Insurance Agreement dated as of November 18, 2003



 Exhibit 10.4 
  

  
 INSURANCE AGREEMENT 
  
 among 
  
 MBIA INSURANCE CORPORATION, 
 as Note Insurer, 
  
 CAPITAL ONE AUTO FINANCE, INC., 
 in its individual capacity and as Servicer,

  
 CAPITAL ONE AUTO RECEIVABLES, LLC, 
 as Seller, 
  
 CAPITAL ONE AUTO FINANCE TRUST 2003-B, 
 as Issuer 
  
 and 
  
 JPMORGAN CHASE BANK, 
 as Indenture Trustee 
  
 $1,000,000,000 
 Capital One Auto Finance Trust 2003-B 
 Asset Backed Notes, Series 2003-B 
 Class A-1 Notes, Class A-2 Notes, 
 Class A-3 Notes, and Class A-4 Notes 
  
 Dated as of November 18, 2003 
  








 TABLE OF CONTENTS 
  


	 	  	 	  	Page


	
	ARTICLE I
		
	 DEFINITIONS
	  	1
	
	ARTICLE II
	
	REPRESENTATIONS, WARRANTIES AND COVENANTS
			
	 Section 2.01.
	  	Representations and Warranties of the COAF Companies	  	10
	 Section 2.02.
	  	Affirmative Covenants of the COAF Companies	  	14
	 Section 2.03.
	  	Negative Covenants of the COAF Companies	  	17
	 Section 2.04.
	  	Representation and Covenants of Indenture Trustee	  	18
	 Section 2.05.
	  	Representations, Warranties and Covenants of the Issuer	  	18
	 Section 2.06.
	  	Representations and Warranties of Note Insurer	  	19
	 Section 2.07.
	  	Covenant of Note Insurer; Confidentiality	  	20
	
	ARTICLE III
	
	THE POLICIES; REIMBURSEMENT
			
	 Section 3.01.
	  	Issuance of the Policies	  	20
	 Section 3.02.
	  	Payment of Fees and Premium	  	23
	 Section 3.03.
	  	Reimbursement and Additional Payment Obligation	  	23
	 Section 3.04.
	  	Indemnification; Limitation of Liability	  	25
	 Section 3.05.
	  	Payment Procedure	  	27
	 Section 3.06.
	  	Subrogation	  	28
	 Section 3.07.
	  	Reimbursement	  	28
	
	ARTICLE IV
	
	FURTHER AGREEMENTS
			
	 Section 4.01.
	  	Effective Date; Term of the Insurance Agreement	  	28
	 Section 4.02.
	  	Further Assurances and Corrective Instruments	  	28
	 Section 4.03.
	  	Obligations Absolute	  	29
	 Section 4.04.
	  	Assignments; Reinsurance; Third-party Rights	  	30
	 Section 4.05.
	  	Liability of the Note Insurer	  	31
	 Section 4.06.
	  	Nonpetition Covenant	  	31
	 Section 4.07.
	  	Parties To Join in Enforcement Action	  	31









	ARTICLE V
	
	DEFAULTS; REMEDIES
			
	 Section 5.01.
	  	Defaults	  	32
	 Section 5.02.
	  	Remedies; No Remedy Exclusive	  	33
	 Section 5.03.
	  	Waivers	  	34
	
	ARTICLE VI
	
	MISCELLANEOUS
			
	 Section 6.01.
	  	Amendments, Etc.	  	34
	 Section 6.02.
	  	Notices	  	34
	 Section 6.03.
	  	Severability	  	36
	 Section 6.04.
	  	Governing Law	  	36
	 Section 6.05.
	  	Consent to Jurisdiction	  	36
	 Section 6.06.
	  	Consent of the Note Insurer	  	37
	 Section 6.07.
	  	Counterparts	  	37
	 Section 6.08.
	  	Headings	  	37
	 Section 6.09.
	  	Trial by Jury Waived	  	37
	 Section 6.10.
	  	Limited Liability	  	37
	 Section 6.11.
	  	Entire Agreement	  	38
	 Section 6.12.
	  	Limitation of Liability	  	38

  

 ii 








 INSURANCE AGREEMENT 
  
 THIS INSURANCE AGREEMENT (this “Insurance Agreement”) is dated as of November 18, 2003 by and among MBIA
INSURANCE CORPORATION (the “Note Insurer”), CAPITAL ONE AUTO FINANCE, INC., in its individual capacity as seller under the Purchase Agreement (“COAF”) and as the Servicer (the “Servicer”), CAPITAL ONE AUTO
RECEIVABLES, LLC, as Seller (the “Seller”), CAPITAL ONE AUTO FINANCE TRUST 2003-B, as Issuer (the “Issuer”), and JPMORGAN CHASE BANK in its capacity as indenture trustee (the “Indenture Trustee”).

  
 WHEREAS, the Indenture Trustee is authenticating
$1,000,000,000 principal amount of the Capital One Auto Finance Trust 2003-B, Asset Backed Notes, Series 2003-B, Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, and Class A-4 Notes, pursuant to an Indenture as more specifically defined below. The
Notes will be secured by the Trust Estate as defined in the Indenture; and 
  
 WHEREAS, the Issuer, Seller, COAF and Servicer have requested that the Note Insurer issue its Note Guaranty Insurance Policy (the “Note Insurance Policy”) to guarantee payment of Insured Payments (as defined
in Note Insurance Policy) with respect to the Notes, upon such terms and conditions as were mutually agreed upon by the parties and subject to the terms and conditions of the Note Insurance Policy and has asked the Note Insurer to issue an Interest
Rate Swap Policy (the “Swap Policy”) and together with the Note Insurance Policy, the “Policies”) and the Note Insurer has agreed to insure certain amounts which may be due from the Owner Trustee on behalf of Capital One Auto
Finance Trust 2003-B (the “Issuer”) to the Swap Provider under the Swap Agreement; and 
  
 WHEREAS, the parties hereto desire to specify the conditions precedent to the issuance of the Policies by the Note Insurer, the indemnity and
reimbursement to be provided by COAF and the Servicer in respect of amounts paid by the Note Insurer under the Policies and to provide for certain other matters; and 
  
 WHEREAS, the Note Insurer shall be paid an insurance premium pursuant to the Indenture, and the details of such premium are
set forth herein; and 
  
 WHEREAS, each COAF Company (as defined
below) has undertaken certain obligations in consideration for the Note 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 Transaction Documents (as defined
below). 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 Agreement as a
whole and not to any particular paragraph, clause or other subdivision hereof, unless otherwise specifically noted. 
  
 “Approved Party” means an entity that (i) is rated at least investment grade by S&P and Moody’s, or (ii) has a consolidated
Tangible Net Worth not less than the greater of 8.5% of its Managed Assets and $400,000,000. 
  
 “Business Day” means any day other than a Saturday or a Sunday or a day on which banking institutions in the states of Delaware, California, Texas, Virginia or New York, or in the state in which the
Corporate Trust Office of the Indenture Trustee is located, are authorized or obligated by law, executive order or government decree to be closed. 
  
 “Capital One Information” means the information included in the Prospectus, but excluding the Note Insurer Information and the
Underwriter Information. 
  
 “COAF” means Capital
One Auto Finance, Inc., a Texas corporation, and its successors and assigns. 
  
 “COAF Company” means COAF, in its individual capacity as seller under the Purchase Agreement and as Servicer, and the Seller. 
  
 “Commission” means the Securities and Exchange Commission. 
  
 “Cumulative Net Charge-Off Ratio” means, as of any
Determination Date, the ratio of (a) the aggregate Principal Balance of Receivables that became Defaulted Receivables plus all the Cram Down Losses which occurred during the period from the Initial Cut-Off Date through the end of the related
Collection Period reduced by the amount of Liquidation Proceeds with respect to Defaulted Receivables received during such period which are applied to principal of the Defaulted Receivables to (b) the sum of (i) the initial aggregate Principal
Balance of the Initial Receivables plus (ii) the initial aggregate Principal Balance of the Subsequent Receivables as of their respective Subsequent Cut-Off Dates. 
  
 “Date of Issuance” means the date on which each Policy is issued as specified therein. 
  
 “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 Ratio” means, as of a Determination Date, the ratio of (a) the aggregate Principal Balance of Receivables that were Delinquent Receivables at the end of the related Collection Period to
(b) the aggregate Principal Balance of all Receivables as of the first day of such related Collection Period. 
  

 2 








 “Delinquent Receivable” means any Receivable (other than a Defaulted Receivable) as to
which any portion of a scheduled payment remains unpaid for more than 60 days from the date on which it is due and payable. 
  
 “Event of Default” means any event of default specified in Section 5.01 of this Insurance Agreement. 
  
 “Fee Letter” means the fee letter dated as of November 18,
2003, from the Note Insurer to the Owner Trustee, the Servicer, and the Indenture Trustee. 
  
 “Financial Statements” means, with respect to COAF, the balance sheets and the statements of income, retained earnings and cash flows for the 12-month period then ended and the notes thereto which
have been provided to the Note Insurer. 
  
 “Fiscal
Agent” means the Fiscal Agent, if any, designated pursuant to the terms the Note Policy or the Swap Policy, as applicable. 
  
 “Fitch” means Fitch, Inc., and any successor thereto, and, if such corporation shall for any reason no longer perform the functions of a
securities rating agency, “Fitch” shall be deemed to refer to any other nationally recognized rating agency designated by the Note Insurer. 
  
 “Indemnification Agreement” means that certain Indemnification Agreement dated as of November 5, 2003 by and among the Note Insurer and
Lehman Brothers Inc. and Wachovia Securities, as Representatives of the several Underwriters (as defined therein). 
  
 “Indenture” means that certain Indenture dated as of November 18, 2003, between the Issuer and the Indenture Trustee. 
  
 “Insurance Agreement Event of Default” means any of the
following: 
  
 (a) any failure (i) to observe or
perform any covenant or obligation of the Owner Trustee, COAF, the Seller, the Issuer or the Servicer set forth herein, or in the Indenture, the Sale and Servicing Agreement or the Purchase Agreement which has not been cured within 30 days from the
date of receipt by the Owner Trustee, COAF, the Seller, the Issuer or the Servicer, as the case may be, of written notice from the Indenture Trustee or the Note Insurer of such breach or default and such breach or default could reasonably have a
material adverse affect on the interests of the Note Insurer or the Noteholders (as determined in the Note Insurer’s sole discretion), or (ii) of any Person to deposit into the Collection Account or the Reserve Account all amounts required to
be deposited therein by the required deposit date and such failure has continued for a period of at least three Business Days (A) after notice is received by such Person from the Indenture Trustee or the Note Insurer or (B) after discovery of such
failure by a responsible officer of such Person; provided, however, that no Insurance Agreement Event of Default will result from the breach by the Servicer of any covenant for which the repurchase of the affected Receivables is specified as the
sole remedy pursuant to Section 3.6 of the Sale and Servicing Agreement and such repurchase takes place within the time frame required by Section 2.3 and Section 3.6 of the Insurance Agreement; 
  

 3 








 (b) any representation, warranty or statement of the Indenture Trustee, the Servicer, the
Owner Trustee, COAF, the Issuer or the Seller (other than representations and warranties under Section 3.2 of the Purchase Agreement and Section 2.2, 3.2, 3.3, 3.4 or 3.5 of the Sale and Servicing Agreement) contained herein or in the Indenture or
in the Sale and Servicing Agreement, the Purchase Agreement or in any report, document or certificate delivered pursuant to the foregoing agreements shall prove to be incorrect in any material respect as of the time when the same shall have been
made and, within 30 days after written notice thereof shall have been given to the Indenture Trustee and the defaulting party (if not the Indenture Trustee) by the Servicer, the Note Insurer, the Indenture Trustee or by Noteholders constituting
Noteholder Approval, the circumstances or condition in respect of which such representation, warranty or statement was incorrect shall not have been eliminated or otherwise cured or waived by the Note Insurer and could reasonably have a material
adverse affect on the interests of the Note Insurer or the Noteholders (as determined in the Note Insurer’s sole discretion); 
  
 (c) the cessation of a valid perfected first priority security interest in the Receivables or the Trust Accounts in favor of the Indenture
Trustee which is not cured within three days of receipt of notice thereof; 
  
 (d) a payment default by the Issuer, the Servicer or any Affiliate of the Servicer in any agreement to which any such Person is a party and under which any indebtedness owing by such Person having a principal amount
greater than $100,000,000 was created or is governed; 
  
 (e) as of the Determination Date with respect to each Collection Period, the three month average of the Delinquency Ratios for such Collection Period and the two Collection Periods immediately preceding such Collection Period is greater
than the level specified for such month in such table: 
  

 4 









	 Collection Period

	  	Delinquency Ratio


	 December 2003-February 2004
	  	6.50%
	 March 2004
	  	5.50%
	 April 2004-June 2004
	  	6.00%
	 July 2004-October 2004
	  	6.50%
	 November 2004-February 2005
	  	7.50%
	 March 2005
	  	6.50%
	 April 2005-June 2005
	  	7.00%
	 July 2005-October 2005
	  	7.50%
	 November 2005-February 2006
	  	8.50%
	 March 2006
	  	7.50%
	 April 2006-June 2006
	  	8.00%
	 July 2006-October 2006
	  	8.50%
	 November 2006-December 2006
	  	9.50%
	 January 2007-February 2007
	  	10.50%
	 March 2007-June 2007
	  	9.50%
	 July 2007-October 2007
	  	10.00%
	 November 2007 and thereafter
	  	11.00%

  
 provided that an
Insurance Agreement Event of Default occurring under this clause (e) shall be deemed to have been cured if, as of the Determination Date with respect to each of any three consecutive Collection Periods following the occurrence of an Insurance
Agreement Event of Default pursuant to this clause (e), the average of the Delinquency Ratios for such Collection Periods is less than the percentage above for the applicable Collection Period; 
  
 (f) a draw is made on the Note Insurance Policy; 

 
 (g) as of the Determination Date in any month prior to
and including the applicable month set forth in the table below, the Cumulative Net Charge-Off Ratio exceeds the level specified for such month in such table: 
  

	 Month

	  	Cumulative Net
Charge-off Ratio


	 June 2004
	  	4.00%
	 July 2004
	  	4.25%
	 August 2004
	  	4.75%
	 September 2004
	  	5.75%
	 October 2004
	  	6.00%
	 November 2004
	  	6.50%
	 December 2004
	  	7.25%
	 January 2005
	  	7.75%
	 February 2005
	  	8.25%
	 March 2005
	  	9.00%
	 April 2005
	  	9.50%
	 May 2005
	  	10.00%
	 June 2005
	  	10.50%
	 July 2005
	  	11.00%
	 August 2005
	  	11.50%
	 September 2005
	  	12.00%
	 October 2005
	  	12.50%
	 November 2005
	  	12.75%
	 December 2005
	  	13.00%
	 January 2006
	  	13.25%
	 February 2006
	  	13.50%
	 March 2006-May 2006
	  	14.00%
	 June 2006 and thereafter
	  	15.25%

  

 5 








 (h) except as permitted by the Sale and Servicing Agreement, any assignment by the
Servicer of its rights and obligations under the Sale and Servicing Agreement or any attempt to make such an assignment; 
  
 (i) failure to make any payment with respect to the Notes pursuant to Section 4.4(a) of the Sale and Servicing Agreement, which continues
unpaid for a period of three Business Days; 
  
 (j) So long COAF is not an Approved Party, Capital One Financial Corporation, one of its subsidiaries or an Approved Party shall cease to own 51% of the voting stock of COAF without the prior written consent of the Note Insurer; 

 
 (k) the occurrence of an Servicer Termination Event or
Event of Default under the Indenture; or 
  
 (l)
any Event of Default or Termination Event (as defined in the Swap Agreement) occurs under the Swap Agreement. 
  
 “Investment Company Act” means the Investment Company Act of 1940, including, unless the context otherwise requires, the rules and
regulations thereunder, as amended. 
  
 “Issuer”
means Capital One Auto Finance Trust 2003-B. 
  
 “Late
Payment Rate” means the rate of interest as it is publicly announced by Citibank, N.A. at its principal office in New York, New York as its prime rate (any change in such prime rate of interest to be effective on the date such change is
announced by Citibank, N.A.) plus 2.0%. 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. 
  
 “Managed
Assets” means, with respect to any Person, receivables owned, receivables sold to securitization trusts and serviced by such Person, and all other serviced or owned assets. 
  

 6 








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

  
 “Note Insurer Information” means the
information relating to the Note Insurer in the Prospectus Supplement as of the date thereof under the heading “The Note Guaranty Insurance Policy and the Note Insurer” and the financial statements of the Note Insurer incorporated by
reference into the Prospectus Supplement. 
  
 “Notes” means the Capital One Auto Finance Trust 2003-B, Asset Backed Notes, Series 2003-B, designated as Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, and Class A-4 Notes issued in accordance with the provisions of
the Indenture. 
  
 “Owners” means registered
holders of Notes. 
  
 “Person” means an
individual, joint stock company, trust, unincorporated association, joint venture, corporation, limited liability company, business or owner trust, partnership or other organization or entity (whether governmental or private). 
  
 “Premium” means the premium payable in accordance with
Section 3.02 of this Insurance Agreement. 
  
 “Prospectus” means, collectively, (a) the Preliminary Prospectus Supplement dated November 4, 2003 to the Prospectus dated November 4, 2003 and (b) the Final Prospectus Supplement dated November 5, 2003 to the Prospectus
dated November 4, 2003, each relating to the sale of the Notes on the Closing Date. 
  

 7 








 “Reserve Account Increase Condition” means: 
  
 (a) the occurrence of one or both of the following events:

  
 (i) as of the Determination Date with respect
to any Collection Period, the average of the Delinquency Ratios for such Collection Period and the two Collection Periods immediately preceding such Collection Period is greater than the level specified for such month in the following table:

  

	 Collection Period

	  	Delinquency Ratio


		
	December 2003-February 2004	  	5.50%
	March 2004	  	4.50%
	April 2004-June 2004	  	5.00%
	July 2004-October 2004	  	5.50%
	November 2004-February 2005	  	6.50%
	March 2005	  	5.50%
	April 2005-June 2005	  	6.00%
	July 2005-October 2005	  	6.50%
	November 2005-February 2006	  	7.50%
	March 2006	  	6.50%
	April 2006-June 2006	  	7.00%
	July 2006-October 2006	  	7.50%
	November 2006-December 2006	  	8.50%
	January 2007-February 2007	  	9.50%
	March 2007-June 2007	  	8.50%
	July 2007-October 2007	  	9.00%
	November 2007 and thereafter	  	10.00%

  
 provided that a
Reserve Account Increase Condition occurring under this clause (a) shall be deemed to have been cured if, as of the Determination Date with respect to each of any three consecutive Collection Periods following the occurrence of a Reserve Account
Increase Condition pursuant to this clause, the average of the Delinquency Ratios for such Collection Periods is less than the percentage specified above for the applicable Collection Period; or 
  
 (ii) as of the Determination Date in any month prior to and
including the applicable month set forth in the table below, the Cumulative Net Charge-Off Ratio exceeds the level specified for such month in such table: 
  

	 Month

	  	Cumulative Net
Charge-off Ratio


	 March 2004-May 2004
	  	2.50%
	 June 2004
	  	3.50%
	 July 2004
	  	3.75%
	 August 2004
	  	4.00%
	 September 2004
	  	4.75%
	 October 2004
	  	5.00%
	 November 2004
	  	5.50%
	 December 2004
	  	6.25%
	 January 2005
	  	6.75%
	 February 2005
	  	7.25%
	 March 2005
	  	7.75%
	 April 2005
	  	8.25%
	 May 2005
	  	8.75%
	 June 2005
	  	9.25%
	 July 2005
	  	9.75%
	 August 2005
	  	10.25%
	 September 2005
	  	10.75%
	 October 2005
	  	11.25%
	 November 2005
	  	11.50%
	 December 2005
	  	11.75%
	 January 2006
	  	12.00%
	 February 2006
	  	12.25%
	 March 2006-May 2006
	  	12.75%
	 June 2006 and thereafter
	  	13.75%

  

 8 








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

 
 “S&P” means Standard & Poor’s Ratings
Services, 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 Note Insurer. 
  
 “Swap
Agreement” means the ISDA Master Agreement dated as of November 18, 2003 between the Issuer, and the Swap Provider, the Schedule thereto and the Confirmation bearing Reference No. 295850 dated November 18, 2003. 
  
 “Swap Policy” means the Interest Rate Swap Insurance Policy
No. 42801(2) issued by MBIA Insurance Corporation, which guarantees certain payments due under the Swap Agreement. 
  
 “Swap Provider” means Wachovia Bank, National Association, and its permitted successors and assigns. 
  
 “Tangible Net Worth” means, with respect to any Person, the
net worth of such Person calculated in accordance with GAAP, after subtracting therefrom the aggregate amount of such Person’s intangible assets, including, without limitation, goodwill, franchises, licenses, patents, trademarks, copyrights and
service marks. 
  
 “Term of the Insurance
Agreement” shall be determined as provided in Section 4.01 of this Insurance Agreement. 
  
 “Transaction” means the transactions contemplated by the Transaction Documents including the transactions described in the Prospectus.

  

 9 








 “Transaction Documents” means this Insurance Agreement, the Prospectus, the Indenture,
the Swap Agreement, the Purchase Agreement, the Sale and Servicing Agreement, the Limited Guaranty, the Underwriting Agreement, the Trust Agreement, and the Notes. 
  
 “Underwriter Information” means the information furnished by the Underwriters in writing expressly for use
in the Prospectus and included in the second paragraph (regarding concessions and discounts) and the second sentence of the ninth paragraph (regarding market making) under the caption “Underwriting” in the Prospectus Supplement.

  
 ARTICLE II 
  
 REPRESENTATIONS, WARRANTIES AND COVENANTS 
  
 Section 2.01. Representations and Warranties of the COAF Companies.

  
 (a) Representations and Warranties
of the Seller. The Seller makes the following representations and warranties as of the date hereof and the Date of Issuance: 
  
 (i) Existence and Power. The Seller is a Delaware limited liability company validly existing and in good standing under the laws of
its state of organization and has, in all material respects, full power and authority to own its assets and operate its business as presently owned or operated, and to execute, deliver and perform its obligations under the Transaction Documents to
which it is a party. The Seller has obtained all necessary licenses and approvals in each jurisdiction where the failure to do so could reasonably result in a Material Adverse Change. 
  
 (ii) Authorization and No Contravention. The execution, delivery and performance by the Seller of the
Transaction Documents to which it is a party have been duly authorized by all necessary action on the part of the Seller and do not contravene or constitute a default under (A) any applicable law, rule or regulation, (B) its organizational documents
or (C) any material indenture or material agreement or material instrument to which the Seller is a party or by which its properties are bound (other than violations of such laws, rules, regulations, indentures or agreements which do not affect the
legality, validity or enforceability of any of such agreements and which, individually or in the aggregate, could reasonably result in a Material Adverse Change). 
  
 (iii) No Consent Required. No approval or authorization by, or filing with, any Governmental
Authority is required in connection with the execution, delivery and performance by the Seller of any Transaction Document other than (A) UCC filings, (B) approvals and authorizations that have previously been obtained and filings that have
previously been made or approvals, authorizations or filings which will be made on a timely fashion and (C) , authorizations or filings which, if not obtained or made, would not reasonably result in a Material Adverse Change. 
  

 10 








 (iv) Binding Effect. Each Transaction Document to which the Seller is a party
constitutes the legal, valid and binding obligation of the Seller enforceable against the Seller in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
receivership, conservatorship or other similar laws affecting creditors’ rights generally and, if applicable, the rights of creditors of limited liability companies from time to time in effect or by general principles of equity. 
  
 (v) No Proceedings. There are no actions, suits or
proceedings pending or, to the knowledge of the Seller, threatened against the Seller before or by any Governmental Authority that (A) assert the invalidity or unenforceability of this Agreement or any of the other Transaction Documents, (B) seeking
to prevent the issuance of the Notes or the consummation of any of the transactions contemplated by this Agreement or any of the other Transaction Documents, (C) seeking any determination or ruling that could reasonably result in a Material Adverse
Change, or (D) relating to the Seller that would materially and adversely affect the federal or Applicable Tax State income, excise, franchise or similar tax attributes of the Notes. 
  
 (vi) Compliance With Securities Laws. The initial offer and sale of the Notes comply in all material
respects with all requirements of law, including all registration requirements of applicable securities laws. Without limitation of the foregoing, the Prospectus 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 Prospectus set forth
under the heading “THE NOTE GUARANTY INSURANCE POLICY AND THE NOTE INSURER,” the consolidated financial statements of the Note Insurer incorporated by reference in the Prospectus or the Underwriter Information. Neither the offer nor the
sale of the Notes has been or will be in violation of the Securities Act or any other federal or state securities laws. Neither the Issuer nor the Seller is required to be registered as an “investment company” under the Investment Company
Act. 
  
 (vii) Transaction Documents. Each
of the representations and warranties of the Seller contained in the Transaction Documents is true and correct in all material respects, and the Seller hereby makes each such representation and warranty to, and for the benefit of, the Note Insurer
as if the same were set forth in full herein, provided that the remedy for any breach of this paragraph shall be limited to the remedies specified in the related Transaction Document. 
  
 (viii) Solvency. The Seller is solvent and will not be rendered insolvent by the Transaction and,
after giving effect to the Transaction, the Seller will not be left with an unreasonably small amount of capital with which to engage in its business, nor does the Seller intend to incur, or believe that it has incurred, debts beyond its ability to
pay as they mature. The Seller does not contemplates the 

  

 11 








 
commencement of insolvency, bankruptcy, liquidation or consolidation proceedings or the appointment of a receiver, liquidator, conservator, trustee or
similar official in respect of any COAF Company or any of their assets. 
  
 (b) Representations and Warranties of Servicer. Each of the Servicer and COAF makes the following representations and warranties as of the date hereof and the Date of Issuance: 
  
 (i) Existence and Power. Each of the Servicer and
COAF is a Texas corporation validly existing and in good standing under the laws of its state of organization and has, in all material respects, full power and authority to own its assets and operate its business as presently owned or operated, and
to execute, deliver and perform its obligations under the Transaction Documents to which it is a party. Each of the Servicer and COAF has obtained all necessary licenses and approvals in each jurisdiction where the failure to do so could reasonably
result in a Material Adverse Change. 
  
 (ii)
Authorization and No Contravention. The execution, delivery and performance by each of the Servicer and COAF of the Transaction Documents to which it is a party have been duly authorized by all necessary action on the part of the Servicer and
COAF and do not contravene or constitute a default under (A) any applicable law, rule or regulation, (B) its organizational documents or (C) any material indenture or material agreement or instrument to which the Servicer or COAF is a party or by
which its properties are bound (other than violations of such laws, rules, regulations, indentures or agreements which do not affect the legality, validity or enforceability of any of such agreements and which, individually or if the aggregate, and
would not reasonably result in a Material Adverse Change. 
  
 (iii) No Consent Required. No approval or authorization by, or filing with, any Governmental Authority is required in connection with the execution, delivery and performance by the Servicer or COAF of any
Transaction Document other than (A) UCC filings, (B) approvals and authorizations that have previously been obtained and filings that have previously been made or approvals, authorizations or filings which will be made on a timely fashion and (C)
approval, authorizations or filings which, if not obtained or made, would not reasonably result in a Material Adverse Change. 
  
 (iv) Binding Effect. Each Transaction Document to which the Servicer or COAF is a party constitutes the legal, valid and binding
obligation of the Servicer enforceable against it in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, receivership, conservatorship or other similar laws
affecting creditors’ rights generally and, if applicable, the rights of creditors of limited liability companies from time to time in effect or by general principles of equity. 
  

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 (v) No Proceedings. There are no actions, suits or proceedings pending or, to the
knowledge of the Servicer or COAF, threatened against the Servicer or COAF before or by any Governmental Authority that (A) assert the invalidity or unenforceability of this Agreement or any of the other Transaction Documents, (B) seeking to prevent
the issuance of the Notes or the consummation of any of the transactions contemplated by this Agreement or any of the other Transaction Documents, (C) seeking any determination or ruling that would materially and adversely affect the performance by
the Servicer of its obligations under this Agreement or any of the other Transaction Documents, or (D) relating to the Servicer or COAF that would materially and adversely affect the federal or Applicable Tax State income, excise, franchise or
similar tax attributes of the Notes. 
  
 (vi)
Financial Statements. The Financial Statements of Capital One Financial Corporation, copies of which have been furnished to the Note Insurer, (A) are, as of the dates and for the periods referred to therein, complete and correct in all
material respects, (B) present fairly the financial condition and results of operations of COAF as of the dates and for the periods indicated and (C) 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 Financial Statements, there has been no Material Adverse Change in respect of COAF; and except as disclosed in the
Financial Statements, COAF is 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 COAF. 
  
 (vii) Compliance With Securities Laws. The offer and
sale of the Notes comply in all material respects with all requirements of law, including all registration requirements of applicable securities laws. Without limitation of the foregoing, the Prospectus 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 Prospectus set forth under the heading “THE NOTE GUARANTY INSURANCE POLICY AND THE NOTE INSURER,” the consolidated financial statements of the Note Insurer incorporated by reference in the Prospectus or the Underwriter
Information. Neither the offer nor the sale of the Notes has been or will be in violation of the Securities Act or any other federal or state securities laws. Neither the Issuer nor the Seller is required to be registered as an “investment
company” under the Investment Company Act. 
  
 (viii) Transaction Documents. Each of the representations and warranties of the Servicer and COAF contained in the Transaction Documents is true and correct in all material respects, and the Servicer and COAF hereby make each such
representation and warranty to, and for the benefit of, the Note Insurer as if the same were set forth in full herein, provided that the remedy for any breach of this paragraph shall be limited to the remedies specified in the related Transaction
Document. 
  

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 (ix) Solvency. Each of the Servicer and COAF is solvent and will not be rendered
insolvent by the Transaction and, after giving effect to the Transaction, neither the Servicer nor COAF will be left with an unreasonably small amount of capital with which to engage in its business, nor does the Servicer or COAF intend to incur, or
believe that it has incurred, debts beyond its ability to pay as they mature. Neither the Servicer nor COAF 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 any COAF Company or any of their assets. 
  
 Section 2.02. Affirmative Covenants of the COAF Companies. The COAF Companies hereby agree that during the Term of the Insurance Agreement, unless
the Note Insurer shall otherwise expressly consent in writing: 
  
 (a) Compliance With Agreements and Applicable Laws. The COAF Companies shall not be in default under the Transaction Documents and shall comply with all material requirements of any law, rule or
regulation applicable to each such party in all circumstances where non-compliance could reasonably result in a Material Adverse Change. Except in accordance with any provision of the Transaction Documents that expressly states Note Insurer consent
is not required, no COAF Company shall agree to any amendment to or modification of the terms of any Transaction Documents or its respective organizational documents (including without limitation and as applicable its articles of incorporation,
partnership agreement, bylaws, certificate of formation and limited liability company agreement) unless the Note Insurer shall have otherwise consented. 
  
 (b) Corporate Existence. Each COAF Company, its successors and assigns, shall maintain its corporate or other existence and
shall at all times continue to be duly organized under the laws of its respective jurisdiction of incorporation or formation and duly qualified and duly authorized and shall conduct its business in accordance with the terms of its certificate of
incorporation and bylaws or other formation documents in all circumstances where failure could reasonably result in a Material Adverse Change. 
  
 (c) The Servicer To Provide Financial Statements; Accountants’ Reports; Other Information. The Servicer shall keep or
cause to be kept in reasonable detail books and records of account of COAF’s, and its consolidated subsidiaries’, 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 Note Insurer: 
  
 (i) Financial Statements. All reports, certificates and reviews required to be furnished under Sections 3.8 and 3.9 of the Sale and Servicing Agreement. 
  

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 (ii) Initial and Continuing Reports. On or before the Closing Date, the Servicer
will provide the Note Insurer a copy of the electronic file or other such medium as may be acceptable to the Note Issuer to be delivered to the Indenture Trustee setting forth, as to each Receivable, the information required on the schedule of
receivables. 
  
 (iii) Other Information.
Promptly upon receipt thereof, copies of all schedules, financial statements or other similar reports delivered to or by the Servicer pursuant to the terms of the Sale and Servicing Agreement and, promptly upon request, such other data or reports
relating to the Transaction as the Note Insurer may reasonably request. 
  
 The Note Insurer agrees that it and its agents, accountants and attorneys shall keep confidential all financial statements, reports and other information delivered by the Servicer pursuant to this subsection 2.02(c)
to the extent provided in subsection 2.02(f) hereof. 
  
 (d) Access to Records; Discussions With Officers and Accountants. On an annual basis, or as often as the Note Insurer deems appropriate upon the occurrence of an Insurance Agreement Event of Default, each COAF Company shall,
upon the reasonable request of the Note Insurer, permit the Note Insurer or its authorized agents: 
  
 (i) to inspect its books and records as they may relate to the Notes, the obligations of such party under the Transaction Documents, and
the Transaction; 
  
 (ii) to discuss the affairs,
finances and accounts of each COAF Company with the chief operating officer and the chief financial officer of such COAF Company, as the case may be; and 
  
 (iii) with any COAF Company’s consent, which consent shall not be unreasonably withheld, to discuss the affairs, finances and
accounts of such COAF Company with such company’s independent accountants, provided that an officer of such COAF Company shall have the right to be present during such discussions; provided, however, that upon the occurrence of an Insurance
Agreement Event of Default, no such consent of the COAF Companies will be required but the Note Insurer will provide reasonable notice to such COAF Company prior to such discussions and such discussions may not create an undue burden on such COAF
Company’s or the accountants’ business. 
  
 Such inspections and discussions shall be conducted during normal business hours at the Note Issuer’s cost and expense and shall not unreasonably disrupt the business of such COAF Company. The books and records of each COAF Company
will be maintained at the address of such COAF Company designated herein for receipt of notices, unless the Servicer shall otherwise advise the parties hereto in writing. 
  

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 (e) Notice of Material Events. Each COAF Company shall be obligated (which
obligation shall be satisfied as to each if performed by any of them) promptly to inform the Note Insurer in writing of the occurrence of any of the following to the extent any of the following relate to it: 
  
 (i) the submission of any claim or the initiation of any
legal process, litigation or administrative or judicial investigation, or rule-making or disciplinary proceeding by or against any COAF Company that (A) could be required to be disclosed to the Commission or to any COAF Company’s shareholders
or (B) is deemed reasonably likely to result in a Material Adverse Change with respect to any COAF Company, or to the knowledge of such COAF Company, the promulgation of any proceeding or any proposed or final rule which would result in a Material
Adverse Change with respect to any COAF Company; 
  
 (ii) any change in the location of any COAF Company’s principal offices, jurisdiction of organization, legal name as indicated on the public records of any COAF Company’s jurisdiction of organization which shows any COAF Company
to be organized, or any change in the location of any COAF Company’s books and records; 
  
 (iii) the occurrence of any Default, Event of Default hereunder , Event of Default under the Indenture; Servicer Termination Event or of
any Material Adverse Change; 
  
 (iv) the
commencement of any proceedings by or against any COAF Company 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 any COAF Company or any of its assets; or 
  
 (v) the receipt of notice that (A) any COAF Company is being placed under regulatory supervision, (B) any license, permit, charter,
registration or approval necessary for the conduct of any COAF Company’s business is to be, or may be suspended or revoked, or (C) any COAF Company is to cease and desist any practice, procedure or policy employed by any COAF Company in the
conduct of its business, and such suspension, revocation or cessation may reasonably be expected to result in a Material Adverse Change with respect to any COAF Company. 
  
 (f) 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 Estate. Each COAF Company shall, upon the request of the Note Insurer, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, within 10 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 

  

 16 








 
Documents. In addition, each of the COAF Companies agrees to cooperate with S&P, Fitch and Moody’s in connection with any review of the Transaction
that may be undertaken by S&P, Fitch and Moody’s after the date hereof. 
  
 (g) Maintenance of Licenses. Each COAF Company or any successors thereof shall maintain all licenses, permits, charters and
registrations which are material to the conduct of its business in all circumstances where failure reasonably could result in a Material Adverse Change. 
  
 (h) Redemption of Notes. The Servicer shall instruct the Indenture Trustee, upon redemption of the Notes pursuant to the
Transaction Documents, to furnish to the Note Insurer a notice of such redemption and, upon a redemption or other payment of all of the Notes to surrender the Policies to the Note Insurer for cancellation. 
  
 (i) Third-party Beneficiary. Subject to the
provisions of the Transaction Documents, each COAF Company agrees that the Note Insurer shall have all rights provided to the Note Insurer in the Transaction Documents and that the Note Insurer shall constitute a third-party beneficiary of the
Transaction Documents; provided, however, it is expressly acknowledged by the Note Insurer that the remedy for any breach of representation and warranty of COAF and the Seller under Section 3.2 of the Purchase Agreement and Section 2.2, 3.2, 3.3,
3.4 or 3.5 of the Sale and Servicing Agreement, the remedy for any breach shall be limited to the remedies specified in the Purchase Agreement. 
  
 (j) Amendments. The Servicer will provide the Note Insurer with written notice of any change or amendment to any Transaction
Document as currently in effect. 
  
 (k)
Closing Documents. The Servicer shall provide or cause to be provided to the Note Insurer an executed original copy of each document executed in connection with the Transaction within 90 days after the date of closing. 
  
 (l) Corporate Formalities. The Seller shall
have annual shareholder meetings or meetings of members, as applicable, and at least annual board of directors meetings as applicable; provided, however, that the members or the board of directors may act by unanimous written consent in lieu of such
meetings. 
  
 (m) Servicing of
Receivables. Servicer shall service all Receivables in all material respects in compliance with the Sale and Servicing Agreement. 
  
 Section 2.03. Negative Covenants of the COAF Companies. Each COAF Company hereby agrees that during the Term of the Insurance Agreement, unless the
Note Insurer shall otherwise expressly consent in writing: 
  
 (a) Impairment of Rights. No COAF Company shall take any action, or fail to take any action, if such action or failure to take action is reasonably likely to result in a Material Adverse Change with
respect to any COAF Company, or may interfere in any material respect with the enforcement of any rights of the Note Insurer under or with respect to the Transaction Documents. Each COAF Company shall give the Note Insurer 

  

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written notice of any such action or, to the best of the knowledge of any COAF Company, 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. Each COAF Company shall furnish to the Note Insurer all information reasonably
requested by it that is reasonably necessary to determine compliance with this paragraph. 
  
 (b) Waiver, Amendments, Etc. Except in accordance with the Transaction Documents, no COAF Company shall waive, modify or
amend, or consent to any waiver, modification or amendment of, any of the terms, provisions or conditions of the Transaction Documents without the consent of the Note Insurer. 
  
 (c) Transaction Documents. No COAF Company will at any time in the future deny that the
Transaction Documents constitute the legal, valid and binding obligations of each COAF Company, as applicable. 
  
 Section 2.04. Representation and Covenants of Indenture Trustee. 
  
 (a) Representations and Warranties. As of the Date of Issuance, each of the representations
and warranties of the Indenture Trustee set forth in the Transaction Documents are true and correct in all material respects, and the Indenture Trustee makes each such representation and warranty to, and for the benefit of, the Note Insurer as if
the same were set forth in full herein. 
  
 (b)
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 both the Indenture Trustee and the Note Insurer are parties unless the Note Insurer shall otherwise consent, provided that such consent shall not be required if a Note Insurer
Default has occurred and is continuing. 
  
 Section 2.05.
Representations, Warranties and Covenants of the Issuer. The Issuer hereby represents and warrants as follows: 
  
 (a) Representations and Warranties. As of the Date of Issuance, each of the representations and warranties of the Issuer set
forth in the Transaction Documents is true and correct in all material respects and the Issuer makes each such representation and warranty to, and for the benefit of, the Note Insurer as if the same were set forth in full herein. 
  
 (b) Compliance and Amendments. The Issuer
shall comply in all material respects with the terms and conditions of the Transaction Documents it is a party and, except in accordance with the Transaction Documents, the Issuer 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 Note Insurer shall otherwise give its prior written consent. 
  

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 (c) Principal Place of Business. The principal place of business of the
Issuer is located in Wilmington, Delaware. 
  
 (d) Interest Rate Swap Agreement. The Issuer agrees that it will not exercise any right that it may have to terminate the Interest Rate Swap Agreement pursuant to Part 1(k)(i)(D) of the Schedule to the Interest Rate Swap Agreement
unless either (i) a Replacement Interest Rate Swap Agreement is in place or (ii) the Rating Agency Condition is met with respect to Standard and Poor’s. 
  

(e) Covenant To Pay Interest. On each Payment Date, the Issuer shall pay or cause to be paid to the applicable Class of
Noteholders, interest in an amount equal to the Class A-1 Note Interest, Class A-2 Note Interest, Class A-3-A Note Interest, Class A-3-B Note Interest, Class A-4-A Note Interest and Class A-4-B Note Interest, as the case may be. 
  
 Section 2.06. Representations and Warranties of Note Insurer. The Note
Insurer represents, warrants and agrees as follows as of the Closing Date: 
  
 (a) Organization and Licensing. The Insurer is a duly organized and validly existing New York stock insurance corporation duly qualified to conduct an insurance business in the State of New York and in
any other jurisdiction where qualification may be necessary to accomplish the Transaction. 
  
 (b) Corporate Power. The Insurer has the corporate power and authority to issue the Policy and execute and deliver this
Insurance Agreement and to perform all of its obligations hereunder and thereunder. 
  
 (c) Authorization; Approvals. Proceedings legally required for the issuance and execution of the Policy and the execution,
delivery and performance of this Insurance Agreement have been taken and licenses, orders, consents or other authorizations or approvals of any governmental boards or bodies legally required for the enforceability of the Policy and the conduct by
the Insurer of the business and activities contemplated by the Transaction have been obtained; any proceedings not taken and any licenses, authorizations or approvals not obtained are not material to the enforceability of the Policy. 
  
 (d) Enforceability. The Policy, when issued,
and this Insurance Agreement will each constitute a legal, valid and binding obligation of the Insurer, enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium, receivership and other similar laws
affecting creditors’ rights generally and to general principles of equity and subject to principles of public policy limiting the right to enforce the indemnification provisions contained therein and herein, insofar as such provisions relate to
indemnification for liabilities arising under federal securities laws. 
  
 (e) 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 ability to perform its obligations under the Policy or this Insurance Agreement. 
  

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 (f) Compliance With Law, Etc. No practice, procedure or policy employed, or
proposed to be employed, by the Insurer in the conduct of its business violates any law, regulation, judgment, agreement, order or decree applicable to the Insurer that, if enforced, could result in a Material Adverse Change with respect to the
Insurer. 
  
 Section 2.07. Covenant of Note Insurer;
Confidentiality. The Note Insurer hereby covenants as follows: The Note 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 Note Insurer to make such information available to its regulators, securities rating agencies, reinsurers, credit and liquidity providers,
counsel and accountants. If the Note Insurer is requested or required (by oral questions, interrogatories, requests for information or documents subpoena, civil investigative demand or similar process) to disclose any information of which it becomes
aware through such inspections or discussions, the Note Insurer will promptly notify COAF or the Servicer of such request(s) so that COAF or the Servicer may seek an appropriate protective order and/or waive the Note Insurer’s compliance with
the provisions of this Insurance Agreement. If, in the absence of a protective order or the receipt of a waiver hereunder, the Note Insurer is, nonetheless, in the opinion of its counsel, compelled to disclose such information to any tribunal or
else stand liable for contempt or suffer other censure or significant penalty, the Note Insurer may disclose such information to such tribunal that the Note Insurer is compelled to disclose, provided that a copy of all information disclosed is
provided to COAF or the Servicer, as the case maybe, promptly upon such disclosure, so long as the Note Insurer is not prohibited from providing notice to COAF or Servicer by such tribunal. 
  
 ARTICLE III 
  
 THE POLICIES; REIMBURSEMENT 
  
 Section 3.01. Issuance of the Policies. The Note 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 Note 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, and the Note Insurer shall have received a fully executed copy of
the Fee Letter. 
  
 (b) Transaction
Documents. The Note Insurer shall have received a copy of each of the Transaction Documents, in form and substance satisfactory to the Note Insurer, duly authorized, executed and delivered by each party thereto. 
  

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 (c) Certified Documents and Resolutions. The Note Insurer shall have
received a copy of (i) the certificate of incorporation, limited liability company agreement and bylaws or other organizational documents, as applicable, of each COAF Company and (ii) the resolutions of each COAF Company’s Board of Directors or
members or a committee thereof, as applicable, authorizing the issuance of the Notes and the execution, delivery and performance by each COAF Company of the Transaction Documents and the transactions contemplated thereby, certified by the Secretary
or an Assistant Secretary of each COAF Company (which certificate shall state that such certificate of incorporation, bylaws and resolutions or other organizational documents are in full force and effect without modification on the Date of
Issuance). 
  
 (d) Incumbency
Certificate. The Note Insurer shall have received a certificate of the Secretary or an Assistant Secretary of each COAF Company certifying the names and signatures of the officers of such COAF Company authorized to execute and deliver the
Transaction Documents and that shareholder, partner or member (as applicable) consent to the execution and delivery of such documents is not necessary. 
  
 (e) Representations and Warranties; Certificate. The representations and warranties of each COAF Company 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 Note Insurer shall have received a certificate of appropriate officers of each COAF Company to
that effect. 
  
 (f) Opinions of
Counsel. 
  
 (i) In-house counsel
for COAF shall have issued its favorable opinion, in form and substance acceptable to the Note Insurer and its counsel, regarding the corporate existence and authority of COAF, in its capacity as seller under the Purchase Agreement and as Servicer.

  
 (ii) The law firm of Richards, Layton &
Finger shall have issued its favorable opinion, in form and substance acceptable to the Note Insurer and its counsel, regarding the corporate existence and authority of the Seller. 
  
 (iii) The law firm of Richards, Layton & Finger shall have issued its favorable opinion, in form and
substance acceptable to the Note Insurer and its counsel, regarding the corporate existence and authority of the Issuer. 
  
 (iv) The law firm of Mayer, Brown, Rowe & Maw LLP shall have furnished its favorable opinion in form and substance acceptable to the
Note Insurer and its counsel, regarding the validity and enforceability of the Transaction Documents against COAF, in its capacity as seller under the Purchase Agreement and as Servicer. 
  
 (v) The law firm of Mayer, Brown, Rowe & Maw LLP shall have furnished its favorable opinion in form and
substance acceptable to the Note Insurer and its counsel, regarding the validity and enforceability of the Transaction Documents against the Seller and the Issuer. 
  

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 (vi) The law firm of Mayer, Brown, Rowe & Maw LLP shall have furnished its opinions,
in form and substance acceptable to the Note Insurer and its counsel, regarding the transfer of the Trust Estate, certain bankruptcy and non-consolidation issues, security interest issues and the tax treatment of the Notes under federal tax laws.

  
 (vii) The Note Insurer shall have received
such other opinions of counsel, in form and substance acceptable to the Note Insurer and its counsel, addressing such other matters as the Note Insurer may reasonably request. 
  
 (g) Approvals, Etc. The Note 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 any COAF Company, required in connection with the Transaction. 
  
 (h) No Litigation, Etc. No suit, action or other proceeding, investigation or injunction, or
final judgment relating thereto, shall be pending or, to the knowledge of any COAF Company, 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) 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. 
  
 (k) Issuance of Ratings. The Note Insurer shall have received confirmation that the risk secured by the Note Insurance
Policy constitutes an investment-grade risk, that the Class A-1 Notes when issued will be rated “A-1+” by S&P, “Prime 1” by Moody’s and “F1+” by Fitch and that the Class A-2 Notes, Class A-3 Notes, and Class
A-4 Notes, when issued, will be rated “AAA” by S&P, “Aaa” by Moody’s and “AAA” by Fitch. 
  
 (l) No Default. No Default or Event of Default shall have occurred. 
  
 (m) Additional Items. The Note Insurer shall
have received such other documents, instruments, approvals or opinions requested by the Note Insurer as may be reasonably necessary to effect the Transaction, including, but not limited to, evidence satisfactory to the Note Insurer that the
conditions precedent, if any, in the Transaction Documents have been satisfied. 
  
 (n) Underwriting Agreement. The Note Insurer shall have received copies of each of the documents, and specifically be
entitled to rely on each of the documents, required to be delivered to the Underwriters pursuant to the Underwriting Agreement. 
  

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 (o) Conform to Documents. The Note Insurer and its counsel shall have
determined that all documents, certificates and opinions to be delivered in connection with the Notes conform to the terms of the Transaction Documents. 
  
 (p) Perfection of Security Interest. All actions required to be taken to perfect the security interest of the Issuer and the
Indenture Trustee in the Trust Estate shall have been performed. 
  
 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 Note Insurer in connection with the issuance of the
Policies in accordance with the terms of the Fee Letter. Any fees of the Note Insurer’s auditors payable in respect of any amendment or supplement to the Prospectus or any other Prospectus incurred after the Date of Issuance shall be paid by
the Servicer on demand. 
  
 (b) Rating
Agency Fees. The Servicer shall promptly pay the initial fees of the Rating Agencies with respect to the Notes and the transactions contemplated hereby following receipt of a statement with respect thereto, and shall pay or cause to be paid
any subsequent fees of the Rating Agencies with respect to, and directly allocable to, the Notes. The Note Insurer shall not be responsible for any fees or expenses of the Rating Agencies. The fees for any other rating agency shall be paid by the
party requesting such other rating agency’s rating. 
  
 (c) Premium. In consideration of the issuance by the Note Insurer of the Policies, the Note 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, pursuant to the Indenture. The Premium paid hereunder or under the Indenture shall be
nonrefundable without regard to whether the Note Insurer makes any payment under the Policies or any other circumstances relating to the Notes or provision being made for payment of the Notes prior to maturity. The Servicer or the Indenture Trustee,
as the case may be, shall make all payments of Premium to be made by them by wire transfer to an account designated from time to time by the Note Insurer by written notice to the Servicer or the Indenture Trustee, respectively. 
  
 Section 3.03. Reimbursement and Additional Payment Obligation.

  
 (a) In accordance with the priorities
established in Section 4.4(a) of the Sale and Servicing Agreement, the Note Insurer shall be entitled to (i) reimbursement for any payment made by the Note 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 Insurance Policy) or 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 

  

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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,
(ii) payment or reimbursement of any other amounts owed to the Note Insurer under this Agreement together with interest thereon at a rate equal to the Late Payment Rate and (iii) reimbursement for any payments made by the Insurer with respect to the
fees and expenses of a successor Servicer or with respect to any transition costs relating to the transfer of servicing from the Servicer to such successor Servicer together with interest thereon at a rate equal to the Late Payment Rate. 

 
 (b) The Servicer agrees to pay to the Note Insurer as
follows: anything in Section 3.03(a) to the contrary notwithstanding, the Note Insurer shall be entitled to reimbursement from the Servicer (i) for payments made under the Policies arising as a result of the failure by any COAF Company to repurchase
any Receivable required to be repurchased pursuant to Section 3.3 of the Purchase Agreement and Sections 2.3, 2.6 and 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 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) for
payments made under the Policies, arising as a result of the Servicer’s failure to deposit into the Collection Account any amount required to be so deposited pursuant to any Transaction Document, 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. 
  
 (c) The Servicer and the
Issuer agree to pay to the Note Insurer as follows: any and all charges, fees, costs and expenses that the Note Insurer may reasonably pay or incur, including, but not limited to, reasonable attorneys’ and accountants’ fees and expenses,
in connection with (i) 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 (ii) any action, proceeding or investigation affecting the Issuer, the Trust Property or the rights or obligations of the Note Insurer under the Policies or the Transaction Documents, including (without
limitation) any judgment or settlement entered into affecting the Note Insurer or the Note Insurer’s interests, or (iii) any consent, amendment, waiver or other action with respect to, or related to, any Transaction Document, whether or not
executed or completed (“Reimbursable Amounts”). Reimbursable Amounts due to the Note Insurer shall bear interest at a rate equal to the Late Payment Rate. In the event that the Servicer fails to pay to the Note Insurer any Reimbursable
Amounts, the Note Insurer shall be entitled to reimbursement of such amount together with interest thereon from Section 4.4 of the Sale and Servicing Agreement. In addition, the Note 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. 
  

 24 








 (d) Servicer agrees to pay to the Note Insurer as follows: interest on any and all
amounts described in subclauses (b), (c) and (e) 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 from the date due until payment thereof in
full, in each case, payable to the Note Insurer at the Late Payment Rate per annum. 
  
 (e) The Servicer agrees to pay to the Note Insurer as follows: any payments made by the Note Insurer on behalf of, or advanced to, the
Servicer or COAF, respectively, including, without limitation, any amounts payable by the Servicer or COAF pursuant to the Notes or any other Transaction Documents. All such amounts are to be immediately due and payable without demand. 

 
 (f) Following optional redemption of the Notes pursuant
to Section 6.02 of the Indenture, the Servicer agrees to reimburse the Note Insurer for any Insured Payments required to be made pursuant to the Policies in respect of any Preference Amounts subsequent to the date of such optional redemption.

  
 (g) Notwithstanding any other provisions of
this Agreement, none of the terms and provisions of this Agreement shall ever be construed to create a contract to pay to the Note Insurer for the use, forbearance or detention of money, interest in excess of the maximum amount of interest permitted
to be charged by the Note Insurer to any of the COAF Companies under applicable state or federal law from time to time in effect, and none of the COAF Companies shall ever be required to pay interest in excess of such maximum amount. If, for any
reason, interest is paid hereunder in excess of such maximum amount, then promptly upon any determination that such excess has been paid the Note Insurer will, at its option, either refund such excess to the payor thereof or apply such excess to the
principal owing by such payor hereunder. 
  
 Section 3.04.
Indemnification; Limitation of Liability. 
  
 (a) In addition to any and all rights of indemnification or any other rights of the Note Insurer pursuant hereto or under law or equity, the Servicer, the Issuer and COAF and any successor thereto agree to pay, and to protect, indemnify and
save harmless, the Note Insurer and its officers, directors, shareholders, employees, agents and each person, if any, who controls the Note Insurer within the meaning of either Section 15 of the Securities Act or Section 20 of the Securities
Exchange Act (the “Note Insurer Indemnified Parties”) 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 Note Insurer Indemnified Parties (herein collectively referred to as “Liabilities”) of any
nature (but excluding lost profits and other consequential damages) arising out of or relating to the transactions contemplated by the Transaction Documents by reason of: 
  
 (i) to the extent not covered by the Indemnification Agreement any act or omission of any COAF Company in
connection with the offering, issuance, sale or delivery of the Notes other than by reason of false or misleading Note Insurer Information or the Underwriter Information; 
  

 25 








 (ii) any untrue statement or alleged untrue statement of a material fact contained in any
of the Capital One Information or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;

  
 (iii) the misfeasance or malfeasance of, or
negligence or theft committed by, any director, officer, employee or agent of any COAF Company; 
  
 (iv) the violation by any COAF Company of any federal or state securities, banking or antitrust laws, rules or regulations in connection
with the issuance, offer and sale of the Notes or the transactions contemplated by the Transaction Documents; 
  
 (v) the violation by any COAF Company of any federal or state laws, rules or regulations relating to the Transaction or the origination of
the Receivables, including, without limitation, any consumer protection, lending and disclosure laws or any laws with respect to the maximum amount of interest permitted to be received on account of any loan of money or with respect to the
Receivables; 
  
 (vi) the breach by the Servicer,
the Issuer or COAF of any of its obligations under this Insurance Agreement or any of the other Transaction Documents (other than breaches under Section 3.2 of the Purchase Agreement or Section 2.2, 3.2, 3.3, 3.4 or 3.5 of the Sale and Security
Agreement); and 
  
 (vii) the breach by the
Servicer, the Issuer or COAF of any representation or warranty on the part of the Servicer, the Issuer or COAF contained in this Insurance Agreement or any of the other Transaction Documents or in any certificate or report furnished or delivered to
the Note Insurer thereunder other than any breach for which the remedy under the Transaction Documents is the repurchase of a Receivable, provided that such Receivable has been repurchased in accordance with the 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. 
  
 (b) In addition to any and all rights of indemnification or
any other rights of the Servicer, the Issuer and COAF pursuant hereto or under law or equity, the Note Insurer agrees to pay, and to protect, indemnify and save harmless, the Servicer, the Issuer and COAF and their respective officers, directors,
shareholders, employees, agents 

  

 26 








 
and each person, if any, who controls the Servicer, the Issuer or COAF within the meaning of either Section 15 of the Securities Act or Section 20 of the
Securities Exchange Act (the “Capital One Indemnified Parties”) 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 Capital One Indemnified Parties (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 any of the Note Insurer Information or any omission
or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; 
  
 (ii) a breach of any of the representations, warranties or
agreements of Note Insurer contained in Section 2.06 hereof; or 
  
 (iii) any failure of the Note Insurer to make a payment required to be made under the Policies. 
  
 (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 indemnifying party under this Section 3.04(c), 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 it 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 reasonably 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), 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. 
  
 Section 3.05. Payment
Procedure. In the event of any payment by the Note Insurer, the Indenture Trustee and the Servicer agree to accept the voucher or other evidence of payment as prima facie evidence of the propriety thereof and the liability therefor to the Note
Insurer. All payments to be made to the Note Insurer under this Insurance Agreement shall be made to the Note Insurer in lawful currency of the United States of America in immediately available funds 
  

 27 








 
at the notice address for the Note Insurer as specified in the Indenture on the date when due or as the Note Insurer shall otherwise direct by written notice
to the other parties hereto. In the event that the date of any payment to the Note 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 Note 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 Note Insurer pursuant to the Policies, the Note 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 to any moneys paid or payable in respect of the Notes 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 Note Insurer, are necessary to evidence such subrogation and to perfect the rights of the Note Insurer to receive any
such moneys paid or payable in respect of the Notes, under the Transaction Documents or otherwise. 
  
 Section 3.07. Reimbursement. The parties hereto acknowledge that, to the extent of any payment made by the Note Insurer pursuant to the Policies,
the Note Insurer has the right to be reimbursed such amounts plus interest thereon at the Late Payment Rate, all in accordance with Section 4.4 of the Sale and Servicing Agreement and in accordance with the priorities set forth therein for
reimbursement of the Note Insurer. 
  
 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 Note Insurer is no longer subject to a claim under the Policies and the Policies shall have been surrendered to the Note
Insurer for cancellation and (b) all amounts payable to the Note Insurer by any COAF Company or from any other source under the Transaction Documents and all amounts payable under the Notes have been paid in full; provided, however, that the
provisions of Sections 3.03 and 3.04 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 COAF Companies 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 Note Insurer, and any such waiver without the
written consent of the Note Insurer shall be null and void and of no force or effect. 
  

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 (b) To the extent permitted by law, the COAF Companies 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 Note Insurer may request and as may be required in the Note 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 COAF Companies 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 Notes or either Policy; 
  
 (ii) any exchange or release of any other obligations hereunder; 
  
 (iii) the existence of any claim, setoff, defense, reduction, abatement or other right that any of the COAF
Companies may have at any time against the Note Insurer or any other Person; 
  
 (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 Note Insurer under the Policies
against presentation of a certificate or other document that does not strictly comply with terms of the Policies; or 
  
 (vi) any failure of any of the COAF Companies to receive the proceeds from the sale of the Notes. 
  
 (b) Each of the COAF Companies and any and all others who
are now or may become liable for all or part of the obligations of any of the COAF Companies 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 any of the COAF Companies; (v) agree that its liabilities hereunder shall, except as otherwise expressly


  

 29 








 
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 Note 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. 
  
 (c) Nothing herein shall be construed as prohibiting any COAF Company 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. No COAF Company may assign
its rights under this Insurance Agreement, or delegate any of its duties hereunder, without the prior written consent of the Note Insurer. 
  
 (b) The Note 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 Note Insurer may in its discretion determine; provided, however, that no such participation or reinsurance agreement or arrangement shall relieve the Note Insurer of
any of its obligations hereunder or under the Policies. 
  
 (c) In addition, the Note 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 Note Insurer in connection
therewith any rights of the Note Insurer under the Transaction Documents or with respect to any real or personal property or other interests pledged to the Note Insurer, or in which the Note 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 Note Insurer against any COAF Company,
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, the Issuer nor any Owner
shall have any right to payment from any Premiums paid or payable hereunder or under the Indenture or from any other amounts paid by any COAF Company pursuant to Section 3.02, 3.03 or 3.04 hereof. 
  

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 Section 4.05. Liability of the Note Insurer. Neither the Note 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 omissions of the Indenture Trustee in connection therewith; or
(b) the validity, sufficiency, accuracy or genuineness of documents delivered to the Note 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 Note Insurer shall have actual knowledge thereof). In furtherance and not in limitation of the foregoing, the Note Insurer may accept documents that
appear on their face to be in order, without responsibility for further investigation. 
  
 Section 4.06. Nonpetition Covenant. Each party hereto agrees that, prior to the date which is one year and one day after payment in full of all obligations of each Bankruptcy Remote Party in respect of all
securities issued by any Bankruptcy Remote Party involved in this Transaction (a) such party shall not authorize such Bankruptcy Remote Party to commence a voluntary winding-up or other voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to such Bankruptcy Remote Party or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect in any jurisdiction or seeking the appointment of an administrator, a trustee,
receiver, liquidator, custodian or other similar official with respect to such Bankruptcy Remote Party or any substantial part of its property or to consent to any such relief or to the appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against such Bankruptcy Remote Party, or to make a general assignment for the benefit of, its creditors generally, any party hereto or any other creditor of such Bankruptcy Remote Party, and (b) of the
parties hereto shall commence or join with any other Person in commencing any proceeding against such Bankruptcy Remote Party under any bankruptcy, reorganization, liquidation or insolvency law or statute now or hereafter in effect in any
jurisdiction. This Section shall survive the termination of this Agreement. 
  
 Section 4.07. Parties To Join in Enforcement Action. 
  
 (a) To the extent necessary to enforce any right of the Note Insurer in or remedy of the Note Insurer under any Receivable or related
asset, the Indenture Trustee, the Issuer and each COAF Company agree to join in any action initiated by the Indenture Trustee or the Note 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 a COAF Company is a party (including, without limitation, an insolvency or bankruptcy proceeding in respect of any COAF Company) which affects the Trust Estate, the Policies or the obligations of the Note Insurer under the Transaction
Documents, and (y) with respect to which such COAF Company fails to defend or answer, the Note Insurer shall have the right to direct, assume or otherwise participate in the defense thereof. In such event, the Note 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 

  

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protect the Trust Estate. All costs and expenses of the Note Insurer in connection with such action, proceeding or investigation, (including, without
limitation, any judgment or settlement entered into or paid by the Note Insurer), shall be included in the Reimbursement Obligations. 
  
 (c) The Indenture Trustee shall cooperate with, and take such action as directed by, the Note Insurer, including (without limitation)
entering into such agreements and settlements as the Note Insurer in its sole discretion shall direct with respect to such court proceeding. The Indenture Trustee shall not be liable to the Note Insurer for any such action that conforms to the
direction of the Note 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 Payment Date immediately following the date incurred, then the Note Insurer shall 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 Note Insurer prompt written notice of any action, proceeding or investigation that names the Owner Trustee or the Issuer as a party or that could adversely affect the Trust Estate or the rights or obligations
of the Note Insurer hereunder or under the Policies or the other Transaction Documents, including (without limitation) any insolvency or bankruptcy proceeding in respect of the Servicer, COAF, the Seller 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 Note Insurer’s prior written consent or unless directed by the Note Insurer, undertake or join any litigation or agree to any settlement of any
action, proceeding or investigation affecting the Owner Trustee, the Issuer or the Trust Estate or the rights or obligations of the Note Insurer hereunder or under the Policies or the other Transaction Documents. 
  
 ARTICLE V 
  
 DEFAULTS; REMEDIES 
  
 Section 5.01. Defaults. The occurrence of any of the following events shall constitute an Event of Default hereunder: 
  
 (a) An Insurance Agreement Event of Default shall occur and
be continuing; 
  
 (b) (i) Any COAF Company shall
fail to pay when due any amount payable by such COAF Company hereunder and such failure has continued for a period of at least three Business Days upon receipt of notice by the applicable COAF Company from the Note Insurer, or if specified in the
applicable Transaction Document, the applicable grace period set forth therein, or (ii) a legislative body has enacted any law that declares or a court of competent jurisdiction shall find or rule that any of the Transaction Documents are not valid
and binding on any COAF Company; 
  

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 (c) 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 any COAF Company and such decree or order shall have remained in force undischarged or unstayed
for a period of 90 consecutive days; 
  
 (d) Any
COAF Company 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 any COAF
Company or of or relating to all or substantially all of the property of any of them; or 
  
 (e) Any COAF Company 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.

  
 Section 5.02. Remedies; No Remedy Exclusive.

  
 (a) Upon the occurrence of an Event of
Default, the Note 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 any COAF Company to the Note Insurer pursuant to the Transaction
Documents to be immediately due and payable, and the same shall thereupon be immediately due and payable; provided, however, that any such payment by the Seller or the Issuer shall be paid in accordance with Section 4.4 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 this Insurance Agreement or the Transaction Documents or to enforce performance and observance of any obligation, agreement or covenant of any COAF Company under this
Insurance Agreement or 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 this
Insurance Agreement, the Transaction Documents or existing at law or in equity. No delay or omission to exercise any right or power accruing under this Insurance Agreement or the 

  

 33 








 
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 Note Insurer to exercise any remedy reserved to the Note Insurer in this Article, it shall not be
necessary to give any notice, other than such notice as may be required in this Article. 
  
 (c) Each party to this Insurance Agreement hereby agrees that, in addition to any other rights or remedies existing in its favor, it shall
be entitled to specific performance and/or injunctive relief in order to enforce any of its rights or any obligation owed to it under the Transaction Documents. 
  

Section 5.03. Waivers. 
  
 (a) No failure by the Note Insurer to exercise, and no delay by the Note Insurer in exercising, any right hereunder shall operate as a
waiver thereof. The exercise by the Note Insurer of any right hereunder shall not preclude the exercise of any other right, and the remedies provided herein to the Note Insurer are declared in every case to be cumulative and not exclusive of any
remedies provided by law or equity. 
  
 (b) The
Note 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 Note Insurer and delivered to the
Servicer. 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 Servicer agrees to promptly provide a copy of any amendment to this Insurance Agreement to the Indenture Trustee and the Rating
Agencies. No act or course of dealing shall be deemed to constitute an amendment, modification or termination hereof. 
  
 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: 
  

	 To the Note Insurer:
	  	 MBIA Insurance Corporation

	 	  	 113 King Street

	 	  	 Armonk, NY 10504

	 	  	 Attention: Insured Portfolio Management - Structured Finance (IPM-SF) (Capital One 2003-B)


  

 34 









	 	  	 Facsimile: (914) 765-3810

	 	  	 Confirmation: (914) 765-3781

		
	 To the Servicer:
	  	 Capital One Auto Finance, Inc.

	 	  	 1680 Capital One Drive

	 	  	 McLean, VA 22102

	 	  	 Attention: Director of Securitization

	 	  	 Facsimile: (703) 720-2121

	 	  	 Confirmation: (703) 720-1000

		
	 With a copy to:
	  	 Capital One Auto Finance, Inc.

	 	  	 1680 Capital One Drive

	 	  	 McLean, VA 22102

	 	  	 Attention: Legal Department

	 	  	 Facsimile: (703) 720-2121

	 	  	 Confirmation: (703) 875-1000

		
	 To COAF:
	  	 Capital One Auto Finance, Inc.

	 	  	 1680 Capital One Drive

	 	  	 McLean, VA 22102

	 	  	 Attention: Director of Securitization

	 	  	 Facsimile: (703) 720-2121

	 	  	 Confirmation: (703) 720-1000

		
	 With a copy to:
	  	 Capital One Auto Finance, Inc.

	 	  	 1680 Capital One Drive

	 	  	 McLean, VA 22102

	 	  	 Attention: Legal Department

	 	  	 Facsimile: (703) 720-2121

	 	  	 Confirmation: (703) 720-1000

		
	 To the Seller:
	  	 Capital One Auto Receivables, LLC

	 	  	 1680 Capital One Drive

	 	  	 McLean, VA 22102

	 	  	 Attention: Director of Securitization

	 	  	 Facsimile: (703) 720-2121

	 	  	 Confirmation: (703) 720-1000

		
	 With a copy to:
	  	 Capital One Auto Receivables, LLC

	 	  	 1680 Capital One Drive

	 	  	 McLean, VA 22102

	 	  	 Attention: Legal Department

	 	  	 Facsimile: (703) 720-2121

	 	  	 Confirmation: (703) 720-1000


  

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	 To the Indenture Trustee:
	  	JPMorgan Chase Bank
	 	  	6th Floor
	 	  	4 New York Plaza,
	 	  	New York, NY 10004-2413
	 	  	Attention: Institutional Trust Services— Capital One Auto Finance 2003-B
	 	  	Facsimile: (212) 623-5932
	 	  	Confirmation: (212) 623-5379
		
	 To the Issuer:
	  	Capital One Auto Finance Trust 2003-B
	 	  	c/o Wilmington Trust Company
	 	  	Rodney Square North
	 	  	North Market Street
	 	  	Wilmington, DE 19890
	 	  	Attention: Corporate Trust Administration— Capital One Auto Finance Trust 2003-B
	 	  	Facsimile: (302) 651-8653
	 	  	Confirmation: (302) 651-8882

  
 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 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 taw, 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 

  

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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) Nothing contained in this Insurance Agreement shall
limit or affect the Note 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 any COAF Company or its or their property in the courts of any
jurisdiction. 
  
 Section 6.06. Consent of the Note
Insurer. In the event that the consent of the Note Insurer is required under any of the Transaction Documents, the determination whether to grant or withhold such consent shall be made by the Note Insurer in its sole discretion without any
implied duty towards any other Person, except as otherwise expressly provided therein. 
  
 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 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 Notes 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 

  

 37 








 
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. This Insurance Agreement 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. Limitation of Liability. It is expressly understood and
agreed by and among the parties hereto (a) that this Insurance Agreement is executed and delivered by Wilmington Trust Company, not in its individual capacity but solely as Owner Trustee under the Amended and Restated Trust Agreement dated as of
November 18, 2003 with Capital One Auto Receivables, LLC (the “Trust Agreement”) in the exercise of the power and authority conferred and vested in it as such Owner Trustee, (b) each of the representations, undertakings and agreements made
herein by the Issuer are not personal representations, undertakings and agreements of Wilmington Trust Company, but are binding only on the Issuer, (c) nothing contained herein shall be construed as creating any liability on Wilmington Trust
Company, individual or personally, to perform any covenant of the Issuer either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties hereto and by any person claiming by, through or under any such
party, and (d) under no circumstances shall Wilmington Trust Company be personally liable for the payment of any indebtedness or expense of the Issuer or be liable for the breach or failure of any obligation, representation, warranty or covenant
made or undertaken by the Issuer under this Insurance Agreement. 
  
 [Remainder of page intentionally left blank] 
  

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 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 Note Insurer

		
	 By
	 	 /s/ Adam M. Carta


	 Name:
	 	 Adam M. Carta

	 Title:
	 	 Assistant Secretary

	
	 CAPITAL ONE AUTO FINANCE, INC.,

	 as Servicer and in its capacity as seller under the
 Purchase Agreement

		
	 By
	 	 /s/ Patrick Gray


	 Name:
	 	 Patrick Gray

	 Title:
	 	 Chief Executive Officer, Treasurer &
 Secretary

	
	 CAPITAL ONE AUTO RECEIVABLES, LLC,
 as Seller

		
	 By
	 	 /s/ Al Ciafre


	 Name:
	 	 Al Ciafre

	 Title:
	 	 Assistant Vice President

	
	 CAPITAL ONE AUTO FINANCE TRUST
 2003-B

	
	 By WILMINGTON TRUST COMPANY, not in its individual capacity but solely in its capacity as Owner
Trustee

		
	 By
	 	 /s/ Joann A. Rozell


	 Name:
	 	 Joann A. Rozell

	 Title:
	 	 Financial Services Officer



  

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	 JPMORGAN CHASE BANK,

	 as Indenture Trustee

		
	 By
	 	 /s/ Craig M. Kantor


	 Name:
	 	 Craig M. Kantor

	 Title:
	 	 Vice President



  

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