Document:

Exhibit 10.5

 

Exhibit 10.5

EXECUTION COPY

 

MBIA INSURANCE CORPORATION,

as Insurer

SANTANDER CONSUMER USA INC.,

as Servicer and Originator

SANTANDER DRIVE AUTO RECEIVABLES LLC,

as Seller

SANTANDER DRIVE AUTO RECEIVABLES TRUST 2007-2,

as Issuer

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Indenture Trustee

and

U.S. BANK TRUST NATIONAL ASSOCIATION,

not in its individual capacity but solely as Owner Trustee

INSURANCE AGREEMENT

Santander Drive Auto Receivables Trust 2007-2

$600,000,000 Class A Asset Backed Notes

$103,000,000 Class A-1 5.8014% Asset Backed Notes

$128,000,000 Class A-2 LIBOR + .35% Asset Backed Notes

$369,000,000 Class A-3 LIBOR + .80% Asset Backed Notes

Dated as of September 5, 2007

 

4848-3897-6769.8

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	ARTICLE I
	 	 	 	 
	 
	 	 	 	 
	DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II
	 	 	 	 
	REPRESENTATIONS, WARRANTIES AND COVENANTS
	 	 	 	 
	 
	 	 	 	 
	Section 2.01. Representation and Warranties of the Servicer and the Originator
	 	 	9	 
	Section 2.02. Affirmative Covenants of the Servicer and the Originator
	 	 	12	 
	Section 2.03. Negative Covenants of the Servicer and the Originator
	 	 	19	 
	Section 2.04. Representations and Warranties of the Seller and the Issuer
	 	 	20	 
	Section 2.05. Affirmative Covenants of the Seller and the Issuer
	 	 	23	 
	Section 2.06. Negative Covenants of the Seller and the Issuer
	 	 	26	 
	Section 2.07. Representations, Warranties and Covenants of Indenture Trustee
	 	 	27	 
	Section 2.08. [Reserved]
	 	 	29	 
	Section 2.09. Representations, Warranties and Covenants of Owner Trustee
	 	 	29	 
	 
	 	 	 	 
	ARTICLE III
	 	 	 	 
	THE POLICIES; REIMBURSEMENT
	 	 	 	 
	Section 3.01. Issuance of the Policies
	 	 	29	 
	Section 3.02. Payment of Fees and Premium
	 	 	31	 
	Section 3.03. Reimbursement and Additional Payment Obligation
	 	 	32	 
	Section 3.04. Indemnification; Limitation of Liability
	 	 	33	 
	Section 3.05. Payment Procedure
	 	 	36	 
	Section 3.06. Subrogation
	 	 	36	 
	 
	 	 	 	 
	ARTICLE IV
	 	 	 	 
	FURTHER AGREEMENTS
	 	 	 	 
	 
	 	 	 	 
	Section 4.01. Effective Date; Term of the Insurance Agreement
	 	 	36	 
	Section 4.02. Further Assurances and Corrective Instruments
	 	 	37	 
	Section 4.03. Obligations Absolute
	 	 	37	 
	Section 4.04. Assignments; Reinsurance; Third-Party Rights
	 	 	38	 
	Section 4.05. Liability of the Insurer
	 	 	39	 
	Section 4.06. Parties Will Not Institute Insolvency Proceedings
	 	 	40	 
	Section 4.07. Parties to Join in Enforcement Action
	 	 	40	 
	Section 4.08. Replacement Swap Agreement
	 	 	41	 
	 
	 	 	 	 
	ARTICLE V
	 	 	 	 
	DEFAULTS; REMEDIES
	 	 	 	 
	Section 5.01. Defaults
	 	 	41	 
	Section 5.02. Remedies; No Remedy Exclusive
	 	 	42	 
	Section 5.03. Waivers
	 	 	43	 

4848-3897-6769.8

 

 

	 	 	 	 	 
	 	 	Page
	ARTICLE VI
	 	 	 	 
	MISCELLANEOUS
	 	 	 	 
	 
	 	 	 	 
	Section 6.01. Amendments, Etc.
	 	 	43	 
	Section 6.02. Notices
	 	 	44	 
	Section 6.03. Severability
	 	 	45	 
	Section 6.04. Governing Law
	 	 	45	 
	Section 6.05. Consent to Jurisdiction
	 	 	45	 
	Section 6.06. Consent of the Insurer
	 	 	46	 
	Section 6.07. Counterparts
	 	 	46	 
	Section 6.08. Headings
	 	 	46	 
	Section 6.09. Trial by Jury Waived
	 	 	46	 
	Section 6.10. Limited Liability
	 	 	47	 
	Section 6.11. Entire Agreement
	 	 	47	 
	Section 6.12. Additional Covenant
	 	 	47	 

 4848-3897-6769.8

 ii 

 

 

INSURANCE AGREEMENT

     THIS INSURANCE AGREEMENT (this “Insurance Agreement”), dated as of September 5, 2007, is by
and among SANTANDER AUTO DRIVE RECEIVABLES LLC, as Seller (together with its permitted successors
and assigns, the “Seller”), SANTANDER CONSUMER USA INC., as Servicer under the Sale and Servicing
Agreement described below (together with its permitted successors and assigns, the “Servicer”) and
as Originator (the “Originator”), SANTANDER DRIVE AUTO RECEIVABLES TRUST 2007-2, as Issuer (the
“Issuer), MBIA INSURANCE CORPORATION (the “Insurer”), WELLS FARGO BANK, NATIONAL ASSOCIATION, as
Indenture Trustee (the “Indenture Trustee”), and U.S. BANK TRUST NATIONAL ASSOCIATION, not in its
individual capacity, but solely as Owner Trustee (the “Owner Trustee”).

     WHEREAS, the Indenture dated as of September 5, 2007 relating to the Santander Drive Auto
Receivables Trust 2007-2 $600,000,000 Class A Asset Backed Notes, $103,000,000 Class A-1 5.8014%
Asset Backed Notes, $128,000,000 Class A-2 LIBOR + .35% Asset Backed Notes, and $369,000,000 Class
A-3 LIBOR + .80% Asset Backed Notes (the “Obligations”), by and among the Issuer and the Indenture
Trustee (the “Indenture”) provides for, among other things, the issuance of the Obligations and the
Insurer has issued its note guaranty insurance policy (the “Note Policy”) that guarantees certain
payments on the Obligations and its Interest Rate Swap Insurance Policy (the “Swap Policy” and
together with the Note Policy, the “Policies”) under which the Insurer has agreed to insure certain
amounts which may be due from the Issuer to the Swap Provider under the Swap Agreement;

     WHEREAS, the Insurer shall be paid an insurance premium pursuant to the Sale and Servicing
Agreement, and the details of such premium are set forth herein; and

     WHEREAS, the Seller, the Servicer, the Originator, and the Issuer have undertaken certain
obligations in consideration for the Insurer’s issuance of the Policies;

     NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained,
the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

     The terms defined in this Article I shall have the meanings provided herein for all purposes
of this Insurance Agreement, unless the context clearly requires otherwise, in both singular and
plural form, as appropriate. Unless the context clearly requires otherwise, all capitalized terms
used herein and not otherwise defined in this Article I shall have the meanings assigned to them in
the Sale and Servicing Agreement. All words used herein shall be construed to be of such gender or
number as the circumstances require. This “Insurance Agreement” shall mean this Insurance
Agreement as a whole and as the same may, from time to time hereafter, be amended, supplemented or
modified. The words “herein,” “hereby,” “hereof,” “hereto,” “hereinabove” and “hereinbelow,” and
words of similar import, refer to this Insurance

 4848-3897-6769.8

  

 

Agreement as a whole and not to any particular paragraph, clause or other subdivision hereof,
unless otherwise specifically noted.

     “Administration Agreement” means the Administration Agreement, dated as of the September 5,
2007, among the Administrator, the Issuer and the Indenture Trustee, as the same may be amended and
supplemented from time to time.

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

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

     “Charge-Off Policy” has the meaning assigned thereto in the Sale and Servicing Agreement.

     “Code” means the Internal Revenue Code of 1986, including, unless the context otherwise
requires, the rules and regulations thereunder, as amended from time to time.

     “Commission” means the Securities and Exchange Commission.

     “Contract Modification” means the revision of one or more material provision of any Contract
(including but not limited to the APR, the number or amounts of the Contract Scheduled Payments,
length of term, interest rate, monthly payment date, scheduled payment, principal balance, or
Financed Vehicle) pursuant to an agreement between the Servicer and the related Obligor, the order
of a bankruptcy court or otherwise.

     “Contracts” means the Contracts as defined in the Sale and Servicing Agreement.

     “Contribution Agreement” means that the Contribution Agreement dated as of September 5, 2007
between the Seller and the Originator as the same may be amended or supplemented from time to time
in accordance with the terms thereof.

     “Cumulative Net Loss Rate Table” The levels set forth below for the periods set forth
below: 

	 	 	 	 	 	 	 	 	 	 	 
	Collection Period No.	 	Collection Period Occurring In	 	Reserve Event	 	Trigger Event
	1 through 3

	 	August 2007-October 2007
	 	 	3.19	%	 	 	4.29	%
	4 through 6

	 	November 2007-January 2008
	 	 	5.96	%	 	 	7.29	%
	7

	 	February 2008
	 	 	8.73	%	 	 	10.29	%
	8
through 9

	 	March 2008-April 2008
	 	 	9.23	%	 	 	10.29	%
	10
through 12

	 	May 2008-July 2008
	 	 	11.54	%	 	 	12.15	%
	13 through 15

	 	August 2008-October 2008
	 	 	13.12	%	 	 	14.50	%
	16 through 18

	 	November 2008-January 2009
	 	 	14.96	%	 	 	16.50	%
	19

	 	February 2009
	 	 	16.58	%	 	 	18.25	%
	20 through 21

	 	March 2009-April 2009
	 	 	17.08	%	 	 	18.25	%

  4848-3897-6769.8

2

 

	 	 	 	 	 	 	 	 	 	 	 
	Collection Period No.	 	Collection Period Occurring In	 	Reserve Event	 	Trigger Event
	22 through 24

	 	May 2009-July 2009
	 	 	18.23	%	 	 	20.00	%
	25 through 27

	 	August 2009-October 2009
	 	 	18.88	%	 	 	21.25	%
	28
through 30

	 	November 2009-January 2010
	 	 	19.81	%	 	 	22.50	%
	31

	 	February 2010
	 	 	20.50	%	 	 	24.00	%
	32
through 36

	 	March 2010-July 2010
	 	 	21.00	%	 	 	24.00	%
	37
through 43

	 	August 2010-February 2011
	 	 	20.50	%	 	 	24.00	%
	44 and thereafter

	 	March 2011 and thereafter
	 	 	21.00	%	 	 	24.00	%

     “Cumulative Net Loss Ratio” means the ratio (expressed as a percentage) of (i) the sum
of the Principal Balances of Contracts that were charged-off in accordance with the Charge-Off
Policy for the period from the initial Cut-off Date through the end of the related Collection
Period reduced by the amount of all Recoveries received by the Servicer during the period from the
initial Cut-off Date through the end of the related Collection Period to (ii) the Original Pool
Balance plus the aggregate Principal Balances of all Subsequent Contracts as of their respective
Cut-off Dates.

     “Date of Issuance” means the date on which the Policies are issued as specified therein.

     “Deemed Cured” a Reserve Event shall be “Deemed Cured” when:

     (i) in the case of a Reserve Event described in clause (a) of the definition thereof,
the average Delinquency Ratio for the three Collection Periods preceding such Distribution
Date is less than or equal to the percentage set forth for the applicable Distribution Date
for two consecutive Distribution Dates;

     (ii) in the case of a Reserve Event described in clause (b) of the definition thereof,
the Cumulative Net Loss Ratio is less than or equal to the percentage set forth in the
Cumulative Net Loss Table for the most recent Collection Period ended; or

     (iii) in the case of any Reserve Event, the Class A Insurer has waived such Reserve
Event in writing.

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

     “Delinquency Rate Table” The levels set forth below for the periods set forth below:

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Reserve	 	 
	Collection Period Number	 	Collection Period Occurring In	 	Event	 	Trigger Event
	1 through 6

	 	August 2007
	 	 	6.42	%	 	 	6.42	%
	7

	 	February 2008
	 	 	6.84	%	 	 	6.84	%
	8 through 9

	 	March 2008-April 2008
	 	 	5.40	%	 	 	6.84	%
	10 through 12

	 	May 2008-July 2008
	 	 	5.93	%	 	 	7.47	%
	13 through 15

	 	August 2008-October 2008
	 	 	8.25	%	 	 	8.25	%
	16 through 18

	 	November 2008-January 2009
	 	 	9.13	%	 	 	9.30	%
	19

	 	February 2009
	 	 	9.30	%	 	 	9.51	%

  4848-3897-6769.8

3

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Reserve	 	 
	Collection Period Number	 	Collection Period Occurring In	 	Event	 	Trigger Event
	20
through 21

	 	March 2009-April 2009
	 	 	7.80	%	 	 	9.51	%
	22 through 24

	 	May 2009-July 2009
	 	 	8.15	%	 	 	9.93	%
	25
through 27

	 	August 2009-October 2009
	 	 	9.80	%	 	 	9.93	%
	28 through 30

	 	November 2009-January 2010
	 	 	10.15	%	 	 	10.35	%
	31

	 	February 2010
	 	 	10.30	%	 	 	10.35	%
	32 through 36

	 	March 1010-July 2010
	 	 	8.80	%	 	 	10.35	%
	37
through 43

	 	August 2010-February 2011
	 	 	11.05	%	 	 	11.13	%
	44 and thereafter

	 	March 2011 and thereafter
	 	 	9.55	%	 	 	11.13	%

     “Delinquency Ratio” means a fraction (expressed as a percentage) calculated as of the
last day of the related Collection Period, the numerator of which is the aggregate Principal
Balance of all Delinquent Contracts, and the denominator of which is the Pool Balance.

     “Delinquent Contract” means a Contract with respect to which any Contract Scheduled Payment is
greater than 60 days delinquent as of the last day of the Collection Period preceding the related
Distribution Date.

     “Due Date Change” means a change of the Obligor’s scheduled due date for payment within a
given month (i.e., from the 10th of each month to the 15th of each month).

     “Event of Default” means any event of default specified in Section 5.01 hereof.

     “Fee Letter” means the Fee Letter from the Insurer to the Servicer, the Issuer and Indenture
Trustee, dated September 5, 2007.

     “Fiscal Agent” means the Fiscal Agent, if any, designated pursuant to the terms of the
Policies.

     “Gross Charge-Off Ratio” means the ratio expressed as a percentage, the numerator of which is
the aggregate Principal Balance of all Charged-Off Contracts (measured as of the day on which each
such Contract became a Charged-Off Contract) since the Closing Date and the denominator of which is
the Original Pool Balance plus the aggregate Principal Balances of all Subsequent Contracts as of
their respective Cut-off Dates.

     “HB3” means House Bill No. 3 (signed by the Governor of the State of Texas on May 19, 2006)
and the corresponding sections of Title 2 of the Texas Tax Code implementing House Bill No. 3 and
the rules and regulations promulgated thereunder implementing House Bill No. 3.

     “Indemnification Agreement” means the Indemnification Agreement dated as of August 23, 2007 by
and among the Insurer, the Originator and the Representative of the Underwriters.

     “Indenture Trustee” means Wells Fargo Bank, National Association, a national banking
association, as trustee under the Indenture, and any successor to the Indenture Trustee under the
Indenture.

  4848-3897-6769.8

4

 

     “Investment Company Act” means the Investment Company Act of 1940, including, unless the
context otherwise requires, the rules and regulations thereunder, as amended.

     “Late Payment Rate” means, for any date of determination, the rate of interest equal to the
highest “Prime” lending rate as set forth in The Wall Street Journal plus 3%. The Late Payment
Rate shall be computed on the basis of a year of 365 days calculating the actual number of days
elapsed. In no event shall the Late Payment Rate exceed the maximum rate permissible under any
applicable law limiting interest rates.

     “Liabilities” shall have the meaning ascribed to such term in Section 3.04(a) hereof.

     “Losses” means (i) any actual out-of-pocket loss paid by the Insurer or its respective
parents, subsidiaries and affiliates or any shareholder, director, officer, employee, agent or any
“controlling person” (as such term is used in the Securities Act) of any of the foregoing, and (ii)
any actual out-of-pocket costs and expenses paid by such party, including reasonable fees and
expenses of its counsel, to the extent not paid, satisfied or reimbursed from funds provided by any
other Person (provided that the foregoing shall not create or imply any obligation to pursue
recourse against any such other Person).

     “Material Adverse Change” means, in respect of any Person, a material adverse change in (i)
the business, financial condition, results of operations or properties of such Person or (ii) the
ability of such Person to perform its obligations under any of the Transaction Documents.

     “Modified Cumulative Net Loss Ratio” means as of any date, the ratio (expressed as a
percentage) of (i) the sum of (x) the Principal Balances of Contracts that were charged-off in
accordance with the Charge-Off Policy for the period from the initial Cut-off Date through the end
of the related Collection Period reduced by the amount of all Recoveries received by the Servicer
during the period from the initial Cut-off Date through the end of the related Collection Period,
(y) 50% of the outstanding Principal Balance of all Contracts that are greater than 60 days
delinquent and (z) 50% of the outstanding Principal Balance of all Contracts for which extensions
or payment deferments are in effect (whether granted by the Servicer during the related Collection
Period or an earlier Collection Period) to (ii) the Original Pool Balance plus the aggregate
Principal Balances of all Subsequent Contracts as of their respective Cut-off Dates.

     “Monthly Net Loss Ratio” means the ratio (expressed as a percentage) of (i) (a) the sum of the
remaining Principal Balances of all Contracts that were charged-off in accordance with the
Charge-Off Policy, during the related Collection Period minus (b) the amount of Recoveries received
during such Collection Period to (ii) the Pool Balance as of the last day of the immediately
preceding Collection Period.

     “Moody’s” means Moody’s Investors Service, Inc., a Delaware corporation, and any successor
thereto, and, if such corporation shall for any reason no longer perform the functions of a
securities rating agency, “Moody’s” shall be deemed to refer to any other nationally recognized
rating agency designated by the Insurer.

     “Obligor” means the obligor under each Contract, including any guarantor of such obligor and
their respective successors.

  4848-3897-6769.8

5

 

     “Offering Document” means the Preliminary Prospectus Supplement dated August 22, 2007, the
Prospectus Supplement dated August 23, 2007 and the Prospectus dated August 6, 2007 relating to the
Notes, and any amendment or supplement thereto and any other offering document relating to the
Notes prepared by the Seller, the Servicer, the Originator, or the Issuer that makes reference to
the Policies.

     “Owners” means registered holders of Obligations.

     “Person” means an individual, joint stock company, trust, unincorporated association, joint
venture, corporation, business or owner trust, limited liability company, partnership or other
organization or entity (whether governmental or private).

     “Premium” means the premium payable in accordance with Section 3.02(b) hereof.

     “Premium Percentage” shall have the meaning ascribed to such term in the Fee Letter.

     “Replacement Swap Agreement” means any replacement Swap Agreement entered into at the
direction of the Insurer pursuant to Section 4.08 of this Agreement.

     “Reported Company Financial Statements” means, with respect to the Servicer, the audited,
consolidated balance sheets and the statements of income, retained earnings and cash flows and the
auditor’s opinion letter and all notes thereto which have been provided to the Insurer.

     “Representative of the Underwriters” means Wachovia Capital Markets, LLC.

     “Reserve Event” shall occur, with respect to any Distribution Date, when any of:

     (a) the average Delinquency Ratio for the three Collection Periods preceding such
Distribution Date exceeds the percentage set forth in the Delinquency Rate Table for the
given Distribution Date, or

     (b) the Cumulative Net Loss Ratio exceeds the percentage set forth in the Cumulative
Net Loss Rate Table for the given Distribution Date.

     “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.,
and any successor thereto, and, if such corporation shall for any reason no longer perform the
functions of a securities rating agency, “S&P” shall be deemed to refer to any other nationally
recognized rating agency designated by the Insurer.

     “Sale and Servicing Agreement” means the Sale and Servicing Agreement dated as of September 5,
2007, among the Servicer, the Issuer, the Seller, and the Indenture Trustee, as the same may be
amended or supplemented from time to time in accordance with the terms thereof.

     “Securities Act” means the Securities Act of 1933, including, unless the context otherwise
requires, the rules and regulations thereunder, as amended from time to time.

  4848-3897-6769.8

6

 

     “Securities Exchange Act” means the Securities and Exchange Act of 1934, including, unless the
context otherwise requires, the rules and regulations thereunder, as amended from time to time.

     “Swap Agreement” means the Master Agreement dated as of September 5, 2007 between the Issuer
and the Swap Provider, the Schedule thereto, and (1) Swap Transaction Confirmation bearing Ref. No.
594364.21 dated September 5, 2007 and (2) Swap Transaction Confirmation bearing Ref. No. 594363.21
dated September 5, 2007, which are the subject of the Swap Policy.

     “Swap Policy” shall have the meaning ascribed thereto in the recitals to this Agreement.

     “Swap Provider” means Banco Santander, S.A.

     “Tangible Net Worth” means, with respect to any Person, the difference between:

     (A) the tangible assets of such Person and its Affiliates and subsidiaries calculated
in accordance with GAAP, including 100% of any additional equity contributions, as reduced
by adequate reserves in each case where a reserve is appropriate; and

     (B) all indebtedness, including subordinated debt, of such Person and its Affiliates
and its subsidiaries; provided, however, that: (i) intangible assets such
as patents, trademarks, trade names, copyrights, licenses, good will, organization costs,
advances or loans to, or receivables from directors, officers, employees or affiliates,
prepaid assets, amounts relating to covenants not to compete, pension assets, deferred
charges or treasury stock of any securities unless the same are readily marketable in the
United States of America or are entitled to be used as a credit against federal income tax
liabilities, shall not be included in the calculation of (A) above; and (ii) securities
included as tangible assets shall be valued at their current market price or costs,
whichever is lower; and (iii) any write-up in book value of any assets shall not be taken
into account.

     “Term of the Insurance Agreement” shall be determined as provided in Section 4.01 hereof.

     “Transaction” means the transactions contemplated by the Transaction Documents, including the
transactions described in the Offering Document.

     “Transaction Documents” has the meaning assigned to such term in the Sale and Servicing
Agreement.

     “Transaction Parties” means, collectively, the Originator, the Servicer, the Seller and the
Issuer.

     “Trigger Event” means the occurrence of any one of the following:

     1. The insolvency of any of the Transaction Parties.

  4848-3897-6769.8

7

 

     2. The occurrence of a default or a breach of any representation, warranty, or covenant
under any of the Transaction Documents by any of the Transaction Parties which continues
unremedied for a period of 30 days after such Transaction Party becomes aware of such
default, or breach or other written notice of such default or breach shall have been given
to such Transaction Party.

     3. A payment under the Policies is made by Insurer.

     4. The cessation of a valid perfected first priority security interest in the Trust
Property in favor of the Indenture Trustee on behalf of the Noteholders, the Reserve Account
Letter of Credit Bank or the Insurer.

     5. Both (i) the average Delinquency Ratio for the most current three months exceeds the
percentage set forth in the Delinquency Rate Table for the given Distribution Date and (ii)
the Modified Cumulative Net Loss Ratio exceeds the level specified in such period in the
Cumulative Net Loss Table.

     6. The Cumulative Net Loss Ratio exceeds the level specified for the related Collection
Period in the Cumulative Net Loss Table.

     7. The average Extension Ratio for the three Collection Periods preceding the date of
determination (including any Collection Period ending on such date) exceeds 4.0% and the
Servicer fails to purchase as of the Business Day preceding the Determination Date prior to
the next Payment Date a sufficient amount of previously extended Contracts pursuant to
Section 3.6 of the Sale and Servicing Agreement so as to reduce the Extension Ratio below
4.0%.

     8. The Servicer’s Tangible Net Worth is less than $50,000,000 plus 50% of the
Servicer’s cumulative after tax net income after December 31, 2004 as determined on a
quarterly basis (beginning with the quarter ending December 31, 2006) in accordance with
generally accepted accounting principles and audited annually, but without taking into
account any reduction for net losses during such period; provided, however, that the Trigger
Event in this clause 8 shall be applicable only if Banco Santander, S.A. does not, directly
or indirectly, own at least 51% of the equity interest in the Servicer.

     9. The Servicer realizes a net loss as determined in accordance with generally accepted
accounting principles in each of any two consecutive quarters.

     10. A final, non-appealable judgment shall be entered against, or settlements by any of
the Transaction Parties by a court of competent jurisdiction assessing monetary damages in
excess of $1 million and, in the case of a judgment, such judgment shall not have been
discharged or stayed within 60 days.

     11. Except as permitted by the Transaction Documents, the Servicer shall make any
assignment of any of its rights or obligations under the Transaction Documents or any
attempt to make such an assignment without the express written consent of the Insurer.

  4848-3897-6769.8

8

 

     12. The Internal Revenue Service or Pension Benefit Guaranty Corporation files notice
of a lien with regard to any assets of the Trust Property and such lien is not released
within five Business Days of such notice.

     13. The Servicer (and its affiliates) shall fail to maintain at least one uninsured
warehouse line of credit for the funding of prime, sub-prime and non-prime automotive
contracts in accordance with the Originator’s credit policies for such contracts in an
aggregate amount equal to at least $75 million.

     14. [Reserved.]

     15. Banco Santander, S.A. fails to own, directly or indirectly, at least 51% of the
equity interest in the Servicer.

     16. The Servicer or any of its affiliates or subsidiaries is in default under any
indebtedness having an outstanding principal amount of $1 million or more.

provided, however, the Insurer has the right to waive any Trigger Event other than those events
described in paragraphs 1, 2, 4, 11, or 12 above.

     “Underwriting Agreement” means the Underwriting Agreement dated August 23, 2007 among the
Representative of the Underwriters, the Seller, the Issuer and the Originator with respect to the
offer and sale of the Obligations, as the same may be amended from time to time.

ARTICLE II

REPRESENTATIONS, WARRANTIES AND COVENANTS

     Section 2.01. Representation and Warranties of the Servicer and the Originator. The Servicer
and the Originator represent, warrant and covenant as of the Date of Issuance, each solely as to
those matters relating to itself, as follows:

     (a) Due Organization and Qualification. The Servicer and the Originator are each a
corporation duly organized, validly existing and in good standing under the laws of its
respective jurisdiction of organization. Each of the Servicer and the Originator is duly
qualified to do business, is in good standing and has obtained all licenses, permits,
charters, registrations and approvals (together, “approvals”) necessary for the conduct of
its business as currently conducted and as described in the Offering Document and the
performance of its obligations under the Transaction Documents, in each jurisdiction in
which the failure to be so qualified or to obtain such approvals would render any
Transaction Document unenforceable in any respect or would have a material adverse effect
upon the Transaction, the Owners or the Insurer.

     (b) Power and Authority. Each of the Servicer and the Originator has all requisite
power and authority to conduct its business as currently conducted and, as described in the
Offering Document, to execute, deliver and perform its obligations under the Transaction
Documents and to consummate the Transaction.

  4848-3897-6769.8

9

 

     (c) Due Authorization. The execution, delivery and performance of each of the
Transaction Documents to which it is a party by the Servicer and the Originator have been
duly authorized by all requisite action and do not require any additional approvals or
consents, or other action by or any notice to or filing with any Person, including, without
limitation, any governmental entity or the Servicer’s or the Originator’s shareholders which
have not previously been obtained or given by the Servicer or the Originator.

     (d) Noncontravention. Neither the execution and delivery of the Transaction Documents
by the Servicer or the Originator, the consummation of the transactions contemplated thereby
nor the satisfaction of the terms and conditions of the Transaction Documents:

     (i) conflicts with or results in any breach or violation of any provision of
the organizational documents, as applicable, of the Servicer or the Originator, or
any law, rule, regulation, order, writ, judgment, injunction, decree, determination
or award currently in effect having applicability to the Servicer or the Originator
or any of their material properties, including regulations issued by an
administrative agency or other governmental authority having supervisory powers over
the Servicer or the Originator;

     (ii) constitutes a default by the Servicer or the Originator under or a breach
of any provision of any loan agreement, mortgage, indenture or other agreement or
instrument to which the Servicer or the Originator is a party or by which any of its
or their respective properties, which are individually or in the aggregate material
to the Servicer or the Originator, is or may be bound or affected; or

     (iii) results in or requires the creation of any lien upon or in respect of any
assets of the Servicer or the Originator, except as contemplated by the Transaction
Documents.

     (e) Legal Proceedings. There is no action, proceeding or investigation by or before
any court, governmental or administrative agency or arbitrator against or affecting the
Servicer or the Originator or any of its or their subsidiaries, or any properties or rights
of the Servicer or the Originator or any of its or their subsidiaries, pending or, to the
Servicer’s or the Originator’s knowledge after reasonable inquiry, threatened, which, in any
case, could reasonably be expected to result in a Material Adverse Change with respect to
the Servicer or the Originator.

     (f) Valid and Binding Obligations. The Obligations, when executed, authenticated and
issued in accordance with the Indenture, and the Transaction Documents (other than the
Obligations), when executed and delivered by the Servicer and the Originator, will
constitute the legal, valid and binding obligations of the Servicer and the Originator, as
applicable, enforceable in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors’ rights generally and general equitable principles and
public policy considerations as to rights of indemnification for

  4848-3897-6769.8

10

 

violations of federal securities laws. Neither the Servicer nor the Originator will at
any time in the future deny that the Transaction Documents constitute the legal, valid and
binding obligations of the Servicer and the Originator, as applicable.

     (g) Financial Statements. The Reported Company Financial Statements, copies of which
have been furnished to the Insurer, (i) are, as of the dates and for the periods referred to
therein, complete and correct in all material respects, (ii) present fairly the financial
condition and results of operations of the companies reported therein as of the dates and
for the periods indicated and (iii) have been prepared in accordance with generally accepted
accounting principles consistently applied, except as noted therein (subject as to interim
statements to normal year-end adjustments). Since the date of the most recent Reported
Company Financial Statements, there has been no Material Adverse Change in such conditions
or operations. Except as disclosed in the Reported Company Financial Statements, the
Servicer and the Originator are not subject to any contingent liabilities or commitments
that, individually or in the aggregate, have a material possibility of causing a Material
Adverse Change in respect of the Servicer or the Originator.

     (h) Compliance With Law, Etc. No practice, procedure or policy employed, or proposed
to be employed, by the Servicer or the Originator in the conduct of its business violates
any law, regulation, judgment, agreement, order or decree applicable to any of them that, if
enforced, could reasonably be expected to result in a Material Adverse Change with respect
to the Servicer or the Originator. The Servicer and the Originator are not in breach of or
in default under any applicable law or administrative regulation of its respective
jurisdiction of incorporation, or any department, division, agency or instrumentality
thereof or of the United States or any applicable judgment or decree or any loan agreement,
note, resolution, certificate, agreement or other instrument to which the Servicer or the
Originator is a party or is otherwise subject which, if enforced, would have a material
adverse effect on the ability of the Servicer or the Originator, as the case may be, to
perform its respective obligations under the Transaction Documents.

     (i) Taxes. The Servicer, the Originator, and the Servicer’s and the Originator’s
parent company or companies have filed prior to the date hereof all federal and state tax
returns that are required to be filed and paid all taxes, including any assessments received
by them that are not being contested in good faith, to the extent that such taxes have
become due, except for any failures to file or pay that, individually or in the aggregate,
would not result in a Material Adverse Change with respect to the Servicer or the
Originator.

     (j) Accuracy of Information. Neither the Transaction Documents, nor other information
relating to the Contracts, the operations of the Servicer or the Originator (including
servicing or origination of the loans or the financial condition of the Servicer or the
Originator (collectively, the “Documents”), as amended, supplemented or superseded,
furnished to the Insurer by the Servicer or the Originator contain any statement of a
material fact by the Servicer or the Originator which was untrue or misleading in any
material adverse respect when made. Neither the Servicer nor the

  4848-3897-6769.8

11

 

Originator has any knowledge of circumstances that could reasonably be expected to
cause a Material Adverse Change with respect to the Servicer or the Originator. Since the
furnishing of the Documents, there has been no change nor any development or event involving
a prospective change known to the Servicer or the Originator that would render any of the
Documents untrue or misleading in a material respect.

     (k) Compliance With Securities Laws. The offer and sale of the Obligations comply in
all material respects with all requirements of law, including all registration requirements
of applicable securities laws. Without limitation of the foregoing, the Offering Document
does not contain any untrue statement of a material fact and does not omit to state a
material fact necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading; provided, however, that no representation is
made with respect to the information in the Offering Document set forth under the heading
“THE NOTE POLICY AND THE INSURER” or the consolidated financial statements of the Insurer
incorporated by reference in the Offering Document. Neither the offer nor the sale of the
Obligations has been or will be in violation of the Securities Act or any other federal or
state securities laws. The Issuer and the Seller are not required to be registered as an
“investment company” under the Investment Company Act.

     (l) Transaction Documents. Each of the representations and warranties of the Servicer
and the Originator contained in the Transaction Documents is true and correct in all
material respects, and the Servicer and the Originator hereby make each such representation
and warranty to, and for the benefit of, the Insurer as if the same were set forth in full
herein.

     (m) Solvency. The Servicer and the Originator are solvent and will not be rendered
insolvent by the Transaction and, after giving effect to the Transaction, neither the
Servicer nor the Originator will be left with an unreasonably small amount of capital with
which to engage in its business, nor does the Servicer nor the Originator intend to incur,
or believe that it has incurred, debts beyond its ability to pay as they mature. Neither
the Servicer nor the Originator contemplates the commencement of insolvency, bankruptcy,
liquidation or consolidation proceedings or the appointment of a receiver, liquidator,
conservator, trustee or similar official in respect of the Servicer or the Originator or any
of their assets.

     (n) Principal Place of Business; Jurisdiction of Organization. The principal place of
business of the Servicer is located in Dallas, Texas. The Servicer is a limited partnership
organized in Delaware. “Santander Consumer USA Inc.” is the correct legal name of the
Servicer indicated on the public records of the Servicer’s jurisdiction of organization
which shows the Servicer to be organized.

     Section 2.02. Affirmative Covenants of the Servicer and the Originator. The Servicer and the
Originator hereby agree, each solely to those matters relating to itself, that during the Term of
the Insurance Agreement, unless the Insurer shall otherwise expressly consent in writing:

  4848-3897-6769.8

12

 

     (a) Compliance With Agreements and Applicable Laws. The Servicer and the Originator
shall not be in default under the Transaction Documents and shall comply with all material
requirements of any law, rule or regulation applicable to it. Neither the Servicer nor the
Originator shall agree to any amendment to or modification of the terms of any Transaction
Documents unless the Insurer shall have given its prior written consent.

     (b) Maintaining Existence. The Servicer, its successors and assigns, the Originator,
and its successors and assigns shall maintain their respective existence and shall at all
times continue to be duly organized under the laws of its respective jurisdiction of
organization and duly qualified and duly authorized (as described in subsections 2.01(a),
(b) and (c) hereof) and shall conduct its business in accordance with the terms of its
organizational documents.

     (c) Financial Statements; Accountants’ Reports; Other Information. The Servicer and
the Originator shall keep or cause to be kept in reasonable detail books and records of
account of their assets and business, including, but not limited to, books and records
relating to the Transaction. The Servicer shall furnish or cause to be furnished to the
Insurer:

     (i) Annual Financial Statements. As soon as available, and in any event within
120 days after the close of each fiscal year of the Servicer, the audited
consolidated balance sheets of the Servicer and its subsidiaries as of the end of
such fiscal year and the related audited consolidated statements of income, changes
in shareholders’ equity and cash flows for such fiscal year, all in reasonable
detail and stating in comparative form the respective figures for the corresponding
date and period in the preceding fiscal year, prepared in accordance with generally
accepted accounting principles, consistently applied, and accompanied by the audit
opinion of the Servicer’s independent accountants (which shall be a nationally
recognized independent public accounting firm) and by the certificate specified in
Section 2.02(e) hereof.

     (ii) Quarterly Financial Statements. As soon as available, and in any event
within 90 days after each of the first three fiscal quarters of each fiscal year of
the Servicer, the unaudited consolidated balance sheets of the Servicer, and its
subsidiaries as of the end of such fiscal quarter and the related unaudited
consolidated statements of income, changes in shareholders’ equity and cash flows
for such fiscal quarter, all in reasonable detail and stating in comparative form
the respective figures for the corresponding date and period in the preceding fiscal
year, prepared in accordance with generally accepted accounting principles,
consistently applied, and accompanied by the certificate specified in Section
2.02(e) hereof.

     (iii) Initial and Continuing Reports. On or before the Date of Issuance, the
Servicer will provide the Insurer a copy of the magnetic tape to be delivered to the
Indenture Trustee on the Closing Date setting forth as to each Contract, the
information required to be included in the Schedule of Contracts relating to the

  4848-3897-6769.8

13

 

Initial Contracts. Thereafter, the Servicer shall deliver to the Insurer not
later than 12:00 noon, New York City time, on each Determination Date the report
required by Section 3.8 of the Sale and Servicing Agreement.

     (iv) Computer Diskette. Beginning in September 2007, the Servicer will deliver
to the Insurer on a quarterly basis, a computer diskette containing a quarterly
summary of the information provided to the Insurer pursuant to clause (iii) of this
subsection 2.02(c) and also containing information similar to the information
provided in the Schedule of Contracts.

     (v) Certain Information. Upon the reasonable request of the Insurer, the
Servicer and the Originator shall promptly provide copies of any requested proxy
statements, financial statements, reports and registration statements which the
Servicer or the Originator files with, or delivers to, the Commission or any
national securities exchange.

     (vi) Other Information. Promptly upon receipt thereof, copies of all
schedules, financial statements or other similar reports delivered to or by the
Servicer and the Originator pursuant to the terms of the Sale and Servicing
Agreement and, promptly upon request, such other data as the Insurer may reasonably
request.

     All financial statements specified in clauses (i) and (ii) of this subsection 2.02(c)
shall be furnished in consolidated form for the Servicer and all its subsidiaries in the
event the Servicer shall consolidate its financial statements with its subsidiaries.

     The Insurer agrees that it and its agents, accountants and attorneys shall keep
confidential all financial statements, reports and other information delivered by the
Servicer or the Originator pursuant to this subsection 2.02(c) to the extent provided in
subsection 2.02(f) hereof.

     (d) Reports Reflecting Contract Changes. The Servicer shall, on or before each
Determination Date, provide the Insurer with a written report reflecting (i) the number and
aggregate Principal Balance of any Contracts that were the subject of an extension or
payment deferment during the related Collection Period, (ii) the number and aggregate
Principal Balance of Contracts that were the subject of a Contract Modification (other than
an extension, payment deferment or Due Date Change) and (iii) the number and aggregate
Principal Balance of any Contracts that were the subject of Due Date Changes.

     (e) Compliance Certificate. The Servicer shall deliver to the Insurer, concurrently
with the delivery of the financial statements required pursuant to subsection 2.02(c)(i) and
(ii) hereof, one or more certificates signed by an officer of the Servicer, authorized to
execute such certificates on behalf of the Servicer stating that:

     (i) a review of the Servicer performance under the Transaction Documents during
such period has been made under such officer’s supervision;

  4848-3897-6769.8

14

 

     (ii)
to the best of such individual’s knowledge following reasonable inquiry, no Default or
Event of Default has occurred, or if a Default or Event of Default has occurred, specifying
the nature thereof and, if the Servicer has a right to cure pursuant to Section 7.1 of the Sale
and Servicing Agreement, stating in reasonable detail (including, if applicable, any supporting calculations)
the steps, if any, being taken by the Servicer to cure such Default or Event of Default or to otherwise comply
with the terms of the agreement to which such Default or Event of Default relates;

     (iii) the attached financial statements submitted in accordance with subsection
2.02(c)(i) or (ii) hereof, as the case
may be, are complete and correct in all
material respects and present fairly the financial condition and results of
operations of the Servicer as of the dates and for the periods indicated, in
accordance with generally accepted accounting principles consistently applied; and

     (iv) the Servicer has in full force and effect a blanket fidelity bond (or
direct surety bond) and an errors and omissions insurance policy in accordance with
the terms and requirements of Section 3.12 of the Sale and Servicing Agreement.

     (f) Access to Records; Discussions With Officers and Accountants. On an annual basis,
or upon the occurrence of a Material Adverse Change, the Servicer or the Originator shall,
upon the reasonable request of the Insurer, permit the Insurer or its authorized agents:

     (i) to inspect the books and records of the Servicer and the Originator as they
may relate to the Obligations, the obligations of the Servicer or the Originator
under the Transaction Documents, and the Transaction;

     (ii) to discuss the affairs, finances and accounts of the Servicer or the
Originator with the chief operating officer and the chief financial officer of the
Servicer or the Originator, as the case may be; and

     (iii) with the Servicer’s or the Originator’s consent, as applicable, which
consent shall not be unreasonably withheld, to discuss the affairs, finances and
accounts of the Servicer or the Originator with the Servicer’s or the Originator’s
independent accountants, provided that an officer of the Servicer or the Originator
shall have the right to be present during such discussions.

     Such inspections and discussions shall be conducted during normal business hours and
shall not unreasonably disrupt the business of the Servicer or the Originator. The books
and records of the Servicer shall be maintained at the address of the Servicer designated
herein for receipt of notices, unless the Servicer shall otherwise advise the parties hereto
in writing, and the books and records of the Originator shall be maintained at the addresses
of the Originator designated herein for receipt of notices, unless the Originator shall
otherwise advise the parties hereto in writing.

  4848-3897-6769.8

15

 

     The Insurer agrees that it and its shareholders, directors, agents, accountants and
attorneys shall keep confidential any matter of which it becomes aware through such
inspections or discussions (unless readily available from public sources), except as may be
otherwise required by regulation, law or court order or requested by appropriate
governmental authorities or as necessary to preserve its rights or security under or to
enforce the Transaction Documents, provided that the foregoing shall not limit the right of
the Insurer to make such information available to its regulators, securities rating
agencies, reinsurers, credit and liquidity providers, counsel and accountants.

     (g) Notice of Material Events. The Servicer and the Originator shall be obligated
(which obligation shall be satisfied as to each if performed by the Servicer or the
Originator) promptly to inform the Insurer in writing of the occurrence of any of the
following only to the extent any of the following relate to it and only to the extent each
has actual knowledge, notice or reason to know of such event:

     (i) the submission of any claim or the initiation or threat of any legal
process, litigation or administrative or judicial investigation, or rule making or
disciplinary proceeding by or against the Servicer or the Originator that (A) could
be required to be disclosed to the Commission or to the Servicer’s or the
Originator’s shareholders or (B) could result in a Material Adverse Change with
respect to the Servicer or the Originator, or the promulgation of any proceeding or
any proposed or final rule which would result in a Material Adverse Change with
respect to the Servicer or the Originator;

     (ii) the submission of any claim or the initiation or threat of any legal
process, litigation or administrative or judicial investigation in any federal,
state or local court or before any arbitration board, or any such proceeding
threatened by any government agency, which, if adversely determined, would result in
a Material Adverse Change with respect to the Issuer, the Seller, the Owners or the
Insurer.

     (iii) any change in the location of the Servicer’s or the Originator’s
principal offices or any change in the location of the Servicer’s or the
Originator’s books and records, jurisdiction of organization, legal name as
indicated on the public records of the Servicer’s or the Originator’s jurisdiction
of organization which shows the Servicer or the Originator to be organized;

     (iv) the occurrence of any Default or Event of Default or of any Material
Adverse Change;

     (v) the commencement of any proceedings by or against the Servicer or the
Originator under any applicable bankruptcy, reorganization, liquidation,
rehabilitation, insolvency or other similar law now or hereafter in effect or of any
proceeding in which a receiver, liquidator, conservator, trustee or similar official
shall have been, or may be, appointed or requested for the Servicer or the
Originator or any of its or their assets;

  4848-3897-6769.8

16

 

     (vi) the receipt of notice that (A) the Servicer or the Originator is being
placed under regulatory supervision, (B) any license, permit, charter, registration
or approval necessary for the conduct of the Servicer’s or the Originator’s business
is to be, or may be suspended or revoked, or (C) the Servicer or the
Originator is to cease and desist any practice, procedure or policy employed by
the Servicer or the Originator in the conduct of its business, and such cessation
may result in a Material Adverse Change with respect to the Servicer or the
Originator; or

     (vii) the occurrence of any Trigger Event or Reserve Event.

     (h) Financing Statements and Further Assurances. The Servicer will cause to be filed
all necessary financing statements or other instruments, and any amendments or continuation
statements relating thereto, necessary to be kept and filed in such manner and in such
places as may be required by law to preserve and protect fully the interest of the Indenture
Trustee in the Trust Property. The Servicer and the Originator shall, upon the request of
the Insurer, from time to time, execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, within ten days of such request, such amendments hereto and such
further instruments and take such further action as may be reasonably necessary to
effectuate the intention, performance and provisions of the Transaction Documents. In
addition, each of the Servicer and the Originator agree to cooperate with S&P and Moody’s in
connection with any review of the Transaction that may be undertaken by S&P or Moody’s after
the date hereof and to provide all information reasonably requested by S&P or Moody’s.

     (i) Maintenance of Licenses. The Servicer and the Originator, respectively, or any
successors thereof shall maintain all licenses, permits, charters and registrations which
are material to the conduct of its business.

     (j) Redemption of Obligations. The Servicer shall instruct the Indenture Trustee, upon
redemption, or payment, of all of the Obligations pursuant to the Indenture, to furnish to
the Insurer a notice of such redemption and, upon a redemption, or payment, of all of the
Obligations to surrender the Note Policy to the Insurer for cancellation.

     (k) Disclosure Document. Each Offering Document delivered with respect to the Notes
shall clearly disclose that the Note Policy is not covered by the property/casualty
insurance security fund specified in Article 76 of the New York Insurance Law.

     (l) Third-Party Beneficiary. The Servicer and the Originator agree that the Insurer
shall have all rights of a third-party beneficiary of, and pursuant to, the Servicer’s and
the Originator’s agreements under any of the Transaction Documents (other than the
Underwriting Agreement) and hereby incorporate and restate their representations, warranties
and covenants as set forth therein for the benefit of the Insurer.

     (m) Servicing of Contracts. The Servicer shall perform such actions with respect to
the Contracts as are provided to be performed by it in the Sale and Servicing

  4848-3897-6769.8

17

 

Agreement.
The Servicer will provide the Insurer with prior written notice of any change or amendment
to any Transaction Document as currently in effect.

     (n) Maintenance of Interest. On or before each March 30 beginning in 2008, so long as
any of the Obligations are outstanding, the Servicer shall furnish to the Insurer
and the Indenture Trustee an officers’ certificate either stating that such action has
been taken with respect to the recording, filing, rerecording and refiling of any financing
statements and continuation statements as is necessary to maintain the interest of the
Indenture Trustee in the Trust Property created by the Indenture and reciting the details of
such action or stating that no such action is necessary to maintain such interests. Such
officers’ certificate shall also describe the recording, filing, rerecording and refiling of
any financing statements and continuation statements that will be required to maintain the
interest of the Indenture Trustee in the Trust Property until the date such next officers’
certificate is due. The Servicer will use its best efforts to cause any necessary
recordings or filings to be made with respect to the Trust Property.

     (o) Closing Documents. The Servicer shall provide or cause to be provided to the
Insurer a bound volume or volumes of the Transaction Documents and an executed original copy
of each document executed in connection with the Transaction within 60 days after the date
of closing.

     (p) Preference Payments. With respect to any Preference Amount (as defined in the Note
Policy), the Servicer shall provide to the Insurer upon the request of the Insurer:

     (i) a certified copy of the final nonappealable order of a court having
competent jurisdiction ordering the recovery by a trustee in bankruptcy as avoidable
preference amounts included in previous distributions under Section 4.4 of the Sale
and Servicing Agreement to any Owner pursuant to the United States Bankruptcy Code,
11 U.S.C. §§101 et seq., as amended (the “Bankruptcy Code”);

     (ii) an opinion of counsel satisfactory to the Insurer, and upon which the
Insurer shall be entitled to rely, stating that such order is final and is not
subject to appeal;

     (iii) an assignment in such form as reasonably required by the Insurer,
irrevocably assigning to the Insurer all rights and claims of the Servicer, the
Indenture Trustee, the Owner Trustee and any Owner relating to or arising under the
Contract against the debtor which made such preference payment or otherwise with
respect to such preference amount; and

     (iv) appropriate instruments to effect (when executed by the affected party)
the appointment of the Insurer as agent for the Indenture Trustee and any Owner in
any legal proceeding relating to such preference payment being in a form
satisfactory to the Insurer.

     (q) Santander Consumer USA Inc. To Be Sole Member. Santander Consumer USA Inc. shall
be the sole member of the Seller while any of the Obligations

  4848-3897-6769.8

18

 

are outstanding. Santander
Consumer USA Inc. shall not sell, pledge or otherwise transfer such membership interest
without the prior written consent of the Insurer.

     (r) Texas Margin Tax. In the event that a tax is levied or assessed upon the Issuer or
upon all or part of the Trust Estate under HB3, which tax becomes due and
payable by the Issuer, the Originator covenants and agrees to pay such tax to the
applicable taxing authority on behalf of the Issuer when and as due and payable by the
Issuer. Notwithstanding anything to the contrary contained herein, nothing in this
Insurance Agreement should be read to imply that the Issuer is doing business in Texas, has
sufficient nexus with Texas in order for HB3 to apply to the Issuer or is otherwise subject
to the tax described in HB3.

     Section 2.03. Negative Covenants of the Servicer and the Originator. The Servicer and the
Originator hereby agree, each solely as to those matters which relate to itself, that during the
Term of the Insurance Agreement, unless the Insurer shall otherwise expressly consent in writing:

     (a) Impairment of Rights. Neither the Servicer nor the Originator shall take any
action, or fail to take any action, if such action or failure to take action may result in a
material adverse change as described in clause (ii) of the definition of Material Adverse
Change with respect to the Servicer or the Originator, or may interfere with the enforcement
of any rights of the Insurer under or with respect to the Transaction Documents. The
Servicer or the Originator shall give the Insurer written notice of any such action or
failure to act on the earlier of: (i) the date upon which any publicly available filing or
release is made with respect to such action or failure to act or (ii) promptly prior to the
date of consummation of such action or failure to act. The Servicer and the Originator
shall furnish to the Insurer all information requested by it that is reasonably necessary to
determine compliance with this subsection (a).

     (b) Adverse Selection Procedure. The Servicer and the Originator will not use any
adverse selection procedure in selecting the Contracts to be transferred to the Indenture
Trustee from the outstanding loans that qualify under the Sale and Servicing Agreement for
inclusion in the Trust Property.

     (c) Waiver, Amendments, Etc. Neither the Servicer nor the Originator shall waive,
modify or amend, or consent to any waiver, modification or amendment of, any of the terms,
provisions or conditions of any of the Transaction Documents without the prior written
consent of the Insurer.

     (d) Contracts; Charge-off Policy. Except as otherwise permitted in the Indenture, the
Servicer and the Originator, shall not alter or amend any Contract, their respective
collection policies or their respective charge-off policies in a manner that materially
adversely affects the Insurer unless the Insurer shall have previously given its consent,
which consent shall not be unreasonably withheld.

     (e) Lockbox Arrangements. The Servicer and the Originator shall not alter or modify
the lockbox or collection account arrangements that are in effect as of the Closing

  4848-3897-6769.8

19

 

Date relating to collection of payments on the Contracts without prior written notice to the
Insurer.

     (f) Organizational Documents. Without the prior written consent of the Insurer, the
Servicer and the Originator will not cause or permit any amendment to the
(i) Certificate of Limited Partnership of, or the Agreement of Limited Partnership of,
Drive Residual Holdings LP or (ii) Certificate of Formation of, or the Limited Liability
Company Agreement of, Drive Residual Holdings GP LLC.

     Section 2.04. Representations and Warranties of the Seller and the Issuer. As of the Date of
Issuance, the Seller and the Issuer represent, warrant and covenant each solely as to those matters
relating to itself, as follows:

     (a) Due Organization and Qualification. The Seller is a limited liability company and
the Issuer is a statutory trust, and each are duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization. The Seller and the Issuer are
duly qualified to do business, are in good standing and have obtained all licenses, permits,
charters, registrations and approvals (together, “approvals”) necessary for the conduct of
its respective business as currently conducted and as described in the Offering Document and
the performance of its respective obligations under the Transaction Documents to which it is
a party, in each jurisdiction in which the failure to be so qualified or to obtain such
approvals would render any Transaction Document to which it is a party unenforceable in any
respect or would have a material adverse effect upon the Transaction, the Owners or the
Insurer.

     (b) Power and Authority. The Seller and the Issuer have all necessary power and
authority to conduct its respective business as currently conducted and, as described in the
Offering Document, to execute, deliver and perform its respective obligations under the
Transaction Documents to which it is a party and to consummate the Transaction.

     (c) Due Authorization. The execution, delivery and performance of the Transaction
Documents by the Seller and the Issuer have been duly authorized by all necessary corporate
action and do not require any additional approvals or consents, or other action by or any
notice to or filing with any Person, including, without limitation, any governmental entity
or the Seller’s members or the Issuer’s owners, which have not previously been obtained or
given by the Seller or the Issuer.

     (d) Noncontravention. Neither of the execution and delivery of the Transaction
Documents by the Seller or the Issuer, the consummation of the transactions contemplated
thereby or the satisfaction of the terms and conditions of the Transaction Documents:

     (i) conflicts with or results in any breach or violation of any provision of
the organizational documents of the Seller or the Trust Agreement of the Issuer or
any law, rule, regulation, order, writ, judgment, injunction, decree, determination
or award currently in effect having applicability to the Seller or the

  4848-3897-6769.8

20

 

Issuer or any
of its respective material properties, including regulations issued by an
administrative agency or other governmental authority having supervisory powers over
the Seller or the Issuer;

     (ii) constitutes a default by the Seller or the Issuer under or a breach of any
provision of any loan agreement, mortgage, indenture or other agreement or
instrument to which the Seller or the Issuer is a party or by which any of its
respective properties, which are individually or in the aggregate material to Seller
or the Issuer, is or may be bound or affected; or

     (iii) results in or requires the creation of any lien upon or in respect of any
assets of the Seller or the Issuer except as contemplated by the Transaction
Documents.

     (e) Legal Proceedings. There is no action, proceeding or investigation by or before
any court, governmental or administrative agency or arbitrator against or affecting the
Seller or the Issuer or any properties or rights of the Seller or the Issuer pending or, to
the Seller’s or the Issuer’s knowledge after reasonable inquiry, threatened, which, in any
case, could reasonably be expected to result in a Material Adverse Change with respect to
the Seller or the Issuer.

     (f) Valid and Binding Obligations. The Obligations, when executed, authenticated and
issued in accordance with the Indenture and the Transaction Documents (other than the
Obligations), when executed and delivered by the Seller and the Issuer, will constitute the
legal, valid and binding obligations of the Seller and the Issuer, as applicable,
enforceable in accordance with their respective terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors’ rights generally and general equitable principles and public policy
considerations as to rights of indemnification for violations of federal securities laws.
The Seller and the Issuer will not at any time in the future deny that the Transaction
Documents constitute the legal, valid and binding obligations of the Seller and the Issuer,
as applicable.

     (g) Compliance With Law, Etc. No practice, procedure or policy employed, or proposed
to be employed, by the Seller or the Issuer in the conduct of its respective business
violates any law, regulation, judgment, agreement, order or decree applicable to any of them
that, if enforced, could reasonably be expected to result in a Material Adverse Change with
respect to the Seller or the Issuer. The Seller and the Issuer are not in breach of or
default under any applicable law or administrative regulation of its respective jurisdiction
or incorporation, or any department, division, agency or instrumentality thereof or of the
United States or any applicable judgment or decree or any loan agreement, note, resolution,
certificate, agreement or other instrument to which the Seller or the Issuer are a party or
is otherwise subject which, if enforced, would have a material adverse effect on the ability
of the Seller or the Issuer to perform its respective obligations under the Transaction
Documents.

  4848-3897-6769.8

21

 

     (h) Compliance With Securities Laws. The offer and sale of the Obligations comply in
all material respects with all requirements of law, including all registration requirements
of applicable securities laws. Without limitation of the foregoing, the Offering Document
does not contain any untrue statement of a material fact and does not omit to state a
material fact necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading; provided, however, that no
representation is made with respect to the information in the Offering Document set forth
under the heading “THE NOTE POLICY AND THE INSURER” or the consolidated financial statements
of the Insurer incorporated by reference in the Offering Document. Neither the offer nor the
sale of the Obligations has been or will be in violation of the Securities Act or any other
federal or state securities laws.

     (i) Taxes. The Seller and the Issuer have filed prior to the date hereof all federal
and state tax returns that are required to be filed and paid all taxes, including any
assessments received by them that are not being contested in good faith, to the extent that
such taxes have become due, except for any failures to file or pay that, individually or in
the aggregate, would not result in a Material Adverse Change with respect to the Seller or
the Issuer.

     (j) Transaction Documents. Each of the representations and warranties of the Seller
and the Issuer contained in the Transaction Documents is true and correct in all material
respects and the Seller and the Issuer hereby make each such representation and warranty to,
and for the benefit of, the Insurer as if the same were set forth in full herein.

     (k) Solvency. The Seller and the Issuer are solvent and will not be rendered insolvent
by the Transaction and, after giving effect to the Transaction, the Seller and the Issuer
will not be left with an unreasonably small amount of capital with which to engage in its
respective business, neither the Seller nor the Issuer intend to incur, or believe that it
incurred, debts beyond its ability to pay as they mature. The Seller and the Issuer do not
contemplate the commencement of insolvency, bankruptcy, liquidation or consolidation
proceedings or the appointment of a receiver, liquidator, conservator, trustee or similar
official in respect of the Seller or the Issuer or any of its respective assets.

     (l) Principal Place of Business; Jurisdiction of Organization.

     (i) The principal place of business of the Seller is Dallas, Texas. The Seller
is a limited liability company organized in Delaware. “Santander Drive Auto
Receivables LLC” is the correct legal name of the Seller indicated on the public
records of the Seller’s jurisdiction of organization which shows the Seller to be
organized.

     (ii) The principal place of business of the Issuer is located in Wilmington,
Delaware. The Issuer is a statutory trust organized in Delaware. “Santander Drive
Auto Receivables Trust 2007-2” is the correct legal name of the Issuer indicated on
the public records of the Issuer’s jurisdiction of organization which shows the
Issuer to be organized.

  4848-3897-6769.8

22

 

     (iii) The principal place of business of the Owner Trustee is located in
Wilmington, Delaware. The Owner Trustee is a national banking association organized
under the laws of the United States. “U.S. Bank Trust National Association” is the
correct legal name of the Owner Trustee indicated on the
public records of the Owner Trustee’s jurisdiction of organization which shows
the Owner Trustee to be organized.

     (m) Investment Company Act. The Seller and the Issuer are not an “investment company,”
or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment
company,” as such terms are defined in the Investment Company Act.

     (n) No Consents. No authorization or approval or other action by, and no notice to or
filing with, any Person, including, without limitation, any governmental entity or
regulatory body, is required for the due execution, delivery and performance by the Seller
or Issuer of the Transaction Documents or any other material document or instrument to be
delivered thereunder, except (in each case) such as have been obtained or the failure of
which to be obtained would not be reasonably likely to have a material adverse effect on the
Transaction.

     (o) No Material Event of Default. There is no material event of default on the part of
the Seller or Issuer under any agreement involving financial obligations which would
materially adversely impact the financial conditions or operations of the Trust or its
obligations under any document associated with this Transaction.

     Section 2.05. Affirmative Covenants of the Seller and the Issuer. The Seller and the Issuer
hereby agree, each solely as to matters relating to itself, that during the Term of the Insurance
Agreement, unless the Insurer shall otherwise expressly consent in writing:

     (a) Compliance With Agreements and Applicable Laws. The Seller and the Issuer shall
not be in default under the Transaction Documents and shall comply with all material
requirements of any law, rule or regulation applicable to it. The Seller and the Issuer
shall not agree to any material amendment to or modification of the terms of any Transaction
Documents unless the Insurer shall have given its prior written consent.

     (b) Maintain Existence. The Seller and the Issuer, its successors and assigns, shall
maintain its existence and shall at all times continue to be duly organized under the laws
of its respective jurisdiction and duly qualified and duly authorized and shall conduct its
business in accordance with the terms of its organizational documents.

     (c) Notice of Material Events. The Seller and the Issuer shall be obligated promptly
to inform the Insurer in writing of the occurrence of any of the following to the extent any
of the following relate to it and to the extent that it receives actual notice of the
occurrence of any of the following events:

     (i) the submission of any claim or the initiation or threat of any legal
process, litigation or administrative or judicial investigation, or rule making or
disciplinary proceeding by or against the Seller or the Issuer that (A) could be

  4848-3897-6769.8

23

 

required to be disclosed to the Commission or to the Seller’s stockholders or the
Issuer’s owners or (B) could result in a Material Adverse Change with respect to the
Seller or the Issuer, or the promulgation of any proceeding or any proposed or
final rule which would result in a Material Adverse Change with respect to the
Seller or the Issuer;

     (ii) any change in the location of the Seller’s, the Issuer’s or The Owner
Trustee’s principal place of business, jurisdiction of organization, legal name as
indicated on the public records of the Seller’s, the Issuer’s or The Owner Trustee’s
jurisdiction of organization which shows the Seller, the Issuer or The Owner Trustee
to be organized or any change in the location of the Seller’s or the Issuer’s books
and records;

     (iii) the occurrence of any Default or Event of Default or of any Material
Adverse Change;

     (iv) the commencement of any proceedings by or against the Seller or the Issuer
under any applicable bankruptcy, reorganization, liquidation, rehabilitation,
insolvency or other similar law now or hereafter in effect or of any proceeding in
which a receiver, liquidator, conservator, trustee or similar official shall have
been, or may be, appointed or requested for the Seller or the Issuer or any of its
respective assets; or

     (v) the receipt of notice that (A) the Seller or the Issuer is being placed
under regulatory supervision, (B) any license, permit, charter, registration or
approval necessary for the conduct of the Seller’s or the Issuer’s business is to
be, or may be suspended or revoked, or (C) the Seller or the Issuer is to cease and
desist any practice, procedure or policy employed by the Seller or the Issuer in the
conduct of its respective business, and such cessation may result in a Material
Adverse Change with respect to the Seller or the Issuer.

     (d) Financing Statements and Further Assurances. To the extent provided in the
Indenture and the Sale and Servicing Agreement, the Issuer will cause to be filed all
necessary financing statements or other instruments, and any amendments or continuation
statements relating thereto, necessary to be kept and filed in such manner and in such
places as may be required by law to preserve and protect fully the interest of the Indenture
Trustee. The Seller and the Issuer shall, upon the request of the Insurer, from time to
time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered,
within ten days of such request, such amendments hereto and such further instruments and
take such further action as may be reasonably necessary to effectuate the intention,
performance and provisions of the Transaction Documents to which it is a party. In
addition, the Seller and the Issuer agree to cooperate with S&P and Moody’s in connection
with any review of the Transaction that may be undertaken by S&P and Moody’s after the date
hereof.

  4848-3897-6769.8

24

 

     (e) Maintenance of Licenses. The Seller and the Issuer, or any successors thereof,
shall maintain all licenses, permits, charters and registrations which are material to the
conduct of its respective business.

     (f) The Seller Member Meetings. The Seller shall have annual member meetings and at
least annual board of director meetings and shall prepare income and franchise tax returns
as appropriate. The Seller shall deliver to the Insurer copies of the minutes of such
meetings no later than April 30 of each year and such tax returns promptly upon filing but
in no event later than August 31 of each year, beginning in 2008.

     (g) Third-party Beneficiary. The Seller and the Issuer agree that the Insurer shall
have all rights of a third-party beneficiary in respect of each Transaction Document (other
than the Underwriting Agreement) and hereby incorporates and restates its representations,
warranties and covenants as set forth therein for the benefit of the Insurer.

     (h) Tax Matters. The Seller and the Issuer will take all actions necessary to ensure
that the Issuer is taxable as a partnership for federal and state income tax purposes and
not as an association (or publicly traded partnership), taxable as a corporation.

     (i) Financial Statements; Accountants’ Reports; Other Information. The Seller and the
Issuer shall keep or cause to be kept in reasonable detail books and records of account of
its assets and business, including, but not limited to, books and records relating to the
Transaction. The Seller and the Issuer shall furnish or cause to be furnished to the
Insurer promptly upon receipt thereof, copies of all schedules, financial statements or
other similar reports delivered to or by the Seller and the Issuer pursuant to the terms of
the Transaction Documents and, promptly upon request, such other data as the Insurer may
reasonably request.

     (j) Access to Records; Discussions With Officers and Accountants. On an annual basis,
or upon the occurrence of a Material Adverse Change, the Seller and the Issuer shall, upon
the reasonable request of the Insurer, at its expense, permit the Insurer or its authorized
agents:

     (i) to inspect the books and records of the Seller or the Issuer as they may
relate to the Obligations, the obligations of the Seller or the Issuer under the
Transaction Documents, and the Transaction;

     (ii) to discuss the affairs, finances and accounts of the Seller or the Issuer
with the chief operating officer and the chief financial officer of the Seller or
the Issuer, as the case may be; and

     (iii) with the Seller or the Issuer’s consent, as the case may be, which
consent shall not be unreasonably withheld, to discuss the affairs, finances and
accounts of the Seller or the Issuer with the Seller or the Issuer’s independent
accountants, as applicable, provided that an officer of the Seller or the Issuer
shall have the right to be present during such discussions.

  4848-3897-6769.8

25

 

     Such inspections and discussions shall be conducted during normal business hours and
shall not unreasonably disrupt the business of the Seller or the Issuer. The books and
records of the Seller or the Issuer will be maintained at the address of the Seller or the
Issuer designated herein for receipt of notices, unless the Seller or the Issuer shall
otherwise advise the parties hereto in writing.

     The Insurer agrees that it and its shareholders, directors, agents, accountants and
attorneys shall keep confidential any matter of which it becomes aware through such
inspections or discussions (unless readily available from public sources), except as may be
otherwise required by regulation, law or court order or requested by appropriate
governmental authorities or as necessary to preserve its rights or security under or to
enforce the Transaction Documents, provided that the foregoing shall not limit the right of
the Insurer to make such information available to its regulators, securities rating
agencies, reinsurers, credit and liquidity providers, counsel and accountants.

     Section 2.06. Negative Covenants of the Seller and the Issuer. The Seller and the Issuer
hereby agree that during the Term of the Insurance Agreement, unless the Insurer shall otherwise
expressly consent in writing:

     (a) Impairment of Rights. The Seller and the Issuer shall not take any action, or fail
to take any action, if such action or failure to take action may result in a material
adverse change as described in clause (ii) of the definition of Material Adverse Change with
respect to the Seller or the Issuer, or may interfere with the enforcement of any rights of
the Insurer under or with respect to the Transaction Documents. The Seller and the Issuer
shall give the Insurer written notice of any such action or failure to act on the earlier
of: (i) the date upon which any publicly available filing or release is made with respect to
such action or failure to act or (ii) promptly prior to the date of consummation of such
action or failure to act. The Seller and the Issuer shall furnish to the Insurer all
information requested by it that is reasonably necessary to determine compliance with this
paragraph.

     (b) Waiver, Amendments, Etc. Except in accordance with the Transaction Documents, the
Seller and the Issuer shall not waive, modify or amend, or consent to any waiver,
modification or amendment of, any of the material terms, provisions or conditions of the
Transaction Documents without the consent of the Insurer which consent shall not
unreasonably be withheld. Except upon the prior written consent of the Insurer, the Seller
and the Issuer shall not allow the transfer, modification or amendment, nor consent to any
transfer, modification or amendment of the Certificate of Trust issued pursuant to the Trust
Agreement.

     (c) Restrictions on Liens. The Seller and the Issuer shall not, except as contemplated
by the Transaction Documents, (i) create, incur or suffer to exist, or agree to create,
incur or suffer to exist, or consent to cause or permit in the future (upon the happening of
a contingency or otherwise) the creation, incurrence or existence of any Lien or Restriction
on Transferability of the Contracts or (ii) sign or file under the Uniform Commercial Code
of any jurisdiction any financing statement which names the

  4848-3897-6769.8

26

 

Seller and the Issuer as a
debtor, or sign any security agreement authorizing any secured party thereunder to file such
financing statement, with respect to the Contracts.

     (d) Successors. The Seller and the Issuer shall not remove or replace, or cause to be
removed or replaced, the Servicer, the Indenture Trustee or the Owner Trustee without the
prior approval of the Insurer.

     (e) Subsidiaries. The Seller and the Issuer shall not form, or cause to be formed, any
subsidiaries.

     (f) No Mergers. The Seller and the Issuer shall not consolidate with or merge into
any Person or transfer all or any material amount of its assets to any Person, liquidate or
dissolve except as permitted by the Trust Agreement and as contemplated by the transaction
documents.

     (g) Other Activities. The Seller and the Issuer shall not (i) sell, pledge, transfer,
exchange or otherwise dispose of any of its assets except as permitted under the Transaction
Documents; or (ii) engage in any business or activity except as contemplated by the
Transaction Documents and as permitted by the Trust Agreement.

     (h) Trust Agreement. The Seller and the Issuer shall not amend the Trust Agreement
without the prior written consent of the Insurer.

     Section 2.07. Representations, Warranties and Covenants of Indenture Trustee. The Indenture
Trustee represents and warrants to, as of the Date of Issuance, and covenant with the other parties
as follows:

     (a) Due Organization and Qualification. The Indenture Trustee is a national banking
association, duly organized, validly existing and in good standing under the laws of the
United States of America. The Indenture Trustee is duly qualified to do business, is in
good standing and has obtained all licenses, permits, charters, registrations and approvals
(together, “approvals”) necessary for the conduct of its business as currently conducted and
as described in the Offering Document and the performance of its obligations under the
Transaction Documents, in each jurisdiction in which the failure to be so qualified or to
obtain such approvals would render any Transaction Document unenforceable in any respect or
would have a material adverse effect upon the Transaction, the Owners or the Insurer.

     (b) Due Authorization. The execution, delivery and performance of the Transaction
Documents by the Indenture Trustee have been duly authorized by all necessary corporate
action and do not require any additional approvals or consents, or other action by or any
notice to or filing with any Person, including, without limitation, any governmental entity
or the Indenture Trustee’s stockholders, which have not previously been obtained or given by
the Indenture Trustee.

     (c) Noncontravention. Neither the execution and delivery of the Transaction Documents
by the Indenture Trustee, the consummation of the transactions contemplated thereby nor the
satisfaction of the terms and conditions of the Transaction Documents:

  4848-3897-6769.8

27

 

     (i) conflicts with or results in any breach or violation of any provision of
the organizational documents of the Indenture Trustee or any law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
currently in effect having applicability to the Indenture Trustee or any of its
material properties, including regulations issued by an administrative agency or
other governmental authority having supervisory powers over the Indenture Trustee;

     (ii) constitutes a default by the Indenture Trustee under or a breach of any
provision of any loan agreement, mortgage, indenture or other agreement or
instrument to which the Indenture Trustee is a party or by which any of its
properties, which are individually or in the aggregate material to the Indenture
Trustee is or may be bound or affected; or

     (iii) results in or requires the creation of any lien upon or in respect of any
assets of the Indenture Trustee, except as contemplated by the Transaction
Documents.

     (d) Legal Proceedings. There is no action, proceeding or investigation by or before
any court, governmental or administrative agency or arbitrator against or affecting the
Indenture Trustee, or any of its or their subsidiaries, or any properties or rights of the
Indenture Trustee or any of its or their subsidiaries, pending or, to the Indenture
Trustee’s knowledge after reasonable inquiry, threatened, which, in any case, could
reasonably be expected to result in a Material Adverse Change with respect to the Indenture
Trustee.

     (e) Valid and Binding Obligations. The Obligations, when executed, authenticated and
issued in accordance with the Indenture, and the Transaction Documents (other than the
Obligations) to which it is a party, when executed and delivered by the Indenture Trustee
will constitute the legal, valid and binding obligations of the Indenture Trustee, as
applicable, enforceable in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors’ rights generally and general equitable principles. The
Indenture Trustee will not at any time in the future deny that the Transaction Documents
constitute the legal, valid and binding obligations of the Indenture Trustee, as applicable.

     (f) Compliance With Law, Etc. No practice, procedure or policy employed, or proposed
to be employed, by the Indenture Trustee in the conduct of its business violates any law,
regulation, judgment, agreement, order or decree applicable to the Indenture Trustee, if
enforced, could reasonably be expected to result in a Material Adverse Change with respect
to the Indenture Trustee. The Indenture Trustee is not in breach of or in default under any
applicable law or administrative regulation of its respective jurisdiction of incorporation,
or any department, division, agency or instrumentality thereof or of the United States or
any applicable judgment or decree or any loan agreement, note, resolution, certificate,
agreement or other instrument to which the Indenture Trustee is a party or is otherwise
subject which, if enforced, would have a

  4848-3897-6769.8

28

 

material adverse effect on the ability of the
Indenture Trustee to perform its respective obligations under the Transaction Documents.

     (g) Transaction Documents. Each of the representations and warranties of the Indenture
Trustee contained in the Transaction Documents is true and correct in all material respects,
and the Indenture Trustee hereby makes each such representation and warranty to, and for the
benefit of, the Insurer as if the same were set forth in full herein.

     (h) Compliance and Amendments. The Indenture Trustee shall comply in all material
respects with the terms and conditions of the Transaction Documents to which it is a party
and the Indenture Trustee shall not agree to any amendment to or modification of the terms
of any of the Transaction Documents to which it is a party unless the Insurer shall
otherwise give its prior written consent.

     Section 2.08. [Reserved]

     Section 2.09. Representations, Warranties and Covenants of Owner Trustee. The Owner Trustee
hereby represents and warrants as follows:

     (a) Representations and Warranties. As of the Date of Issuance, each of the
representations and warranties of the Owner Trustee set forth in the Transaction Documents
is true and correct in all material respects and the Owner Trustee makes each such
representation and warranty to, and for the benefit of, the Insurer as if the same were set
forth in full herein.

     (b) Compliance and Amendments. The Owner Trustee shall comply in all material respects
with the terms and conditions of the Transaction Documents to which each, respectively, is a
party and the Owner Trustee shall not agree to any amendment to or modification of the terms
of any of the Transaction Documents to which it is a party unless the Insurer shall
otherwise give its prior written consent.

ARTICLE III

THE POLICIES; REIMBURSEMENT

     Section 3.01. Issuance of the Policies. The Insurer agrees to issue the Policies on the
Closing Date subject to satisfaction of the conditions precedent set forth below:

     (a) Payment of Initial Premium and Expenses. The Insurer shall have been paid, by the
Servicer, that portion of a nonrefundable Premium payable on the Date of Issuance and the
Servicer shall agree to reimburse or pay directly other fees and expenses identified in
Section 3.02 hereof as payable.

     (b) Transaction Documents. The Insurer shall have received a fully executed copy of
the Fee Letter and a copy of each of the Transaction Documents, in form and substance
satisfactory to the Insurer, duly authorized, executed and delivered by each party thereto.

  4848-3897-6769.8

29

 

     (c) Certified Documents and Resolutions. The Insurer shall have received a copy of (i)
the organizational documents of the Servicer, the Originator, the Seller and the Issuer and
(ii) the resolutions of the Servicer’s, the Seller’s, the Issuer’s, and the
Originator’s Board of Directors authorizing the issuance of the Obligations and the
execution, delivery and performance by the Servicer, the Seller, the Issuer, and the
Originator of the Transaction Documents and the transactions contemplated thereby, certified
by the Secretary or an Assistant Secretary of the Servicer, the Seller, the Issuer, and the
Originator (which certificate shall state that such organizational documents and resolutions
are in full force and effect without modification on the Date of Issuance).

     (d) Incumbency Certificate. The Insurer shall have received a certificate of the
Secretary or an Assistant Secretary of the Servicer, the Seller, the Issuer, and the
Originator certifying the names and signatures of the officers of the Servicer, the Seller,
the Issuer, and the Originator authorized to execute and deliver the Transaction Documents
and that shareholder consent to the execution and delivery of such documents is not
necessary.

     (e) Representations and Warranties; Certificate. The representations and warranties of
the Servicer, the Seller, the Issuer, and the Originator set forth or incorporated by
reference in this Insurance Agreement shall be true and correct as of the Date of Issuance
as if made on the Date of Issuance and the Insurer shall have received a certificate of
appropriate officers of the Servicer, the Seller, the Issuer, and the Originator to that
effect.

     (f) Opinions of Counsel.

     (i) The law firm of Cowles & Thompson, P.C. shall have issued its favorable
opinion, in form and substance acceptable to the Insurer and its counsel, regarding
the corporate existence and authority of the Servicer, the Seller, the Issuer, and
the Originator and the validity and enforceability of the Transaction Documents
against such parties.

     (ii) The law firm of Dechert LLP shall have furnished its opinions in form and
substance acceptable to the Insurer and its counsel, regarding the sale of the Trust
Property, certain bankruptcy issues, and the tax treatment of payments on the
Obligations under federal tax laws.

     (iii) The Insurer shall have received such other opinions of counsel, in form
and substance acceptable to the Insurer and its counsel, addressing such other
matters as the Insurer may reasonably request. Each opinion of counsel delivered in
connection with the Transaction shall be addressed to and delivered to the Insurer.

     (g) Approvals, Etc. The Insurer shall have received true and correct copies of all
approvals, licenses and consents, if any, including, without limitation, any required
approval of the shareholders of the Servicer, the Seller, the Issuer, and the Originator,
required in connection with the Transaction.

  4848-3897-6769.8

30

 

     (h) No Litigation, Etc. No suit, action or other proceeding, investigation or
injunction, or final judgment relating thereto, shall be pending or threatened before any
court or governmental agency in which it is sought to restrain or prohibit or to obtain
damages or other relief in connection with the Transaction Documents or the
consummation of the Transaction.

     (i) Legality. No statute, rule, regulation or order shall have been enacted, entered
or deemed applicable by any government or governmental or administrative agency or court
that would make the transactions contemplated by any of the Transaction Documents illegal or
otherwise prevent the consummation thereof.

     (j) Issuance of Ratings. The Insurer shall have received confirmation that the risk
secured by the Note Policy constitutes at least an investment grade risk by S&P and Moody’s,
that the Class A-1 Notes, when issued, will be rated “A-1+” by S&P and “Prime-1” by Moody’s,
and that each of the Class A-2 Notes and Class A-3 Notes, when issued, will be rated “AAA”
by S&P and “Aaa” by Moody’s.

     (k) No Default. No Default or Event of Default shall have occurred.

     (l) Additional Items. The Insurer shall have received such other documents,
instruments, approvals or opinions requested by the Insurer or its counsel as may be
reasonably necessary to effect the Transaction, including, but not limited to, evidence
satisfactory to the Insurer and its counsel that the conditions precedent, if any, in the
Transaction Documents have been satisfied.

     (m) Conform to Documents. The Insurer and its counsel shall have determined that all
documents, certificates and opinions to be delivered in connection with the Obligations
conform to the terms of the Transaction Documents.

     (n) Compliance With Fee Letter. All other terms, conditions and requirements of the
Fee Letter shall have been satisfied.

     (o) Satisfaction of Conditions of the Underwriting Agreement. All conditions in the
Underwriting Agreement relating to the Underwriters’ obligation to purchase the Notes shall
have been satisfied.

     (p) Underwriting Agreement. The Insurer shall have received copies of each of the
documents, and shall be entitled to rely on each of the documents, required to be delivered
to the Underwriters pursuant to the Underwriting Agreement.

     Section 3.02. Payment of Fees and Premium.

     (a) Legal and Accounting Fees. The Servicer shall pay or cause to be paid, on the Date
of Issuance, legal fees and disbursements incurred by the Insurer in connection with the
issuance of the Policies and any fees of the Insurer’s auditors in accordance with the terms
of the Fee Letter. Any fees of the Insurer’s auditors payable in respect of any amendment
or supplement to the Offering Document or any other Offering Document incurred after the
Date of Issuance shall be paid by the Servicer on demand.

  4848-3897-6769.8

31

 

     (b) Premium. In consideration of the issuance by the Insurer of the Policies, the
Insurer shall be entitled to receive the Premium as and when due in accordance with
the terms of the Fee Letter (i) in the case of Premium due on or before the Date of
Issuance, directly from the Servicer and (ii) in the case of Premium due after the Date of
Issuance, first, pursuant to the Sale and Servicing Agreement, and second, to the extent the
amounts in subclause first are not sufficient, directly from the Servicer. The Premium shall
be calculated according to paragraph 2 of the Fee Letter. The Premium paid hereunder or
under the Sale and Servicing Agreement shall be nonrefundable without regard to whether the
Insurer makes any payment under the Policies or any other circumstances relating to the
Obligations or provision being made for payment of the Obligations prior to maturity. The
Servicer and the Indenture Trustee shall make all payments of Premium to be made by them by
wire transfer to an account designated from time to time by the Insurer by written notice to
the Servicer and the Indenture Trustee.

     Section 3.03. Reimbursement and Additional Payment Obligation.

     (a) In accordance with the priorities established in Section 4.4 of the Sale and
Servicing Agreement, the Insurer shall be entitled to (i) reimbursement for any payment made
by the Insurer under the Policies, which reimbursement shall be due and payable on the date
that any amount is to be paid pursuant to a Notice (as defined in the Note Policy) or a
Demand for Payment (as defined in the Swap Policy), in an amount equal to the amount to be
so paid and all amounts previously paid that remain unreimbursed, together with interest on
any and all amounts remaining unreimbursed (to the extent permitted by law, if in respect of
any unreimbursed amounts representing interest) from the date such amounts became due until
paid in full (after as well as before judgment), at a rate of interest equal to the Late
Payment Rate and (ii) payment or reimbursement of any other amounts owed to the Insurer
under this Agreement together with interest thereon at a rate equal to the Late Payment
Rate.

     (b) Notwithstanding anything in subsection 3.03(a) to the contrary, The Originator
agrees to reimburse the Insurer as follows: (i) from the Originator, for payments made under
the Policies arising as a result of the Seller’s or any Originator’s failure to repurchase
any Contract required to be repurchased pursuant to Section 2.3 of the Sale and Servicing
Agreement or Section 3.3 of the Contribution Agreement, together with interest on any and
all amounts remaining unreimbursed (to the extent permitted by law, if in respect of any
unreimbursed amounts representing interest) from the date such amounts became due until paid
in full (after as well as before judgment), at a rate of interest equal to the Late Payment
Rate, and (ii) from the Originator, for payments made under the Policies, arising as a
result of (A) the Servicer’s failure to deposit into the Collection Account any amount
required to be so deposited pursuant to the Sale and Servicing Agreement or (B) the
Servicer’s failure to repurchase any Contract required to be repurchased under Section 3.6
of the Sale and Servicing Agreement, together with interest on any and all amounts remaining
unreimbursed (to the extent permitted by law, if in respect to any unreimbursed amounts
representing interest) from the date such amounts became due until paid in full (after as
well as before judgment), at a rate of interest equal to the Late Payment Rate.

  4848-3897-6769.8

32

 

     (c) The Servicer agrees to pay to the Insurer as follows: any and all charges, fees,
costs and expenses that the Insurer may reasonably pay or incur, including, but not
limited to, attorneys’ and accountants’ fees and expenses, in connection with (i) any
accounts established to facilitate payments under the Policies to the extent the Insurer has
not been immediately reimbursed on the date that any amount is paid by the Insurer under the
Policies, (ii) the enforcement, defense or preservation of any rights in respect of any of
the Transaction Documents, including, without limitation, instituting, defending, monitoring
or participating in any litigation or proceeding (including, without limitation, any
insolvency or bankruptcy proceeding in respect of any Transaction participant or any
affiliate thereof) relating to any of the Transaction Documents, any party to any of the
Transaction Documents, in its capacity as such a party, or the Transaction, (iii) any
action, proceeding or investigation affecting the Trust, the Trust Property or the rights or
obligations of the Insurer under the Policies or the Transaction Documents, including
(without limitation) any judgment or settlement entered into affecting the Insurer or the
Insurer’s interests, (iv) any consent, amendment, waiver or other action with respect to, or
related to, any Transaction Document, whether or not executed or completed or (v)
preparation of bound volumes of the Transaction Documents; (“Reimbursable Amounts”).
Reimbursable Amounts due to the Insurer shall bear interest at a rate equal to the Late
Payment Rate. In the event that the Servicer fails to pay to the Insurer any Reimbursable
Amounts, the Insurer shall be entitled to reimbursement of such amount together with
interest thereon from Section 4.4(a)(7) of the Sale and Servicing Agreement. Costs and
expenses shall include a reasonable allocation of compensation and overhead attributable to
the time of employees of the Insurer spent in connection with the actions described in
clause (ii) above, and the Insurer reserves the right to charge a reasonable fee as a
condition to executing any waiver, consent or amendment proposed in respect of any of the
Transaction Documents.

     (d) The Servicer agrees to pay to the Insurer as follows: interest on any and all
amounts described in subsections (b), (c), (e) and (f) of this Section 3.03 from the date
payable or paid by such party until payment thereof in full, and interest on any and all
amounts described in Section 3.02 hereof from the date due until payment thereof in full, in
each case, payable to the Insurer at the Late Payment Rate per annum.

     (e) The Servicer and the Issuer, each on behalf of itself, agree to pay to the Insurer
as follows: any payments made by the Insurer on behalf of, or advanced to, the Servicer or
the Issuer, respectively, including, without limitation, any amounts payable by the Servicer
or the Issuer pursuant to the Obligations or any other Transaction Documents.

     (f) Following termination of the Indenture pursuant to Section 10.1 thereof, The
Originator agrees to reimburse the Insurer for any Insured Payments required to be made
pursuant to the Policies subsequent to the date of such termination.

     All such amounts are to be immediately due and payable without demand.

  4848-3897-6769.8

33

 

     Section 3.04. Indemnification; Limitation of Liability.

     (a) In addition to any and all rights of indemnification or any other rights of the
Insurer pursuant hereto or under law or equity, the Issuer, the Seller, the Originator,
and the Servicer and any successors thereto agree to pay, and to protect, indemnify and
save harmless, the Insurer and its officers, directors, shareholders, employees, agents, and
each person, if any, who controls the Insurer within the meaning of either Section 15 of the
Securities Act, or Section 20 of the Securities Exchange Act, from and against any and all
claims, Losses, liabilities (including penalties), actions, suits, judgments, demands,
damages, costs or reasonable expenses (including, without limitation, reasonable fees and
expenses of attorneys, consultants and auditors and reasonable costs of investigations) or
obligations whatsoever paid by the Insurer (herein collectively referred to as
“Liabilities”) of any nature arising out of or relating to the transactions contemplated by
the Transaction Documents by reason of:

     (i) any untrue statement or alleged untrue statement of a material fact
contained in the Offering Document or in any amendment or supplement thereto or in
any preliminary offering document, or arising out of or based upon any omission or
alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
Liabilities arise out of or are based upon any such untrue statement or omission or
allegation thereof based upon information set forth in the Offering Document under
the caption “THE NOTE POLICY AND THE INSURER”, or in the financial statements of the
Insurer, including any information in any amendment or supplement to the Offering
Document furnished by the Insurer in writing expressly for use therein that amends
or supplements such information (all such information being referred to herein as
“Insurer Information”);

     (ii) to the extent not covered by clause (i) above, any act or omission of the
Issuer, the Seller, the Originator, or the Servicer, or the allegation thereof, in
connection with the offering, issuance, sale or delivery of the Obligations other
than by reason of false or misleading information provided by the Insurer in writing
for inclusion in the Offering Document as specified in clause (i) above;

     (iii) the misfeasance or malfeasance of, or negligence or theft committed by,
any director, officer, employee or agent of the Issuer, the Seller, the Originator,
or the Servicer;

     (iv) the violation by the Issuer, the Seller, the Originator, or the Servicer
of any federal or state securities, banking or antitrust laws, rules or regulations
in connection with the issuance, offer and sale of the Obligations or the
transactions contemplated by the Transaction Documents;

     (v) the violation by the Issuer, the Seller, the Originator, or the Servicer of
any federal or state laws, rules or regulations relating to the Transaction or the
origination of the Contracts, including, without limitation, any consumer
protection, lending and disclosure laws or any laws with respect to the

  4848-3897-6769.8

34

 

maximum amount of interest permitted to be received on account of any loan of money or with
respect to the Contracts;

     (vi) the breach by the Issuer, the Seller, the Originator, the Administrator,
or the Servicer of any of its obligations under this Insurance Agreement or any of
the other Transaction Documents; and

     (vii) the breach by the Issuer, the Seller, the Originator, the Administrator,
or the Servicer of any representation or warranty on the part of the Issuer, the
Seller, the Originator, the Administrator, or the Servicer contained in the
Transaction Documents or in any certificate or report furnished or delivered to the
Insurer thereunder.

     The parties hereto agree that with respect to the matters described in clauses (iii),
(iv), (v), (vi) and (vii) above, the Issuer shall only be responsible for liabilities
related to those actions or inactions taken by the Issuer, the Seller shall only be
responsible for liabilities related to those actions or inactions taken by the Seller, the
Originator shall only be responsible for liabilities related to those actions or inactions
taken by the Originator, and the Servicer shall only be responsible for liabilities related
to those actions or inactions taken by the Servicer or the Administrator.

     This indemnity provision shall survive the termination of this Insurance Agreement and
shall survive until the statute of limitations has run on any causes of action which arise
from one of these reasons and until all suits filed as a result thereof have been finally
concluded.

     (b) The Originator agrees to indemnify the Trust and the Insurer for any and all
Liabilities incurred by the Trust and the Insurer due to any claim, counterclaim,
rescission, setoff, or defense asserted by an Obligor under any Contract subject to the
Federal Trade Commission regulations provided in 16 C.F.R. Part 433.

     (c) Any party which proposes to assert the right to be indemnified under this Section
3.04 will, promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim is to be made against the Issuer,
the Seller, the Originator, or the Servicer (each an “Indemnifying Party”) under this
Section 3.04, notify the Indemnifying Party of the commencement of such action, suit or
proceeding, enclosing a copy of all papers served. In case any action, suit or proceeding
shall be brought against any indemnified party and such indemnified party shall notify the
Indemnifying Party of the commencement thereof, the Indemnifying Party shall be entitled to
participate in, and, to the extent that it shall wish, to assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice from the Indemnifying Party
to such indemnified party of its election so to assume the defense thereof, the Indemnifying
Party shall not be liable to such indemnified party for any legal or other expenses other
than reasonable costs of investigation subsequently incurred by such indemnified party in
connection with the defense thereof. The indemnified party shall have the right to employ
its counsel in any such action the defense of which is assumed by the Indemnifying Party in
accordance with the terms of this subsection (c),

  4848-3897-6769.8

35

 

but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless the employment of counsel by such
indemnified party has been authorized
by the Indemnifying Party. The Indemnifying Party shall not be liable for any
settlement of any action or claim effected without its consent.

     (d) In addition to any and all rights of indemnification or any other rights of the
Insurer pursuant hereto or under law or equity, the Indenture Trustee agrees to pay, and to
protect, indemnify and save harmless, the Insurer and its officers, directors, shareholders,
employees, agents, including each person, if any, who controls the Insurer within the
meaning of either Section 15 of the Securities Act, as amended, or Section 20 of the
Securities Exchange Act, as amended, from and against any and all claims, losses,
liabilities (including penalties), actions, suits, judgments, demands, damages, costs or
reasonable expenses (including, without limitation, reasonable fees and expenses of
attorneys, consultants and auditors and reasonable costs of investigations) or obligations
whatsoever of any nature arising out of the breach by the Indenture Trustee of any of its
obligations under this Insurance Agreement or under any other Transaction Documents. This
indemnity provision shall survive the termination of this Insurance Agreement and shall
survive until the statute of limitations has run on any causes of action which arise from
one of these reasons and until all suits filed as a result thereof have been finally
concluded.

     (e) [Reserved]

     Section 3.05. Payment Procedure. In the event of any payment by the Insurer, the Issuer, the
Seller, the Originator, the Servicer, and the Indenture Trustee agree to accept the voucher or
other evidence of payment as prima facie evidence of the propriety thereof and the liability
therefor to the Insurer. All payments to be made to the Insurer under this Insurance Agreement
shall be made to the Insurer in lawful currency of the United States of America in immediately
available funds at the notice address for the Insurer as specified in Section 6.02 hereof on the
date when due or as the Insurer shall otherwise direct by written notice to the other parties
hereto. In the event that the date of any payment to the Insurer or the expiration of any time
period hereunder occurs on a day which is not a Business Day, then such payment or expiration of
time period shall be made or occur on the next succeeding Business Day with the same force and
effect as if such payment was made or time period expired on the scheduled date of payment or
expiration date. Payments to be made to the Insurer under this Insurance Agreement shall bear
interest at the Late Payment Rate from the date when due to the date paid.

     Section 3.06. Subrogation. The parties hereto acknowledge that to the extent of any payment
made by the Insurer pursuant to the Policies, the Insurer shall be fully subrogated to the extent
of such payment plus interest thereon at the Late Payment Rate, to the rights of the Noteholders or
the Swap Provider, as the case may be, to any moneys paid or payable in respect of the Notes or the
Swap Agreement, as the case may be, under the Transaction Documents or otherwise subject to
applicable law. The parties hereto agree to such subrogation and further agree to execute such
instruments and to take such actions as, in the sole and reasonable judgment of the Insurer, are
necessary to evidence such subrogation and to perfect the rights of the Insurer to receive any such
moneys paid or payable in respect of the Notes under the Transaction Documents or otherwise.

  4848-3897-6769.8

36

 

ARTICLE IV

FURTHER AGREEMENTS

     Section 4.01. Effective Date; Term of the Insurance Agreement. This Insurance Agreement
shall take effect on the Date of Issuance and shall remain in effect until the later of (a) such
time as the Insurer is no longer subject to a claim under the Policies and the Policies shall have
been surrendered to the Insurer for cancellation and (b) all amounts payable to the Insurer by the
Servicer, the Indenture Trustee, the Issuer, the Originator, or the Seller or from any other source
under the Transaction Documents and all amounts payable under the Obligations have been paid in
full; provided, however, that the provisions of Sections 3.02, 3.03, 3.04 and 4.06 hereof shall
survive any termination of this Insurance Agreement.

     Section 4.02. Further Assurances and Corrective Instruments.

     (a) Excepting at such times as a default in payment under the Policies shall exist or
shall have occurred, none of the Servicer, the Seller, the Issuer, the Originator, or the
Indenture Trustee shall grant any waiver of rights under any of the Transaction Documents to
which any of them is a party without the prior written consent of the Insurer, and any such
waiver without the prior written consent of the Insurer shall be null and void and of no
force or effect.

     (b) To the extent permitted by law, the Servicer, the Seller, the Originator, the
Issuer, and the Indenture Trustee agree that they will, from time to time, execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered, such
supplements hereto and such further instruments as the Insurer may request and as may be
required in the Insurer’s judgment to effectuate the intention of or facilitate the
performance of this Insurance Agreement.

     Section 4.03. Obligations Absolute.

     (a) The obligations of the Servicer, the Seller, the Originator, the Issuer, and the
Indenture Trustee hereunder shall be absolute and unconditional and shall be paid or
performed strictly in accordance with this Insurance Agreement under all circumstances
irrespective of:

     (i) any lack of validity or enforceability of, or any amendment or other
modifications of, or waiver, with respect to any of the Transaction Documents, the
Obligations or the Policies;

     (ii) any exchange or release of any other obligations hereunder;

     (iii) the existence of any claim, setoff, defense, reduction, abatement or
other right that the Servicer, the Seller, the Issuer, the Originator, or the
Indenture Trustee may have at any time against the Insurer or any other Person;

  4848-3897-6769.8

37

 

     (iv) any document presented in connection with the Policies proving to be
forged, fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect;

     (v) any payment by the Insurer under the Policies against presentation of a
certificate or other document that does not strictly comply with terms of the
Policies;

     (vi) any failure of the Servicer, the Seller, the Issuer, the Originator, or
the Indenture Trustee to receive the proceeds from the sale of the Obligations; or

     (vii) any breach by the Servicer, the Seller, the Issuer, the Originator, or
the Indenture Trustee of any representation, warranty or covenant contained in any
of the Transaction Documents.

     (b) The Servicer, the Seller, the Issuer, the Originator, the Indenture Trustee, and
any and all others who are now or may become liable for all or part of the obligations of
the Servicer, the Seller, the Issuer, the Originator, or the Indenture Trustee under this
Insurance Agreement agree to be bound by this Insurance Agreement and (i) to the extent
permitted by law, waive and renounce any and all redemption and exemption rights and the
benefit of all valuation and appraisement privileges against the indebtedness and
obligations evidenced by any Transaction Document or by any extension or renewal thereof;
(ii) waive presentment and demand for payment, notices of nonpayment and of dishonor,
protest of dishonor and notice of protest; (iii) waive all notices in connection with the
delivery and acceptance hereof and all other notices in connection with the performance,
default or enforcement of any payment hereunder, except as required by the Transaction
Documents; (iv) waive all rights of abatement, diminution, postponement or deduction, or any
defense other than payment, or to any right of setoff or recoupment arising out of any
breach under any of the Transaction Documents, by any party thereto or any beneficiary
thereof, or out of any obligation at any time owing to the Servicer, the Seller, the Issuer,
the Originator, or the Indenture Trustee; (v) agree that its liabilities hereunder shall,
except as otherwise expressly provided in this Section 4.03, be unconditional and without
regard to any setoff, counterclaim or the liability of any other Person for the payment
hereof; (vi) agree that any consent, waiver or forbearance hereunder with respect to an
event shall operate only for such event and not for any subsequent event; (vii) consent to
any and all extensions of time that may be granted by the Insurer with respect to any
payment hereunder or other provisions hereof and to the release of any security at any time
given for any payment hereunder, or any part thereof, with or without substitution, and to
the release of any Person or entity liable for any such payment; and (viii) consent to the
addition of any and all other makers, endorsers, guarantors and other obligors for any
payment hereunder, and to the acceptance of any and all other security for any payment
hereunder, and agree that the addition of any such obligors or security shall not affect the
liability of the parties hereto for any payment hereunder.

  4848-3897-6769.8

38

 

     (c) Nothing herein shall be construed as prohibiting the Servicer, the Seller, the
Issuer, the Originator, or the Indenture Trustee from pursuing any rights or remedies it may
have against any other Person in a separate legal proceeding.

     Section 4.04. Assignments; Reinsurance; Third-Party Rights.

     (a) This Insurance Agreement shall be a continuing obligation of the parties hereto and
shall be binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. None of the Servicer, the Seller, the Issuer, the
Originator, or the Indenture Trustee may assign its rights under this Insurance Agreement,
or delegate any of its duties hereunder, without the prior written consent of the Insurer.
Any assignment made in violation of this Insurance Agreement shall be null and void.

     (b) The Insurer shall have the right to give participations in its rights under this
Insurance Agreement and to enter into contracts of reinsurance with respect to the Policies
upon such terms and conditions as the Insurer may in its discretion determine; provided,
however, that no such participation or reinsurance agreement or arrangement shall relieve
the Insurer of any of its obligations hereunder or under the Policies.

     (c) In addition, the Insurer shall be entitled to assign or pledge to any bank or other
lender providing liquidity or credit with respect to the Transaction or the obligations of
the Insurer in connection therewith any rights of the Insurer under the Transaction
Documents or with respect to any real or personal property or other interests pledged to the
Insurer, or in which the Insurer has a security interest, in connection with the
Transaction.

     (d) Except as provided herein with respect to participants and reinsurers, nothing in
this Insurance Agreement shall confer any right, remedy or claim, express or implied, upon
any Person, including, particularly, any Owner, other than the Insurer against the Servicer,
the Seller, the Issuer, the Originator, or the Indenture Trustee, and all the terms,
covenants, conditions, promises and agreements contained herein shall be for the sole and
exclusive benefit of the parties hereto and their successors and permitted assigns. Neither
the Indenture Trustee nor any Owner shall have any right to payment from any Premiums paid
or payable hereunder or under the Sale and Servicing Agreement or from any other amounts
paid by the Servicer, the Seller, the Issuer, the Originator, or the Indenture Trustee
pursuant to Section 3.02, 3.03 or 3.04 hereof.

     (e) The Servicer, the Seller, the Issuer, the Originator, and the Indenture Trustee
agree that the Insurer shall have all rights of a third-party beneficiary in respect of the
Indenture and each other Transaction Document to which it is not a signing party and hereby
incorporate and restate their representations, warranties and covenants as set forth therein
for the benefit of the Insurer.

     Section 4.05. Liability of the Insurer. Neither the Insurer nor any of its officers,
directors or employees shall be liable or responsible for: (a) the use that may be made of the
Policies by the Indenture Trustee or the Swap Provider, as applicable, or for any acts or

  4848-3897-6769.8

39

 

omissions of the Indenture Trustee or the Swap Provider in connection therewith; or (b) the
validity, sufficiency, accuracy or genuineness of documents delivered to the Insurer (or its Fiscal
Agent) in connection with any claim under the Policies, or of any signatures thereon, even if such
documents or signatures should in fact prove to be in any or all respects invalid, insufficient,
fraudulent or forged (unless the Insurer shall have actual knowledge thereof). In furtherance and
not in limitation of the foregoing, the Insurer (or its Fiscal Agent) may accept documents that
appear on their face to be in order, without responsibility for further investigation.

     Section 4.06. Parties Will Not Institute Insolvency Proceedings. So long as this Insurance
Agreement is in effect, and for one year following its termination, none of the parties hereto will
file any involuntary petition or otherwise institute any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding or other proceedings under any federal or state bankruptcy or
similar law against the Issuer or the Seller.

     Section 4.07. Parties to Join in Enforcement Action.

     (a) To the extent necessary to enforce any right of the Insurer in or remedy of the
Insurer under any Contract or the Financed Vehicle related thereto, the Indenture Trustee,
the Issuer, the Seller, the Originator, and the Servicer agree to join in any action
initiated by the Indenture Trustee or the Insurer for the protection of such right or
exercise of such remedy.

     (b) In the event of any court proceeding (x) with respect to which any of the Issuer,
the Seller, the Originator, or the Servicer is a party (including, without limitation, an
insolvency or bankruptcy proceeding in respect of the Issuer, the Seller, the Originator, or
the Servicer) which affects the Contracts, the Policies or the obligations of the Insurer
under the Transaction Documents, and (y) with respect to which the Issuer, the Seller, the
Originator, or the Servicer as applicable, fails to defend or answer, the Insurer shall have
the right to direct, assume or otherwise participate in the defense thereof. In such event,
the Insurer shall, following written notice to the Indenture Trustee, have the exclusive
right to determine, in its sole discretion, the actions necessary to preserve and protect
the Contracts. All costs and expenses of the Insurer in connection with such action,
proceeding or investigation, (including, without limitation, any judgment or settlement
entered into or paid by the Insurer), shall be included in the MBIA Reimbursement
Obligations.

     (c) The Indenture Trustee shall cooperate with, and take such action as directed by,
the Insurer, including (without limitation) entering into such agreements and settlements as
the Insurer in its sole discretion shall direct with respect to such court proceeding. The
Indenture Trustee shall not be liable to the Insurer for any such action that conforms to
the direction of the Insurer. The Indenture Trustee’s reasonable out-of-pocket costs and
expenses (including attorneys’ fees and expenses) with respect to any such action shall be
reimbursed pursuant to Section 4.4 of the Sale and Servicing Agreement; provided, however,
that if such costs and expenses are not so reimbursed on the Distribution Date immediately
following the date so incurred, then the Insurer shall

  4848-3897-6769.8

40

 

     reimburse the Indenture Trustee for such costs and expenses within 60 days of such
nonpayment.

     (d) The Indenture Trustee hereby agrees to provide to the Insurer prompt written notice
of any action, proceeding or investigation that names any of the Issuer, the Seller, the
Originator, or the Servicer as a party or that could adversely affect the Contracts or the
rights or obligations of the Insurer hereunder or under the Policies or the other
Transaction Documents, including (without limitation) any insolvency or bankruptcy
proceeding in respect of any of the Issuer, the Seller, the Originator, or the Servicer or
any affiliate thereof.

     (e) Notwithstanding anything contained herein or in any of the other Transaction
Documents to the contrary, the Indenture Trustee shall not, without the Insurer’s prior
written consent or unless directed by the Insurer, undertake or join any litigation or agree
to any settlement of any action, proceeding or investigation affecting the Issuer or the
Contracts or the rights or obligations of the Insurer hereunder or under the Policies or the
other Transaction Documents.

     Section 4.08. Replacement Swap Agreement. In the event that a Swap Agreement is terminated
prior to its scheduled expiration in accordance with the terms of the Swap Agreement, the Issuer
shall at the request of the Insurer enter into a replacement swap agreement (the “Replacement Swap
Agreement”) in form and substance satisfactory to the Insurer with a replacement swap provider
acceptable to the Insurer on the same terms as the Swap Agreement executed on the Closing Date
mutatis mutandis, or with such amendments to the terms as have been approved by S&P, Moody’s and
the Insurer.

ARTICLE V

DEFAULTS; REMEDIES

     Section 5.01. Defaults. The occurrence of any of the following events shall constitute an
Event of Default hereunder:

     (a) Any representation or warranty made by the Servicer, the Seller, the Issuer, the
Originator, the Administrator, or the Indenture Trustee hereunder or under the Transaction
Documents, or in any certificate furnished hereunder or under the Transaction Documents,
shall prove to be untrue or incomplete in any material respect;

     (b) (i) The Servicer, the Seller, the Issuer, the Originator, or the Indenture Trustee
shall fail to pay when due any amount payable by the Servicer, the Seller, the Issuer, the
Originator, and the Indenture Trustee hereunder or (ii) a legislative body has enacted any
law that declares or a court of competent jurisdiction shall find or rule that any
Transaction Document to which it is a party is not valid and binding on the Servicer, the
Seller, the Issuer, the Originator, the Administrator, or the Indenture Trustee, as
applicable;

     (c) The occurrence and continuance of an “Indenture Event of Default” under the
Indenture (as defined therein);

  4848-3897-6769.8

41

 

     (d) Any failure on the part of the Servicer, the Seller, the Issuer, the Originator,
the Administrator, or the Indenture Trustee duly to observe or perform in any material
respect any other of the covenants or agreements on the part of the Servicer, the Seller,
the Issuer, the Originator, the Administrator, or the Indenture Trustee contained in this
Insurance Agreement or in any other Transaction Document which continues unremedied for a
period of 30 days with respect to this Insurance Agreement, or, with respect to any other
Transaction Document, beyond any cure period provided for therein, after the date on which
written notice of such failure, requiring the same to be remedied, shall have been given to
the Servicer, the Seller, the Issuer, the Administrator, or the Originator, as applicable,
by the Insurer (with a copy to the Indenture Trustee) or by the Indenture Trustee (with a
copy to the Insurer);

     (e) A decree or order of a court or agency or supervisory authority having jurisdiction
in the premises in an involuntary case under any present or future federal or state
bankruptcy, insolvency or similar law or the appointment of a conservator or receiver or
liquidator or other similar official in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Servicer, the Seller, the Issuer, or the
Originator, and such decree or order shall have remained in force undischarged or unstayed
for a period of 90 consecutive days;

     (f) The Servicer, the Seller, the Issuer, or the Originator shall consent to the
appointment of a conservator or receiver or liquidator or other similar official in any
insolvency, readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to the Servicer, the Seller, the Issuer, or the Originator or of
or relating to all or substantially all of the property of either;

     (g) The Servicer, the Seller, the Issuer, or the Originator shall admit in writing its
inability to pay its debts generally as they become due, file a petition to take advantage
of or otherwise voluntarily commence a case or proceeding under any applicable bankruptcy,
insolvency, reorganization or other similar statute, make an assignment for the benefit of
its creditors or voluntarily suspend payment of its obligations;

     (h) Any Event of Default or Termination Event (as defined in the Swap Agreement)
relating to the Swap Provider occurs under a Swap Agreement, and a Replacement Swap
Agreement acceptable to the Insurer is not entered into within 60 days of the Early
Termination Date (as defined in the Swap Agreement); or

     (i) A draw is made on the Swap Policy.

     Section 5.02. Remedies; No Remedy Exclusive.

     (a) Upon the occurrence of an Event of Default, the Insurer may exercise any one or
more of the rights and remedies set forth below:

     (i) declare all indebtedness of every type or description then owed by the
Servicer, the Seller, the Issuer, the Originator, or the Indenture Trustee to the
Insurer to be immediately due and payable, and the same shall thereupon be

  4848-3897-6769.8

42

 

immediately due and payable; provided, however, that any such payment by the
Issuer shall be paid in accordance with Section 4.4(a) of the Sale and Servicing
Agreement;

     (ii) exercise any rights and remedies under the Transaction Documents in
accordance with the terms of the Transaction Documents or direct the Indenture
Trustee to exercise such remedies in accordance with the terms of the Transaction
Documents; or

     (iii) take whatever action at law or in equity as may appear necessary or
desirable in its judgment to collect the amounts then due under the Transaction
Documents or to enforce performance and observance of any obligation, agreement or
covenant of the Servicer, the Seller, the Issuer, the Originator, or the Indenture
Trustee under the Transaction Documents.

     (b) Unless otherwise expressly provided, no remedy herein conferred upon or reserved is
intended to be exclusive of any other available remedy, but each remedy shall be cumulative
and shall be in addition to other remedies given under the Transaction Documents existing at
law or in equity. No delay or omission to exercise any right or power accruing under the
Transaction Documents upon the happening of any event set forth in Section 5.01 hereof shall
impair any such right or power or shall be construed to be a waiver thereof, but any such
right and power may be exercised from time to time and as often as may be deemed expedient.
In order to entitle the Insurer to exercise any remedy reserved to the Insurer in this
Article, it shall not be necessary to give any notice, other than such notice as may be
required in this Article V.

     Section 5.03. Waivers.

     (a) No failure by the Insurer to exercise, and no delay by the Insurer in exercising,
any right hereunder shall operate as a waiver thereof. The exercise by the Insurer of any
right hereunder shall not preclude the exercise of any other right, and the remedies
provided herein to the Insurer are declared in every case to be cumulative and not exclusive
of any remedies provided by law or equity.

     (b) The Insurer shall have the right, to be exercised in its complete discretion, to
waive any Event of Default hereunder, by a writing setting forth the terms, conditions and
extent of such waiver signed by the Insurer and delivered to the Servicer, the Seller, the
Issuer, the Originator, and the Indenture Trustee. Unless such writing expressly provides
to the contrary, any waiver so granted shall extend only to the specific event or occurrence
which gave rise to the Event of Default so waived and not to any other similar event or
occurrence which occurs subsequent to the date of such waiver.

ARTICLE VI

MISCELLANEOUS

     Section 6.01. Amendments, Etc. This Insurance Agreement may be amended, modified or
terminated only by written instrument or written instruments signed by the parties hereto. The

  4848-3897-6769.8

43

 

Servicer agrees to promptly provide a copy of any amendment to this Insurance Agreement to the
Indenture Trustee, S&P and Moody’s. No act or course of dealing shall be deemed to constitute an
amendment, modification or termination hereof. In the event that a backup servicer is appointed
pursuant to the terms of the Sale and Servicing Agreement, if requested by the Insurer the parties
hereto agree to amend this Agreement to add such backup servicer as a party hereto with such
obligations hereunder as may be agreed to by the Insurer and the backup servicer; provided,
however, that no such amendment shall modify the obligations of any of the other parties hereto
without the consent of such party.

     Section 6.02. Notices. All demands, notices and other communications to be given hereunder
shall be in writing (except as otherwise specifically provided herein) and shall be mailed by
registered mail or personally delivered or telecopied to the recipient as follows:

	 	(a)	 	To the Insurer:
	 
	 	 	 	MBIA Insurance Corporation

113 King Street

Armonk, NY 10504

Attention: Insured Portfolio Management – Asset-Backed Finance (IPM-SF)

Santander Drive Auto Receivables Trust 2007-2

Telephone No.: (914) 273-4545

Facsimile: (914) 765-3810

(In each case in which notice or other communication to the Insurer refers to an Event of
Default, a claim on the Policies or with respect to which failure on the part of the Insurer
to respond shall be deemed to constitute consent or acceptance, then a copy of such notice
or other communication should also be sent to the attention of each of the general counsel
and the Insurer and shall be marked to indicate “URGENT MATERIAL ENCLOSED.”)

	 	(b)	 	To the Seller:
	 
	 	 	 	Santander Drive Auto Receivables LLC

8585 North Stemmons Freeway, Suite 1100-N

Dallas, Texas 75247

Attention: Jim Moore

Telephone No.: (214) 237-3530

Facsimile: (214) 237-3570
	 
	 	(c)	 	To the Servicer and Originator:
	 
	 	 	 	Santander Consumer USA Inc.

8585 North Stemmons Freeway, Suite 1100-N

Dallas, Texas 75247

Attention: Jim Moore

Telephone No.: (214) 237-3530

Facsimile: (214) 237-3570

  4848-3897-6769.8

44

 

	 	(d)	 	To the Indenture Trustee:
	 
	 	 	 	Wells Fargo Bank, National Association

Sixth Street and Marquette Avenue

MAC N9311-161

Minneapolis, MN 55479

Attention: Corporate Trust Services/Asset-Backed Administration

Telephone No.: (612) 667-8058

Facsimile: (612) 667-3539
	 
	 	(e)	 	To the Issuer:
	 
	 	 	 	Santander Drive Auto Receivables Trust 2007-2

c/o U.S. Bank Trust National Association

300 Delaware Avenue, 9th Floor

Wilmington, DE 19801

Attention: Sterling Correia

Telephone No.: (302) 552-3104

Facsimile: (302) 552-3129
	 
	 	(f)	 	To the Owner Trustee:

U.S. Bank Trust National Association

300 Delaware Avenue, 9th Floor

Wilmington, DE 19801

Attention: Sterling Correia

Telephone No.: (302) 576-3702

Facsimile: (302) 576-3717

     A party may specify an additional or different address or addresses by writing mailed or
delivered to the other parties as aforesaid. All such notices and other communications shall be
effective upon receipt.

     Section 6.03. Severability. In the event that any provision of this Insurance Agreement
shall be held invalid or unenforceable by any court of competent jurisdiction, the parties hereto
agree that such holding shall not invalidate or render unenforceable any other provision hereof.
The parties hereto further agree that the holding by any court of competent jurisdiction that any
remedy pursued by any party hereto is unavailable or unenforceable shall not affect in any way the
ability of such party to pursue any other remedy available to it.

     Section 6.04. Governing Law. This Insurance Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

     Section 6.05. Consent to Jurisdiction.

     (a) The parties hereto hereby irrevocably submit to the jurisdiction of the United
States District Court for the Southern District of New York and any court in the

  4848-3897-6769.8

45

 

State of New York located in the City and County of New York, and any appellate court
from any thereof, in any action, suit or proceeding brought against it and to or in
connection with any of the Transaction Documents or the transactions contemplated thereunder
or for recognition or enforcement of any judgment, and the parties hereto hereby irrevocably
and unconditionally agree that all claims in respect of any such action or proceeding may be
heard or determined in such New York state court or, to the extent permitted by law, in such
federal court. The parties hereto agree that a final judgment in any such action, suit or
proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. To the extent permitted by applicable law,
the parties hereto hereby waive and agree not to assert by way of motion, as a defense or
otherwise in any such suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of such courts, that the suit, action or proceeding is brought
in an inconvenient forum, that the venue of the suit, action or proceeding is improper or
that the related documents or the subject matter thereof may not be litigated in or by such
courts.

     (b) To the extent permitted by applicable law, the parties hereto shall not seek and
hereby waive the right to any review of the judgment of any such court by any court of any
other nation or jurisdiction which may be called upon to grant an enforcement of such
judgment.

     (c) Except as provided in Section 4.06 herein, nothing contained in this Insurance
Agreement shall limit or affect the Insurer’s right to serve process in any other manner
permitted by law or to start legal proceedings relating to any of the Transaction Documents
against the any party hereto or its or their property in the courts of any jurisdiction.

     Section 6.06. Consent of the Insurer. In the event that the consent of the Insurer is
required under any of the Transaction Documents, the determination whether to grant or withhold
such consent shall be made by the Insurer in its sole discretion without any implied duty towards
any other Person.

     Section 6.07. Counterparts. This Insurance Agreement may be executed in counterparts by the
parties hereto, and all such counterparts shall constitute one and the same instrument.

     Section 6.08. Headings. The headings of Articles and Sections and the Table of Contents
contained in this Insurance Agreement are provided for convenience only. They form no part of this
Insurance Agreement and shall not affect its construction or interpretation. Unless otherwise
indicated, all references to Articles and Sections in this Insurance Agreement refer to the
corresponding Articles and Sections of this Insurance Agreement.

     Section 6.09. Trial by Jury Waived. Each party hereto hereby waives, to the fullest extent
permitted by law, any right to a trial by jury in respect of any litigation arising directly or
indirectly out of, under or in connection with any of the Transaction Documents or any of the
transactions contemplated thereunder. Each party hereto (A) certifies that no representative,
agent or attorney of any party hereto has represented, expressly or otherwise, that it would not,
in

  4848-3897-6769.8

46

 

the event of litigation, seek to enforce the foregoing waiver and (B) acknowledges that it has
been induced to enter into the Transaction Documents to which it is a party by, among other things,
this waiver.

     Section 6.10. Limited Liability. No recourse under any Transaction Document shall be had
against, and no personal liability shall attach to, any officer, employee, director, affiliate or
shareholder of any party hereto, as such, by the enforcement of any assessment or by any legal or
equitable proceeding, by virtue of any statute or otherwise in respect of any of the Transaction
Documents, the Obligations or the Policies, it being expressly agreed and understood that each
Transaction Document is solely a corporate obligation of each party hereto, and that any and all
personal liability, either at common law or in equity, or by statute or constitution, of every such
officer, employee, director, affiliate or shareholder for breaches by any party hereto of any
obligations under any Transaction Document is hereby expressly waived as a condition of and in
consideration for the execution and delivery of this Insurance Agreement.

     Section 6.11. Entire Agreement. The Transaction Documents and the Policies set forth the
entire agreement between the parties with respect to the subject matter thereof, and this Insurance
Agreement supersedes and replaces any agreement or understanding that may have existed between the
parties prior to the date hereof in respect of such subject matter.

     Section 6.12. Additional Covenant.

     (a) Each of the parties hereto agree not to use MBIA’s name in any public document
including, without limitation, a press release or presentation, announcement or forum
without MBIA’s prior consent. In the event that any party is advised by counsel that it has
a legal obligation to disclose MBIA’s name in any press release, public announcement or
other public document, it shall provide MBIA with at least three business days prior written
notice of its intent to use MBIA’s name together with a copy of the proposed use of MBIA’s
name and of any description of a transaction with MBIA and shall obtain MBIA’s prior consent
as to the form and substance of the proposed use of MBIA’s name and any such description.

     (b) Any use by a party of MBIA’s name in press releases, public announcements or other
public documents must be reviewed and approved by: (i) in the case of new transactions, the
appropriate new business division head, (ii) in the case of restructurings, the head of IPM,
(iii) the head of Corporate Communications and (iv) the member of the legal group who
supports the relevant division.

[REMAINDER OF PAGE INTENTIONALLY BLANK;

SIGNATURE PAGE FOLLOWS]

  4848-3897-6769.8

47

 

     IN WITNESS WHEREOF, the parties hereto have executed this Insurance Agreement, all as of the
day and year first above mentioned.

	 	 	 	 	 
	 	 	MBIA INSURANCE CORPORATION, 

as
Insurer
	 
	 	 	 	 
	 

	 	By	 	/s/ Amy R. Gonch 
	 

	 	 	 	 
	 

	 	Title:
	 	Assistant Secretary
	 
	 	 	 	 
	 	 	SANTANDER DRIVE AUTO
RECEIVABLES LLC,

 as Seller

By Santander Consumer USA Inc., as Sole Member
	 
	 	 	 	 
	 

	 	By	 	/s/ Jim W. Moore 
	 

	 	 	 	 
	 

	 	Title	 	Vice President 
	 
	 	 	 	 
	 	 	WELLS FARGO BANK, NATIONAL ASSOCIATION,

 as
Indenture Trustee
	 
	 	 	 	 
	 

	 	By	 	/s/ Marianna C. Stershic 
	 

	 	 	 	 
	 

	 	Title	 	Vice President 

Santander Drive Auto Receivables Trust 2007-2

Class A Asset Backed Notes

Insurance Agreement Signature Page

4848-3897-6769.8

 

 

	 	 	 	 	 
	 	 	SANTANDER CONSUMER USA INC.,
 as
Servicer and Originator
	 
	 	 	 	 
	 

	 	By	 	/s/ Jim W. Moore 
	 

	 	 	 	 
	 

	 	Title	 	Vice President 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	DRIVE AUTO RECEIVABLES
TRUST 2007-2,

 as Issuer
	 
	 	 	 	 
	 	 	By U.S. Bank Trust National Association, not in

its individual capacity, but solely as Owner

Trustee on behalf of the Issuer
	 
	 	 	 	 
	 

	 	By	 	/s/ Annette E. Morgan 
	 

	 	 	 	 
	 

	 	Title	 	Trust Officer 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	U.S. BANK TRUST NATIONAL
ASSOCIATION,

 not in its individual capacity,

but solely as Owner Trustee and in its individual

capacity solely for the purposes of

Section 2.04(l)(iii)
	 
	 	 	 	 
	 

	 	By	 	/s/ Annette E. Morgan 
	 

	 	 	 	 
	 

	 	Title	 	Trust Officer 
	 

	 	 	 	 

Santander Drive Auto Receivables Trust 2007-2

Class A Asset Backed Notes

Insurance Agreement Signature Page

4848-3897-6769.8Exhibit 10.6

 

Exhibit 10.6

FEE LETTER

September 5, 2007

Santander Consumer USA Inc.

8585 North Stemmons Freeway, Suite 1100-N

Dallas, Texas 75247

Santander Drive Auto Receivables Trust 2007-2

c/o U.S. Bank Trust National Association

300 Delaware Avenue, 9th Floor

Wilmington, Delaware 19801

Wells Fargo Bank, National Association

Sixth Street and Marquette Avenue

MAC N9311-161

Minneapolis, MN 55479

Santander Drive Auto Receivables Trust 2007-2

$600,000,000 Class A Asset Backed Notes

$103,000,000 Class A-1 5.8014% Asset Backed Notes

$128,000,000 Class A-2 LIBOR + .35% Asset Backed Notes

$369,000,000 Class A-3 LIBOR + .80% Asset Backed Notes

Ladies and Gentlemen:

     This letter (this “Fee Letter”) will confirm the agreement of Santander Consumer USA Inc.,
(“Santander Drive”), Santander Drive Auto Receivables Trust 2007-2 (the “Issuer”) and MBIA
Insurance Corporation (“MBIA”) that the following nonrefundable payments and other obligations are
to be made and undertaken in connection with, and subject to, the closing of the above-described
transaction and in consideration of the issuance by MBIA of its Financial Guaranty Insurance Policy
(the “Policy”) in respect thereof. The Premium paid to MBIA shall be nonrefundable for any reason
whatsoever, including the lack of any payment under the Policy or any other circumstances relating
to the Notes or provision being made for payments of the Notes prior to maturity.

     This Fee Letter is the Fee Letter referred to in the Insurance Agreement dated as of September
5, 2007 (the “Insurance Agreement”) by and among MBIA, as Insurer, Santander Consumer USA Inc., as
Servicer and Originator, Santander Drive Receivables LLC, as Seller, the Issuer, Wells Fargo Bank,
National Association, as Indenture Trustee (the “Indenture
Trustee”) and Backup Servicer, and U.S. Bank Trust National
Association, as Owner Trustee.

   4834-1665-0241.5

 

 

 The
obligations of the Issuer hereunder constitute an obligation of the Issuer under the Insurance
Agreement. Capitalized terms used but not otherwise defined herein shall have the meanings set
forth in the Insurance Agreement or the Indenture dated as of September 5, 2007 (the “Indenture”)
executed by the Issuer and the Indenture Trustee, as the same may be amended and supplemented from
time to time in accordance with the terms thereof.

     1. Fees: Santander Drive or the Issuer shall pay the following amounts on or before the
Closing Date:

     (a) Legal fees and expenses of Kutak Rock to be billed separately, in an amount not to
exceed $45,000 which shall be wired to the Kutak Rock account set forth below;

     (b) If a certificate or consent from the Insurer’s auditor regarding the inclusion of
MBIA’s audited financial statements in any of the documents is required, the fee of the
Insurer’s auditor letter to be billed directly by PricewaterhouseCoopers, L.L.P;

     (c) The due diligence fees and expenses of The Acuiti Group in the amount of
$18,527.06;

     (d) Fees of Moody’s Investor’s Service and Standard & Poor’s Ratings Services (the
“Rating Agencies”) to be billed to the Issuer directly by the Rating Agencies.

     2. Premium: The Issuer shall pay to MBIA, pursuant to Section 5.08(a)(v) of the Sale and
Servicing Agreement, (a) on the first Distribution Date, an amount equal to the product of (i)
0.00733% times (ii) the Class A Note Balance of the Class A Notes with respect to such date (prior
to giving effect to any Class A Principal Distributable Amount on such date) and (b) commencing on
the second Distribution Date and on each Distribution Date thereafter, an amount equal to the
product of (i) 0.01833% and (ii) the Class A Note Balance of the Class A Notes with respect to such
date (prior to giving effect to any Class A Principal Distributable Amount on such date), which
amounts shall constitute the “Premium” referred to in Section 3.02 of the Insurance Agreement. The
Premium is based on a rate of 22 basis points per annum (the “Premium Percentage”). The amount of
Premium due on each Distribution Date shall be rounded to the nearest dollar and wired to the MBIA
account set forth below.

     3. Wiring Instructions: Unless another account is designated to you in writing federal funds
wire transfers:

     (a) to MBIA should be made with the following details specifically stated on the wire
instructions:

   4834-1665-0241.5

2

 

	 	 	 	MBIA wiring instructions:

Account Name: MBIA Insurance Corporation

Account Number: 910-2-721-728

Bank: JPMorgan Chase Bank

4 Chase Metro Tech Center

Brooklyn, NY 11245

ABA Number: 021 0000 21

Reference: Policy No. 501381

     (b) to Kutak Rock should be made with the following details specifically stated on the
wire instructions:

	 	 	 	Kutak Rock wiring instructions:

Account Name: Kutak Rock LLP

ABA Number: 104000016

Bank: First National Bank of Omaha (Nebraska)

Account Number: 24-690470

Reference: 6613/01-3892

     4. The Indenture Trustee hereby acknowledges its obligation to pay the amounts set forth above
from moneys of the Issuer pursuant to the terms of the Indenture.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,

SIGNATURE PAGE FOLLOWS]

   4834-1665-0241.5

3

 

Exhibit
10.6

	 	 	 	 	 
	 	 	Sincerely,
	 
	 	 	 	 
	 	 	MBIA INSURANCE CORPORATION
	 
	 	 	 	 
	 

	 	By	 	/s/ Amy R. Gonch 
	 

	 	 	 	 
	 

	 	 	 	Assistant Secretary

	 	 	 	 	 
	ACKNOWLEDGED AND AGREED	 	 
	 
	 	 	 	 
	SANTANDER CONSUMER USA INC.	 	 
	 
	 
	By
	 	/s/ Jim W. Moore 	 	 
	 

	 	 

	 	 
	Title

	 	Vice
President 
	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	SANTANDER DRIVE AUTO RECEIVABLES
TRUST 2007-2,

 as Issuer	 	 
	 
	 	 	 	 
	By U.S. Bank Trust National Association,

not in its individual capacity, but solely as Owner Trustee

on behalf of the Issuer	 	 
	 
	 
	By
	 	/s/ Annette E. Morgan 	 	 
	 

	 	 

	 	 
	Title

	 	Trust
Officer 
	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Indenture Trustee	 	 
	 
	 
	By
	 	/s/ Marianna C. Stershic 	 	 
	 

	 	 

	 	 
	Title	 	Vice President 
	 	 
	 

	 	 

	 	 
	 
	 	 	 	 

Santander Drive Auto Receivables Trust 2007-2

Fee Letter Signature Page

4834-1665-0241.5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00129-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00129-of-00352.parquet"}]]