Exhibit 10.5
EXECUTION COPY
MBIA INSURANCE CORPORATION,
as Insurer,
CAPITAL ONE AUTO FINANCE, INC.
and
CAPITAL ONE AUTO RECEIVABLES, LLC
as Issuer Parties
and
DEUTSCHE BANK SECURITIES INC.,
as Representative of the Underwriters
INDEMNIFICATION AGREEMENT
$1,200,000,000
Capital One Auto Finance Trust 2002-A
Automobile Receivable-Backed Notes, Series 2002-A
Class A-1 Notes, Class A-2 Notes, Class A-3 Notes
and Class A-4 Notes
Dated as of April 16, 2002
TABLE OF CONTENTS
Page
Section 1. Definitions.....................................................1
Section 2. Representations and Warranties of the Insurer .................2
Section 3. Representations and Warranties of the Underwriters..............4
Section 4. Reserved........................................................4
Section 5. Indemnification.................................................5
Section 6. Notice To Be Given..............................................5
Section 7. Contribution....................................................7
Section 8. Notices.........................................................9
Section 9. Governing Law, Etc..............................................9
Section 10. Other Obligations Not Effected.................................10
Section 11. Limitations....................................................10
Section 12. Counterparts...................................................10
Section 13. Non-petition...................................................10
INDEMNIFICATION AGREEMENT
This Agreement, dated as of April 16, 2002 is between MBIA Insurance
Corporation (the "Insurer"), as the Insurer under the Note Guaranty Insurance
Policy (the "Policy") issued in connection with the Offered Notes described
below, CAPITAL ONE AUTO FINANCE, INC. ("COAF"), CAPITAL ONE AUTO RECEIVABLES,
LLC ("XXXX," and together with COAF, the "Issuer Parties") and DEUTSCHE BANK
SECURITIES INC., as Representative of the Underwriters (the "Representative") on
behalf of the Underwriters (as defined below).
Section 1. Definitions. As used in this Agreement, the following terms
shall have the respective meanings stated herein, unless the context clearly
requires otherwise, in both singular and plural form, as appropriate.
Capitalized terms used in this Agreement but not otherwise defined herein will
have the meanings ascribed to such terms in the Indenture (as described below).
"Act" means the Securities Act of 1933, as amended, together with all
related rules and regulations.
"Agreement" means this Indemnification Agreement by and between the Insurer
and the Representative of the Underwriters.
"Indemnified Party" means any party entitled to any indemnification
pursuant to Section 5 below, as the context requires.
"Indemnifying Party" means any party required to provide indemnification
pursuant to Section 5 below, as the context requires.
"Indenture" means the Indenture dated as of April 23, 2002 by and between
the Wilmington Trust Company, as Owner Trustee, and JPMorgan Chase Bank, as
Indenture Trustee.
"Insurance Agreement" means the Insurance Agreement, dated as of April 23,
2002 by and among the Insurer, the Owner Trustee, the Seller, the Transferor,
the Servicer, the Indenture Trustee and Owner Trustee.
"Insurer Party" means the Insurer and its respective parents, subsidiaries
and affiliates and any shareholder, director, officer, employee, agent or any
"controlling person" (as such term is used in the Act) of any of the foregoing.
"Issuer Party" means each of COAF and XXXX and its parent, subsidiaries,
and affiliates and any member, shareholder, director, officer, employee, agent
or any "controlling person" (as such term is used in the Act) of any of the
following.
"Losses" means (i) any actual out-of-pocket loss paid by the party entitled
to indemnification or contribution hereunder 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).
"Offered Notes" means the Capital One Auto Finance Trust 2002-A Automobile
Receivable-Backed Notes, Series 2002-A, Class X-0, Xxxxx-X-0, Xxxxx-X-0 and
Class-A-4, issued in accordance with the provisions of the Indenture.
"Person" means any individual, partnership, joint venture, corporation,
trust or unincorporated organization or any government or agency or political
subdivision thereof.
"Prospectus Supplement" means the Preliminary Prospectus Supplement dated
April 15, 2001 and the Prospectus Supplement dated April 16, 2002 with respect
to the Offered Notes.
"Servicer" means Capital One Auto Finance, Inc. as the Servicer of the
Receivables or any other Eligible Servicer acting as servicer pursuant to the
Servicing Agreement. Unless the context otherwise requires "Servicer" also
refers to any successor Servicer appointed under the Indenture or pursuant to
the Servicing Agreement.
"Servicing Agreement" means the Servicing Agreement dated as of April 23,
2002 by and among the Owner Trustee, the Indenture Trustee and the Servicer.
"Underwriter Party" means, with respect to the Underwriters, each such
Underwriter and its parent, subsidiaries and affiliates and any shareholder,
director, officer, employee, agent or "controlling person" (as such term is used
in the Act) of any of the foregoing.
"Underwriting Agreement" means the Underwriting Agreement by and among
COAF, Capital One Auto Receivables, LLC and the Representative as representative
of the Underwriters dated as of April 16, 2002.
"Underwriter" means in plural form Deutsche Bank Securities Inc., Banc of
America Securities LLC, Credit Suisse First Boston and JPMorgan and in singular
form each of Deutsche Bank Securities Inc., Banc of America Securities LLC,
Credit Suisse First Boston and JPMorgan.
Section 2. Representations and Warranties of the Insurer The Insurer
represents and warrants to each Underwriter and the each Issuer Party as
follows:
(a) Organization and Licensing. The Insurer is a duly incorporated and
existing New York stock insurance company licensed to do business in the
State of New York and is in good standing under the laws of such state.
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(b) Corporate Power. The Insurer has the corporate power and authority
to issue the Policy and execute and deliver this Agreement and to perform
all of its obligations hereunder and thereunder.
(c) Authorization; Approvals. The issuance of the Policy and the
execution, delivery and performance of this Agreement have been duly
authorized by all necessary corporate proceedings. No further approvals or
filings of any kind, including, without limitation, any further approvals
of or further filings with any governmental agency or other governmental
authority, or any approval of the Insurer's board of directors or
stockholders, are necessary for the Policy and this Agreement to constitute
the legal, valid and binding obligations of the Insurer.
(d) Enforceability. The Policy, when issued, and this Agreement will
each constitute a legal, valid and binding obligation of the Insurer,
enforceable in accordance with its terms, subject to applicable laws
affecting the enforceability of creditors' rights generally.
(e) Financial Information. The consolidated financial statements of
the Insurer and its subsidiaries as of December 31, 2001 and December 31,
2000 and for each of the three years in the period ended December 31, 2001
incorporated by reference in the Prospectus Supplement (the "Insurer
Financial Statements"), fairly present in all material respects the
financial condition of the Insurer as of such date and for the period
covered by such statements in accordance with generally accepted accounting
principles consistently applied, and since December 31, 2001, there has
been no material change in such financial condition of the Insurer which
would materially and adversely affect its ability to perform its
obligations under the Policy.
(f) Insurer Information. The information in the Prospectus Supplement
of the date hereof under the caption "THE Note Guaranty Insurance Policy
AND THE NOTE INSURER" (the "Insurer Information") is limited and does not
purport to provide the scope of disclosure required to be included in a
prospectus for a registrant under the Securities Act of 1933, in connection
with the public offer and sale of securities of such registrant. Within
such limited scope of disclosure, the Insurer Information does not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(g) No Litigation. There are no actions, suits, proceedings or
investigations pending or, to the best of the Insurer's knowledge,
threatened against it at law or in equity or before or by any court,
governmental agency, board or commission or any arbitrator which, if
decided adversely, would materially and adversely affect its condition
(financial
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or otherwise) or operations of it or would materially and adversely affect
its ability to perform its obligations under this Agreement or the Policy.
Section 3. Representations and Warranties of the Underwriters. Each
Underwriter severally represents and warrants (only with respect to itself) to
the Insurer as follows:
(a) Prospectus Supplement. It represents and warrants to and agrees
with the Insurer that the statements in the Prospectus Supplement made in
reliance upon and in conformity with written information relating to such
Underwriter furnished to Capital One Auto Finance, Inc. specifically for
use in the preparation of the Prospectus Supplement, and acknowledged in
writing set forth in the second paragraph (regarding concessions and
discounts) and the first sentence of the eighth paragraph (regarding
marketmaking) under the caption "Underwriting" in the Prospectus Supplement
(referred to herein as the "Underwriter Information"), are true and correct
in all material respects.
(b) Corporate Power. It has the corporate power and authority to
execute and deliver this Agreement and the Underwriting Agreement and to
perform all of its obligations hereunder and thereunder in all material
respects.
(c) Authorization; Approvals. The execution, delivery and performance
of this Agreement and the Underwriting Agreement by such Underwriter have
been duly authorized by all necessary corporate proceedings. No further
approvals or filings of any kind, including, without limitation, any
further approvals of or further filing with any governmental agency or
other governmental authority, or any approval of such Underwriter's board
of directors or stockholders, are necessary for this Agreement and the
Underwriting Agreement to constitute the legal, valid and binding
obligation of such Underwriter.
(d) Enforceability. This Agreement and the Underwriting Agreement will
each constitute a legal, valid and binding obligation of such Underwriter,
each enforceable in accordance with its terms, subject, as to the
enforcement of remedies, to bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting the enforceability of
creditors' rights generally applicable in the event of the bankruptcy,
insolvency or reorganization of such Underwriter and to general principles
of equity.
(e) No Litigation. There are no actions, suits, proceedings or
investigations pending or, to the best of such Underwriter's knowledge,
threatened against it at law or in equity or before any court, governmental
agency, board or commission or any arbitrator which, if decided adversely,
would materially and adversely affect its condition (financial or
otherwise) or its operations or would materially and adversely affect its
ability to perform its obligations under this Agreement and the
Underwriting Agreement.
Section 4. Reserved.
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Section 5. Indemnification.
(a) The Insurer hereby agrees, upon the terms and subject to the
conditions of this Agreement, to indemnify, defend and hold harmless each
Issuer Party and each Underwriter Party against (i) any and all Losses
incurred by them with respect to the offer and sale of any of the Offered
Notes and resulting from the Insurer's breach of any of its representations
and warranties set forth in Section 2 of this Agreement, and (ii) any and
all Losses to which any Issuer Party or any Underwriter Party may become
subject, under the Act or otherwise, subject to the limited scope of the
Insurer Information described below insofar as such Losses arise out of or
result from an untrue statement of a material fact contained in the
Prospectus Supplement or the omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that
such untrue statement or omission was made in the Insurer Information
included therein; and provided further, that it is understood that the
Insurer Information is limited and does not purport to provide the scope of
disclosure required to be included in a prospectus for a registrant under
the Securities Act of 1933, in connection with the public offer and sale of
securities of such registrant.
(b) Each Underwriter hereby agrees, severally and not jointly, upon
the terms and subject to the conditions of this Agreement, to indemnify,
defend and hold harmless each Insurer Party against (i) any and all Losses
incurred by it with respect to the offer and sale of any of the Offered
Notes and resulting from such Underwriter's breach of any of its
agreements, representations and warranties set forth in Section 3 of this
Agreement and (ii) any and all Losses to which any Insurer Party may become
subject, under the Act or otherwise, insofar as such Losses arise out of or
result from an untrue statement of a material fact contained in the
Prospectus Supplement or the omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading in each case to the extent, but only to the extent, that
such untrue statement or omission was made in the Underwriter Information
(as defined above) included therein.
(c) Upon the incurrence of any Losses entitled to indemnification
hereunder, the Indemnifying Party shall reimburse the Indemnified Party
promptly upon establishment by the Indemnified Party to the Indemnifying
Party of the Losses incurred.
Section 6. Notice To Be Given.
(a) Except as provided in Section 7 below with respect to
contribution, the indemnification provided herein by the Indemnifying Party
shall be the exclusive remedy of each Indemnified Party for the Losses
resulting from the Indemnifying Party's breach of a representation,
warranty or agreement hereunder; provided, however, that each Indemnified
Party shall be entitled to pursue any other remedy at law or in equity for
any
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such breach so long as the damages sought to be recovered shall not exceed
the Losses incurred thereby resulting from such breach.
(b) In the event that any action or regulatory proceeding shall be
commenced or claim asserted which may entitle an Indemnified Party to be
indemnified under this Agreement, such party shall give the Indemnifying
Party written or facsimile notice of such action or claim reasonably
promptly after receipt of written notice thereof.
(c) Upon request of the Indemnified Party, the Indemnifying Party
shall retain counsel reasonably satisfactory to the Indemnified Party to
represent the Indemnified Party and any others the Indemnifying Party may
designate in such proceeding and shall pay the fees and disbursements of
such counsel related to such proceeding. The Indemnifying Party may, at its
option, at any time upon written notice to the Indemnified Party, assume
the defense of any proceeding and may designate counsel reasonably
satisfactory to the Indemnified Party in connection therewith, provided
that the counsel so designated would have no actual or potential conflict
of interest in connection with such representation. Unless it shall assume
the defense of any proceeding, the Indemnifying Party shall not be liable
for any settlement of any proceeding, effected without its written consent,
but if settled with such consent or if there be a final judgment for the
plaintiff, the Indemnifying Party agrees to indemnify the Indemnified Party
from and against any loss or liability by reason of such settlement or
judgment. The Indemnifying Party shall be entitled to participate in the
defense of any such action or claim in reasonable cooperation with, and
with the reasonable cooperation of, each Indemnified Party.
(d) The Indemnified Party will have the right to employ its own
counsel in any such action, but the fees and expenses of such counsel will
be at the expense of such Indemnified Party unless (i) the employment of
counsel by the Indemnified Party at the Indemnifying Party's expense has
been authorized in writing by the Indemnifying Party, (ii) the Indemnifying
Party has not in fact employed counsel to assume the defense of such action
within a reasonable time after receiving notice of the commencement of the
action or (iii) the named parties to any such action include the
Indemnifying Party on the one hand and, on the other hand, the Indemnified
Party, and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them
(in which case if such Indemnified Party notifies the Indemnifying Party in
writing that it elects to employ separate counsel at the expense of the
Indemnifying Party, the Indemnifying Party shall not have the right to
assume the defense of such action or proceeding on such Indemnified Party's
behalf), in each of which cases the reasonable fees and expenses of counsel
(including local counsel) will be at the expense of the Indemnifying Party,
and all such fees and expenses will be reimbursed promptly as they are
incurred. In the event that any expenses so paid by the Indemnifying Party
are subsequently determined not to be required to be borne by the
Indemnifying Party hereunder, the party which received such payment shall
promptly refund to the
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Indemnifying Party the amount so paid by such Indemnifying Party.
Notwithstanding the foregoing, in connection with any one action or
separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances,
the Indemnifying Party shall not be liable for the fees and expenses of
more than one counsel for the Issuer Parties, more than one counsel for all
Underwriter Parties and more than one counsel for all Insurer Parties, as
applicable.
(e) The Indemnified Parties shall cooperate with the Indemnifying
Parties in resolving any event, which would give rise to an indemnity
obligation pursuant to Section 5 hereof in the most efficient manner.
(f) No settlement of any such claim or action shall be entered into
without the consent of each Indemnified Party who is subject to such claim
or action, on the one hand, and each Indemnifying Party who is subject to
such claim or action, on the other hand; provided, however, that the
consent of such Indemnified Party shall not be required if such settlement
fully discharges, with prejudice against the plaintiff, the claim or action
against such Indemnified Party.
(g) Any failure by an Indemnified Party to comply with the provisions
of this Section shall relieve the Indemnifying Party of liability only if
such failure is materially prejudicial to any legal pleadings, grounds,
defenses or remedies in respect thereof or the Indemnifying Party's
financial liability hereunder, and then only to the extent of such
prejudice.
Section 7. Contribution.
(a) To provide for just and equitable contribution if the
indemnification provided by the Insurer is determined to be unavailable for
any Underwriter Party (other than pursuant to Section 4 or 5 of this
Agreement), or if the indemnification provided by the Underwriters is
determined to be unavailable for any Insurer Party (other than pursuant to
Section 4 or 6 of this Agreement), the Insurer and the relevant Underwriter
shall contribute to the aggregate costs of liabilities arising from any
breach of their respective representations and warranties set forth in this
Agreement on the basis of the relative fault of all Insurer Parties and all
relevant Underwriter Parties.
(b) To provide for just and equitable contribution if the
indemnification provided by the Insurer is determined to be unavailable for
the Issuer Parties (other than pursuant to Section 5 or 6 of this
Agreement), the Insurer shall contribute to the aggregate cost of
liabilities arising from any breach of their respective representations and
warranties set forth in this Agreement on the basis of the relative fault
of all Insurer Parties and the Issuer Parties.
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(c) Notwithstanding anything in this Section 7 to the contrary, (i)
the Insurer shall not be required to contribute an amount in excess of the
amount by which the total of the insurance premiums that have been received
by the Insurer under the Insurance Agreement exceeds the amount of any
damages that the Insurer has otherwise been required to pay in respect of
any breach by the Insurer of the representations and warranties contained
in Section 2 hereof, and (ii) no Underwriter shall be required to
contribute an amount in excess of the amount by which the total
underwriting fees, discounts and commissions received by such Underwriter
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay in respect of any breach by such Underwriter of its
representations and warranties contained in Section 3 hereof.
(d) The relative fault of each Indemnifying Party, on the one hand,
and of each Indemnified Party, on the other hand, shall be determined by
reference to, among other things, whether the breach of, or alleged breach
of, any of its representations and warranties set forth in Section 2 or 3
of this Agreement relates to information supplied by, or action within the
control of, the Insurer Party or the relevant Underwriter Party and the
Parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such breach.
(e) The Parties agree that the Insurer shall be solely responsible for
the Insurer Information and for the Insurer Financial Statements, that each
Underwriter shall be responsible for the Underwriter Information provided
by such Underwriter in writing for use in the Prospectus Supplement.
(f) No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(g) The indemnity agreements contained in this Agreement shall remain
operative and in full force and effect, regardless of (i) any investigation
made by or on behalf of any Underwriter Party, any Insurer Party or any
Issuer Party, (ii) the issuance of any Offered Notes or the Policy or (iii)
any termination of this Agreement.
(h) Upon the incurrence of any Losses entitled to contribution
hereunder, the contributor shall reimburse the party entitled to
contribution promptly upon establishment by the party entitled to
contribution to the contributor of the Losses incurred.
(i) The Underwriters shall be severally and not jointly liable for any
contribution required by this Section 7.
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Section 8. Notices. All notices and other communications provided for under
this Agreement shall be addressed to the address set forth below as to each
party or at such other address as shall be designated by a party in a written
notice to the other party.
(a) If to the Insurer:
MBIA Insurance Corporation
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Insured Portfolio Management--Structured Finance
(IPM-SF)
(b) If to the Issuer Parties:
Capital One Auto Finance, Inc.
0000 Xxxxx Xxxxxx Xxxxx
XxXxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Confirmation: (000) 000-0000
With a copy to Legal Department
Facsimile: (000) 000-0000
Confirmation: (000) 000-0000
Capital One Auto Receivables, LLC
0000 Xxxxx Xxxxxx Xxxxx
XxXxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Confirmation: (000) 000-0000
With a copy to Legal Department
Facsimile: (000) 000-0000
Confirmation: (000) 000-0000
(c) If to the Representative:
Deutsche Bank Securities Inc.
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx x'Xxxxxx, Managing Director
Section 9. Governing Law, Etc. This Agreement shall be deemed to be a
contract under the laws of the State of New York and shall be governed by and
construed in accordance with the
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laws of the State of New York without regard to its conflicts of laws
provisions. This Agreement may not be assigned by any party without the express
written consent of each other party. Amendments of this Agreement shall be in
writing signed by each party. This Agreement shall not be effective until
executed by each of the Insurer, each Issuer Party and the Underwriters.
Section 10. Other Obligations Not Effected. This Agreement in no way limits
or otherwise affects the indemnification obligations of the Underwriters and
COAF under the Underwriting Agreement.
Section 11. Limitations. Nothing in this Agreement shall be construed as a
representation or undertaking by the Insurer concerning maintenance of the
rating currently assigned to its claims-paying ability by Xxxxx'x Investors
Service, Inc. ("Moody's") and/or Standard & Poor's, a division of The
XxXxxx-Xxxx Companies, Inc. ("S&P") or any other rating agency (collectively,
the "Rating Agencies").
Section 12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall together constitute but one and the same
instrument.
Section 13. Non-petition. So long as the Insurance Agreement is in effect,
and for one year and one day following its termination, each of the parties
hereto agree that it (with respect to itself) will not file any involuntary
petition or otherwise institute any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding or other proceeding under any federal or
state bankruptcy or similar law against the Issuer Parties or the Seller.
[Remainder of page intentionally left blank; signature page follows]
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IN WITNESS WHEREOF, the Parties hereto have caused this Indemnification
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized, all as of the date first above written.
MBIA INSURANCE CORPORATION
By
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Title
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DEUTSCHE BANK SECURITIES INC., for itself
and as Representative of the Underwriters
By
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Title
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By
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Title
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CAPITAL ONE AUTO FINANCE, INC., as Issuer
Party
By
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Title
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CAPITAL ONE AUTO RECEIVABLES, LLC, as
Issuer Party
By
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Title
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Capital One Auto Finance Trust 2002-A
Indemnification Agreement Signature Page
