall on such preceding Payment Date, over the amount in respect
of interest that is actually paid to Noteholders on such preceding Payment Date, plus interest on
the amount of interest due but not paid to Noteholders on the preceding Payment Date, to the extent
permitted by law, at the respective Interest Rates borne by such Notes for the related Interest
Period.



     “Interest Period” means (i) with respect to the first Payment Date, the period from
and including the Closing Date to but excluding the first Payment Date and (ii) with respect to
each subsequent Payment Date, the period from and including the prior Payment Date to but excluding
such subsequent Payment Date (in each case assuming that the Payment Date for the Class A-2-A
Notes, the Class A-2-B Notes, the



A-14









 




Class A-3 Notes and the Class A-4-A Notes is always on the 15th day of the calendar
month in which that Payment Date occurs).




     “Interest Rate” means (a) with respect to the Class A-1 Notes, the Class A-1 Interest
Rate, (b) with respect to the Class A-2-A Notes, the Class A-2-A Interest Rate, (c) with respect to
the Class A-2-B Notes, the Class A-2-B Interest Rate, (d) with respect to the Class A-3 Notes, the
Class A-3 Interest Rate, (e) with respect to the Class A-4-A Notes, the Class A-4-A Interest Rate
or (f) with respect to the Class A-4-B Notes, the Class A-4-B Interest Rate.



     “Interest Rate Swap Agreement” means the Initial Interest Rate Swap Agreement and any
Replacement Interest Rate Swap Agreement.



     “Issuer” means Santander Drive Auto Receivables Trust 2007-3, a Delaware statutory
trust established pursuant to the Trust Agreement, until a successor replaces it and, thereafter,
means the successor and, for purposes of any provision contained herein, each other obligor on the
Notes.



     “Issuer Order” and “Issuer Request” means a written order or request of the
Issuer signed in the name of the Issuer by any one of its Authorized Officers and delivered to the
Indenture Trustee, a copy of which shall be delivered to the Insurer.



     “Late Payment Rate” has the meaning set forth in the Insurance Agreement.



     “LIBOR” means, with respect to any interest period, the London interbank offered rate
for deposits in U.S. dollars having a maturity of one month commencing on the related LIBOR
Determination Date which appears on Reuters Screen LIBOR 01 Page, or any successor thereto, as of
11:00 a.m., London time, on such LIBOR Determination Date; provided, however, that for the first
interest period, LIBOR shall mean an interpolated rate for deposits based on London interbank
offered rates for deposits in U.S. dollars for a period that corresponds to the actual number of
days in the first interest period. If the rates used to determine LIBOR do not appear on the
Reuters Screen LIBOR 01 Page, the rates for that day will be determined on the basis of the rates
at which deposits in U.S. dollars, having a maturity of one month and in a principal balance of not
less than U.S. $1,000,000 are offered at approximately 11:00 a.m., London time, on such LIBOR
Determination Date to prime banks in the London interbank market by the reference banks. The
Indenture Trustee will request the principal London office of each of such reference banks to
provide a quotation of its rate. If at least two such quotations are provided, the rate for that
day will be the arithmetic mean to the nearest 1/100,000 of 1.00% (0.0000001), with five
one-millionths of a percentage point rounded upward, of all such quotations. If fewer than two
such quotations are provided, the rate for that day will be the arithmetic mean to the nearest
1/100,000 (0.0000001), with five one-millionths of a percentage point rounded upward, of the
offered per annum rates that one or more leading banks in New York City, selected by the Indenture
Trustee (after consultation with the seller), are quoting as of approximately 11:00 a.m., New York
City time, on such LIBOR Determination Date to leading European banks for United States dollar
deposits for that maturity; provided that if the banks selected as aforesaid are not quoting as
mentioned in this sentence, LIBOR in effect for the applicable interest period will be LIBOR in
effect for the previous interest period. The reference banks are the four major banks in the
London interbank market selected by the Indenture Trustee (after consultation with the depositor).



     “LIBOR Determination Date” means the second London Business Day prior to the Closing
Date with respect to the first Payment Date and, as to each subsequent payment date, the second
London Business Day prior to the immediately preceding Payment Date.



A-15









 





     “Lien” means, for any asset or property of a Person, a lien, security interest,
mortgage, pledge or encumbrance in, of or on such asset or property in favor of any other Person,
except any Permitted Lien.



     “Limited Guaranty” means the Limited Guaranty, dated as of the Closing Date, issued by
Banco Santander, S.A., for the benefit of the Issuer, the Indenture Trustee, the Owner Trustee, the
Noteholders and the Insurer.



     “Liquidation Proceeds” means the monies collected from whatever source during a
Collection Period on a Charged-Off Contract, net of the sum of (i) any out-of-pocket expenses
reasonably incurred by the Servicer in enforcing such Charged-Off Contract plus (ii) any amounts
required by law to be remitted to the related Obligor.



     “London Business Day” means any day other than a Saturday, Sunday or day on which
banking institutions in London, England are authorized or obligated by law or government decree be
closed.



     “Modified Contract Scheduled Payment” means, with respect to any Contract which is not
a Charged-Off Contract and as to which the related Obligor shall have been declared bankrupt with
the result that the amount of such Obligor’s periodic Contract Scheduled Payment has been reduced
pursuant to an order of the bankruptcy court, the amount of such reduced periodic Contract
Scheduled Payment.



     “Monthly Capitalized Interest Amount” means, in the case of the November 2007,
December 2007, January 2008, February 2008, March 2008 and April 2008 Payment Dates, an amount
equal to the excess of (i) the product of (a) a fraction, the numerator of which is the actual
number of days elapsed in the related interest accrual period and the denominator of which is 360,
(b) the sum of the weighted average of the Interest Rates and the Premium Rate (as such term is
defined in the Insurance Agreement) and (c) the amount on deposit in the Pre-Funding Account as of
the last day of the second preceding Collection Period, or, in the case of the November 15, 2007
Payment Date, as of the Closing Date, over (ii) the Pre-Funding Earnings for such Payment Date.



     “Moody’s” means Moody’s Investors Service, Inc., or any successor that is a nationally
recognized statistical rating organization.



     “Net Swap Payment” means for the Interest Rate Swap Agreement, the net amounts owed by
the Issuer to the Swap Counterparty, if any, on any Swap Payment Date, excluding Swap Termination
Payments.



     “Net Swap Receipts” means for the Interest Rate Swap Agreement, the net amounts owed
by the Swap Counterparty to the Issuer, if any, on any Swap Payment Date, including, without
limitation, any Swap Termination Payments.



     “Note” means a Class A-1 Note, Class A-2-A Note, Class A-2-B Note, Class A-3 Note,
Class A-4-A Note or Class A-4-B Note, in each case substantially in the forms of Exhibit A
to the Indenture.



     “Note Balance” means, with respect to any date of determination, for any Class, the
Class A-1 Note Balance, the Class A-2-A Note Balance, the Class A-2-B Note Balance, the Class A-3
Note Balance, the Class A-4-A Note Balance or the Class A-4-B Note Balance, as applicable, or with
respect to the Notes generally, the sum of all of the foregoing.



     “Note Depository Agreement” means the agreement, dated as of the Closing Date, between
the Issuer and DTC, as the initial Clearing Agency relating to the Notes, as the same may be
amended or supplemented from time to time.



A-16









 





     “Note Distribution Account” means the account by that name established and maintained
pursuant to Section 4.1 of the Sale and Servicing Agreement.



     “Note Factor” on a Payment Date means, with respect to each Class of Notes, a
six-digit decimal figure equal to the Note Balance of such Class of Notes as of the end of the
related Collection Period divided by the Note Balance of such Class of Notes as of the Closing
Date. The Note Factor will be 1.000000 as of the Closing Date; thereafter, the Note Factor will
decline to reflect reductions in the Note Balance of such Class of Notes.



     “Note Owner” means, with respect to a Book-Entry Note, the Person who is the
beneficial owner of such Book-Entry Note, as reflected on the books of the Clearing Agency or a
Person maintaining an account with such Clearing Agency (directly as a Clearing Agency Participant
or as an indirect participant, in each case in accordance with the rules of such Clearing Agency).



     “Note Policy” means the financial guaranty insurance policy dated the Closing Date
issued by the Insurer with respect to the Notes.



     “Note Preference Claim” has the meaning specified in Section 9.1(d) of the
Sale and Servicing Agreement.



     “Note Register” and “Note Registrar” have the respective meanings set forth in
Section 2.4 of the Indenture.



     “Noteholder” means, as of any date, the Person in whose name a Note is registered on
the Note Register on such date.



     “Noteholder Principal Distributable Amount” means, with respect to the Notes, (i) the
sum of (A) with respect to any Payment Date, 87.50% of the Principal Distributable Amount if no
Trigger Event has occurred, 100% of the Principal Distributable Amount if a Trigger Event has
occurred, and 0% of the Principal Distributable Amount after the payment in full of the notes, to
be paid sequentially to each Class of Notes) plus (B) any Principal Carryover Shortfall; and (ii)
with respect to the Final Scheduled Payment Date on any Class of Notes, the Note Balance of that
Class of Notes.



     “Noteholders’ Monthly Accrued Interest” shall mean, with respect to any Payment Date,
the aggregate interest accrued for the related Interest Period on the Class A-1 Notes, the Class
A-2-A Notes, the Class A-2-B Notes, the Class A-3 Notes, the Class A-4-A Notes and the Class A-4-B
Notes at the respective Interest Rate for such Class on the Note Balance of each such Class on the
immediately preceding Payment Date or the Closing Date, as the case may be, after giving effect to
all payments of principal to the Noteholders of such Class on or prior to such preceding Payment
Date.



     “Notes” shall mean, collectively, the Class A-1 Notes, the Class A-2-A Notes, the
Class A-2-B Notes, the Class A-3 Notes, the Class A-4-A Notes, and the Class A-4-B Notes.



     “Notice” shall have the meaning specified in Section 9.1(a).



     “Notice of Funding Date” means a notice in the form of Exhibit A to the Sale
and Servicing Agreement.



     “Obligor” means, for any Contract, each Person obligated to pay such Contract.



A-17









 





     “Officer’s Certificate” means (i) with respect to the Issuer, a certificate signed by
any Authorized Officer of the Issuer and (ii) with respect to the Seller or the Servicer, a
certificate signed by the chairman of the board, the president, any executive vice president, any
vice president, the treasurer, any assistant treasurer or the controller of the Seller or the
Servicer, as applicable, in each case complying with the applicable requirements of Section
11.1 of the Indenture.



     “Opinion of Counsel” means one or more written opinions of counsel who may, at the
request of the Servicer and with the written consent of the Indenture Trustee and the Insurer, be
employees of or counsel to the Issuer, the Servicer, the Seller or the Administrator and who shall
be reasonably satisfactory to the Indenture Trustee and the Insurer, and which opinion or opinions
comply with any applicable requirements of the Transaction Documents and are in form and substance
reasonably satisfactory to the recipient(s) including the Insurer. Opinions of Counsel need
address matters of law only and may be based upon stated assumptions as to relevant matters of
fact.



     “Optional Purchase” has the meaning set forth in Section 8.1 of the Sale and
Servicing Agreement.



     “Optional Purchase Price” has the meaning set forth in Section 8.1 of the Sale
and Servicing Agreement.



     “Original Pool Balance” means the aggregate Principal Balance of the Contracts as of
the Initial Cut-off Date.



     “Originator” means Santander Consumer.



     “Other Assets” means any assets (or interests therein) (other than the Trust Estate)
conveyed or purported to be conveyed by the Seller to another Person or Persons other than the
Issuer, whether by way of a sale, capital contribution or by virtue of the granting of a lien.



     “Outstanding” means, as of any date, all Notes (or all Notes of an applicable Class)
theretofore authenticated and delivered under the Indenture except:




     (i) Notes (or Notes of an applicable Class) theretofore cancelled by the Note Registrar
or delivered to the Note Registrar for cancellation pursuant to Section 2.8 of the
Indenture;




     (ii) Notes (or Notes of an applicable Class) or portions thereof the payment for which
money in the necessary amount has been theretofore deposited with the Indenture Trustee or
any Paying Agent in trust for the related Noteholders (provided, however, that if such Notes
are to be redeemed, notice of such redemption has been duly given pursuant to the Indenture
or provision therefor, satisfactory to the Indenture Trustee, has been made); and




     (iii) Notes (or Notes of an applicable Class) in exchange for or in lieu of other Notes
(or Notes of such Class) that have been authenticated and delivered pursuant to the
Indenture unless proof satisfactory to the Indenture Trustee is presented that any such
Notes are held by a bona fide purchaser;


provided that in determining whether Noteholders holding the requisite Note Balance have given any
request, demand, authorization, direction, notice, consent, vote or waiver hereunder or under any
Transaction Document, Notes owned by the Issuer, the Seller, the Servicer, the Administrator or any
of their respective Affiliates shall be disregarded and deemed not to be Outstanding, except that,
in


A-18









 






determining whether the Indenture Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent, vote or waiver, only Notes that a Responsible
Officer of the Indenture Trustee knows to be so owned shall be so disregarded; provided, further,
however, that Notes which have been paid with proceeds of the Note Policy shall continue to remain
outstanding until the Insurer has been paid as subrogee hereunder or reimbursed pursuant to the
Insurance Agreement and the Insurer shall be deemed to be the Holder thereof to the extent of any
payments thereon made by the Insurer. Notes so owned that have been pledged in good faith may be
regarded as Outstanding if the pledgee thereof establishes to the satisfaction of the Indenture
Trustee such pledgee’s right so to act with respect to such Notes and that such pledgee is not the
Issuer, the Seller, the Servicer, the Administrator or any of their respective Affiliates.




     “Overcollateralization Amount” means, on any Payment Date, the amount by which the
Pool Balance exceeds the Note Balance less the amount on deposit in the Pre-Funding Account.



     “Overcollateralization Percentage” means, on any Payment Date, the ratio of the
Overcollateralization Amount to the Pool Balance.



     “Overfunded Capitalized Interest Amount” means, with respect to:



     (a) the December 17, 2007 Payment Date, the excess of (a) the amount on deposit in the
Capitalized Interest Account on such Payment Date (after giving effect to the transfer of the
Monthly Capitalized Interest Amount to the Collection Account on such date) over (b) the product of
(1) 1/360, (2) 0%, (3) 150 and (4) the amount on deposit in the Pre-Funding Account (excluding
Pre-Funding Earnings) at the close of business on November 30, 2007;



     (b) the January 15, 2008 Payment Date, the excess of (a) the amount on deposit in the
Capitalized Interest Account on such Payment Date (after giving effect to the transfer of the
Monthly Capitalized Interest Amount to the Collection Account on such date) over (b) the product of
(1) 1/360, (2) 0%, (3) 120 and (4) the amount on deposit in the Pre-Funding Account (excluding
Pre-Funding Earnings) at the close of business on December 31, 2007;



     (c) the February 15, 2008 Payment Date, the excess of (a) the amount on deposit in the
Capitalized Interest Account on such Payment Date (after giving effect to the transfer of the
Monthly Capitalized Interest Amount to the Collection Account on such date) over (b) the product of
(1) 1/360, (2) 0%, (3) 90 and (4) the amount on deposit in the Pre-Funding Account (excluding
Pre-Funding Earnings) at the close of business on January 31, 2008;



     (d) the March 17, 2008 Payment Date, the excess of (a) the amount on deposit in the
Capitalized Interest Account on such Payment Date (after giving effect to the transfer of the
Monthly Capitalized Interest Amount to the Collection Account on such date) over (b) the product of
(1) 1/360, (2) 0%, (3) 60 and (4) the amount on deposit in the Pre-Funding Account (excluding
Pre-Funding Earnings) at the close of business on February 29, 2008;



     (e) the April 15, 2008 Payment Date, the excess of (a) the amount on deposit in the
Capitalized Interest Account on such Payment Date (after giving effect to the transfer of the
Monthly Capitalized Interest Amount to the Collection Account on such date) over (b) the product of
(1) 1/360, (2) 0%, (3) 30 and (4) the amount on deposit in the Pre-Funding Account (excluding
Pre-Funding Earnings) at the close of business on March 31, 2008; and



A-19









 





     (f) the May 15, 2008 Payment Date, the amount on deposit in the Capitalized Interest Account
on such Payment Date (after giving effect to the transfer of the Monthly Capitalized Interest
Amount to the Collection Account on such date).



     “Owner Trustee” means U.S. Bank Trust National Association, a national banking
association, not in its individual capacity but solely as owner trustee under the Trust Agreement,
and any successor Owner Trustee thereunder.



     “Owner Trustee Fee” means $3,500 per annum, payable monthly.



     “Paying Agent” means the Indenture Trustee or any other Person that meets the
eligibility standards for the Indenture Trustee set forth in Section 6.11 of the Indenture
and is authorized by the Issuer to make the payments to and distributions from the Note
Distribution Account, including the payment of principal of or interest on the Notes on behalf of
the Issuer.



     “Payment Date” means the 15th day of each calendar month beginning November
15, 2007; provided, however, whenever a Payment Date would otherwise be a day that is not a
Business Day, the Payment Date shall be the next Business Day. As used herein, the “related”
Payment Date with respect to a Collection Period shall be deemed to be the Payment Date which
immediately follows such Collection Period.



     “Payment Default” has the meaning set forth in Section 5.4(a) of the
Indenture.



     “Permitted Liens” means (a) any liens created by the Transaction Documents; (b) any
liens for taxes not due and payable or the amount of which is being contested in good faith by
appropriate proceedings; and (c) any liens of mechanics, suppliers, vendors, materialmen, laborers,
employees, repairmen and other like liens securing obligations which are not due and payable or the
amount or validity of which is being contested in good faith by appropriate proceedings.



     “Person” means any individual, corporation, limited liability company, estate,
partnership, joint venture, association, joint stock company, trust (including any beneficiary
thereof), unincorporated organization or government or any agency or political subdivision thereof.



     “Physical Property” has the meaning specified in the definition of “Delivery”
above.



     “Pool Balance” means, at any time, the aggregate Principal Balance of the Contracts at
such time.



     “Pool Factor” on a Payment Date means a six-digit decimal figure equal to the sum of
the Pool Balance and the funds in the Pre-Funding Account (excluding investment income) as of the
end of the preceding Collection Period divided by the sum of the aggregate Principal Balance of the
Contracts as of the Initial Cut-Off Date plus the Initial Pre-Funding Account Deposit Amount. The
Pool Factor will be 1.000000 as of the Cut-Off Date; thereafter, the Pool Factor will decline to
reflect reductions in the Pool Balance.



     “Pre-Funding Account” means the account by that name established and maintained
pursuant to Section 4.1 of the Sale and Servicing Agreement.



     “Pre-Funding Earnings” means, with respect to any date of determination during the
Funding Period, the actual investment income earned during the previous calendar month on amounts
on deposit in the Pre-Funding Account during such period as calculated by the Indenture Trustee.



A-20









 





     “Predecessor Note” 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; provided,
however, for the purpose of this definition, any Note authenticated and delivered under Section
2.5 of the Indenture in lieu of a mutilated, destroyed, lost or stolen Note shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Note.



     “Preference Amount” has the meaning specified in the Note Policy.



     “Premium” means the insurance premium payable to the Insurer pursuant to the Insurance
Agreement.



     “Principal Balance” of a Contract as of any date means the Amount Financed minus the
sum of (i) that portion of all Contract Scheduled Payments received on or prior to such day
allocable to principal, (ii) any refunded portion of extended warranty protection plan costs, or of
physical damage, credit life or disability insurance premiums included in the Amount Financed,
(iii) any payment of the Repurchase Amount with respect to the Contract allocable to principal,
(iv) the principal portion of any Modified Contract Scheduled Payments received on or prior to such
day and (v) any prepayment in full or any partial prepayments applied to reduce the principal
balance of the Contract; provided, however, that any Charged-Off Contract or Repurchased Contract
shall have a Principal Balance of zero.



     “Principal Carryover Shortfall” means, as of the close of business on any Payment
Date, the excess of the Noteholder Principal Distributable Amount from the preceding Payment Date
over the amount that was actually deposited in the Note Distribution Account on such preceding
Payment Date to be distributed as principal on the Notes.



     “Principal Distributable Amount” means, for any Payment Date, the sum of: (i) all
collections received on the Contracts (other than Charged-Off Contracts and contracts purchased by
the Servicer or repurchased by the Seller during the related Collection Period pursuant to the
Transaction Documents) that are allocable to principal, including all full and partial principal
prepayments; (ii) the Principal Balance of all contracts that became Charged-Off Contracts during
the related Collection Period, (iii) the amount of any repurchase price required to be paid by the
Seller or the Servicer relating to contracts they are required to purchase pursuant to the
Transaction Documents allocable to principal during the related Collection Period; (iv) at the
Insurer’s option, the aggregate Principal Balance of all Contracts required to be purchased by the
Seller or the Servicer pursuant to Sections 2.3 or 3.6 of the Sale and Servicing
Agreement and Section 3.3 of the Contribution Agreement during the Collection Period that
were not purchased; and (v) the aggregate amount of Cram Down Losses during the related Collection
Period.



     “Proceeding” means any suit in equity, action at law or other judicial or
administrative proceeding.



     “Purchase Price” has the meaning set forth in Section 2.4 of the Contribution
Agreement.



     “Rating Agency” means Moody’s or S&P or both as the context requires.



     “Rating Agency Condition” means, with respect to any event or circumstance and each
Rating Agency, either (a) written confirmation to the Indenture Trustee and the Insurer by such
Rating Agency that the occurrence of such event or circumstance will not itself cause such Rating
Agency to downgrade or withdraw its rating assigned to any of the Notes, without giving effect to
the Note Policy on the ratings assigned to any of the Notes or (b) that such Rating Agency shall
have been given notice of such event at least ten days prior to the occurrence of such event (or,
if ten days’ advance notice is impracticable, as much advance notice as is practicable) and such
Rating Agency shall not have issued any written notice



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that the occurrence of such event will itself cause such Rating Agency to downgrade or
withdraw its rating assigned to any of the Notes, without giving effect to the Note Policy on the
ratings assigned to any of the Notes.




     “Record Date” means, unless otherwise specified in any Transaction Document, with
respect to any Payment Date or Redemption Date, (i) for any Definitive Notes and for the
Certificates, if any, the close of business on the last Business Day of the calendar month
immediately preceding the calendar month in which such Payment Date or Redemption Date occurs and
(ii) for any Book-Entry Notes, the close of business on the Business Day immediately preceding such
Payment Date or Redemption Date.



     “Records” means, for any Contract, all contracts, books, records and other documents
or information (including computer programs, tapes, disks, software and related property and
rights, to the extent legally transferable) relating to such Contract or the related Obligor.



     “Recoveries” means, with respect to a Charged-Off Contract and for any Collection
Period occurring after the date on which such Contract becomes a Charged-Off Contract, all
payments, including insurance proceeds, that the Servicer received from or on behalf of an Obligor
regarding such Charged-Off Contract, or from liquidation of the related Financed Vehicle, net of
any reasonably incurred out-of-pocket expenses incurred by the Servicer in enforcing such
Charged-Off Contract.



     “Redemption Date” means in the case of a redemption of the Notes pursuant to
Section 10.1 of the Indenture, the Payment Date specified by the Administrator or the
Issuer pursuant to Section 10.1 of the Indenture.



     “Redemption Price” means an amount equal to the unpaid principal amount of the
outstanding Notes plus accrued and unpaid interest thereon to but excluding the Redemption Date
plus all amounts due to the Insurer (including without limitation the Reimbursement Obligations),
the Swap Counterparty, the Indenture Trustee, the Backup Servicer, if any, and the Owner Trustee
under the Transaction Documents.



     “Registered Holder” means the Person in whose name a Note is registered on the Note
Register on the related Record Date.



     “Regulation AB” means Subpart 229.1100 — Asset Backed Securities (Regulation AB), 17
C.F.R. §§229.1100-229.1123, as such may be amended from time to time and subject to such
clarification and interpretation as have been provided by the Commission in the adopting release
(Asset-Backed Securities, Securities Act Release No. 33-8518. 70 Fed. Reg. 1,506, 1,531 (January 7,
2005)) or by the staff of the Commission, or as may be provided by the Commission or its staff from
time to time.



     “Reimbursement Obligations” means the sum of (a) the aggregate unreimbursed amount of
any payments made by the Insurer under the Note Policy and the Swap Policy (excluding
reimbursements for Swap Termination Payments made under the Swap Policy), together with interest on
such amount from the date of payment by the Insurer until paid in full at a rate of interest equal
to the Late Payment Rate, (b) all costs and expenses of the Insurer in connection with any action,
proceeding or investigation affecting the issuing entity, the Trust Property or the rights or
obligations of the Insurer under the Transaction Documents or under the Note Policy and the Swap
Policy (excluding reimbursements for Swap Termination Payments made under the Swap Policy) or under
the other Transaction Documents, including (without limitation) any judgment or settlement entered
into affecting the Insurer or the Insurer’s interests, together with interest thereon at a rate
equal to the Late Payment Rate and (c) any other amounts owed to the Insurer under the Insurance
Agreement including, without limitation, any



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Transition Expenses and Reliening Expenses paid by the Insurer, together with interest thereon
at a rate equal to the Late Payment Rate.



     “Related Security” means, for any Contract (i) all right, title, and interest of the
Seller in and to the Contracts and all monies due thereunder after the applicable Cut-Off Date;
(ii) the interest of the Seller in the security interests in the Financed Vehicles granted by
Obligors pursuant to the Contracts and any accessions thereto; (iii) the interest of the Seller in
any proceeds from claims on any physical damage, credit life or disability, or other insurance
policies maintained by the Obligors thereon covering the Financed Vehicles or the Obligors relating
to the Contracts and any proceeds from the liquidation of Contracts or the related Financed
Vehicles; (iv) all right, title and interest (but not the obligations) of the Seller in and to the
Contribution Agreement and this Agreement, insofar as such right, title and interest relates to the
Contracts, the related Contract Files or the related Financed Vehicles, including the right of the
Seller to cause the Originator, as applicable, to repurchase the Contracts from the Seller under
certain circumstances; (v) the interest of the Seller in any Dealer Recourse relating to the
Contracts; (vi) the interest of the Seller in certain rebates of premiums and other amounts
relating to insurance policies and other items financed under the Contracts in effect after the
applicable Cut-Off Date; (vii) the Trust Accounts and all funds on deposit from time to time and
all rights of the Seller therein; (viii) rights under the Interest Rate Swap Agreement and payments
made by the Swap Counterparty under the Interest Rate Swap Agreement, (ix) the related Contract
Files; and (x) the proceeds of any and all of the foregoing.



     “Reliening Expenses” has the meaning set forth in Section 3.4(b) of the Sale
and Servicing Agreement.



     “Replacement Interest Rate Swap Agreement” means, with respect to any Swap
Counterparty, any replacement Interest Rate Swap Agreement in form and substance acceptable to the
Insurer entered into pursuant to the conditions set forth in the Interest Rate Swap Agreement.



     “Replacement Swap Counterparty” means, with respect to any Swap Counterparty, any
replacement Swap Counterparty approved in writing by the Insurer under a Replacement Interest Rate
Swap Agreement that satisfies the conditions set forth in the Interest Rate Swap Agreement.



     “Repurchase Price” means the amount equal to the amount that would be required to be
paid by an Obligor to prepay in full its Contract under the terms thereof (including one month’s
interest thereon at the related APR) which the Seller or the Servicer as applicable (pursuant
hereto) or Santander Consumer (pursuant to the Contribution Agreement), will be obligated hereunder
(i) to pay to repurchase a Contract and (ii) to exercise the Optional Purchase.



     “Repurchased Contract” means a Contract purchased by the Originator pursuant to
Section 3.3 of the Contribution Agreement, by the Servicer pursuant to Section 3.2
or Section 3.6 of the Sale and Servicing Agreement or by the Seller pursuant to Section
2.1 or  Section 2.3 of the Sale and Servicing Agreement.



     “Reserve Account” means the account designated as such, established and maintained
pursuant to Section 4.1 of the Sale and Servicing Agreement.



     “Reserve Account Letter of Credit” means an irrevocable direct pay letter of credit
(i) issued by a Reserve Account Letter of Credit Bank, (ii) in form and substance satisfactory to
each Rating Agency and the Insurer, (iii) for the benefit of the Indenture Trustee and in form
reasonably acceptable to the Indenture Trustee, (iv) providing for the amount thereof to be
available to the Indenture Trustee in multiple drawings conditioned only upon presentation of the
applicable certificate in the form attached to



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such Reserve Account Letter of Credit, (v) having an initial term of at least one year and
(vi) credited to the Reserve Account.



     “Reserve Account Letter of Credit Bank” means an entity acceptable to the Controlling
Party that issues a Reserve Account Letter of Credit.



     “Reserve Amount” means, with respect to any Payment Date, the amount available, from
whatever source, in the Reserve Account and under each Reserve Account Letter of Credit with
respect to such Payment Date.



     “Reserve Event” has the meaning specified in the Insurance Agreement.



     “Residual Interest” means the beneficial interest in the Issuer. The Residual
Interest shall not be represented by a Certificate except upon the request of the Residual
Interestholder pursuant to the terms of the Trust Agreement.



     “Residual Interest Account” means the account designated as such, established and
maintained pursuant to Section 4.1 of the Sale and Servicing Agreement.



     “Residual Interestholder” means a holder of the Residual Interest, whether or not
certificated. The Seller shall be the initial Residual Interestholder.



     “Responsible Officer” means, with respect to the Indenture Trustee or the Owner
Trustee, any officer within the Corporate Trust Office of the Indenture Trustee or the Owner
Trustee, as the case may be, including any Vice President, Assistant Vice President, Assistant
Treasurer, Assistant Secretary, Trust Officer or any other officer of the Indenture Trustee or the
Owner Trustee customarily performing functions similar to those performed by any of the above
designated officers and also, with respect to a particular matter, any other officer to whom such
matter is referred because of such officer’s knowledge of any familiarity with the particular
subject.



     “Sale and Servicing Agreement” means the Sale and Servicing Agreement, dated as of the
Closing Date, by and among the Seller, the Issuer, the Servicer and the Indenture Trustee, as the
same may be amended, modified or supplemented from time to time.



     “Santander Consumer” means Santander Consumer USA Inc., an Illinois corporation, and
its successors and assigns.



     “Sarbanes Certification” has the meaning set forth in Section 10.22 of the
Sale and Servicing Agreement.



     “Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002, as amended, modified or
supplemented from time to time, and any successor law thereto.



     “Schedule of Contracts” means, as the context may require, (i) the schedule of Initial
Contracts or Subsequent Contracts, as the case may be, transferred to the Issuer on the Closing
Date or a Funding Date, respectively, or (ii) collectively, the schedule of all Contracts assigned
to the Issuer by the Seller as of the date of determination, with such additions and deletions as
properly made pursuant to the Transaction Documents.



     “Securities” means the Notes and the Residual Interests.



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     “Securities Act” means the Securities Act of 1933, as amended.



     “Seller” means Santander Drive Auto Receivables LLC, a Delaware limited liability
company.



     “Servicer” means Santander Consumer, initially, and any replacement Servicer appointed
pursuant to the Sale and Servicing Agreement.



     “Servicer’s Certificate” means the certificate delivered pursuant to Section
3.8 of the Sale and Servicing Agreement and executed by its Chairman of the Board, Vice
Chairman, the President, any Vice President, the Treasurer, any Assistant Treasurer, the Chief
Financial Officer, the Secretary, any Assistant Secretary, the Controller or any Assistant
Controller of the Servicer.



     “Servicer’s Data Date” has the meaning set forth in Section 3.8(b) of the Sale
and Servicing Agreement.



     “Servicer’s Date File” has the meaning set forth in Section 3.8(b) of the Sale
and Servicing Agreement.



     “Servicer Termination Event” means any one or more of the following that shall have
occurred and be continuing:



     (a) failure by the Servicer (i) to deposit to the Collection Account any amount required to be
deposited therein by the Servicer that shall continue unremedied for a period of one Business Day
or (ii) to deliver to the Indenture Trustee and the Insurer the Servicer’s Certificate on the
related Determination Date that shall continue unremedied for a period of one Business Day, in the
case of either clause (i) or (ii) after the earlier to occur of (A) written notice of such failure
having been received by the Servicer from the Indenture Trustee or the Insurer or (B) discovery of
such failure by an officer of the Servicer;



     (b) failure on the part of the Seller, the Originator or the Servicer, as the case may be, to
repurchase a Contract in accordance with Section 2.3 or Section 3.6, as the case
may be, which failure shall continue unremedied for a period of one Business Day after the earlier
to occur of (i) the date on which written notice of such failure, requiring the same to be
remedied, shall have been given (A) to the Servicer or the Seller, as the case may be, by the
Indenture Trustee or (B) to the Servicer or the Seller, as the case may be, and the Indenture
Trustee by a majority of the Holders of the Notes or the Insurer or (ii) discovery of such failure
by an officer of the Servicer or the Seller, as the case may be;



     (c) failure on the part of the Servicer or the Seller duly to observe or to perform in any
material respect any other covenants or agreements of the Servicer or the Seller (as the case may
be) set forth in the Notes or in this Agreement or any other Transaction Document, which failure
shall (i) materially and adversely affect the rights of Noteholders or the Insurer and (ii)
continue unremedied for a period of 30 days after the earlier to occur of (A) the date on which
written notice of such failure, requiring the same to be remedied, shall have been given (1) to the
Servicer or the Seller, as the case may be, by the Indenture Trustee or (2) to the Servicer or the
Seller, as the case may be, and to the Indenture Trustee by the majority of the Holders of Notes or
the Insurer; or (B) discovery of such failure by an officer of the Servicer or the Seller;



     (d) the entry of a decree or order by a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator, receiver or liquidator for the
Servicer in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding up or liquidation of its respective affairs, and the continuance of
any such decree or order unstayed and in effect for a period of 60 consecutive days or the entry of
any decree or order for relief in



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respect of the Servicer or the Seller under any bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustment of debt or similar law, whether now or hereafter in effect,
which decree or order for relief continues unstayed and in effect for a period of 60 consecutive
days;




     (e) the consent by the Servicer or the Seller to the appointment of a conservator or receiver
or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to the Servicer or the Seller or relating to substantially all
of its property; or the admission by the Servicer or the Seller in writing of its inability to pay
its debts generally as they become due, the filing by the Servicer or the Seller of a petition to
take advantage of any applicable insolvency or reorganization statute, the making by the Servicer
or the Seller of an assignment for the benefit of its creditors, or the voluntarily suspension by
the Servicer or the Seller of payment of its obligations; or



     (f) the occurrence of a Servicing Termination Trigger Event beyond the applicable cure period,
if any.



     “Servicing Criteria” shall mean the “servicing criteria” set forth in Item 1122(d) of
Regulation AB, as such may be amended from time to time.



     “Servicing Fee” means, for any Collection Period, a fee payable on a senior basis to
the Servicer for services rendered during such Collection Period, which shall be the product of (i)
3.00%, (ii) one-twelfth (or, in the case of the first Payment Date, a fraction equal to the number
of days from but not including the Initial Cut-Off Date to and including the last day of the first
Collection Period over 360) and (iii) the Pool Balance as of the first day of such Collection
Period.



     “Servicing Termination Trigger Event” means, with respect to any Payment Date (i) the
occurrence of a Trigger Event under the Insurance Agreement or (ii) any event under the transaction
documents relating to any other securitization transaction of the Servicer and/or the Seller or any
Affiliate of the Servicer allowing for the removal of the related Servicer in which the issued
securities are insured by the Insurer.



     “Simple Interest Contract” means any Contract under which the portion of a payment
allocable to interest and the portion allocable to principal is determined in accordance with the
Simple Interest Method.



     “Simple Interest Method” means the method of allocating a fixed level payment on an
obligation between principal and interest, pursuant to which the portion of such payment that is
allocated to interest is equal to the product of the fixed rate of interest on such obligation
multiplied by the unpaid Principal Balance multiplied by the period of time (expressed as a
fraction of a year, based on the actual number of days in the calendar month and 365 days in the
calendar year) elapsed since the preceding payment under which the obligation was made and the
remainder of such payment is allocable to principal.



     “Specified Reserve Amount” means for any Payment Date with respect to which: (i) no
Reserve Event occurred that has not been Deemed Cured and no Trigger Event has occurred that has
not been waived by the Insurer, the greater of (a) 26.50% less the Overcollateralization Percentage
multiplied by the Pool Balance as of the end of the related Collection Period and (b) the lesser of
(1) 3.00% of the sum of the Original Pool Balance and the aggregate Principal Balances of all
Subsequent Contracts as of their respective Cut-Off Dates and (2) the Note Balance immediately
prior to such Payment Date; (ii) a Reserve Event has occurred that has not been Deemed Cured and no
Trigger Event has occurred that has not been waived by the Insurer, the greater of (a) 31.50% less
the Overcollateralization Percentage multiplied by the Pool Balance as of the end of the related
Collection Period and (b) the lesser of (1) 3.00% of the sum of the Original Pool Balance and the
aggregate Principal Balances of all Subsequent



A-26









 




Contracts as of their respective Cut-Off Dates and (2) the Note Balance immediately prior to
such Payment Date, and (iii) a Trigger Event has occurred that has not been waived by the Insurer,
the lesser of (a) 100% of the Note Balance as of the end of the related Collection Period and (b)
an amount that shall be determined by the Insurer in its sole discretion; provided, however, that
the “Specified Reserve Amount” shall never exceed the then-outstanding Note Balance; provided,
further, however, that the “Specified Reserve Amount” may, if permitted by the Insurer and approved
by the Rating Agencies, be reduced by an amount acceptable to the Insurer and the Rating Agencies.
Notwithstanding the foregoing, once a Trigger Event has occurred, the Reserve Amount may, at the
Insurer’s discretion, be used to pay additional principal on the Notes sequentially until paid down
to zero and then to pay all amounts due to the Insurer in accordance with Section 4.3(b).




     “STAMP” has the meaning set forth in Section 2.4 of the Indenture.



     “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., or any successor that is a nationally recognized statistical rating organization.



     “Statutory Trust Act” means Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code
§ 3801 et seq.



     “Subsequent Contract” means a Contracts transferred to the Issuer on a Funding Date.



     “Subsequent Cut-Off Date” means, with respect to any Subsequent Contract, the date
specified in the Notice of Funding Date related to such Subsequent Contract.



     “Subsequent Conveyed Assets” has the meaning set forth in Section 2.2 of the
Contribution Agreement.



     “Subsequent Reserve Amount” means, on each Funding Date, an amount equal to 8.75% of
the aggregate Principal Balance of Subsequent Contracts as of the related Subsequent Cut-off Date
transferred to the Issuer on such Funding Date or such additional amount as set forth in
Section 2.5(v)(A) of the Contribution Agreement or Section 2.1(c)(v)(A) hereof. On
each Funding Date, the Subsequent Reserve Amount must be funded either by a cash deposit (such
amount to be funded with cash withdrawn from the Pre-Funding Account and deducted from the proceeds
paid to the Seller as consideration of the transfer of Subsequent Contracts on such Funding Date),
by the issuance of a Reserve Account Letter of Credit or an increase in the face amount of any
existing Reserve Account Letter of Credit, or any combination thereof.



     “Subsequent Transferred Assets” means (a) all of the Seller’s rights, title and
interest in the Subsequent Conveyed Assets, (b) all of the Seller’s rights under the Contribution
Agreement, the Sale and Servicing Agreement and the Limited Guaranty and (c) all proceeds of the
foregoing.



     “Successor Servicer” means any entity appointed as a successor to the Servicer
pursuant to Section 7.1(a) of the Sale and Servicing Agreement.



     “Successor Servicing Fee” means any fee payable to a Successor Servicer hereunder on
each Payment Date equal to the amount set forth in the applicable Backup Servicing Agreement.



     “Swap Collateral Account” means a single, segregated trust account in the name of the
Indenture Trustee, which shall be designated as the “Swap Collateral Account” which shall be held
in trust for the benefit of the Noteholders and the Insurer established pursuant to Section
4.9(e) of the Sale and Servicing Agreement.



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     “Swap Counterparty” means the Initial Swap Counterparty and any Replacement Swap
Counterparty.



     “Swap Payment Date” means the date on which Net Swap Receipts or Net Swap Payments, as
applicable, are made pursuant to the Interest Rate Swap Agreement.



     “Swap Policy” means the financial guaranty insurance policy for the swap agreement
dated as of the Closing Date issued by the Insurer for the benefit of the Initial Swap Counterparty
with respect to the Initial Interest Rate Swap Agreement.



     “Swap Replacement Proceeds” means any amounts received from a Replacement Swap
Counterparty in consideration for entering into a Replacement Interest Rate Swap Agreement for a
terminated Interest Rate Swap Agreement.



     “Swap Termination Payment” means payment due to the Swap Counterparty by the Issuer or
to the Issuer by the Swap Counterparty, including interest that may accrue thereon, under the
Interest Rate Swap Agreement due to a termination of the Interest Rate Swap Agreement due to an
“event of default” or “termination event” under the Interest Rate Swap Agreement.



     “Swap Termination Payment Account” means a single segregated trust account held in the
United States in the name of the Indenture Trustee which shall be held in trust for the benefit of
the Noteholders and the Insurer pursuant to Section 4.9(b) of the Sale and Servicing
Agreement.



     “Termination Date” shall mean the date on which all amounts owing to the Noteholders
and, as certified in writing to the Owner Trustee by the Insurer, all amounts owing to the Insurer
under the Transaction Documents have been paid in full and the Note Policy and the Swap Policy have
been surrendered to the Insurer for cancellations.



     “TIA” or “Trust Indenture Act” means the Trust Indenture Act of 1939, as
amended and as in force on the date hereof, unless otherwise specifically provided.



     “Transaction Documents” means the Indenture, the Certificate of Trust, the Notes, the
Note Depository Agreement, the Sale and Servicing Agreement, the Contribution Agreement, each
Assignment, each Reserve Account Letter of Credit, any Backup Servicing Agreement, each
reimbursement agreement relating to each Reserve Account Letter of Credit, the Underwriting
Agreement, the Certificates, the Intercreditor Agreement, the Administration Agreement, the
Insurance Agreement, the Interest Rate Swap Agreement, the Limited Guaranty and the Trust
Agreement, and other documents and certificates delivered in connection therewith as the same may
be amended or modified from time to time.



     “Transferred Assets” means (a) the Initial Transferred Assets and (b) the Subsequent
Transferred Assets.



     “Transfer Taxes” means any tax, fee or governmental charge payable by the Seller, the
Issuer or the Indenture Trustee to any federal, state or local government.



     “Transition Expenses” has the meaning given such term in Section 7.1(d) of the
Sale and Servicing Agreement.



     “Trigger Event” has the meaning set forth in the Insurance Agreement.



A-28









 





     “Trust” means the Issuer.



     “Trust Accounts” means the Collection Account, the Note Distribution Account, the
Residual Interest Account, the Pre-Funding Account, the Capitalized Interest Account, the Reserve
Account, the Swap Collateral Account and the Swap Termination Payment Account.



     “Trust Agreement” means the Trust Agreement, dated as of September 26, 2007 between
the Seller and the Owner Trustee, as amended and restated by the Amended and Restated Trust
Agreement, dated as of the Closing Date, between the Seller and the Owner Trustee, as the same may
be amended and supplemented from time to time.



     “Trust Estate” means the assets conveyed or intended to be conveyed to the Issuer
pursuant to Section 2.1(a) and (b) of the Sale and Servicing Agreement and all
rights of the Issuer in the Interest Rate Swap Agreement.



     “UCC” means, unless the context otherwise requires, the Uniform Commercial Code as in
effect in the relevant jurisdiction, as amended from time to time.



     “Underwriting Agreement” means the underwriting agreement, dated October 9, 2007,
among Wachovia Capital Markets, LLC, as representative, the Seller and Santander Consumer USA Inc.



     “United States” or “USA” means the United States of America (including all
states, the District of Columbia and political subdivisions thereof).



     The foregoing definitions shall be equally applicable to both the singular and plural forms of
the defined terms. Unless otherwise inconsistent with the terms of this Agreement, all accounting
terms used herein shall be interpreted, and all accounting determinations hereunder shall be made,
in accordance with GAAP. Amounts to be calculated hereunder shall be continuously recalculated at
the time any information relevant to such calculation changes.




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