Document:

exv10w5

Exhibit 10.5

SCHEDULE

to the

MASTER AGREEMENT

dated as of [       ]

between

BANCO SANTANDER S.A. (“Party A”)

and

SANTANDER DRIVE AUTO RECEIVABLES TRUST [       ] (“Party B”)

 

Part 1. Termination Provisions

	(a)	 	“Specified Entity” means, with respect to Party A for all purposes of this Agreement, none
specified, and with respect to Party B for all purposes of this Agreement, none specified.

	(b)	 	“Specified Transaction” has its meaning as defined in Section 14 of this Agreement.

	(c)	 	The “Automatic Early Termination” provision of Section 6(a) of this Agreement does not apply
to Party A or Party B.

	(d)	 	The “Transfer to Avoid Early Termination” provision of Section 6(b)(ii) shall be amended by
deleting the words “or if a Tax Event upon Merger occurs and the Burdened Party is the
Affected Party.”

	(e)	 	Payments on Early Termination. Except as otherwise provided in this Schedule, “Market
Quotation” and the “Second Method” apply. In the case of any Terminated Transaction that is,
or is subject to, any unexercised option, the words “economic equivalent of any payment or
delivery” appearing in the definition of “Market Quotation” shall be construed to take into
account the economic equivalent of the option.

	(f)	 	“Termination Currency” means United States Dollars.

	(g)	 	Timing of Party B Termination Payment. If an amount calculated as being due in respect of an
Early Termination Date under Section 6(e) of this Agreement is an amount to be paid by Party B
to Party A then, notwithstanding the provisions of Section 6(d)(ii) of this Agreement, such
amount will be payable on the first distribution date for the Notes (“Distribution Date”)
following the date on which the payment would have been payable as determined in accordance
with Section 6(d)(ii); provided that if the date on which the payment would have been payable
as determined in accordance with Section 6(d)(ii) is a Distribution Date, then the payment
will be payable on the date determined in accordance with Section 6(d)(ii).

 

 

	(h)	 	Limitation on Defaults by Party A and Party B. The Events of Default specified in Section 5
of this Agreement shall not apply to Party A or Party B except for the following:

	 	(i)	 	Section 5(a)(i) of this Agreement (Failure to Pay or Deliver) shall be
applicable to Party A and Party B, subject to the provisions of the last paragraph
hereof;
	 
	 	(ii)	 	With respect to Party A only, Section 5(a)(ii) of this Agreement (Breach of
Agreement); provided that Section 5(a)(ii) will not apply to Party A with respect to
Party A’s failure to comply with its obligations under Part 5(b)(ii) or 5(b)(iii)
herein or under the Credit Support Annex;
	 
	 	(iii)	 	With respect to Party A only, Section 5(a)(iii) of this Agreement (Credit
Support Default) subject to the provisions of the last paragraph hereof; provided that
Section 5(a)(iii)(1) shall apply to Party B with respect to Party B’s obligations under
Paragraph 3(b) of any Credit Support Annex;
	 
	 	(iv)	 	With respect to Party A only, Section 5(a)(iv) of this Agreement
(Misrepresentation);
	 
	 	(v)	 	With respect to Party A only, Section 5(a)(vi) of this Agreement (Cross
Default). For the purposes of this Part 1 h(v), “Threshold Amount” shall mean, with
respect to Party A, (x) 3% of Party A’s “Total Equity Capital” as described in its most
recently published Call Report, or (y) if Party A is not Banco Santander S.A., 3% of
the shareholder’s equity (excluding deposits) of such Person; “Specified Indebtedness,”
with respect to Party A, shall have the meaning specified in Section 14, provided that
Specified Indebtedness shall not include deposits received in the course of Party A’s
ordinary banking business; and “Call Report” shall mean, a “Consolidated Reports of
Condition and Income for a Bank with Domestic and Foreign Officers” of Party A, filed
with Federal Deposit Insurance Corporation on a quarterly basis or, if such form is not
required to be filed, such other comparable form applicable to Party A from time to
time;
	 
	 	(vi)	 	Section 5(a)(vii) of this Agreement (Bankruptcy) shall apply to Party A and
Party B; provided that clauses (2), (7) and (9) thereof shall not apply with respect to
Party B, provided further that clause (4) shall not apply to Party B to the extent that
it refers to proceedings or petitions instituted or presented by Party A or any of its
Affiliates, provided further that clause (6) shall not apply to Party B to the extent
that it refers to (i) any appointment that is effected by or pursuant to the
Transaction Documents or (ii) any appointment to which Party B has not become subject,
and provided further that clause (8) shall not apply to Party B to the extent that
clause (8) relates to clauses (2), (4), (6) and (7) (except to the extent that such
provisions are not disapplied to Party B); and
	 
	 	(vii)	 	Section 5(a)(viii) of this Agreement (Merger Without Assumption) shall be
applicable to Party A and Party B.

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	 	 	Notwithstanding Sections 5(a)(i) and 5(a)(iii) of this Agreement, any failure by Party A to
comply with or perform any obligation to be complied with or performed by Party A under the
Credit Support Annex shall not be an Event of Default unless (i) a Moody’s Second Trigger
Downgrade Event has occurred and at least 30 Local Business Days have elapsed since the last
time Moody’s Second Trigger Downgrade Event occurred, and (ii) such failure is not remedied
on or before the third Local Business Day after notice of such failure is given to Party A.

	(i)	 	Limitation on Termination Events by Party A and Party B. The Termination Events specified in
Section 5 of this Agreement shall not apply to Party A or Party B except for the following:

	 	(i)	 	Section 5(b)(i) of this Agreement (Illegality);
	 
	 	(ii)	 	Section 5(b)(ii) of this Agreement (Tax Event); provided that Section 5(b)(ii)
shall be amended by deleting the words “(x) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date on which a
Transaction is entered into (regardless of whether such action is taken or brought with
respect to a party to this Agreement) or (y)”; and
	 
	 	(iii)	 	Section 5(b)(iii) of this Agreement (Tax Event Upon Merger); provided that
Party A shall not be entitled to designate an Early Termination Date by reason of a Tax
Event upon Merger in respect of which it is the Affected Party.

	(j)	 	Additional Termination Events. The occurrence of any of the following events shall be an
Additional Termination Event.

	 	(i)	 	Second Trigger Rating Replacement. A Moody’s Second Trigger Downgrade Event
has occurred and is continuing and at least 30 Local Business Days have elapsed since
such Moody’s Second Trigger Downgrade Event first occurred, and at least one Eligible
Replacement has made a Firm Offer that would, assuming the occurrence of an Early
Termination Date, qualify as a Market Quotation (on the basis that Part 1(k)(i)
applies) and which remains capable of becoming legally binding upon acceptance. With
respect to the foregoing Additional Termination Event, Party A shall be the sole
Affected Party and all Transactions shall be Affected Transactions.
	 
	 	(ii)	 	S&P Ratings Event. Party A fails to comply with the downgrade provisions as
set forth in Part 5(b)(iii), after giving effect to the relevant time frame specified
therein. With respect to the foregoing Additional Termination Event, Party A shall be
the sole Affected Party and all Transactions shall be Affected Transactions.
	 
	 	(iii)	 	Fitch Ratings Event. Party A fails to comply with the downgrade provisions as
set forth in Part 5(b)(v), after giving effect to the relevant time frame specified
therein. With respect to the foregoing Additional Termination Event, Party A shall be
the sole Affected Party and all Transactions shall be Affected Transactions.

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	 	(iv)	 	Regulation AB. Party A fails to comply with Part 5(r)(ii) of this Agreement.
With respect to the foregoing Additional Termination Event, Party A shall be the sole
Affected Party and all Transactions shall be Affected Transactions.
	 
	 	(v)	 	Termination. Party B or the Trust Estate cease to exist. With respect to the
foregoing Additional Termination Event, Party B shall be the sole Affected Party and
all Transactions shall be Affected Transactions.
	 
	 	(vi)	 	Acceleration. The Trustee declares the Notes due and payable for any reason
and such declaration is (or becomes) unrescindable or irrevocable. With respect to the
foregoing Additional Termination Event, Party B shall be the sole Affected Party and
all Transactions shall be Affected Transactions.
	 
	 	(vii)	 	Redemption. Any mandatory redemption, auction call redemption, optional
redemption, tax redemption, clean-up call or other prepayment in full or repayment in
full of all Notes outstanding occurs under the Indenture (or any notice is given to
that effect and such mandatory redemption, auction call redemption, optional
redemption, tax redemption, clean-up call or other prepayment or repayment is not
capable of being rescinded); provided that, for the avoidance of doubt, any such
redemption, clean-up call or other prepayment shall be with respect to all outstanding
Notes. With respect to the foregoing Additional Termination Event, Party B shall be
the sole Affected Party and all Transactions shall be Affected Transactions.
	 
	 	(viii)	 	Default. Any Event of Default (as defined in the Indenture) occurs under the
Indenture (or any notice is given by the Trustee or any other authorized party to that
effect), the Notes have been declared due and payable under the Indenture (and such
declaration has not been rescinded and annulled in accordance with the Indenture), and
the Trustee, the Noteholders or any other party authorized under the terms of the
Indenture and Sale and Servicing Agreement and any other Transaction Documents, or by
law: (1) sells, liquidates or disposes of any of the Collateral under the Indenture;
(2) institutes Proceedings for the collection of all amounts payable under the
Indenture; (3) institutes Proceedings for the complete or partial foreclosure of the
Indenture with respect to the Collateral; or (4) exercises any remedies of a secured
party under the UCC with respect to the Collateral, and any such action is not to
judgment or final decree. With respect to the foregoing Additional Termination Event,
Party B shall be the sole Affected Party and all Transactions shall be Affected
Transactions.
	 
	 	(ix)	 	Amendment. Any Transaction Document is amended or modified without the prior
written consent of Party A (provided that the prior written consent of Party A is
required under any such Transaction Document) and such amendment or modification could
have a materially adverse effect on Party A; provided, however, that it shall not be an
Additional Termination Event where such amendment or modification involves the
appointment of any successor trustee, securities administrator, master servicer or
servicer pursuant to the terms of the Indenture. With respect to the foregoing
Additional Termination Event, Party B

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	 	 	 	shall be the sole Affected Party and all Transactions shall be Affected
Transactions.
	 
	 	(x)	 	Notwithstanding anything in Section 6 of this Agreement to the contrary, any
amounts due as a result of the occurrence of an Additional Termination Event described
in Parts 1(j)(v) through (ix) of this Schedule may be calculated prior to the Early
Termination Date and shall be payable on the Early Termination Date. With respect to
the foregoing Additional Termination Event, Party B shall be the sole Affected Party
and all Transactions shall be Affected Transactions.

	(k)	 	Calculations. Notwithstanding Section 6 of this Agreement, if an Early Termination Date is
designated at a time when Party A is: (A) the sole Affected Party in respect of an Additional
Termination Event or a Tax Event Upon Merger; or (B) the Defaulting Party in respect of any
Event of Default, the following shall apply:

	 	(i)	 	The definition of “Market Quotation” shall be deleted in its entirety and
replaced with the following:
	 
	 	 	 	“Market Quotation” means, with respect to one or more Terminated Transactions, a
Firm Offer which is (1) made by a Reference Market-maker that is an Eligible
Replacement, (2) for an amount that would be paid to Party B (expressed as a
negative number) or by Party B (expressed as a positive number) in consideration of
an agreement between Party B and such Reference Market-maker to enter into a
transaction (the “Replacement Transaction”) that would have the effect of preserving
for such party the economic equivalent of any payment or delivery (whether the
underlying obligation was absolute or contingent and assuming the satisfaction of
each applicable condition precedent) by the parties under Section 2(a)(i) in respect
of such Terminated Transactions or group of Terminated Transactions that would, but
for the occurrence of the relevant Early Termination Date, have been required after
that date, (3) made on the basis that Unpaid Amounts in respect of the Terminated
Transaction or group of Transactions are to be excluded but, without limitation, any
payment or delivery that would, but for the relevant Early Termination Date, have
been required (assuming satisfaction of each applicable condition precedent) after
that Early Termination Date is to be included and (4) made in respect of a
Replacement Transaction with terms that are, in all material respects, no less
beneficial for Party B than those of this Agreement (save for the exclusion of
provisions relating to Transactions that are not Terminated Transactions) as
determined by Party B.
	 
	 	(ii)	 	Settlement Amount. The definition of Settlement Amount shall be deleted in its
entirety and replaced with the following:

	 	 	 	“Settlement Amount” means, with respect to any Early Termination Date, an
amount (as determined by Party B) equal to:

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	 	(a)	 	if, on or prior to such Early Termination Date,
a Market Quotation for the relevant Terminated Transaction or group of
Terminated Transactions is accepted by Party B so as to become legally
binding, the Termination Currency Equivalent of the amount (whether
positive or negative) of such Market Quotation;
	 
	 	(b)	 	if, on such Early Termination Date, no Market
Quotation for the relevant Terminated Transaction or group of
Terminated Transactions has been accepted by Party B so as to become
legally binding and one or more Market Quotations from Approved
Replacements have been communicated to Party B and remain capable of
becoming legally binding upon acceptance by Party B, the Termination
Currency Equivalent of the amount (whether positive or negative) of the
lowest of such Market Quotations (for the avoidance of doubt, (I) a
Market Quotation expressed as a negative number is lower than a Market
Quotation expressed as a positive number and (II) the lower of two
Market Quotations expressed as negative numbers is the one with the
largest absolute value); or
	 
	 	(c)	 	if, on such Early Termination Date, no Market
Quotation for the relevant Terminated Transaction or group of
Terminated Transactions is accepted by Party B so as to become legally
binding and no Market Quotation from an Approved Replacement has been
communicated to Party B and remains capable of becoming legally binding
upon acceptance by Party B, Party B’s Loss (whether positive or
negative and without reference to any Unpaid Amounts) for the relevant
Terminated Transaction or group of Terminated Transactions.”

	 	(iii)	 	For the purpose of determining satisfaction of clause (4) of the definition of
Market Quotation, Party B (and the Trustee on behalf of Party B) shall act in a
commercially reasonable manner.
	 
	 	(iv)	 	At any time on or before the Latest Settlement Amount Determination Day at
which two or more Market Quotations remain capable of becoming legally binding upon
acceptance, Party B shall be entitled to accept only the lowest of such Market
Quotations.
	 
	 	(v)	 	If Party B requests Party A in writing to obtain Market Quotations, Party A
shall use its reasonable efforts to do so before the Latest Settlement Amount
Determination Day.
	 
	 	(vi)	 	If the Settlement Amount is a negative number, Section 6(e)(i)(3) of this
Agreement shall be deleted in its entirety and replaced with the following:

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	 	 	 	Second Method and Market Quotation. If Second Method and Market Quotation (without
giving effect to the amendment to “Market Quotation” in Part 1(k)(i)) apply, (1)
Party B shall pay to Party A an amount equal to the absolute value of the Settlement
Amount in respect of the Terminated Transactions, (2) Party B shall pay to Party A
the Termination Currency Equivalent of the Unpaid Amounts owing to Party A and (3)
Party A shall pay to Party B the Termination Currency Equivalent of the Unpaid
Amounts owing to Party B; provided that, (i) the amounts payable under (2) and (3)
shall be subject to netting in accordance with Section 2(c) of this Agreement and
(ii) notwithstanding any other provision of this Agreement, any amount payable by
Party A under (3) shall not be netted-off against any amount payable by Party B
under (1).

	(l)	 	Designation of Early Termination Date. Notwithstanding any other provision of this
Agreement, Party B shall not designate an Early Termination Date, and no transfer of any
rights or obligations under this Agreement shall be made by either party, unless each Rating
Agency has been given prior written notice of such amendment, designation or transfer.

	(m)	 	Amendments. This Agreement shall not be amended unless each Rating Agency has been given
prior written notice and, with respect to S&P only, the Rating Agency Condition has been
satisfied.

Part 2. Tax Provisions 

	(a)	 	Payer Tax Representations. For the purpose of Section 3(e) of this Agreement, each party
makes the following representation: None.

	(b)	 	Gross Up. Section 2(d)(i)(4) shall not apply to Party B as X, and Section 2(d)(ii) shall not
apply to Party B as Y, in each case such that Party B shall not be required to pay any
additional amounts referred to therein.

	(c)	 	Indemnifiable Tax. The definition of “Indemnifiable Tax” in Section 14 is deleted in its
entirety and replaced with the following:

	 	 	“Indemnifiable Tax” means, in relation to payments by Party A, any Tax and, in relation to
payments by Party B, no Tax.

	(d)	 	Payee Tax Representations. For the purpose of Section 3(f) of this Agreement:

	 	(i)	 	Party A makes the following representation(s): None
	 
	 	(ii)	 	Party B makes the following representation(s): None.

	(e)	 	Tax Forms.

	 	(i)	 	Delivery of Tax Forms. For the purpose of Section 4(a)(i), and without
limiting Section 4(a)(iii), each party agrees to duly complete, execute and deliver to
the

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	 	 	 	other party the tax forms specified below with respect to it (A) before the first
Payment Date under this Agreement, (B) promptly upon reasonable demand by the other
party and (C) promptly upon learning that any such form previously provided by Party
has become obsolete or incorrect.
	 
	 	 	 	In addition, in the case of any tax form that is a Periodic Tax Form required to be
delivered by Party B under this Agreement, Party B agrees to renew such tax form
prior to its expiration by completing, executing and delivering to Party A that tax
form (“Renewal Tax Form”) in each succeeding third year following the year of
execution of any such tax form or Renewal Tax Form delivered by Party B to Party A
under this Agreement so that Party A receives each Renewal Tax Form not later than
December 31 of the relevant year. “Periodic Tax Form” means any IRS Form W-8BEN,
W-8IMY or W-8EXP that is delivered by Party B to Party A without a U.S. Taxpayer
Identification Number.
	 
	 	(ii)	 	Tax Forms to be Delivered by Party A: None specified.
	 
	 	(iii)	 	Tax forms to be Delivered by Party B:
	 
	 	 	 	Party B will deliver a correct, complete and duly executed U.S. Internal Revenue
Service Form W-9 (or successor thereto) that eliminates U.S. federal back-up
withholding tax on payments to Party B under this Agreement.

Part 3. Documents

	(a)	 	Delivery of Documents. When it delivers this Agreement, each party shall also deliver its
Closing Documents to the other party in form and substance reasonably satisfactory to the
other party. For each Transaction, a party shall deliver, promptly upon request, a duly
executed incumbency certificate for the person(s) executing the Confirmation for that
Transaction on behalf of that party.

	(b)	 	Closing Documents.

	 	(i)	 	For Party A, “Closing Documents” means:

	 	(A)	 	an opinion of Party A’s counsel addressed to Party B and the
Rating Agencies in form and substance acceptable to Party B;
	 
	 	(B)	 	a duly executed incumbency certificate for each person
executing this Agreement for Party A, or in lieu thereof, a copy of the
relevant pages of its official signature book; and
	 
	 	(C)	 	each Credit Support Document (if any) specified for Party A in
this Schedule, together with a duly executed incumbency certificate for the
person(s) executing that Credit Support Document, or in lieu thereof, a copy of
the relevant pages of its official signature book.

	 	(ii)	 	For Party B, “Closing Documents” means:

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	 	(A)	 	an opinion of Party B’s counsel addressed to Party A and the
Rating Agencies in form and substance acceptable to Party A;
	 
	 	(B)	 	a duly executed copy of the Indenture and the other operative
documents relating thereto and referred to therein, executed and delivered by
the parties thereto; and
	 
	 	(C)	 	a duly executed certificate of an authorized officer of the
Owner Trustee of Party B certifying the name and true signature of each person
authorized to execute this Agreement and enter into Transactions for Party B.

Part 4. Miscellaneous

	(a)	 	Addresses for Notices. For purposes of Section 12(a) of this Agreement, all notices to a
party shall, with respect to any particular Transaction, be sent to its address, telex number
or facsimile number specified in the relevant Confirmation, provided that any notice under
Section 5 or 6 of this Agreement, and any notice under this Agreement not related to a
particular Transaction, shall be sent to a party at its address, telex number or facsimile
number specified below; provided, further, that any notice under the Credit Support Annex
shall be sent to a party at its address, telex number or facsimile number specified in the
Credit Support Annex.

	 	 	 	 	 
	To Party A:	 	[Please confirm]	 	 
	 	 	Madrid Head Office:
	 
	 	 	 	 
	 

	 	Address:
	 	Ciudad Grupo Santander Edificio Marisma, Planta Baja
28660 Boadilla del Monte, Madrid.
	 

	 	Attn.:
	 	Swaps Administration
	 

	 	Telex:
	 	42362 / 45928 BADER E
	 

	 	Swift:
	 	BSCHESMM
	 

	 	Fax:
	 	(341) 2571228
	 

	 	Tel.:
	 	(341) 2893116
	 

	 	 	 	For all purposes and with respect to Transactions through that
Office
	 
	 	 	 	 
	 	 	New York Branch:
	 
	 	 	 	 
	 

	 	Address:
	 	45 East 53rd Street, N.Y. 10022 New York
	 

	 	Attn.:
	 	Swaps Department
	 

	 	Telex:
	 	BANSAN 662480 UW
	 

	 	Swift:
	 	BSCHUS33
	 

	 	Fax:
	 	(212) 350 3535
	 

	 	Tel.:
	 	(212) 350 3500
	 

	 	 	 	Only with respect to Transactions through that Office

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	 	 	To Party B:

	 	 	Santander Drive Auto Receivables Trust [           ]

	 	 	c/o U.S. Bank Trust National Association

		 	300 Delaware Avenue, 9th Floor

	 	 	Wilmington, Delaware, 19801

	(b)	 	Process Agent. For the purpose of Section 13(c) of this Agreement:

	 	 	Party A appoints as its Process Agent: Not applicable

	 	 	Party B appoints as its Process Agent: Not applicable.

	(c)	 	Offices. The provisions of Section 10(a) will apply to this Agreement.

	(d)	 	Multibranch Party. For the purpose of Section 10(c) of this Agreement, neither party is a
Multibranch Party.

	(e)	 	“Calculation Agent” means Party A; provided that if Party A is the Defaulting Party, the
Calculation Agent shall be any designated party mutually agreed to by the parties until such
time as Party A is no longer the Defaulting Party.

	(f)	 	Credit Support Document.

	 	(i)	 	For Party A, the following is a Credit Support Document: the Credit Support
Annex dated the date hereof (the “Credit Support Annex”) and duly executed and
delivered by Party A and Party B and any Eligible Guarantee, if applicable.
	 
	 	(ii)	 	For Party B, the following is a Credit Support Document: the Credit Support
Annex.

	(g)	 	Credit Support Provider.

	 	(i)	 	For Party A, Credit Support Provider means the guarantor under any Eligible
Guarantee, if any.
	 
	 	(ii)	 	For Party B, the Credit Support Provider means: none.

	(h)	 	Governing Law. This Agreement will be governed by and construed in accordance with the law
(and not the law of conflicts except with respect to §§ 5-1401 and 5-1402 of the New York
General Obligations Law) of the State of New York.

	(i)	 	Waiver of Jury Trial. To the extent permitted by applicable law, each party irrevocably
waives any and all right to trial by jury in any legal proceeding in connection with this
Agreement, any Credit Support Document to which it is a party, or any Transaction.

	(j)	 	Netting of Payments. Section 2(c)(ii) of this Agreement will apply to all Transactions.

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	(k)	 	“Affiliate” has its meaning as defined in Section 14 of this Agreement, provided that Party B
shall be deemed to have no Affiliates.

	(l)	 	Severability. If any term, provision, covenant, or condition of this Agreement, or the
application thereof to any party or circumstance, shall be held to be illegal, invalid or
unenforceable (in whole or in part) for any reason, the remaining terms, provisions, covenants
and conditions hereof shall continue in full force and effect as if this Agreement had been
executed with the illegal, invalid or unenforceable portion eliminated, so long as this
Agreement as so modified continues to express, without material change, the original
intentions of the parties as to the subject matter of this Agreement and the deletion of such
portion of this Agreement will not substantially impair the respective benefits or
expectations of the parties to this Agreement; provided, however, that this severability
provision shall not be applicable if any provision of Section 1(c), 2, 5, 6 or 13 (or any
definition or provision in Section 14 to the extent it relates to, or is used in or in
connection with any such Section) shall be held to be invalid or unenforceable.

	(m)	 	Single Agreement. Section 1(c) shall be amended by adding the words “, the credit support
annex entered into between Party A and Party B in relation to this Agreement” after the words
“Master Agreement.”

	(n)	 	Local Business Day. The definition of Local Business Day in Section 14 of this Agreement
shall be amended by the addition of the words “or any Credit Support Document” after “Section
2(a)(i)” and the addition of the words “or Credit Support Document” after “Confirmation”.

Part 5. Other Provisions

	(a)	 	2006 ISDA Definitions. This Agreement and each Transaction are subject to the 2006 ISDA
Definitions published by the International Swaps and Derivatives Association, Inc. (the “2006
ISDA Definitions”) and will be governed by the provisions of the 2006 ISDA Definitions. The
provisions of the 2006 ISDA Definitions are incorporated by reference in, and shall form part
of, this Agreement and each Confirmation. Any reference to a “Swap Transaction” in the 2006
ISDA Definitions is deemed to be a reference to a “Transaction” for purposes of this Agreement
or any Confirmation, and any reference to a “Transaction” in this Agreement or any
Confirmation is deemed to be a reference to a “Swap Transaction” for purposes of the 2006 ISDA
Definitions. The provisions of this Agreement (exclusive of the 2006 ISDA Definitions) shall
prevail in the event of any conflict between such provisions and the 2006 ISDA Definitions.

	 	 	“Transaction Documents” shall have the meaning ascribed to such term in Appendix A of that
certain Sale and Servicing Agreement dated as of [       ], as amended, modified or
supplemented from time to time, among [Santander Drive Auto Receivables LLC, as seller,
Party B, as Issuer, Santander Consumer USA Inc., as Servicer, and Wells Fargo Bank, National
Association, as Indenture Trustee].

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	 	 	All other capitalized terms used herein and not defined herein shall have the definitions
ascribed to them in the Indenture and Credit Support Annex.

	(b)	 	Downgrade Provisions.

	 	(i)	 	Second Trigger Failure Condition. So long as a Moody’s Second Trigger
Downgrade Event has occurred, Party A shall, at its own expense use commercially
reasonable efforts, as soon as reasonably practicable, to either (i) furnish an
Eligible Guarantee of Party A’s obligations under this Agreement from a guarantor that
maintains the First Trigger Required Ratings and/or the Moody’s Second Trigger Ratings
Threshold or (ii) effect a transfer pursuant to Part 6(a).
	 
	 	(ii)	 	S&P Collateralization Event. It shall be a collateralization event if either
(A) the unsecured, short-term debt obligations of the Relevant Entity are rated below
“A-1” by S&P or (B) if the Relevant Entity does not have a short-term rating from S&P,
the unsecured, long-term senior debt obligations of a Relevant Entity are rated below
“A” by S&P (“S&P Collateralization Event”). For the avoidance of doubt, the parties
hereby acknowledge and agree that notwithstanding the occurrence of an S&P
Collateralization Event, this Agreement and each Transaction hereunder shall continue
to be a Swap Agreement for purposes of the Transaction Documents.
	 
	 	(iii)	 	S&P Ratings Event. It shall be a ratings event if at any time after the date
hereof, the Relevant Entity fails to satisfy the Hedge Counterparty Ratings Threshold
or the Relevant Entity is no longer rated by S&P (“S&P Ratings Event”). Within 60
calendar days from the date an S&P Ratings Event has occurred and so long as such S&P
Ratings Event is continuing, Party A shall, at its sole expense, (x) obtain an Eligible
Replacement that upon satisfaction of the Rating Agency Condition, assumes the
obligations of Party A under this Agreement (through an assignment and assumption
agreement in form and substance reasonably satisfactory to Party B) or (y) obtain at
its sole cost and expense an Eligible Guarantee from an entity that satisfies the Hedge
Counterparty Rating Requirements subject to the satisfaction of the Rating Agency
Condition with respect to such guaranty.
	 
	 	(iv)	 	Fitch Collateralization Event. It shall be a collateralization event if either
(A) the unsecured, short-term debt obligations of the Relevant Entity are rated below
“F1” by Fitch or (B) the unsecured, long-term senior debt obligations of a Relevant
Entity are rated below “A” by Fitch (“Fitch Collateralization Event”). For the
avoidance of doubt, the parties hereby acknowledge and agree that notwithstanding the
occurrence of an Fitch Collateralization Event, this Agreement and each Transaction
hereunder shall continue to be a Swap Agreement for purposes of the Transaction
Documents.
	 
	 	(v)	 	Fitch Ratings Event. It shall be a ratings event if at any time after the date
hereof, the Relevant Entity fails to satisfy the Hedge Counterparty Ratings Threshold
or the Relevant Entity is no longer rated by Fitch (“Fitch Ratings

12

 

	 	 	 	Event”). Within 30 calendar days from the date an Fitch Ratings Event has occurred
and so long as such Fitch Ratings Event is continuing, Party A shall, at its sole
expense, (x) obtain an Eligible Replacement that assumes the obligations of Party A
under this Agreement (through an assignment and assumption agreement in form and
substance reasonably satisfactory to Party B) or (y) obtain at its sole cost and
expense an Eligible Guarantee from an entity that satisfies the Hedge Counterparty
Rating Requirements with respect to such guaranty.
	 
	 	(vi)	 	Downgrade Definitions.

	 	(A)	 	“DBRS” means DBRS, Inc.
	 
	 	(B)	 	“Eligible Guarantee” means an unconditional and irrevocable
guarantee of all present and future obligations of Party A under this Agreement
(or, solely for purposes of the definition of Eligible Replacement, all present
and future obligations of such Eligible Replacement under this Agreement or its
replacement, as applicable) which is provided by a guarantor as principal
debtor rather than surety and which is directly enforceable by Party B, the
form and substance of which guarantee are subject to the Rating Agency
Condition with respect to S&P, and either (A) a law firm has given a legal
opinion confirming that none of the guarantor’s payments to Party B under such
guarantee will be subject to deduction or Tax collected by withholding and such
opinion has been delivered to Moody’s, or (B) such guarantee provides that, in
the event that any of such guarantor’s payments to Party B are subject to
deduction or Tax collected by withholding, such guarantor is required to pay
such additional amount as is necessary to ensure that the net amount actually
received by Party B (free and clear of any Tax collected by withholding) will
equal the full amount Party B would have received had no such deduction or
withholding been required, or (C) in the event that any payment under such
guarantee is made net of deduction or withholding for Tax, Party A is required,
under Section 2(a)(i), to make such additional payment as is necessary to
ensure that the net amount actually received by Party B from the guarantor will
equal the full amount Party B would have received had no such deduction or
withholding been required.
	 
	 	(C)	 	“Eligible Replacement” means an entity (A) that lawfully could
perform the obligations owing to Party B under this Agreement (or its
replacement, as applicable) and (B) (I) (x) which has credit ratings from S&P
[and Fitch] that satisfy the Hedge Counterparty Ratings Requirement or (y) all
present and future obligations of which entity owing to Party B under this
Agreement (or its replacement, as applicable) are guaranteed pursuant to an
Eligible Guarantee provided by a guarantor with credit ratings from S&P [and
Fitch] that satisfy the Hedge Counterparty Ratings Requirement, in either case
if S&P [and Fitch] is a Rating Agency, and (II)(x) which has credit ratings
from Moody’s at least equal to the Moody’s Second Trigger Ratings Threshold or
(y) all present and future obligations of which entity

13

 

	 		 	owing to Party B under this Agreement (or its replacement, as applicable)
are guaranteed pursuant to an Eligible Guarantee provided by a guarantor
with credit ratings from Moody’s at least equal to the Moody’s Second
Trigger Ratings Threshold, in either case if Moody’s is a Rating Agency, and
(III)(x) which has credit ratings from Fitch that satisfy the Hedge
Counterparty Ratings Requirement or (y) all present and future obligations
of which entity owing to Party B under this Agreement (or its replacement,
as applicable) are guaranteed pursuant to an Eligible Guarantee provided by
a guarantor with credit ratings from Fitch that satisfy the Hedge
Counterparty Ratings Requirement, in either case if Fitch is a Rating
Agency.
	 
	 	(D)	 	“Firm Offer” means an offer which, when made, was capable of
becoming legally binding upon acceptance.
	 
	 	(E)	 	“First Trigger Required Ratings” means with respect to an
entity, either (i) where the entity is the subject of a Moody’s Short-term
Rating, such entity’s Moody’s Short-term Rating is “Prime-I” and the entity’s
long-term, unsecured and unsubordinated debt or counterparty obligations are
rated “A2” or above by Moody’s or (ii) where the entity is not the subject of a
Moody’s Short-term Rating, its long-term, unsecured and unsubordinated debt or
counterparty obligations are rated “AI” or above by Moody’s.
	 
	 	(F)	 	“Fitch” means Fitch ratings.
	 
	 	(G)	 	“Hedge Counterparty Ratings Requirement” means (i) a short-term
senior unsecured debt rating of at least “A-1” by S&P, or a long-term senior
unsecured debt rating of at least “A+” by S&P if it has no short-term rating,
or (ii) a short-term senior unsecured debt rating of at least “F1” by Fitch,
and, if such entity has a long-term senior unsecured debt rating by Fitch, a
long-term senior unsecured debt rating of at least “A” by Fitch. For the
purpose of this definition, no direct or indirect recourse against one or more
shareholders of the substitute counterparty (or against any Person in control
of, or controlled by, or under common control with, any such shareholder) shall
be deemed to constitute a guarantee, security or support of the obligations of
the substitute counterparty.
	 
	 	(H)	 	“Hedge Counterparty Ratings Threshold” means (i) such entity
has a short-term rating of at least “A-2” by S&P, or a long-term rating of at
least “BBB+” by S&P if it has no short-term rating and (ii) if such entity is
rated by Fitch, such entity has a short-term rating of at least “F2” by Fitch,
or a long-term rating of at least “BBB+” by Fitch. For the avoidance of all
doubts, the parties hereby acknowledge and agree that notwithstanding the
occurrence of an S&P Ratings Event [or a Fitch Ratings Event], this Agreement
and each Transaction hereunder shall continue to be a Swap Agreement for
purposes of the Transaction Documents.

14

 

	 	(I)	 	“Moody’s” means Moody’s Investors Service, Inc.
	 
	 	(J)	 	“Moody’s Second Trigger Downgrade Event” means that no Relevant
Entity has credit ratings from Moody’s at least equal to the Moody’s Second
Trigger Ratings Threshold.
	 
	 	(K)	 	“Moody’s Second Trigger Ratings Threshold” means, with respect
to Party A, the guarantor under an Eligible Guarantee, or an Eligible
Replacement, (i) if such entity has a short-term unsecured and unsubordinated
debt rating from Moody’s, a long-term unsecured and unsubordinated debt rating
or counterparty rating from Moody’s of “A3” and a short-term unsecured and
unsubordinated debt rating from Moody’s of “Prime-2”, or (ii) if such entity
does not have a short-term unsecured and unsubordinated debt rating from
Moody’s, a long-term unsecured and unsubordinated debt rating or counterparty
rating from Moody’s of “A3”.
	 
	 	(L)	 	“Moody’s Short-term Rating” means a rating assigned by Moody’s
under its short-term rating scale in respect of an entity’s short-term,
unsecured and unsubordinated debt obligations.
	 
	 	(M)	 	“Rating Agency” shall mean S&P, Moody’s, [Fitch and DBRS].
	 
	 	(N)	 	“Rating Agency Condition” shall mean first receiving prior
written confirmation from S&P [and Fitch] [and DBRS] that their then-current
ratings of the rated Notes will not be downgraded or withdrawn by such Rating
Agency.
	 
	 	(O)	 	“Relevant Entity” means Party A and any guarantor under an
Eligible Guarantee in respect of all of Party A’s present and future
obligations under this Agreement.
	 
	 	(P)	 	“S&P” means Standard & Poor’s Rating Services, a division of
The McGraw-Hill Companies, Inc.

	(c)	 	Additional Representations. Section 3 of this Agreement is hereby amended by adding the
following Sections 3(g), (h), (i) and (j):

	 	“(g) 	 	 Non-Reliance. For any Relevant Agreement: (i) it acts as principal and not as
agent, (ii) it acknowledges that the other party acts only arm’s length and is not its
agent, broker, advisor or fiduciary in any respect, and any agency, brokerage, advisory
or fiduciary services that the other party (or any of its affiliates) may otherwise
provide to the party (or to any of its affiliates) excludes the Relevant Agreement,
(iii) it is relying solely upon its own evaluation of the Relevant Agreement (including
the present and future results, consequences, risks, and benefits thereof, whether
financial, accounting, tax, legal, or otherwise) and upon advice from its own
professional advisors, (iv) it understands the Relevant Agreement and those risks, has
determined they are appropriate for it, and willingly assumes those risks, (v) it has
not relied and will not be relying upon any evaluation

15

 

	 		 	or advice (including any recommendation, opinion, or representation) from the other
party, its affiliates or the representatives or advisors of the other party or its
affiliates (except representations expressly made in the Relevant Agreement or an
opinion of counsel required thereunder); and (vi) if a party is acting as a
Calculation Agent or Valuation Agent, it does so not as the other party’s agent or
fiduciary, but on an arm’s length basis for the purpose of performing an
administrative function in good faith.
	 
	 	 	 	“Relevant Agreement” means this Agreement, each Transaction, each Confirmation, any
Credit Support Document, and any agreement (including any amendment, modification,
transfer or early termination) between the parties relating thereto or to any
Transaction.
	 
	 	(h)	 	Eligibility. It is an “eligible contract participant” within the meaning of
the Commodity Exchange Act (as amended by the Commodity Futures Modernization Act of
2000).
	 
	 	(i)	 	FDIC Requirements. If it is a bank subject to the requirements of 12 U.S.C. §
1823(e), its execution, delivery and performance of this Agreement (including the
Credit Support Annex and each Confirmation) have been approved by its board of
directors or its loan committee, such approval is reflected in the minutes of said
board of directors or loan committee, and this Agreement (including the Credit Support
Annex and each Confirmation) will be maintained as one of its official records
continuously from the time of its execution (or in the case of any Confirmation,
continuously until such time as the relevant Transaction matures and the obligations
therefor are satisfied in full).
	 
	 	(j)	 	ERISA. It is not (i) an employee benefit plan as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) or a plan as
defined in Section 4975(e) of the Internal Revenue Code of 1986, as amended (the
“Code”), subject to Title I of ERISA or Section 4975 of the Code, or a plan as so
defined but which is not subject to Title I of ERISA or Section 4975 of the Code (each,
an “ERISA Plan”), (ii) a person or entity acting on behalf of an ERISA Plan, or (iii) a
person or entity the assets of which constitute assets of an ERISA Plan.”

	(d)	 	Recorded Conversations. Each party and any of its Affiliates may electronically record any
of its telephone conversations with the other party or with any of the other party’s
Affiliates in connection with this Agreement or any Transaction, and any such recordings may
be submitted in evidence in any proceeding to establish any matters pertinent to this
Agreement or any Transaction.

	(e)	 	Transfers by Party A.

	 	(i)	 	Section 7 of this Agreement shall not apply to Party A and, subject to Part
5(e)(ii), Party A shall not transfer, whether by way of security or otherwise, any
interest or obligation in or under this Agreement without first satisfying the Rating
Agency

16

 

	 	 	 	Condition (with respect to S&P) and without the prior written consent of Party B;
provided that, to the extent that Party A or Party B makes a transfer pursuant to
this Part 6, it shall first provide prior written notice to the Rating Agencies of
such transfer; provided that, to avoid any doubt, the parties hereto acknowledge and
agree that notwithstanding any provision in the Agreement to the contrary
(including, but not limited to Part 5(e)(ii)), with respect to any and all
transfers, the Rating Agency Condition (with respect to S&P) must in any event be
satisfied.
	 
	 	(ii)	 	Subject to Part 1(1), Party A may (at its own cost) transfer its rights and
obligations with respect to this Agreement to any other entity (a “Transferee”) that is
an Eligible Replacement through a novation or other assignment and assumption agreement
or similar agreement in form and substance reasonably satisfactory to Party B; provided
that:

	 	(A)	 	the Transferee contracts with Party B on terms that (x) are
identical to the terms of this Agreement in respect of any obligation (whether
absolute or contingent) to make payment or delivery after the effective date of
such transfer and (y) insofar as they do not relate to payment or delivery
obligations, are, in all material respects, no less beneficial for Party B than
the terms of this Agreement immediately before such transfer;
	 
	 	(B)	 	unless such transfer is effected for the purpose of Section
5(e)(ii) or at a time when First Rating Trigger Requirements apply, Party B has
determined that the condition in Part 5(e)(ii)(A)(y) above is satisfied.
	 
	 	 	 	The “First Rating Trigger Requirements” shall apply so long as no Relevant
Entity has the First Trigger Required Ratings.
	 
	 	 	 	An entity shall have the “First Trigger Required Ratings” (A) where such
entity is the subject of a Moody’s Short-term Rating, if such rating is
Moody’s “Prime-1” and its long-term, unsecured and unsubordinated debt or
counterparty obligations are rated “A2” or above by Moody’s and (B) where
such entity is not the subject of a Moody’s Short-term Rating, if its
long-term, unsecured and unsubordinated debt or counterparty obligations are
rated “Al” or above by Moody’s.
	 
	 	(C)	 	as of the date of such transfer the Transferee will not be
required to withhold or deduct on account of a Tax from any payments under this
Agreement unless the Transferee will be required to make payments of additional
amounts pursuant to Section 2(d)(i)(4) of this Agreement in respect of such
Tax, (B) a Termination Event or Event of Default does not occur under this
Agreement as a result of such transfer, and (C) Party A receives confirmation
from S&P that transfer to the Transferee does not violate the Rating Agency
Condition. Following such transfer, all references to Party A shall be deemed
to be references to the Transferee.

17

 

	 	(iii)	 	In determining whether or not a transfer satisfies the condition in Part
5(e)(ii)(A)(y) above, Party B shall act in a commercially reasonable manner.
	 
	 	(iv)	 	If an entity has made a Firm Offer (which remains capable of becoming legally
binding upon acceptance) to be the transferee of a transfer to be made in accordance
with Part 5(e)(ii) above, Party B shall, at Party A’s written request and cost, take
any reasonable steps required to be taken by it to effect such transfer.
	 
	 	(v)	 	Section 5(e)(ii) shall be amended by (i) replacing the words “all its rights
and obligations under this Agreement in respect of the Affected Transactions to another
of its Offices or Affiliates so that such Termination Event ceases to exist” with the
words “its rights and obligations under this Agreement in respect of the Affected
Transactions in accordance with Part 5(e) of the Schedule (on the basis that each
reference to “Agreement” in Part 5(e) is replaced by the words “Agreement in respect of
the Affected Transactions”)” and (ii) the deletion of the sentence: “Any such transfer
by a party under this Section 6(b)(ii) will be subject to and conditional upon the
prior written consent of the other party, which consent will not be withheld if such
other party’s policies in effect at such time would permit it to enter into
transactions with the transferee on the terms proposed.”.
	 
	 	(vi)	 	Following a transfer in accordance with Part 5(e)(ii), all references to Party
A shall be deemed to be references to the Transferee.
	 
	 	(vii)	 	Except as specified otherwise in the documentation evidencing a transfer, a
transfer of all the obligations of Party A made in compliance with this Part 5(e) will
constitute an acceptance and assumption of such obligations (and any related interests
so transferred) by the transferee, a novation of the transferee in place of Party A
with respect to such obligations (and any related interests so transferred), and a
release and discharge by Party B of Party A from, and an agreement by Party B not to
make any claim for payment, liability, or otherwise against Party A with respect to,
such obligations from and after the effective date of the transfer.

	(f)	 	Permitted Security Interest. For purposes of Section 7 of this Agreement, Party A hereby
consents to the Permitted Security Interest, subject to the provisions of paragraph (c) below.

	 	 	“Permitted Security Interest” means the collateral assignment by Party B of the Swap
Collateral to the Trustee pursuant to the Indenture, and the granting to the Trustee of a
security interest in the Swap Collateral pursuant to the Indenture.

	 	 	“Swap Collateral” means all right, title and interest of Party B in this Agreement, each
Transaction hereunder, and all present and future amounts payable by Party A to Party B
under or in connection with this Agreement or any Transaction governed by this Agreement,
whether or not evidenced by a Confirmation, including, without limitation, any transfer or
termination of any such Transaction.

	 	 	“Trustee” means [Wells Fargo Bank, National Association] or any successor acting as
indenture trustee pursuant to the Indenture.

18

 

	(g)	 	Effect of Permitted Security Interest.

	 	(i)	 	Notwithstanding the Permitted Security Interest, Party B shall not be released
from any of its obligations under this Agreement or any Transaction, and Party A may
exercise its rights and remedies under this Agreement without notice to, or the consent
of the Trustee or any Noteholder except as otherwise expressly provided in this
Agreement.
	 
	 	(ii)	 	Party A’s consent to the Permitted Security Interest is expressly limited to
the Trustee for the benefit of the secured parties under the Indenture, and Party A
does not consent to the sale or transfer by the Trustee of the Swap Collateral to any
other person or entity (other than a successor to the Trustee under the Indenture
acting in that capacity).
	 
	 	(iii)	 	Party B hereby acknowledges that, as a result of the Permitted Security
Interest, all of its rights under this Agreement, including any Transaction, have been
assigned to the Trustee pursuant to the Indenture and notwithstanding any other
provision in this Agreement, Party B may not take any action hereunder to exercise any
of such rights without the prior written consent of the Trustee, including, without
limitation, providing any notice under this Agreement the effect of which would be to
cause an Early Termination Date to occur or be deemed to occur. If Party B gives any
notice to Party A for the purposes of exercising any of Party B’s rights under this
Agreement, Party A shall have the option of treating that notice as void unless that
notice is signed by the Trustee acknowledging its consent to the provisions of that
notice. Nothing herein shall be construed as requiring the consent of the Owner
Trustee, the Trustee or any Noteholder for the performance by Party B of any of its
obligations hereunder.
	 
	 	(iv)	 	Except as expressly provided in this Agreement for any transfer (as provided in
Part 6 hereof), Event of Default, Termination Event, Additional Termination Event,
Party A and Party B may not enter into any agreement to dispose of any Transaction,
whether in the form of a termination, unwind, transfer or otherwise without the prior
written consent of the Trustee.
	 
	 	(v)	 	Except as expressly provided in this Agreement, no amendment, modification, or
waiver in respect of this Agreement will be effective unless (A) evidenced by a writing
executed by each party hereto, and (B) the Trustee has acknowledged their consent
thereto in writing and S&P confirms that the amendment, modification or waiver will not
cause the reduction or withdrawal of its then current rating on any Notes under the
Indenture.

	(h)	 	Payments. All payments to Party B under this Agreement or any Transaction shall be made to
the appropriate account under the Transaction Documents.

	(i)	 	Set-off. Except as otherwise provided in this Schedule, Party A and Party B hereby waive any
and all right of setoff with respect to any amounts due under this Agreement or any
Transaction, provided that nothing herein shall be construed to waive or otherwise

19

 

	 	 	limit the netting provisions contained in Sections 2(c) and 6 of this Agreement or the
setoff rights contained in the Credit Support Annex. Section 6(e) shall be amended by the
deletion of the following sentence: “The amount, if any, payable in respect of an Early
Termination Date and determined pursuant to this Section will be subject to any Setoff”.

	(j)	 	Indenture.

	 	(i)	 	Party B hereby acknowledges that Party A is a secured party under the Indenture
with respect to this Agreement and a third-party beneficiary under the Indenture and
Party B agrees for the benefit of Party A that neither it nor any other Person will
take any action (whether in the form of an amendment, a modification, supplement,
waiver, approval, consent or otherwise) which may have a material adverse effect with
respect to the rights, interest or benefits granted to Party A under the Indenture with
respect to this Agreement, whether or not this Agreement is specifically referred to or
identified therein without the prior written consent of Party A (to the extent such
consent is required under the Indenture).
	 
	 	 	 	“Indenture” means that certain Indenture, by and among Party B as Issuer, and the
Trustee, dated as of [       ], as the same may be amended, modified, supplemented
or restated from time to time.
	 
	 	(ii)	 	On the date Party B executes and delivers this Agreement and on each date on
which a Transaction is entered into, Party B hereby represents and warrants to Party A:
that the Indenture is in full force and effect; that Party B is not party to any
separate agreement with any of the parties to the Indenture that would have the effect
of diminishing or impairing the rights, interests or benefits that have been granted to
Party A under, and which are expressly set forth in, the Indenture; that Party B’s
obligations under this Agreement are secured under the Indenture; that this Agreement
constitutes a “Swap Agreement” under the Transaction Documents applicable to it; that
each Transaction entered into under this Agreement is a Swap Agreement under the
Transaction Documents applicable to it; that Party A constitutes a Swap Provider under
the Transaction Documents applicable to it; that no Event of Default has occurred and
is continuing as defined in the Transaction Documents applicable to it; that nothing
herein violates or conflicts with any of the provisions of the Transaction Documents
applicable to it or any other documents executed in connection therewith. In addition,
on each date on which a Transaction is entered into, Party B hereby represents and
warrants to Party A: that the Transaction meets all of the requirements under the
Transaction Documents applicable to it and does not violate or conflict with any of the
provisions of the Transaction Documents applicable to it or any other documents
executed in connection therewith; and that under the terms of the Transaction Documents
applicable to it, neither the consent of the Owner Trustee, the Trustee nor of any of
the Noteholders under the Transaction Documents is required for Party B to enter into
that Transaction or for Party A to be entitled for that Transaction to the rights,
interests and benefits granted to Party A under the Transaction Documents.

20

 

	 	(iii)	 	Party B will provide at least ten days’ prior written notice to Party A of any
proposed amendment or modification to the Transaction Documents.

	(k)	 	Consent to Notice & Communications. Party B hereby consents to the giving to the Trustee of
notice by Party A of Party A’s address and telecopy and telephone numbers for all purposes of
the Transaction Documents, and in addition, Party A shall also be entitled at any time to
provide the Trustee with copies of this Agreement, including all Confirmations. In addition,
Party A shall not be precluded from communicating with the Trustee or any party to, or any
third party beneficiary under, the Transaction Documents for the purpose of exercising,
enforcing or protecting any of Party A’s rights or remedies under this Agreement or any
rights, interests or benefits granted to Party A under the Transaction Documents.

	(l)	 	No Bankruptcy Petition. Without impairing any right afforded to it under the Transaction
Documents as a third party beneficiary, Party A shall not institute against or cause any other
person to institute against, or join any other person in instituting against the Trust any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any federal or state bankruptcy, dissolution or similar law, for a period of
one year and one day following indefeasible payment in full of the Notes. Nothing shall
preclude, or be deemed to stop, Party A (i) from taking any action prior to the expiration of
the aforementioned one year and one day period, or if longer the applicable preference period
then in effect, in (A) any case or proceeding voluntarily filed or commenced by Party B or (B)
any involuntary insolvency proceeding filed or commenced by a Person other than Party A, or
(ii) from commencing against Party B or any of the Collateral any legal action which is not a
bankruptcy, reorganization, arrangement, insolvency, moratorium, liquidation or similar
proceeding. The provisions of this paragraph shall survive termination of this Agreement.

	(m)	 	Limitation of Liability. It is expressly understood and agreed by the parties hereto that
(i) this Agreement is executed and delivered by the Trustee not individually or personally but
solely as trustee of the Trust, in the exercise of the powers and authority conferred and
vested in it, (ii) each of the representations, undertakings and agreements herein made on the
part of the Trust is made and intended not as a personal representation, undertaking or
agreement by the Trustee but is made and intended for the purpose of binding only the Trust,
(iii) nothing herein contained shall be construed as creating any liability on the part of the
Trustee, individually or personally, to perform any covenant either expressed or implied
contained herein, all such liability, if any, being expressly waived by the parties hereto and
by any Person claiming by, through or under the parties hereto and (iv) under no circumstances
shall the Trustee be personally liable for the payment of any indebtedness or expenses of the
Trust or be liable for the breach or failure of any obligation, representation, warranty or
covenant made or undertaken by the Trust under this Agreement.

	(n)	 	Party A Rights Solely Against Collateral. The liability of Party B to Party A hereunder is
limited in recourse to the assets of the Trust, and to distributions of interest proceeds and
principal proceeds thereon applied in accordance with the terms of the Indenture. Upon
application of and exhaustion of all of the assets of the Trust (and proceeds thereof)

21

 

	 	 	in accordance with the Indenture, Party A shall not be entitled to take any further steps
against Party B to recover any sums due but still unpaid hereunder or thereunder, all claims
in respect of which shall be extinguished. Notwithstanding the foregoing or anything herein
to the contrary, Party A shall not be precluded from declaring an Event of Default or from
exercising any other right or remedy as set forth in this Agreement or the Indenture. The
provisions of this paragraph shall survive termination of this Agreement.

	(o)	 	Change of Account. Section 2(b) of this Agreement is hereby amended by the addition of the
words “to another account in the same legal and tax jurisdiction as the original account”
following the word “delivery” in the first line thereof.

	(p)	 	Notice of Certain Events or Circumstances. Each party agrees, upon learning of the
occurrence or existence of any event or condition that constitutes (or that with the giving of
notice or passage of time or both would constitute) an Event of Default or Termination Event
with respect to such party, promptly to give the other party notice of such event or condition
(or, in lieu of giving notice of such event or condition in the case of an event or condition
that with the giving of notice or passage of time or both would constitute an Event of Default
or Termination Event with respect to the party, to cause such event or condition to cease to
exist before becoming an Event of Default or Termination Event); provided that failure to
provide notice of such event or condition pursuant to this provision shall not constitute an
Event of Default or a Termination Event. Each party agrees to provide to the other party any
other notice reasonably expected to be provided to facilitate compliance with the terms of
this Agreement and the Credit Support Document.

	(q)	 	Regarding Party A. Party B acknowledges and agrees that Party A has had and will have no
involvement in and, accordingly Party A accepts no responsibility for: (i) the establishment,
structure, or choice of assets of Party B; (ii) the selection of any person performing
services for or acting on behalf of Party B; (iii) the selection of Party A as the
Counterparty; (iv) the terms of the Notes, (v) other than with respect to the Prospectus
Information (as defined herein), the preparation of or passing on the disclosure and other
information contained in any offering circular or offering document for the Notes, the
Transaction Documents, or any other agreements or documents used by Party B or any other party
in connection with the marketing and sale of the Notes; (vi) the ongoing operations and
administration of Party B, including the furnishing of any information to Party B which is not
specifically required under this Agreement or (vii) any other aspect of Party B’s existence.

	(r)	 	Compliance with Regulation AB.

	 	(i)	 	Party A has been advised by Party B that Santander Consumer USA Inc. (the
“Sponsor”), and Party B are required under Regulation AB under the Securities Act of
1933 and the Securities Exchange Act of 1934, as amended (“Regulation AB”), to disclose
certain information regarding Party A. Such information may include financial
information to the extent required under Item 1115 of Regulation AB.

22

 

	 	(ii)	 	If required, upon written request, Party A shall provide to Party B or the
Sponsor the applicable financial information described under Item 1115(b) of Regulation
AB (the “Reg AB Financial Information”) within ten (10) Business Days of receipt of a
written request for such Reg AB Financial Information by the Sponsor or Party B (the
“Response Period”), so long as the Sponsor or Party B has reasonably determined, in
good faith, that such information is required under Regulation AB. In the event that
Party A does not provide any such Reg AB Financial Information by the end of the
related Response Period, Party A promptly, but in no event later than ten (10) Local
Business Days following the end of such Response Period shall either, at Party A’s own
expense (1) find a replacement counterparty that (A) has the ability to provide its
applicable Reg AB Financial Information, (B) satisfies the Rating Agency Condition, (C)
is acceptable to Party B and (D) enters into an agreement with Party B substantially in
the form of this Agreement (such replacement counterparty, a “Reg AB Approved Entity”);
(2) obtain a guaranty of Party A’s obligations under this Agreement from an affiliate
of Party A that complies with the financial information disclosure requirements of Item
1115 of Regulation AB, and cause such affiliate to provide Swap Financial Disclosure
and any future Swap Financial Disclosure and other information pursuant to clause (1),
such that disclosure provided in respect of such affiliate will satisfy any disclosure
requirements applicable to the Swap Provider, or (3) transfer Eligible Collateral to
Party B’s Custodian in an amount (taking into account any amount posted pursuant to the
Credit Support Annex, if any) which is sufficient, as reasonably determined in good
faith by the Sponsor, to reduce the aggregate significance percentage below 10% (or, so
long as Party A is able to provide the Swap Financial Disclosure required pursuant to
Item 1115(b)(1) of Regulation AB, below 20%, in the event Party A is requested to
provide the Swap Financial Disclosure required pursuant to Item 1115(b)(2) of
Regulation AB).
	 
	 	(iii)	 	If Party B or the Sponsor request (in writing) the Reg AB Financial
Information from Party A, then the Sponsor or Party B will promptly (and in any event
within one (1) Business Day of the date of the request for the Reg AB Financial
Information) provide Party A with a written explanation of how the significance
percentage was calculated.
	 
	 	(iv)	 	Party A represents and warrants that the statements appearing in the Prospectus
Supplement dated [       ], as supplemented by the Supplement dated [       ], or in the
Prospectus, dated [       ], each relating to Santander Drive Auto Receivables Trust [
] under the headings “The Swap Counterparty” (the “Prospectus Information”) are true
and correct in all material respects and do not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.

	 
	 	(v)	 	(A)	 	 Party A shall indemnify and hold harmless Party B, the Sponsor, their
respective directors or officers and any person controlling Party B or the Sponsor,
from and against any and all losses, claims, damages and liabilities caused by any
untrue statement or alleged untrue statement of a

23

 

	 	 	 	material fact contained in the Prospectus Information or in any Reg AB
Financial Information that Party A provides to Party B or the Sponsor
pursuant to this Part 5(r) (the “Party A Information”) or caused by any
omission or alleged omission to state in the Party A Information a material
fact required to be stated therein or necessary to make the statements
therein not misleading.
	 
	 	(B)	 	The Sponsor shall indemnify and hold harmless Party A, its
respective directors or officers and any person controlling Party A, from and
against any and all losses, claims, damages and liabilities caused by any
untrue statement or alleged untrue statement of a material fact contained in
the Preliminary Prospectus Supplement referred to in clause (iv) above
(together with the accompanying base Prospectus), the Prospectus Supplement
referred to in clause (iv) above (together with the accompanying base
Prospectus) (collectively, the “Prospectus Disclosure”) or caused by any
omission or alleged omission to state in the Prospectus Disclosure a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
provided, however, that the Sponsor shall not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any such untrue statement or alleged untrue statement in or omission or
alleged omission made in any such Prospectus Disclosure in the Party A
Information.

	 	(vi)	 	Promptly after the indemnified party under Part 5(r)(v) receives notice of the
commencement of any such action, the indemnified party will, if a claim in respect
thereof is to be made pursuant to Part 5(r)(v), promptly notify the indemnifying party
in writing of the commencement thereof. In case any such action is brought against the
indemnified party, and it notifies the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to appoint counsel of the indemnifying party’s
choice at the indemnifying party’s expense to represent the indemnified party in any
action for which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party except as set forth below); provided, however, that
such counsel shall be reasonably satisfactory to the indemnified party.
Notwithstanding the indemnifying party’s election to appoint counsel to represent the
indemnified party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall bear the
reasonable fees, costs and expenses of such separate counsel if (i) such indemnified
party shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those available to
the indemnifying party and in the reasonable judgment of such counsel it is advisable
for such indemnified party to employ separate counsel, (ii) a conflict or potential
conflict exists (based on advice of counsel to the indemnified party) between the
indemnified party and the indemnifying party,

24

 

	 	 	 	(iii) the indemnifying party shall not have employed counsel reasonably satisfactory
to the indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party shall
authorize the indemnified party to employ separate counsel at the expense of the
indemnifying party. The indemnifying party will not, without the prior written
consent of the indemnified party, settle or compromise or consent to the entry of
any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party to
such claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising out of
such claim, action, suit or proceeding. No indemnified party will settle or
compromise or consent to the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder without the consent of the indemnifying party,
which consent shall not be unreasonably withheld.

[Signatures follow]

25

 

     TN WITNESS WHEREOF the parties have executed this Schedule on the respective dates specified
below with effect from the date specified on the first page of this document.

	 	 	 

	BANCO SANTANDER S.A.

	 	SANTANDER DRIVE AUTO RECEIVABLES TRUST [     ]

	 	 	 	 	 	 	 	 	 

	By:

	 	 

	 	 	 	By:
	 	[U S. BANK TRUST NATIONAL ASSOCIATION], not
	 

	 	 
	 	 	 	 
	 	in its individual capacity, but solely as Owner Trustee

	 	 	 	 	 	 	 

	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 
	 

	 	 	 	Date:	 	 

26

 

Elections and Variables

to the 1994 ISDA Credit Support Annex

dated as of

[          ]

between

	 	 	 	 	 

	BANCO SANTANDER S.A.

	 	and
	 	SANTANDER DRIVE AUTO
	(“Party A”)

	 	 	 	RECEIVABLES TRUST [ ]
	 

	 	 	 	(“Party B”)

Paragraph 13.

Part 6. Security Interest for “Obligations”.

The term “Obligations” as used in this Annex includes the following additional obligations: None.

Part 7. Credit Support Obligations.

	   (a)	 	Delivery Amount, Return Amount and Credit Support Amount.

	 	(i)	 	“Delivery Amount” has the meaning specified in Paragraph 3(a),
except that:

	 	(a)	 	the words “upon a demand made by the Secured
Party on or promptly following a Valuation Date” shall be deleted and
replaced with the words “not later than the close of business on each
Valuation Date”,
	 
	 	(b)	 	the sentence beginning “Unless otherwise
specified in Paragraph 13” and ending “(ii) the Value as of that
Valuation Date of all Posted Credit Support held by the Secured Party.”
shall be deleted in its entirety and replaced with the following:

     “The “Delivery Amount” applicable to the Pledgor for any Valuation Date will
equal the greatest of

	 	(A)	 	the amount by which (a) the S&P
Credit Support Amount for such Valuation Date exceeds (b) the
S&P Value, as of

27

 

	 	 	 	such Valuation Date, of all Posted Credit Support held by the
Secured Party,

	 	(B)	 	the amount by which (a) the
Moody’s Credit Support Amount for such Valuation Date exceeds
(b) the Moody’s Value, as of such Valuation Date, of all Posted
Credit Support held by the Secured Party; and
	 
	 	(C)	 	the amount by which (a) the Fitch
Credit Support Amount for such Valuation Date exceeds (b) the
Fitch Value, as of such Valuation Date, of all Posted Credit
Support held by the Secured Party.”.

	 	(ii)	 	Transfer to Ensure that the Delivery Amount shall be Zero. If,
on any Valuation Date, the Delivery Amount equals or exceeds the Pledgor’s
Minimum Transfer Amount, the Pledgor will Transfer to the Secured Party
sufficient Eligible Credit Support to ensure that, immediately following such
transfer, the Delivery Amount shall be zero.
	 
	 	(iii)	 	“Return Amount” has the meaning specified in Paragraph 3(b),
except that:

	 	(a)	 	the sentence beginning “Unless otherwise
specified in Paragraph 13” and ending “(ii) the Credit Support Amount.”
shall be deleted in its entirety and replaced with the following:
	 
	 	 	 	“The “Return Amount” applicable to the Secured Party for any
Valuation Date will equal the least of

	 	(A)	 	the amount by which (a) the S&P
Value, as of such Valuation Date, of all Posted Credit Support
held by the Secured Party exceeds (b) the S&P Credit Support
Amount for such Valuation Date,
	 
	 	(B)	 	the amount by which (a) the
Moody’s Value, as of such Valuation Date, of all Posted Credit
Support held by the Secured Party exceeds (b) the Moody’s Credit
Support Amount for such Valuation Date, and
	 
	 	(C)	 	the amount by which (a) the Fitch
Value, as of such Valuation Date, of all Posted Credit Support
held by the Secured Party exceeds (b) the Fitch Credit Support
Amount for such Valuation Date.”.

	 	(b)	 	in no event shall the Secured Party be required
to Transfer any Posted Credit Support under Paragraph 3(b) if,
immediately following such transfer, the Delivery Amount would be
greater than zero.

28

 

	 	(c)	 	The Return Amount shall be, if Cash,
denominated in US Dollars.

	 	(iv)	 	“Credit Support Amount,” as such term is defined in Paragraph
3, shall not apply, and instead, such term shall be replaced, in each instance
in which it is used in this Credit Support Annex, by “Moody’s Credit Support
Amount” (as defined herein), “S&P Credit Support Amount” (as defined herein),
and “Fitch Credit Support Amount” (as defined herein). For purposes of
calculating any Delivery Amount or Return Amount for any Valuation Date,
reference shall be made to the S&P Credit Support Amount, Fitch Credit Support
Amount or the Moody’s Credit Support Amount, in each case for such Valuation
Date, as provided in Paragraphs 13(b)(i)(a) and 13(b)(i)(c), above.

	 	(b)	 	Eligible Collateral. The Valuation Percentages1 listed below shall
apply to the following Eligible Collateral (see the table on the following page):

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Valuation	 	 	 	 
	 	 	Valuation Percentages	 	Percentages for	 	 	 	 
	 	 	for calculating	 	calculating Moody’s	 	Valuation	 	Valuation
	 	 	Moody’s First Trigger	 	Second Trigger	 	Percentages for	 	Percentages for
	 	 	Credit Support	 	Credit Support	 	S&P Credit	 	Fitch Credit
	Instrument	 	Amount	 	Amount.	 	Support Amount	 	Support Amount
	 	 	Moody’s	 	Moody’s	 	S&P	 	Fitch
	U.S. Dollar Cash
	 	 	100	%	 	 	100	%	 	 	100	%	 	 	100	%
	Euro Cash
	 	 	97	%	 	 	93	%	 	 	100	%	 	 	100	%
	Sterling Cash
	 	 	97	%	 	 	94	%	 	 	100	%	 	 	100	%
	Fixed Rate Negotiable Treasury Debt issued by U.S. Treasury Department with Remaining Maturity:
	<1 Year
	 	 	100	%	 	 	100	%	 	TBD2	 	 	99.5	%
	1 to 2 years
	 	 	100	%	 	 	99	%	 	 	 	 	 	 	98.2	%
	2 to 3 years
	 	 	100	%	 	 	98	%	 	 	 	 	 	 	98.2	%
	3 to 5 years
	 	 	100	%	 	 	97	%	 	 	 	 	 	 	96.6	%
	5 to 7 years
	 	 	100	%	 	 	95	%	 	 	 	 	 	 	95.3	%
	7 to 10 years
	 	 	100	%	 	 	94	%	 	 	 	 	 	 	93.9	%
	10 to 20 years
	 	 	100	%	 	 	89	%	 	 	 	 	 	92.7% (10-15 yrs)
	> 20 years
	 	 	100	%	 	 	87	%	 	 	 	 	 	TBD3
	Floating-Rate Negotiable U.S. Dollar Denominated Treasury Debt Issued by The U.S. Treasury Department
	All Maturities
	 	 	100	%	 	 	99	%	 	 	 	 	 	 	 	 
	Fixed-Rate U.S. Dollar Denominated U.S. Agency Debentures with Remaining Maturity:
	< 1 Year
	 	 	100	%	 	 	99	%	 	 	 	 	 	 	 	 
	1 to 2 years
	 	 	100	%	 	 	98	%	 	 	 	 	 	 	 	 
	2 to 3 years
	 	 	100	%	 	 	97	%	 	 	 	 	 	 	 	 
	3 to 5 years
	 	 	100	%	 	 	96	%	 	 	 	 	 	 	 	 
	5 to 7 years
	 	 	100	%	 	 	94	%	 	 	 	 	 	 	 	 

 

			
	1	 	With respect to collateral types not listed
below, such assets will be subject to review and approval by Fitch, S&P and
Moody’s.
	 
	2	 	If an S&P Collateralization Event or S&P
Ratings Event has occurred and is continuing, any collateral type other than
Cash shall be subject to review and approval by S&P.
	 
	3	 	If a Fitch Collateralization Event or a Fitch Ratings Event
has occurred and is continuing, all other types of collateral and Valuation
Percentages are subject to review and approval by Fitch.

29

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Valuation	 	 	 	 	 	 	 
	 	 	Valuation Percentages	 	 	Percentages for	 	 	 	 	 	 	 
	 	 	for calculating	 	 	calculating Moody’s	 	 	Valuation	 	 	Valuation	 
	 	 	Moody’s First Trigger	 	 	Second Trigger	 	 	Percentages for	 	 	Percentages for	 
	 	 	Credit Support	 	 	Credit Support	 	 	S&P Credit	 	 	Fitch Credit	 
	Instrument	 	Amount	 	 	Amount.	 	 	Support Amount	 	 	Support Amount	 
	 	 	Moody’s	 	 	Moody’s	 	 	S&P	 	 	Fitch	 
	7 to 10 years
	 	 	100	%	 	 	93	%	 	 	 	 	 	 	 	 
	10 to 20 years
	 	 	100	%	 	 	88	%	 	 	 	 	 	 	 	 
	> 20 years
	 	 	100	%	 	 	86	%	 	 	 	 	 	 	 	 
	Floating-Rate U.S. Dollar Denominated U.S. Agency Debentures
	All maturities
	 	 	100	%	 	 	98	%	 	 	 	 	 	 	 	 
	Fixed-Rate Euro Denominated Euro-Zone Government Bonds Rated Aa3 or Above by Moody’s and AAA by S&P (see footnote 2) with
Remaining Maturity:
	< 1 Year
	 	 	97	%	 	 	93	%	 	 	 	 	 	 	 	 
	1 to 2 years
	 	 	97	%	 	 	92	%	 	 	 	 	 	 	 	 
	2 to 3 years
	 	 	97	%	 	 	91	%	 	 	 	 	 	 	 	 
	3 to 5 years
	 	 	97	%	 	 	89	%	 	 	 	 	 	 	 	 
	5 to 7 years
	 	 	97	%	 	 	87	%	 	 	 	 	 	 	 	 
	7 to 10 years
	 	 	97	%	 	 	86	%	 	 	 	 	 	 	 	 
	10 to 20 years
	 	 	97	%	 	 	82	%	 	 	 	 	 	 	 	 
	> 20 years
	 	 	97	%	 	 	80	%	 	 	 	 	 	 	 	 
	Floating-Rate Euro Denominated Euro-Zone Government Bonds Rated Aa3 or Above by Moody’s and AAA by S&P (see footnote 2)
	All Maturities
	 	 	97	%	 	 	92	%	 	 	 	 	 	 	 	 
	Qualified Commercial Paper
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	0	%4	 	 	0	%5	 	 	 	 	 	 	 	 

For the purposes of the above table, “Qualified Commercial Paper” means commercial paper
with a rating of at least P-1 by Moody’s and A-1+ by S&P and having a remaining maturity of
not more than one month.

	(c)	 	Thresholds.

	 	i.	 	“Independent Amount” means with respect to Party A: Zero
“Independent Amount” means with respect to Party B: Zero
	 
	 	ii.	 	“Threshold,” as such term is defined in Paragraph 12, shall not
apply, and instead, such term shall be replaced, in each instance in which it
is used in this Annex, as applicable, by: (i) S&P Threshold (as defined herein)
for purposes of calculating the S&P Credit Support Amount; (ii) Moody’s
Threshold (as defined herein) for purposes of calculating the Moody’s Credit
Support Amount and (iii) Fitch Threshold (as defined herein) for purposes of
calculating the Fitch Credit Support Amount.
	 
	 	iii.	 	“Minimum Transfer Amount” means with respect to Party A: USD
$100,000; provided, however, that if S&P is rating the Certificates and the
aggregate Certificate Principal Balances of the rated Certificates falls

 

			
	4	 	Or such other percentage in respect of which
Moody’s has provided a rating affirmation.
	 
	5	 	Or such other percentage in respect of which
Moody’s has provided a rating affirmation.

30

 

	 	 	 	below $50,000,000, then the Minimum Transfer Amount shall mean USD $50,000.
	 
	 	iv.	 	“Minimum Transfer Amount” means with respect to Party B: USD
$100,000 (or if the Posted Collateral is less than $100,000, the aggregate
Value of Posted Collateral), provided, however, that if S&P is rating the
Certificates and the aggregate Certificate Principal Balances of the rated
Certificates falls below $50,000,000, then the Minimum Transfer Amount shall
mean USD $50,000 (or if the Posted Collateral is less than $50,000, the
aggregate Value of Posted Collateral).
	 
	 	v.	 	Rounding. The Delivery Amount will be rounded up to the
nearest integral multiple of USD $10,000. The Return Amount will be rounded
down to the nearest integral multiple of USD $10,000.

	 	(d)	 	“Exposure” has the meaning specified in Paragraph 12, except that (1) after the
word “Agreement” the words “(assuming, for this purpose only, that Part 1(k) of the
Schedule is deleted)” shall be inserted and (2) at the end of such definition, the
words “with terms substantially the same as those of this Agreement.”

Part 3. Valuation and Timing.

	 	(a)	 	“Valuation Agent” means Party A in all circumstances.
	 
	 	(b)	 	“Valuation Date” shall mean each Local Business Day on which either of the S&P
Threshold, Fitch Threshold or the Moody’s Threshold is zero.
	 
	 	(c)	 	“Valuation Time” means the close of business in the city of the Valuation Agent
on the Local Business Day immediately preceding the Valuation Date or date of
calculation, as applicable, provided that the calculations of Value and Credit Support
Amount will, as far as practicable, be made as of approximately the same time on the
same date.
	 
	 	(d)	 	“Notification Time” means 10:00 a.m., New York time, on a Local Business Day.

Part 4. Conditions Precedent and Secured Party’s Rights and Remedies. None.

Part 5. Substitution.

	 	(a)	 	“Substitution Date” has the meaning specified in Paragraph 4(d)(ii).
	 
	 	(b)	 	Consent. If specified here as applicable, then the Pledgor must obtain the
Secured Party’s consent for any substitution pursuant to Paragraph 4(d): Inapplicable.

31

 

Part 6. Dispute Resolution.

	 	(a)	 	“Resolution Time” means 10:00 p.m., New York time on the Local Business Day
following the date on which the notice is given that gives rise to a dispute under
Paragraph 5.
	 
	 	(b)	 	Value. For the purpose of Paragraphs 5(i)(C) and 5(ii), the Value of Eligible
Credit Support or Posted Credit Support as of the relevant Valuation Date or date of
Transfer will be calculated by reference to the terms Moody’s Value, Fitch Value and
S&P Value, as described in Paragraph 13 as modified by (k)(i) below.
	 
	 	(c)	 	Alternative. The provisions of Paragraph 5 will apply.

Part 7. Holding and Using Posted Collateral.

	 	(a)	 	Eligibility to Hold Posted Collateral; Custodians:
	 
	 	 	 	A Custodian will be entitled to hold Posted Collateral on behalf of Party B pursuant
to Paragraph 6(b); provided that:

	 	1)	 	Posted Collateral may be held only in the
following jurisdiction: United States.
	 
	 	2)	 	The Custodian for Party B: (A) is a commercial
bank or trust company which is unaffiliated with Party B and organized
under the laws of the United States or state thereof, having assets of
at least $500 million and: (i) a long-term debt or a deposit rating of
at least “Baa2” by Moody’s; and (ii) a short-term rating of at least
“A-1” by S&P, or if the Custodian has no short-term rating, a long-term
rating of “A+” by S&P; and (B) shall hold all Eligible Credit Support
in the appropriate account under the Transaction Documents (as defined
in the Schedule to the Agreement).
	 
	 	3)	 	Initially, the Custodian for Cash and
Securities for Party B is: The Trustee under the Indenture, or any
successor trustee thereto.
	 
	 	4)	 	In the event that the Custodian’s ratings fall
below those prescribed in subpart (2) above, the Trustee shall within
60 calendar days replace the Custodian with a substitute custodian
satisfying the requirements of subpart (2) above.

	 	(b)	 	Use of Posted Collateral. The provisions of Paragraph 6(c) will not apply to
Party B. The Trustee shall invest Cash Posted Credit Support in such overnight (or
redeemable within two Local Business Days of demand) investments rated at least Prime-1
by Moody’s or AAAm or AAAm-G by S&P and Aaa by Moody’s (or such other investments as
may be affirmed in writing by S&P and Moody’s) as directed by Party A (unless (x) an
Event of Default or an Additional Termination Event has occurred with respect to which
Party A is the defaulting or sole Affected Party and (y) an Early Termination Date has
been designated by Party B, in which case such investment shall be at the direction of
Party B) with

32

 

	 	 	 	gains and losses incurred in respect of such investments to be for the account of
Party A.
	 
	 	(c)	 	Notice. If a party or its Custodian fails to meet the criteria for eligibility
to hold (or, in the case of a party, to use) Posted Collateral set forth in this
Paragraph 13(g), such party shall promptly notify the other party of such
ineligibility.

Part 8. Distributions and Interest Amount.

	 	(a)	 	Interest Rate. The “Interest Rate” will be the actual rate of interest earned
by Party B or the Custodian if the Cash is invested at the direction of Party A in
accordance with Paragraph 13(g)(ii) above, otherwise the “Interest Rate” will be the
federal funds overnight rate as published by the Board of Governors of the Federal
Reserve System in H.15 (519) or its successor publication, or such other rate as the
parties may agree from time to time.
	 
	 	(b)	 	Transfer of Interest Amount. The transfer of the Interest Amount will be made
on the second Local Business Day following the end of each calendar month and on any
other Local Business Day on which Posted Collateral in the form of Cash is transferred
to the Pledgor pursuant to Paragraph 3(b), in each case to the extent that a Delivery
Amount would not be created or increased by that transfer, provided that Party B shall
not be obliged to so transfer any Interest Amount unless and until it has earned and
received such interest.
	 
	 	(c)	 	Alternative to Interest Amount. The provisions of Paragraph 6(d)(ii) will
apply.

Part 9. Address for Transfers.

     Party A: To be notified to Party B by Party A at the time of the request for the transfer.

     Party B: To be notified to Party A by Party B upon request by Party A.

Part 10. Other Provisions.

	 	(a)	 	Costs of Transfer on Exchange.
	 
	 	 	 	Notwithstanding Paragraph 10, the Pledgor will be responsible for, and will
reimburse the Secured Party for, all transfer and other taxes and other costs
involved in the transfer of Eligible Credit Support either from the Pledgor to the
Secured Party or from the Secured Party to the Pledgor.
	 
	 	(b)	 	Cumulative Rights.
	 
	 	 	 	The rights, powers and remedies of the Secured Party under this Annex shall be in
addition to all rights, powers and remedies given to the Secured Party by the
Agreement or by virtue of any statute or rule of law, all of which rights, powers
and remedies shall be cumulative and may be exercised successively or

33

 

	 	 	 	concurrently without impairing the rights of the Secured Party in the Posted Credit
Support created pursuant to this Annex.

Part 11. Definitions and Other Provisions

	 	(a)	 	Generally
	 
	 	 	 	“Fitch Collateralization Event” shall be as defined in the accompanying Schedule.
	 
	 	 	 	“Fitch Ratings Event” shall be as defined in the accompanying Schedule
	 
	 	 	 	“S&P Collateralization Event” shall be as defined in the accompanying Schedule.
	 
	 	 	 	“S&P Ratings Event” shall be as defined in the accompanying Schedule.
	 
	 	 	 	“Value” shall mean, in respect of any date, the related S&P Value, the related Fitch
Value and the related Moody’s Value. Paragraph 4(c) is hereby amended by deleting
the word “Value” and inserting in lieu thereof “S&P Value and Moody’s Value” as
referenced herein. Paragraph 4(d)(ii) is hereby amended by (A) deleting the words
“a Value” and inserting in lieu thereof “an S&P Value, a fitch Value and a Moody’s
Value” and (B) deleting the words “the Value” and inserting in lieu thereof “S&P
Value, Fitch Value and Moody’s Value”. Paragraph 5 is hereby amended by deleting
the word “Value” and inserting in lieu thereof “S&P Value, Fitch Value or Moody’s
Value”. Paragraph 5(i) is hereby amended by deleting the word “Value” and inserting
in lieu thereof “S&P Value, Fitch Value and Moody’s Value”. Paragraph 5(i)(C) is
hereby amended by deleting the word “the Value, if’ and inserting in lieu thereof
“any one or more of the S&P Value, Fitch Value or Moody’s Value, as may be”.
Paragraph 5(ii) is hereby amended by (1) deleting the first instance of the words
“the Value” and inserting in lieu thereof “any one or more of the S&P Value, Fitch
Value or Moody’s Value” and (2) deleting the second instance of the words “the
Value” and inserting in lieu thereof “such disputed S&P Value or Moody’s Value”.
Each of Paragraph 8(b)(iv)(B) and Paragraph 11(a) is hereby amended by deleting the
word “Value” and inserting in lieu thereof “least of the S&P Value, Fitch Value and
Moody’s Value”.
	 
	 	(b)	 	With respect to Fitch:
	 
	 	 	 	“Fitch Credit Support Amount” means, with respect to a Fitch Collateralization Event
relating to an action taken by Fitch that has been continuing for at least thirty
(30) days, an amount in USD equal to the sum of (a) Party B’s Exposure and (b) the
Fitch Volatility Cushion (set forth in Table 4 below). Fitch Volatility Cushion, as
determined by the Valuation Agent for any date, means the Notional Amount of the
Transaction on such date multiplied by the percentage for such date as set out in
the table below on such date.

34

 

	 	 	 	“Fitch Value” means, on any date and with respect to any Eligible Collateral,
the product of (A) the bid price (or the face amount with respect to Cash) obtained
by the Valuation Agent for such Eligible Collateral and (B) the Fitch Valuation
Percentage for such Eligible Collateral set forth in paragraph 13(b)(ii).
	 
	 	(c)	 	With respect to Moody’s:
	 
	 	 	 	“First Trigger Failure Condition” means that no Relevant Entity has credit ratings
from Moody’s at least equal to the Moody’s First Trigger Required Ratings.
	 
	 	 	 	“Moody’s Credit Support Amount” shall mean, as applicable, the Moody’s First Trigger
Credit Support Amount (as defined herein), and Moody’s Second Trigger Credit Support
Amount (as defined herein).

	 	 	“Moody’s First Trigger Credit Support Amount” means, for any Valuation Date, the
excess, if any, of

	 	(a)	 	(A) for any Valuation Date on which (I) a First
Trigger Failure Condition has occurred and has been continuing (x) for
at least 30 Local Business Days or (y) since this Annex was executed
and (II) it is not the case that a Moody’s Second Trigger Event has
occurred and been continuing for at least 30 Local Business Days, an
amount equal to the greater of (a) zero and (b) the sum of the Secured
Party’s aggregate Exposure for all Transactions and the aggregate of
Moody’s Additional Collateralized Amounts for all Transactions.
	 
	 	 	 	For the purposes of this definition, the “Moody’s Additional
Collateralized Amount” with respect to any Transaction shall mean the
product of the applicable Moody’s First Trigger Factor set forth in
Table 1 and the Notional Amount for such Transaction for the
Calculation Period which includes such Valuation Date; or

	 	(B)	 	for any other Valuation Date,
zero, over

	 	(b)	 	the Moody’s Threshold for Party A such
Valuation Date.

	 	 	 	“Moody’s First Trigger Notional Amount Multiplier” means (A) if each Local
Business Day is a Valuation Date, 2%, or (B) otherwise, 4%.
	 
	 	 	 	“Moody’s Second Trigger Credit Support Amount” means, for any Valuation
Date, the excess, if any, of

	 	(a)	 	(A) for any Valuation Date on which it is the
case that a Second Trigger Failure Condition has occurred and been
continuing for at least 30 Local Business Days, an amount equal to the
greatest of

35

 

	 	 	 	(a) zero, (b) the aggregate amount of the Next Payments for all Next
Payment Dates and (c) the sum of the Secured Party’s aggregate
Exposure and the aggregate of Moody’s Additional Collateralized
Amounts for all Transactions.
	 
	 	 	 	For the purposes of this definition:
	 
	 	 	 	“Next Payment” means, in respect of each Next Payment Date, the
greater of (i) the amount of any payments due to be made by Party A
under Section 2(a) on such Next Payment Date less any payments due to
be made by Party B under Section 2(a) on such Next Payment Date (in
each case, after giving effect to any applicable netting under
Section 2(c)) and (ii) zero.
	 
	 	 	 	“Next Payment Date” means each date on which the next scheduled
payment under any Transaction is due to be paid.
	 
	 	 	 	“Moody’s Additional Collateralized Amount” with respect to any
Transaction shall mean, if such Transaction is not a Transaction
Specific Hedge, the product of the applicable Moody’s Second Trigger
Factor set forth in Table 2 and the Notional Amount for such
Transaction for the Calculation Period which includes such Valuation
Date; or
	 
	 	 	 	if such Transaction is a Transaction-Specific Hedge, the product of
the applicable Moody’s Second Trigger Factor set forth in Table 3 and
the Notional Amount for such Transaction for the Calculation Period
which includes such Valuation Date; or

	 	(B)	 	for any other Valuation Date,
zero, over

	 	(b)	 	the Moody’s Threshold for Party A for such
Valuation Date.

	 	 	 	“Moody’s Threshold” means, with respect to Party A and any Valuation Date,
if a Moody’s First Trigger Downgrade Event has occurred and is continuing
and such Moody’s First Trigger Downgrade Event has been continuing (i) for
at least 30 Local Business Days, or (ii) since this Annex was executed,
zero; otherwise, infinity.
	 
	 	 	 	“Moody’s Value” means, on any date and with respect to any Eligible
Collateral the product of (x) the bid price obtained by the Valuation Agent
and (y) the applicable Moody’s Valuation Percentage set forth in Paragraph
13(b)(ii).
	 
	 	 	 	“Second Trigger Failure Condition” means that no Relevant Entity has credit
ratings from Moody’s at least equal to the Moody’s Second Trigger Ratings
Threshold.

36

 

	 	 	 	“Transaction Specific Hedge” means any Transaction that is an interest rate
cap, interest rate floor or interest rate swaption, or an interest rate swap
if (x) the notional amount of the interest rate swap is “balance guaranteed”
or (y) the notional amount of the interest rate swap for any Calculation
Period otherwise is not a specific dollar amount that is fixed at the
inception of the Transaction.

	 	(d)	 	With respect to S&P:
	 
	 	 	 	“S&P Threshold” means, with respect to Party A and any Valuation Date, if (i) an S&P
Collateralization Event has occurred and is continuing and such S&P
Collateralization Event has been continuing for at least 10 Local Business Days or
since this Annex was executed, or (ii) if an S&P Ratings Event has occurred and is
continuing and such S&P Ratings Event has been continuing for at least 10 Local
Business Days, zero; otherwise, infinity.
	 
	 	 	 	“S&P Credit Support Amount” means, for any Valuation Date:

	 	(i)	 	if the S&P Threshold for such Valuation Date is zero and either
(i) an S&P Ratings Event is not continuing or (ii) an S&P Ratings Event is
continuing and less than 10 Local Business Days have elapsed since such S&P
Ratings Event first occurred, an amount equal to the Secured Party’s Exposure;
	 
	 	(ii)	 	if the S&P Threshold for such Valuation Date is zero and an S&P
Ratings Event has occurred and is continuing and 10 or more Local Business Days
have elapsed since such S&P Ratings Event first occurred, an amount equal to
the Secured Party’s Exposure plus (ii) (x) [10]% multiplied by (y) the Notional
Amount of the Transaction.; or
	 
	 	(iii)	 	if the S&P Threshold is infinity, zero.

	 	 	 	“S&P Value” means, on any date and with respect to any Eligible Collateral, (A)
in the case of Eligible Collateral other than Cash, the product of (x) the bid price
obtained by the Valuation Agent for such Eligible Collateral and (y) the applicable
S&P Valuation Percentage for such Eligible Collateral set forth in Paragraph
13(b)(ii) above and (B) in the case of Cash, the amount thereof multiplied by the
applicable S&P Valuation Percentage.

37

 

	 	(e)	 	Demands and Notices.
	 
	 	 	 	All demands, specifications and notices under this Annex will be made pursuant to
the Notices Section of this Agreement, save that any demand, specification or
notice:

	 	(A)	 	shall be given to or made at the following addresses:
	 
	 	 	 	If to Party A: As set forth in Part 4(a) of the Schedule.
	 
	 	 	 	If to Party B: As set forth in Part 4(a) of the Schedule.
	 
	 		 	or at such other address as the relevant party may from time to time
designate by giving notice (in accordance with the terms of this
subparagraph) to the other party;
	 
	 	(B)	 	shall be deemed to be effective at the time such notice is
actually received unless such notice is received on a day which is not a Local
Business Day or after the Notification Time on any Local Business Day in which
event such notice shall be deemed to be effective on the next succeeding Local
Business Day.

	 	 	 	Pursuant to the related Basic Document, the monthly report to Noteholders shall be
made available to Party A in the manner and form specified therein.

	 	(f)	 	Agreement as to Single Secured Party and Pledgor
	 
	 	 	 	Party A and Party B agree that, notwithstanding anything to the contrary in the
first sentence of this Annex, Paragraph 1(b) or Paragraph 2 or the definitions in
Paragraph 12, except with respect to Party B’s obligations under Paragraph 3(b), (a)
the term “Secured Party” as used in this Annex means only Party B, (b) the term
“Pledgor” as used in this Annex means only Party A, (c) only Party A makes the
pledge and grant in Paragraph 2, the acknowledgement in the final sentence of
Paragraph 8(a) and the representations in Paragraph 9 and (d) only Party A will be
required to make Transfers of Eligible Credit Support hereunder. Party A and Party
B further agree that, notwithstanding anything to the contrary in the recital to
this Annex or Paragraph 7, this Annex will constitute a Credit Support Document only
with respect to Party A.
	 
	 	(g)	 	Trustee Capacity.
	 
	 	 	 	It is expressly understood and agreed by the parties hereto that (i) this Annex is
executed and delivered by the Trustee not individually or personally but solely as
trustee of the Trust, in the exercise of the powers and authority conferred and
vested in it, (ii) each of the representations, undertakings and agreements herein
made on the part of the Trust is made and intended not as personal
representations, undertakings and agreements by the Trustee but is made and

38

 

	 	 	 	intended for the purpose of binding only the Trust, (iii) nothing herein contained shall be
construed as creating any liability on the part of the Owner Trustee, individually
or personally, to perform any covenant either expressed or implied contained herein,
all such liability, if any, being expressly waived by the parties hereto and by any
Person claiming by, through or under the parties hereto and (iv) under no
circumstances shall the Owner Trustee be personally liable for the payment of any
indebtedness or expenses of the Trust or be liable for the breach or failure of any
obligation, representation, warranty or covenant made or undertaken by the Trust
under this Annex.
	 
	 	(h)	 	Event of Default. Subclause (iii) of Paragraph 7 shall not apply to Party B.

[Signature page follows]

39

 

     IN WITNESS WHEREOF, the parties have executed this document by their duly authorized officers
with effect from the date specified on the first page hereof.

	 	 	 	 	 	 	 	 	 	 	 

	BANCO SANTANDER S.A.	 	 	 	SANTANDER DRIVE AUTO RECEIVABLES TRUST [      ]	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:
	 	U.S. BANK TRUST NATIONAL	 	 
	 

	 	 

Name:

Title:
	 	 	 	 	 	ASSOCIATION, not in its individual

capacity, but solely as Owner Trustee	 	 
	 

	 		 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	 	 	Title:	 	 

40

 

Table 1

Moody’s First Trigger Factor

	 	 	 	 	 
	Remaining	 	Daily
	Weighted Average	 	Collateral
	Life of Hedge in Years	 	Posting
	1 or less
	 	 	0.15	%
	More than 1 but not more than 2
	 	 	0.30	%
	More than 2 but not more than 3
	 	 	0.40	%
	More than 3 but not more than 4
	 	 	0.60	%
	More than 4 but not more than 5
	 	 	0.70	%
	More than 5 but not more than 6
	 	 	0.80	%
	More than 6 but not more than 7
	 	 	1.00	%
	More than 7 but not more than 8
	 	 	1.10	%
	More than 8 but not more than 9
	 	 	1.20	%
	More than 9 but not more than 10
	 	 	1.30	%
	More than 10 but not more than 11
	 	 	1.40	%
	More than 11 but not more than 12
	 	 	1.50	%
	More than 12 but not more than 13
	 	 	1.60	%
	More than 13 but not more than 14
	 	 	1.70	%
	More than 14 but not more than 15
	 	 	1.80	%
	More than 15 but not more than 16
	 	 	1.90	%
	More than 16 but not more than 17
	 	 	2.00	%
	More than 17 but not more than 18
	 	 	2.00	%
	More than 18 but not more than 19
	 	 	2.00	%
	More than 19 but not more than 20
	 	 	2.00	%
	More than 20 but not more than 21
	 	 	2.00	%
	More than 21 but not more than 22
	 	 	2.00	%
	More than 22 but not more than 23
	 	 	2.00	%
	More than 23 but not more than 24
	 	 	2.00	%
	More than 24 but not more than 25
	 	 	2.00	%
	More than 25 but not more than 26
	 	 	2.00	%
	More than 26 but not more than 27
	 	 	2.00	%
	More than 27 but not more than 28
	 	 	2.00	%
	More than 28 but not more than 29
	 	 	2.00	%
	More than 29
	 	 	2.00	%

41

 

Table 2

Moody’s Second Trigger Factor for Interest Rate Swaps with Fixed Notional Amounts

	 	 	 	 	 
	Remaining	 	Daily
	Weighted Average	 	Collateral
	Life of Hedge in Years	 	Posting
	1 or less
	 	 	0.50	%
	More than 1 but not more than 2
	 	 	1.00	%
	More than 2 but not more than 3
	 	 	1.50	%
	More than 3 but not more than 4
	 	 	1.90	%
	More than 4 but not more than 5
	 	 	2.40	%
	More than 5 but not more than 6
	 	 	2.80	%
	More than 6 but not more than 7
	 	 	3.20	%
	More than 7 but not more than 8
	 	 	3.60	%
	More than 8 but not more than 9
	 	 	4.00	%
	More than 9 but not more than 10
	 	 	4.40	%
	More than 10 but not more than 11
	 	 	4.70	%
	More than 11 but not more than 12
	 	 	5.00	%
	More than 12 but not more than 13
	 	 	5.40	%
	More than 13 but not more than 14
	 	 	5.70	%
	More than 14 but not more than 15
	 	 	6.00	%
	More than 15 but not more than 16
	 	 	6.30	%
	More than 16 but not more than 17
	 	 	6.60	%
	More than 17 but not more than 18
	 	 	6.90	%
	More than 18 but not more than 19
	 	 	7.20	%
	More than 19 but not more than 20
	 	 	7.50	%
	More than 20 but not more than 21
	 	 	7.80	%
	More than 21 but not more than 22
	 	 	8.00	%
	More than 22 but not more than 23
	 	 	8.00	%
	More than 23 but not more than 24
	 	 	8.00	%
	More than 24 but not more than 25
	 	 	8.00	%
	More than 25 but not more than 26
	 	 	8.00	%
	More than 26 but not more than 27
	 	 	8.00	%
	More than 27 but not more than 28
	 	 	8.00	%
	More than 28 but not more than 29
	 	 	8.00	%
	More than 29
	 	 	8.00	%

42

 

Table 3

Moody’s Second Trigger Factor for Transaction-Specific Hedges

	 	 	 	 	 
	Remaining	 	Daily
	Weighted Average	 	Collateral
	Life of Hedge in Years	 	Posting
	1 or less
	 	 	0.65	%
	More than 1 but not more than 2
	 	 	1.30	%
	More than 2 but not more than 3
	 	 	1.90	%
	More than 3 but not more than 4
	 	 	2.50	%
	More than 4 but not more than 5
	 	 	3.10	%
	More than 5 but not more than 6
	 	 	3.60	%
	More than 6 but not more than 7
	 	 	4.20	%
	More than 7 but not more than 8
	 	 	4.70	%
	More than 8 but not more than 9
	 	 	5.20	%
	More than 9 but not more than 10
	 	 	5.70	%
	More than 10 but not more than 11
	 	 	6.10	%
	More than 11 but not more than 12
	 	 	6.50	%
	More than 12 but not more than 13
	 	 	7.00	%
	More than 13 but not more than 14
	 	 	7.40	%
	More than 14 but not more than 15
	 	 	7.80	%
	More than 15 but not more than 16
	 	 	8.20	%
	More than 16 but not more than 17
	 	 	8.60	%
	More than 17 but not more than 18
	 	 	9.00	%
	More than 18 but not more than 19
	 	 	9.40	%
	More than 19 but not more than 20
	 	 	9.70	%
	More than 20 but not more than 21
	 	 	10.00	%
	More than 21 but not more than 22
	 	 	10.00	%
	More than 22 but not more than 23
	 	 	10.00	%
	More than 23 but not more than 24
	 	 	10.00	%
	More than 24 but not more than 25
	 	 	10.00	%
	More than 25 but not more than 26
	 	 	10.00	%
	More than 26 but not more than 27
	 	 	10.00	%
	More than 27 but not more than 28
	 	 	10.00	%
	More than 28 but not more than 29
	 	 	10.00	%
	More than 29
	 	 	10.00	%

43

 

Table 4

Fitch Volatility Cushion:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Remaining Weighted Average Maturity	 	 	 	 	 	 
	Fitch Note	 	(years)
	Rating	 	1	 	2	 	3	 	4	 	5	 	6	 	7	 	8	 	9	 	10
	At least “AA-”
	 	 	0.6	%	 	 	1.6	%	 	 	2.6	%	 	 	3.4	%	 	 	4.2	%	 	 	4.8	%	 	 	5.5	%	 	 	5.9	%	 	 	6.4	%	 	 	7.0	%
	“A+/A”
	 	 	0.3	%	 	 	0.8	%	 	 	1.3	%	 	 	1.7	%	 	 	2.1	%	 	 	2.4	%	 	 	2.8	%	 	 	3.0	%	 	 	3.3	%	 	 	3.6	%
	“A-/BBB+” or
lower
	 	 	0.2	%	 	 	0.6	%	 	 	1.0	%	 	 	1.3	%	 	 	1.6	%	 	 	1.9	%	 	 	2.1	%	 	 	2.3	%	 	 	2.5	%	 	 	2.7	%Exhibit 10.02

Exhibit 10.02

THE HARTFORD 2010 INCENTIVE STOCK PLAN:

ADMINISTRATIVE RULES

ADOPTED BY THE COMPENSATION AND PERSONNEL COMMITTEE

OF THE HARTFORD FINANCIAL SERVICES GROUP, INC.

RELATING TO AWARDS FOR KEY EMPLOYEES

Set forth below are the Administrative Rules (“Rules”) which have been adopted by the Compensation
and Personnel Committee (the “Committee”) of the Board of Directors of The Hartford Financial
Services Group, Inc. (the “Company”) for the administration under The Hartford 2010 Incentive Stock
Plan (the “Plan”) of Awards (as such term is defined in the Plan) for Key Employees of the Company.
These Rules have been adopted in accordance with the Plan which grants the Committee full
discretion and authority to interpret, construe and administer the Plan and any part thereof. Any
or all Rules outlined in this document may be amended, changed, or suspended by the Committee at
any time without prior notice to Key Employees participating in the Plan. In the event of any
conflict between these Rules and the provisions of the Plan, the Plan shall prevail. Capitalized
terms used herein shall have the meanings specified herein or assigned by the Plan.

	 	1.	 	Awards to Tier 1 and 2 and Section 16 Executives: Awards for Tier 1 and Tier
2 executives and executive officers (as defined in Section 16 of the Act and as designated
by the Board of Directors) shall be made by the Committee, or by the Committee Chairman
subject to subsequent ratification by the Committee,

	 
	 	2.	 	Awards to Other Key Employees: Pursuant to Section 11(d) of the Plan, and to
the extent not inconsistent with the Plan, the Committee hereby delegates its authority to
the Chief Executive Officer or the Executive Vice President, Human Resources of the
Company (or other person holding a similar position) to grant Awards of Restricted Stock
or Restricted Units (and to determine all matters related thereto) to Key Employees in
Tier 3 and below who are not executive officers (as defined above) after the date the
Committee makes its annual Awards of Restricted Units to Key Employees, as follows:

An Award of Restricted Stock or Restricted Units to a Key Employee under this Rule shall be
based upon the following guidelines, unless special circumstances (such as the need to
compensate a Key Employee for incentive awards from a prior employer that are forfeited in
connection with his or her employment by the Company) warrant deviation from such
guidelines:

	 	•	 	in the case of Restricted Units, a guideline Award value up to the target
annual Award amount applicable to the Key Employee, and, in the case of Restricted
Stock, a guideline award value up to 100% of the Key Employee’s base salary

	 	•	 	guideline Award vesting pursuant to which the restrictions on an Award lapse
either on the third anniversary of the date of award, or in accordance with the
schedule applicable to the most recent Awards approved by the Committee for Key
Employees.

 

 

 

Awards granted pursuant to the authority delegated hereunder shall be periodically reported
to the Committee.

	 	3.	 	Termination Rules for Restricted Units. Pursuant to the discretion granted
to the Committee with respect to vesting of Restricted Units, if a Key Employee (including
an executive officer and/or a Tier 1 or Tier 2 executive) terminates employment with all
Participating Companies during a Restriction Period because of (a) death, (b) Total
Disability, or (c) his or her termination of employment due to Retirement, that Key
Employee shall be entitled, following the end of the applicable Restriction Period, to a
prorated payment in settlement of such Restricted Units, with such proration based on the
portion of the Restriction Period during which the Key Employee was employed by a
Participating Company.

	 
	 	4.	 	Termination Rules for Restricted Stock. Pursuant to the discretion granted
to the Committee with respect to vesting of Restricted Stock, if a Key Employee terminates
employment with all Participating Companies during a Restriction Period, the restrictions
applicable to the shares of Restricted Stock awarded to such Key Employee shall not lapse
upon such termination of employment (and the shares of Restricted Stock shall not become
vested) except as may be otherwise provided in Section 9 of the Plan (regarding a Change
of Control) or such Key Employee’s Award Document, or as may be specifically approved by
the Committee, regardless of the reason for such termination of employment.

	 
	 	5.	 	Crediting of Dividend Equivalents to Restricted Units. Pursuant to Section
7(g) of the Plan, the Restricted Unit account of a Key Employee shall be credited with
Dividend Equivalents during the Restriction Period, which shall be subject to the same
terms and conditions (and become payable and be paid) as the Restricted Units to which
they relate. All Dividend Equivalents payable in respect of Restricted Units shall be
deemed reinvested in that number of Restricted Units determined based on the Fair Market
Value on the date the corresponding dividend on the Stock is payable to stockholders.

	 
	 	6.	 	Termination of Awards. The Committee may in its sole discretion terminate in
whole or in part such portion of a Key Employee’s Award of Restricted Stock, Restricted
Units, Performance Shares, Options, or Rights as has not at the time of such termination
become vested or with respect to which any applicable Performance Period or Restriction
Period has not lapsed, if the Committee determines that such Key Employee is not
performing satisfactorily the duties to which he or she was assigned (or duties of at
least equal responsibility) on the date the Award was made to the Key Employee.

 

 

 

	 	7.	 	Definition of Total Disability. A “Key Employee” shall be deemed to have
terminated employment by reason of Total Disability for purposes of the Plan if the Key
Employee becomes entitled to receipt of long term disability benefits under the Company’s
Long-Term Disability Benefits Plan for Salaried Employees.

	 
	 	8.	 	Tax Withholding. Federal, state and local income or other taxes to be
withheld with respect to Awards for a Key Employee shall be satisfied by retaining Stock
otherwise deliverable to the Key Employee in an amount sufficient to satisfy the
withholding obligations applicable in respect of such Awards, unless other arrangements
satisfactory to the Executive Vice President, Human Resources are made for withholding.

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