Exhibit 4.3
NOTE GUARANTY INSURANCE POLICY
OBLIGATIONS: $1,100,000,000 POLICY NUMBER: 38997(1)
Capital One Auto Finance Trust 2002-B
Automobile Receivable-Backed Notes, Series 2002-B
Class A-1 Notes, Class A-2-A Notes, Class A-2-B Notes,
Class A-3-A Notes, Class A-3-B Notes, Class A-4-A Notes
and Class A-4-B Notes
MBIA Insurance Corporation (the "Note Insurer"), in consideration of
the payment of the premium and subject to the terms of this Note Guaranty
Insurance Policy (this "Policy"), hereby unconditionally and irrevocably
guarantees to any Class A Noteholder that an amount equal to each full and
complete Insured Payment will be received from the Note Insurer by JPMorgan
Chase Bank, or its successors, as Indenture Trustee for the Class A Noteholders
(the "Indenture Trustee"), on behalf of the Class A Noteholders, for
distribution by the Indenture Trustee to each Class A Noteholder of each Class A
Noteholder's proportionate share of the Insured Payment. The Note Insurer's
obligations hereunder with respect to a particular Insured Payment shall be
discharged to the extent funds equal to the applicable Insured Payment are
received by the Indenture Trustee, whether or not such funds are properly
applied by the Indenture Trustee. Insured Payments shall be made only at the
time set forth in this Policy, and no accelerated Insured Payments shall be made
regardless of any acceleration of the Obligations, unless such acceleration is
at the sole option of the Note Insurer.
Notwithstanding the foregoing paragraph, this Policy does not cover
shortfalls, if any, attributable to the liability of any person for withholding
taxes, if any (including interest and penalties in respect of any such
liability).
The Note Insurer will pay any Insured Payment that is a Preference
Amount on the Business Day following receipt on a Business Day by the Fiscal
Agent (as described below) of (i) a certified copy of the order requiring the
return of a preference payment, (ii) an opinion of counsel satisfactory to the
Note Insurer that such order is final and not subject to appeal, (iii) an
assignment in such form as is reasonably required by the Note Insurer,
irrevocably assigning to the Note Insurer all rights and claims of the Class A
Noteholder relating to or arising under the Obligations against the debtor which
made such preference payment or otherwise with respect to such preference
payment and (iv) appropriate instruments to effect the appointment of the Note
Insurer as agent for such Class A Noteholder in any legal proceeding related to
such preference payment, such instruments being in a form satisfactory to the
Note Insurer, provided that if such documents are received after 12:00 noon, New
York City time, on such Business Day, they will be deemed to be received on the
following Business Day. Such payments shall be disbursed to the receiver or
trustee in bankruptcy named in the final order of the court exercising
jurisdiction on behalf of the Class A Noteholder and not to any Class A
Noteholder directly unless such Class A Noteholder has returned principal or
interest paid on the Obligations to such receiver or trustee in bankruptcy, in
which case such payment shall be disbursed to such Class A Noteholder.
The Note Insurer will pay any Deficiency Amount payable hereunder no
later than 12:00 noon, New York City time, on the later of the Payment Date on
which the related Deficiency Amount is due or the second Business Day following
receipt in New York, New York on a Business Day by State Street Bank and Trust
Company, N.A., as Fiscal Agent for the Note Insurer or any successor fiscal
agent appointed by the Note Insurer (the "Fiscal Agent") of a Notice (as
described below); provided that if such Notice is received after 12:00 noon, New
York City time, on such Business Day, it will be deemed to be received on the
following Business Day. If any such Notice received by the Fiscal Agent is not
in proper form or is otherwise insufficient for the purpose of making claim
hereunder, it shall be deemed not to have been received by the Fiscal Agent for
purposes of this paragraph, and the Note Insurer or the Fiscal Agent, as the
case may be, shall promptly so advise the Indenture Trustee and the Indenture
Trustee may submit an amended Notice.
Insured Payments due hereunder, unless otherwise stated herein, will be
disbursed by the Fiscal Agent to the Indenture Trustee on behalf of the Class A
Noteholders by wire transfer of immediately available funds in the amount of the
Insured Payment less, in respect of Insured Payments related to Preference
Amounts, any amount held by the Indenture Trustee for the payment of such
Insured Payment and legally available therefor.
The Fiscal Agent is the agent of the Note Insurer only, and the Fiscal
Agent shall in no event be liable to Class A Noteholders for any acts of the
Fiscal Agent or any failure of the Note Insurer to deposit, or cause to be
deposited, sufficient funds to make payments due under this Policy.
Subject to the terms of the Indenture (as described below), the Note
Insurer shall be subrogated to the rights of each Class A Noteholder to receive
payments under the Class A Notes to the extent of any payment by the Note
Insurer under the Policy.
As used herein, the following terms shall have the following meanings:
"Business Day" means any day other than (a) a Saturday or a Sunday; or
(b) a day on which commercial banking or federal institutions in New York, New
York, Falls Church, Virginia, Plano, Texas, or in the city in which the
principal trust office of the Indenture Trustee or the principal office of the
Note Insurer, is located are authorized or obligated by law or executive order
to close.
"Class A Noteholder" means each Holder of a Class A Note (as defined in
the Indenture) who, on the applicable Payment Date, is entitled under the terms
of the applicable Class A Notes to payment thereunder.
"Deficiency Amount" means, with respect to any Payment Date, the sum of
(i) the excess, if any, of (a) the Class A Note Interest over (b) the sum of
amounts available for payment from the Revenue Fund and all amounts then on
deposit in the Reserve Fund as of such Payment Date (after giving effect to all
payments pursuant to clauses First through Third of Section 5.05(c)(ii) of the
Indenture), (ii) the excess, if any, of the Principal Deficit (as defined below)
over the sum
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of amounts available for payment from the Revenue Fund and (iii) the Aggregate
Outstanding Principal Balance of each Class of Class A Notes on its respective
Final Scheduled Payment Date to the extent unpaid pursuant to clause (ii) above
and after giving effect to all payments pursuant to clauses First through Eighth
of Section 5.05(c)(ii) of the Indenture.
"Indenture" means the Indenture dated as of September 16, 2002 between
Wilmington Trust Company, as Owner Trustee and the Indenture Trustee, without
regard to any amendment or supplement thereto unless such amendment or
supplement has been approved in writing by the Note Insurer.
"Insured Payment" means the sum of (i) as of any Payment Date, any
Deficiency Amount and (ii) any Preference Amount.
"Notice" means the telephonic or telegraphic notice, promptly confirmed
in writing by facsimile substantially in the form of Exhibit A attached to this
Policy, the original of which is subsequently delivered by registered or
certified mail, from the Indenture Trustee specifying the Insured Payment which
shall be due and owing on the applicable Payment Date.
"Preference Amount" means any amount previously paid to Class A
Noteholders on the Class A Notes that is recoverable and sought to be recovered
as a voidable preference by a trustee in bankruptcy pursuant to the United
States Bankruptcy Code (11 U.S.C.), as amended from time to time in accordance
with a final nonappealable order of a court having competent jurisdiction.
"Principal Deficit" means, with respect to any Payment Date, the
excess, if any, of (i) the Aggregate Outstanding Principal Balance of the Class
A Notes as of the prior Payment Date (after application of all payments on such
date) over (ii) the sum of the amount of the Aggregate Receivable Balance (as of
the last day of the related Collection Period), the amount on deposit in the
Pre-Funding Account (as of the last day of the related Collection Period) and
the amount on deposit in the Reserve Fund (after giving effect to all payments
pursuant to clause First through Seventh of Section 5.05(c)(ii) of the
Indenture).
Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Indenture as of the date of
execution of this Policy, without giving effect to any subsequent amendment to
or modification of the Indenture unless such amendment or modification has been
approved in writing by the Note Insurer.
Any notice hereunder or service of process on the Fiscal Agent may be
made at the address listed below for the Fiscal Agent or such other address as
the Note Insurer shall specify in writing to the Indenture Trustee.
The notice address of the Fiscal Agent is 15th Floor, 61 Broadway, New
York, New York 10006, Attention: Municipal Registrar and Paying Agency, or such
other address as the Fiscal Agent shall specify to the Indenture Trustee in
writing.
This Policy is being issued under and pursuant to, and shall be
construed under, the laws of the State of New York, without giving effect to the
conflict of laws principles thereof.
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No defenses, set-offs and counterclaims of any kind available to the
Note Insurer so as to deny payment of any amount due in respect of this Policy
will be valid and the Note Insurer hereby waives and agrees not to assert any
and all such defenses (including fraud in inducement or fact or any other
circumstances that would have the effect of discharging a surety at law or in
equity), set-offs and counterclaims, including, without limitation any such
rights acquired by subrogation, assignment or otherwise.
The insurance provided by this Policy is not covered by the
Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.
This Policy is not cancelable for any reason. The premium on this
Policy is not refundable for any reason including payment, or provision being
made for payment, prior to maturity of the Obligations.
IN WITNESS WHEREOF, the Note Insurer has caused this Policy to be
executed and attested this 16/th/ day of September, 2002.
MBIA INSURANCE CORPORATION
By /s/ Gary C. Dunton
----------------------------------
President
Attest: /s/ Lisa A. Wilson
----------------------------------
Assistant Secretary
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EXHIBIT A
TO NOTE GUARANTY INSURANCE POLICY
NUMBER: 38997(1)
NOTICE UNDER NOTE GUARANTY
INSURANCE POLICY NUMBER: 38997(1)
State Street Bank and Trust Company, N.A., as Fiscal Agent
for MBIA Insurance Corporation
61 Broadway, 15th Floor
New York, NY 10006
Attention: Municipal Registrar and
Paying Agency
MBIA Insurance Corporation
113 King Street
Armonk, NY 10504
The undersigned, a duly authorized officer of JP Morgan Chase Bank, as
indenture trustee (the "Indenture Trustee"), hereby certifies to State Street
Bank and Trust Company, N.A. (the "Fiscal Agent") and MBIA Insurance Corporation
(the "Note Insurer"), with reference to Note Guaranty Insurance Policy Number:
38997(1) (the "Policy") issued by the Note Insurer in respect of the
$1,100,000,000 Capital One Auto Finance Trust 2002-B, Automobile
Receivable-Backed Notes, Series 2002-B, Class A-1 Notes, Class A-2-A Notes,
Class A-2-B Notes, Class A-3-A Notes, Class A-3-B Notes, Class A-4-A Notes and
Class A-4-B Notes (the "Obligations"), that:
(i) the Indenture Trustee is the indenture trustee under the
Indenture dated as of September 16, 2002 between Wilmington Trust
Company, as Owner Trustee and JPMorgan Chase Bank, as Indenture Trustee
for the Class A Noteholders;
(ii) the Deficiency Amount for the Payment Date occurring on
[ ] (the "Applicable Payment Date") is $[ ] (the
"Deficiency Amount");
(iii) the amount of previously distributed payments on the
Obligations that is recoverable and sought to be recovered as a
voidable preference by a trustee in bankruptcy pursuant to the
Bankruptcy Code in accordance with a final nonappealable order of a
court having competent jurisdiction is $ [ ] (the "Preference Amount");
(iv) the total Insured Payment due is $ [ ], which amount equals
the sum of the Deficiency Amount and the Preference Amount;
(v) the Indenture Trustee is making a claim under and pursuant
to the terms of the Policy for the dollar amount of the Insured Payment
set forth in (ii) above to be applied to the payment of the Deficiency
Amount on the Obligations for the Applicable Payment Date in accordance
with the Indenture and for the dollar amount of the Insured Payment set
forth in (iii) above to be applied to the payment of any Preference
Amount; and
(vi) the Indenture Trustee directs that payment of the Insured Payment
be made to the following account by bank wire transfer of federal or
other immediately available funds in accordance with the terms of the
Policy: [INDENTURE TRUSTEE'S ACCOUNT].
Any capitalized term used above in this Notice and not otherwise
defined herein shall have the meaning assigned thereto in the Policy.
Any Person Who Knowingly And With Intent To Defraud Any Insurance
Company Or Other Person Files An Application For Insurance Or Statement Of Claim
Containing Any Materially False Information, Or Conceals For The Purpose Of
Misleading, Information Concerning Any Fact Material Thereto, Commits A
Fraudulent Insurance Act, Which Is A Crime, And Shall Also Be Subject To A Civil
Penalty Not To Exceed Five Thousand Dollars And The Stated Value Of The Claim
For Each Such Violation.
IN WITNESS WHEREOF, the Indenture Trustee has executed and delivered
this Notice under the Policy as of the [ ] day of [ ].
JPMorgan Chase Bank, as Indenture Trustee
By_______________________________________
Title____________________________________
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