Exhibit 10.2INSURANCE AND INDEMNITY AGREEMENTDated as of November 21, 2007FINANCIAL SECURITY ASSURANCE INC.,as Insurer,TRIAD AUTOMOBILE RECEIVABLES TRUST 2007-B,as Issuer,TRIAD FINANCIAL CORPORATION,as Seller and Servicer,TRIAD FINANCIAL SPECIAL PURPOSE LLC,as Depositor,andCITIBANK, N.A.as Indenture TrusteeTriad Automobile Receivables Trust 2007-BClass A Asset Backed Notes
 

 
TABLE OF CONTENTS         Page  ARTICLE I         DEFINITIONS       Section 1.1 Defined Terms 1Section 1.2 Other Definitional Provisions 10       ARTICLE II         REPRESENTATIONS, WARRANTIES AND COVENANTS       Section 2.1 Representations and Warranties of the Seller and Servicer 10Section 2.2 Affirmative Covenants of Seller and Servicer 11Section 2.3 Negative Covenants of the Seller and Servicer 15Section 2.4 Representations and Warranties of the Insurer 15Section 2.5 Representations and Warranties of the Depositor and the Issuer 16Section 2.6 Affirmative Covenants of the Depositor and the Issuer 17Section 2.7 Negative Covenants of the Depositor and the Issuer 21       ARTICLE III         THE POLICIES; REIMBURSEMENT       Section 3.1 Issuance of the Policies 22Section 3.2 Payment of Fees and Premium 24Section 3.3 Reimbursement Obligation 25Section 3.4 Indemnification 25Section 3.5 Payment Procedure  28Section 3.6 Subrogation  29       ARTICLE IV         FURTHER AGREEMENTS       Section 4.1 Effective Date; Term of the Insurance Agreement 29Section 4.2 Further Assurances and Corrective Instruments 29Section 4.3 Obligations Absolute 30Section 4.4 Assignments; Reinsurance; Third-Party Rights 31Section 4.5 Liability of the Insurer 32Section 4.6 Purchase of Replacement Swap Agreement 32Section 4.7 Rights and Remedies 32
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         Page  ARTICLE V         DEFAULTS AND REMEDIES       Section 5.1 Defaults 33Section 5.2 Remedies; No Remedy Exclusive 34Section 5.3 Waivers 35       ARTICLE VI         MISCELLANEOUS       Section 6.1 Amendments, Etc 35Section 6.2 Notices 36Section 6.3 Severability 37Section 6.4 Governing Law 37Section 6.5 Consent to Jurisdiction 37Section 6.6 Consent of the Insurer 38Section 6.7 Counterparts 38Section 6.8 Headings 38Section 6.9 Trial by Jury Waived 38Section 6.10 Limited Liability 38Section 6.11 Entire Agreement: Facsimile Signatures 39Section 6.12 Indenture Trustee 39Section 6.13 Third-Party Beneficiary 39Section 6.14 No Proceedings 39Section 6.15 Limitation of Owner Trustee Liability 39         EXHIBITS                 EXHIBIT A Triad Automobile Receivables Trust 2007-B ConsolidatedTangible Net Worth Calculation as of September 30, 2007   A-1         EXHIBIT B [Reserved]   B-1         EXHIBIT C Triad Automobile Receivables Trust 2007-B Tangible Net Worth Floor   C-1         SCHEDULES                 SCHEDULE A     Schedule A-1         SCHEDULE B     Schedule B-1         SCHEDULE C     Schedule C-1         SCHEDULE D     Schedule D-1         SCHEDULE2.1(d)     Schedule 2.1(d)-1
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          INSURANCE AND INDEMNITY AGREEMENT (as it may be amended, modified or supplemented from time totime, this “Insurance Agreement”), dated as of November 21, 2007, by and among FINANCIALSECURITY ASSURANCE INC., as Insurer (the “Insurer”), TRIAD AUTOMOBILE RECEIVABLES TRUST2007-B, as Issuer (the “Issuer”), TRIAD FINANCIAL CORPORATION (“Triad”), as Sellerand Servicer (the “Seller” and the “Servicer”, respectively), TRIAD FINANCIALSPECIAL PURPOSE LLC, as Depositor (the “Depositor”) and CITIBANK, N.A. as Indenture Trustee(the “Indenture Trustee”).PRELIMINARY STATEMENTS          A. The Indenture, dated as of November 21, 2007, by and between the Issuer and the IndentureTrustee (the “Indenture”), provides for, among other things, the issuance of the TriadAutomobile Receivables Trust 2007-B Class A Asset Backed Notes.          B. The parties hereto desire that the Insurer issue the FSA Policy to the Indenture Trusteefor the benefit of the Holders, to issue the Swap Policy to the Swap Counterparty and to, amongother things, specify the conditions precedent thereto, the premium in respect thereof and theindemnity, reimbursement, reporting and other obligations of the parties hereto other than theInsurer in consideration thereof.          NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained,the parties hereto agree as follows:**ARTICLE I****DEFINITIONS**          Section 1.1 Defined Terms. Capitalized terms used in this Insurance Agreement shallhave the meanings set forth below. Unless the context clearly requires otherwise, all capitalizedterms used but not defined herein shall have the respective meanings assigned to them in the FSAPolicy or, if not defined therein, in the Swap Policy, or, if not defined therein, in the Indentureor, if not defined therein, in the Sale and Servicing Agreement, or, if not defined therein, in thePurchase Agreement, each as described below.          “Affiliate” means, with respect to any specified Person, any other Person controllingor controlled by or under common control with such specified Person. For the purposes of thisdefinition, “control” when used with respect to any Person means the power to direct the managementand policies of such Person, directly or indirectly, whether through the ownership of votingsecurities, by contract or otherwise; and the terms “controlling” and “controlled” have meaningscorrelative to the foregoing.          “Certificate” means the trust certificate evidencing the beneficial interest of theCertificateholder in the Trust.          “Charter Documents” means, with respect to any Transaction Party, such entity’sorganizational documents, including its trust agreement, certificate of trust, memorandum ofassociation, articles of organization, certificate or articles of incorporation, by-laws and/oroperating agreement.
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          “Class A Notes” means the Class A-1 Notes, the Class A-2a Notes, the Class A-2b Notes,the Class A-3a Notes, the Class A-3b Notes, the Class A-4a Notes and the Class A-4b Notes.          “Class A-1 Notes” means the Class A-1 5.06815% Asset Backed Notes, issued pursuant tothe Indenture and substantially in the form attached as an Exhibit to the Indenture.          “Class A-2a Notes” means the Class A-2a 5.30% Asset Backed Notes, issued pursuant tothe Indenture and substantially in the form attached as an Exhibit to the Indenture.          “Class A-2b Notes” means the Class A-2b Floating Rate Asset Backed Notes, issuedpursuant to the Indenture and substantially in the form attached as an Exhibit to the Indenture.          “Class A-3a Notes” means the Class A-3a 5.24% Asset Backed Notes, issued pursuant tothe Indenture and substantially in the form attached as an Exhibit to the Indenture.          “Class A-3b Notes” means the Class A-3b Floating Rate Asset Backed Notes, issuedpursuant to the Indenture and substantially in the form attached as an Exhibit to the Indenture.          “Class A-4a Notes” means the Class A-4a 5.43% Asset Backed Notes, issued pursuant tothe Indenture and substantially in the form attached as an Exhibit to the Indenture.          “Class A-4b Notes” means the Class A-4b Floating Rate Asset Backed Notes, issuedpursuant to the Indenture and substantially in the form attached as an Exhibit to the Indenture.          “Closing Date” means November 21, 2007.          “Collection Period” means, (i) with respect to the first Distribution Date, the periodbeginning on the close of business on October 31, 2007 and ending on the close of business onNovember 30, 2007, and (ii) with respect to each subsequent Distribution Date, the period beginningon the opening of business on the first day of the immediately preceding calendar month and endingon the close of business on the last day of the immediately preceding calendar month. Any amountstated “as of the close of business on the last day of a Collection Period” shall give effect tothe following calculations as determined as of the end of the day on such last day: (i) allapplications of collections and (ii) all distributions.          “Consolidated Tangible Net Worth” means, as of any date, the consolidatedStockholders’ Equity of any entity and its consolidated subsidiaries, less the consolidated netbook value of all assets of such entity and its consolidated subsidiary (to the extent reflected asan asset in the balance sheet of such entity or any consolidated subsidiary at such date) whichwill be treated as intangibles under GAAP, including without limitation, such items as deferredfinancing expenses, net leasehold improvements, good will, trademarks, trade names, service marks,copyrights, patents, licenses and unamortized debt discount and expense, all as determined as ofsuch date, and calculated in accordance with the example set forth as Exhibit A; provided,that interest-only strips, residual interests or residual certificates issued in connection
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with a public or private securitization transaction (including rights to receive remainingamounts in spread accounts) owned by such entity or its consolidated subsidiaries shall not betreated as intangibles for purposes of this definition; providedfurther, forpurposes of this definition, the consolidated net book value of deferred financing expenses shallbe deemed to equal the product of (1) the total consolidated net book value of deferred financingexpenses and (2) 0.605. For purposes of this definition “Stockholders’ Equity” shallinclude GAAP retained earnings and any equity securities such as common stock or common stockequivalents, including, but not limited to, any non-coupon bearing instruments (other than in aliquidation preference) such as preferred stock, convertible stock or convertible preferred stockof Triad or its Successor. In addition, any coupon bearing stock equivalent (cash, Pay-In-Kindsecurity or combination thereof), preferred or otherwise, will receive equity treatment (not toexceed 30% of total consolidated Stockholders’ Equity) so long as such instrument provides for theability to defer cash coupon payments for a period not to exceed five years and the holder thereofis not entitled to commence bankruptcy, insolvency or similar proceedings against Triad or itsSuccessor. In the event of any dispute among the parties, or any of them, regarding thecalculation of Consolidated Tangible Net Worth or the valuation of any assets included in suchcalculation, which cannot be resolved by such parties, in good faith, within thirty (30) days ofall relevant requested information being supplied, the disputing parties shall, within ten (10)Business Days, agree on a third party (such as an accounting or investment banking firm) to furnishthe results of such calculation within thirty (30) days, such conclusion to be final and binding onthe parties. Notwithstanding any provision in this Agreement to the contrary, if the valuation orother calculation made by such third party is 10% or more higher than the number put forth by theparty promoting the lower valuation or other calculation, then the party promoting the lowervaluation shall pay the costs of the third party, provided that, notwithstanding theforegoing, if the valuation or other calculation made by such third party is 10% or more higherthan the number put forth by the party promoting the lower valuation or other calculation and isstill less than the greater of (x) 7.5% of such entity’s Total Assets and (y) Tangible Net WorthFloor, then the party promoting such lower valuation shall not be required to pay the costs of thethird party. If the valuation or other calculation by such third party is 10% or more lower thanthe number put forth by the party promoting the higher valuation, then that party shall pay thecosts of the third party, even in the circumstance where such calculation results in a valuation orother calculation greater than the greater of (x)7.5% of such entity’s Total Assets and (y)Tangible Net Worth Floor. In all other cases, the costs of the third party shall be shared equallyby the disputing parties.          “Cram Down Loss” means, for any Receivable (other than a Purchased Receivable or aLiquidated Receivable), if a court of appropriate jurisdiction in an insolvency proceeding issuedan order reducing the amount owed on the Receivable or otherwise modifying or restructuring thescheduled payments to be made on the Receivable, an amount equal to the excess of the Receivable’sPrincipal Balance immediately prior to the order over the Receivable’s Principal Balance asreduced.          “Cumulative Net Loss Ratio” means the ratio, expressed as a percentage, computed bydividing: (a) the Cumulative Net Losses by (b) the Original Pool Balance.          “Cumulative Net Losses” means the aggregate principal balance of all Net LiquidationLosses for each Collection Period from the Closing Date to and including the then-currentCollection Period.
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          “Cut-off Date” means October 31, 2007.          “Deemed Cured” means, as of a Determination Date, that no Spread Cap Event shall haveoccurred and be continuing as of such Determination Date and with respect to the two consecutivelypreceding Determination Dates.          “Default” means any occurrence that is, or with notice or the lapse of time or bothwould become, an Event of Default.          “Delinquency Rate” means, with respect to any Determination Date, a fraction,expressed as a percentage, (a) the numerator of which is equal to the aggregate Principal Balanceof all Receivables, other than Liquidated Receivables, for which all or more than 10% of aScheduled Receivables Payment was 60 or more days delinquent as of the last day of the relatedCollection Period and (b) the denominator of which is equal to the Aggregate Principal Balance asof the last day of the related Collection Period.          “Depositor” has the meaning specified in the initial paragraph hereof.          “Determination Date” means, with respect to any Collection Period, the 3rd BusinessDay preceding the Distribution Date in the next Collection Period.          “Distribution Date” means, with respect to each Collection Period, the 12th day of thefollowing Collection Period, or, if such day is not a Business Day, the immediately followingBusiness Day, commencing December 12, 2007.          “Event of Default” has the meaning specified in Section 5.1 hereof          “Fee Letter” means that certain letter agreement dated as of the date hereof betweenthe Issuer and the Insurer and acknowledged by the Indenture Trustee setting forth certain fees andother matters referred to herein, as the same may be amended or supplemented from time to time inaccordance therewith and with this Insurance Agreement.          “Financed Vehicle” means an automobile or light-duty truck, together with allaccessions thereto, securing an Obligor’s indebtedness under the respective Receivable.          “FSA” means Financial Security Assurance Inc., a New York financial guaranty insurancecompany.          “FSA Policy” means the Financial Guaranty Insurance Policy No. 51886A-N dated November21, 2007, including any endorsements thereto, issued by the Insurer to the Indenture Trustee withrespect to the Class A Notes, for the benefit of the Holders.          “Holder” has the meaning given thereto in the FSA Policy.          “Indemnified Party” has the meaning specified in Section 3.4 hereof.          “Indemnifying Party” has the meaning specified in Section 3.4 hereof.
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          “Indenture” means the Indenture dated as of November 21, 2007 between the Issuer andCitibank, N.A. as Indenture Trustee, as the same may be amended or supplemented from time to time.          “Information” has the meaning specified in Section 2.1(c) hereof.          “Insolvency Proceeding” means any proceeding by or against any person under anyapplicable reorganization, bankruptcy, liquidation, rehabilitation, insolvency or other similar lawnow or hereafter in effect or any proceeding in which a receiver, liquidator, conservator, trusteeor similar official shall have been, or may be, appointed or requested for a person or any of itsassets.          “Insurance Agreement” has the meaning given such term in the initial paragraph hereof.          “Insurance Agreement Repurchase Event” means, with respect to any Collection Periodfollowing six (6) months from the Closing Date, the repurchase of more than five (5) Receivables.          “Insurer” means FSA and any successor thereto, as issuer of the FSA Policy and theSwap Policy.          “Insurer Information” means the information furnished by the Insurer in writingexpressly for use in the Offering Document and is limited to the information included under theheadings “The Note Insurer” and “The Policy” in the Preliminary Prospectus Supplement datedNovember 14, 2007 and the Prospectus Supplement dated November 16, 2007 to the Prospectus datedNovember 14, 2007.          “Investment Company Act” means the Investment Company Act of 1940, including, unlessthe context otherwise requires, the rules and regulations thereunder, as amended from time to time.          “Late Payment Rate” means the lesser of (a) the greater of (i) the per annum rate ofinterest publicly announced from time to time by Citibank, N.A. as its prime or base lending rate(any change in such rate of interest to be effective on the date such change is announced byCitibank, N.A.), plus 2% per annum and (ii) the then applicable highest rate of interest on theClass A Notes and (b) the maximum rate permissible under applicable usury or similar laws limitinginterest rates. The Late Payment Rate shall be computed on the basis of the actual number of dayselapsed over a year of 360 days.          “Liquidated Receivable” means, with respect to any Collection Period, any Receivablewith respect to which any of the following has occurred: (i) 10% or more of any ScheduledReceivable Payment is 120 days or more past due, except Receivables with respect to which therelated Financed Vehicles have been repossessed within such 120 days; (ii) the earlier of (A) 90days have elapsed since the Servicer repossessed the Financed Vehicle and (B) the sale of therelated Financed Vehicle; or (iii) the Servicer has determined in good faith that all amounts itexpects to be recovered have been received.
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          “Material Adverse Effect” means, with respect to any event or circumstance, a materialadverse effect on (a) the business, financial condition, operations or assets of the Issuer(considered separately) or the Issuer, the Seller, the Servicer and the Depositor (taken as awhole), (b) the ability of any Triad Party to perform its obligations under any TransactionDocument to which it is a party, (c) the validity, enforceability of, or collectibility of, amountspayable by any Triad Party under any Transaction Document to which it is a party, (d) the status,existence, perfection or priority of the interest of the Issuer or of the Indenture Trustee in theTrust Estate, (e) the validity, enforceability or collectibility of all or any portion of the TrustEstate with an aggregate value of at least $500,000 or (f) the ability of the Insurer to monitorthe performance of the Receivables and compliance of the Triad Parties with the TransactionDocuments unless such impediment results from an action or omission on the part of the Insurer.          “Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.          “Net Liquidation Losses” means, with respect to any Determination Date, the amount, ifany, by which (a) the sum of (i) the Principal Balance of all Receivables which became LiquidatedReceivables during the related Collection Period, and (ii) the aggregate of all Cram Down Lossesthat occurred during such Collection Period, exceeds (b) the Net Liquidation Proceeds receivedduring the related Collection Period in respect of all Liquidated Receivables.          “Net Liquidation Proceeds” means, with respect to a Liquidated Receivable, (1)proceeds from the disposition of the underlying Financed Vehicle; plus (2) any relatedinsurance proceeds; plus (3) other monies received from the Obligor that are allocable toprincipal and interest due under the Receivable, minus (4) the Servicer’s reasonableout-of-pocket costs, including repossession and resale expenses not already deducted from theproceeds, and any amounts required to be remitted to the Obligor by law.          “Net Loss Rate” means, with respect to a Collection Period, the fraction, expressed asa percentage, the numerator of which is equal to the aggregate of the Net Liquidation Losses forsuch Collection Period and the denominator of which is the Aggregate Principal Balance as of thefirst day of such Collection Period.          “Obligor” on a Receivable means the purchaser or co-purchaser(s) of the FinancedVehicle and any other Person who owes payments under the Receivable.          “Offering Document” means, taken together, the Preliminary Prospectus Supplement,dated November 14, 2007 (the “Preliminary Prospectus Supplement”) and the ProspectusSupplement, dated November 16, 2007 (the “Prospectus Supplement”) to the Prospectus, datedNovember 14, 2007 (the “Prospectus”), of the Issuer, in respect of the offering and salesof the Class A Notes, the Prospectus, any amendment or supplement thereto, and any other offeringdocument in respect of the Class A Notes that makes reference to the FSA Policy or the Swap Policy.          “Person” means an individual, corporation, estate, partnership, joint venture,association, joint stock company, trust (including any beneficiary thereof), unincorporatedorganization or government or any agency or political subdivision thereof.          “Premium” means the premium payable in accordance with the Fee Letter.
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          “Premium Supplement” has the meaning specified in the Fee Letter.          “Principal Balance” means, for any Receivable as of any date of determination, (i) theAmount Financed; minus (ii) the sum of (a) that portion of all amounts received on or priorto that date and allocable to principal according to the Receivable’s terms, and (b) any Cram DownLosses for the Receivable accounted for as of that date.          “Purchase Agreement” means the Purchase Agreement dated as of November 21, 2007between Triad Financial Special Purpose LLC and Triad, as the same may be amended or supplementedfrom time to time.          “Purchased Receivable” means, with respect to any Collection Period, a Receivablepurchased as of the close of business on the last day of the Collection Period by Triad or theservicer, as long as Citibank, N.A. is not acting as servicer, as the result of a breach of acovenant or as an exercise of its optional redemption right.          “Rating Agencies” means Moody’s and S&P.          “Receivables” means each motor vehicle retail installment sale contract, installmentloan contract or note and security agreement listed on the Schedule of Receivables attached as anExhibit to the Sale and Servicing Agreement.          “Reimbursement Amount” means, as of any Distribution Date, the sum of (x)(i) allScheduled Payments (with respect to the FSA Policy and the Swap Policy, as defined in the FSAPolicy and the Swap Policy, respectively) and all Insurer Optional Deposits paid by FSA, but forwhich FSA has not been reimbursed prior to such Distribution Date pursuant to Section 3.3 of thisInsurance Agreement, Section 5.6 of the Indenture and Section 5.7 of the Sale and ServicingAgreement, plus (ii) interest accrued on such Scheduled Payments and Insurer OptionalDeposits not previously repaid calculated at the Late Payment Rate from the date the IndentureTrustee, or any other Person at its direction, received the related payments or the date suchpayments were made, and (y) without duplication (i) any amounts then due and owing to FSA underthis Insurance Agreement, the Indenture or the Sale and Servicing Agreement, as certified to theIndenture Trustee by FSA plus (ii) interest on such amounts at the Late Payment Rate.          “Responsible Officer” means any Vice President, Assistant Vice President, AssistantTreasurer, Assistant Secretary or any other officer of the relevant Transaction Party responsiblefor the performance of such Transaction Party’s obligations under the Transaction Documents andalso, with respect to a particular matter, any other officer to whom such matter is referredbecause of such officer’s knowledge of and familiarity with the particular subject.          “Sale and Servicing Agreement” means the Sale and Servicing Agreement, dated as ofNovember 21, 2007, among the Issuer, the Depositor, Triad, as Servicer and Custodian, the IndentureTrustee and the Backup Servicer, as the same may be amended or supplemented from time to time.          “Scheduled Receivables Payment” means, with respect to any Collection Period for anyReceivable, the amount set forth in the Receivable as required to be paid by the Obligor
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in the Collection Period. If, after the Closing Date, the Obligor’s obligation under aReceivable with respect to a Collection Period is modified so as to differ from the amountspecified in the Receivable as a result of (i) the order of a court in an insolvency proceedinginvolving the Obligor, (ii) pursuant to the Servicemembers Civil Relief Act or (iii) modificationsor extensions of the Receivable permitted by Section 4.2(b) of the Sale and Servicing Agreement,the Scheduled Receivables Payment with respect to such Collection Period will refer to theObligor’s payment obligation with respect to the Collection Period as so modified.          “Schedule of Receivables” means the schedule of all motor vehicle retail installmentsale contracts, installment loan contracts and note and security agreements originally held as partof the Trust which is attached as a Schedule to the Sale and Servicing Agreement.          “Securities Act” means the Securities Act of 1933, including, unless the contextotherwise requires, the rules and regulations promulgated thereunder, as amended from time to time.          “Securities Exchange Act” means the Securities Exchange Act of 1934, including, unlessthe context otherwise requires, the rules and regulations promulgated thereunder, as amended fromtime to time.          “Seller” has the meaning specified in the initial paragraph hereof.          “Servicer” has the meaning specified in the recitals hereof.          “Servicer Termination Event” has the meaning specified in Section 9.1 of the Sale andServicing Agreement.          “Servicing Policy and Procedures” means the policies and procedures set forth onSchedule C to the Sale and Servicing Agreement, and any amendments thereto.          “S&P” means Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., and anysuccessor thereto.          “Spread Cap Event” means, with respect to any Determination Date, the occurrence ofany of the following:     (a) the Delinquency Rate with respect to such Determination Date shall exceed the rateprovided for the related Collection Period as set forth in Schedule A; or     (b) the Cumulative Net Loss Ratio with respect to such Determination Date shall exceedthe rate provided for the related Collection Period as set forth in Schedule B;provided that if the Spread Cap Event is Deemed Cured as of such Determination Date, thereshall be no Spread Cap Event on such Determination Date.          “Swap Policy” means the Financial Guaranty Insurance Policy No. 51886B-N datedNovember 21, 2007, including any endorsements thereto, issued by the Insurer to the SwapCounterparty with respect to the Swap Agreement.
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          “Successor” means, following the merger or a consolidation of Triad with any otherPerson, or the conveyance, transfer or lease by Triad of all or substantially all of its assets toanother Person, or Triad’s permitting any other Person to become the successor to Triad’s business,in each case, such other Person.          “Tangible Net Worth Floor” means, with respect to Triad, the calculation set forth inExhibit C attached hereto.          “Total Assets” means, all receivables owned by Triad and all receivables serviced byTriad and owned by any other Person.          “Transaction” means the transactions contemplated by the Transaction Documents.          “Transaction Documents” means this Agreement, the Underwriting Agreement, the Sale andServicing Agreement, the Certificate of Trust, the Trust Agreement, the Purchase Agreement, theIndenture, the Swap Agreement and all other documents and certificates delivered in connectiontherewith except for the FSA Policy and the Swap Policy.          “Transaction Parties” means the Triad Parties and the Indenture Trustee.          “Triad” has the meaning specified in the recitals hereof.          “Triad Party” means any of the Issuer, Triad, the Servicer, the Depositor and theHolder of the Residual Certificate (collectively, the “Triad Parties”).          “Trigger Event” means, with respect to any Determination Date, the occurrence of anyof the following:     (a) the Delinquency Rate with respect to such Determination Date shall exceed the rateprovided for the related Collection Period, as set forth in Schedule C;     (b) the Cumulative Net Loss Ratio with respect to such Determination Date shall exceedthe rate provided for the related Collection Period, as set forth in Schedule D; or     (c) the Consolidated Tangible Net Worth of Triad, or its Successor, is less than thegreater of (x) 7.5% of its Total Assets and (y) the Tangible Net Worth Floor, as set forthin Exhibit C.          “Trust Agreement” means the Trust Agreement dated as of October 23, 2007 among Triad,as Administrator, the Depositor and the Owner Trustee, as amended and restated as of November 21,2007 as the same may be amended and supplemented from time to time.          “Underwriter Information” means the information furnished by the Underwriter inwriting expressly for use in the Offering Document and included in the third, fourth, sixth,seventh, eighth or ninth paragraphs under the heading “Underwriting” in the Preliminary ProspectusSupplement and the Prospectus Supplement.
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          “Underwriter” shall mean Citigroup Global Markets Inc. as representative of theseveral underwriters named in the Underwriting Agreement.          “Underwriting Agreement” means the Underwriting Agreement, dated November 16, 2007between the Underwriter and the Depositor with respect to the offer and sale of the Class A Notes,as amended, modified or supplemented from time to time.          Section 1.2 Other Definitional Provisions. The words “hereof,” “herein” and“hereunder” and words of similar import when used in this Insurance Agreement shall refer to thisInsurance Agreement as a whole and not to any particular provision of this Insurance Agreement, andSection, subsection, Schedule and Exhibit references are to this Insurance Agreement unlessotherwise specified. The meanings given to terms defined herein shall be equally applicable toboth the singular and plural forms of such terms. The words “include” and “including” shall bedeemed to be followed by the phrase “without limitation.” Where a representation, warranty orcovenant herein begins with the words “as to a Person only,” such representation, warranty orcovenant is given by and as to such Person only.**ARTICLE II****REPRESENTATIONS, WARRANTIES AND COVENANTS**          Section 2.1 Representations and Warranties of the Seller and Servicer. Triad herebymakes, to and for the benefit of the Insurer, each of the representations and warranties made by itin each of the Transaction Documents to which it is a party, including Section 3.1 of the PurchaseAgreement and Sections 4.6 and 8.1 of the Sale and Servicing Agreement. Such representations andwarranties are incorporated herein by this reference as if fully set forth herein, and may not beamended except by an amendment complying with the terms of the last sentence of Section 6.1 hereof.In addition, Triad represents and warrants as of the Closing Date as follows:          (a) The offer and sale of the Class A Notes by the Issuer comply in all material respects withall requirements of law, including all registration requirements of applicable securities laws and,without limiting the generality of the foregoing, the Offering Document (other than the UnderwriterInformation and the Insurer Information) does not contain any untrue statement of a material factand does not omit to state a material fact necessary to make the statements made therein, in lightof the circumstances under which they were made, not misleading.          (b) The Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended;the Issuer is not required to be registered as an “investment company” under the Investment CompanyAct; and neither the offer nor the sale of the Class A Notes by the Issuer will be in violation ofthe Securities Act or any other federal or state securities law. Triad shall satisfy any of theinformation reporting requirements of the Securities Exchange Act arising out of the Transaction towhich it, the Depositor or the Issuer is subject.          (c) Neither the Transaction Documents nor any other information relating to the Receivables,the Other Conveyed Property or any other asset in the Trust Estate, the
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operations or financial condition of any of the Triad Parties (collectively, the“Information”), as amended, supplemented or superseded, furnished to the Insurer by suchTriad Party contains any statement of a material fact which was untrue or misleading in anymaterial respect when made. None of the Triad Parties has any knowledge of any circumstances thatcould reasonably be expected to have a Material Adverse Effect. Since the furnishing of theInformation, there has been no change nor any development or event involving a prospective changeknown to any of the Triad Parties that would render any of the Transaction Documents untrue ormisleading in any material respect.          (d) Except as set forth on Schedule 2.1(d) hereto, since May 30, 2007, Triad has notimplemented any material change to its loan underwriting policies (including, without limitation, amaterial change targeting customers in particular credit tiers or having particular credit-historycharacteristics, the use of any new scorecard that is materially different from those previously inuse, a material change in the level of discretion to be exercised by loan officers, a materialchange in verification of applicant information or a material change in the way credit criteria areapplied in relation to customer groups, e.g., geographic groups or credit-tier groups).          Section 2.2 Affirmative Covenants of Seller and Servicer. Triad hereby makes, to andfor the benefit of the Insurer, all of the covenants made by it in the Transaction Documents towhich it is a party, including Section 4.5 of the Purchase Agreement and Section 4.6 of the Saleand Servicing Agreement. Such covenants are hereby incorporated herein by this reference as iffully set forth herein, and may not be amended except by an amendment complying with the terms ofthe last sentence of Section 6.1. In addition, Triad hereby agrees that during the term of thisInsurance Agreement, unless the Insurer shall otherwise expressly consent in writing:          (a) Compliance with Agreements and Applicable Laws. It shall comply with the termsand conditions of and perform its obligations under the Transaction Documents to which it is aparty and shall comply with any law, rule or regulation applicable to it, except where the failureto comply with any such law, rule or regulation is not reasonably likely to have a Material AdverseEffect.          (b) Existence. Except as otherwise expressly provided by the Transaction Documents,it shall maintain its corporate existence and shall at all times continue to be duly organizedunder the laws of the place of its organization and duly qualified and duly authorized thereunder.Additionally, it shall conduct its business in accordance with the terms of its Charter Documentsand shall maintain all licenses, permits, charters and registrations, except for any such license,permit, charter or registration the failure of which to maintain is not reasonably likely to have aMaterial Adverse Effect.          (c) Notice of Material Events. It shall promptly (and, with respect to item (ii)below, in any event not later than two (2) Business Days, and, with respect to all other items notlater than five (5) Business Days) following receipt of actual knowledge by a Responsible Officerthereof inform the Insurer in writing of the occurrence of any of the following:     (i) the submission of any claim or the initiation of any legal process, litigation oradministrative or judicial investigation, or disciplinary proceeding by or against it that
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would be reasonably likely to have a Material Adverse Effect or the promulgation of anyproceeding or any proposed or final ruling in connection with any such litigation,investigation or proceeding that would be reasonably likely to have a Material AdverseEffect;     (ii) the occurrence of any Event of Default hereunder, any Default or Event of Defaultunder the Indenture, any Servicer Termination Event, any Trigger Event or any Spread CapEvent;     (iii) the commencement of any Insolvency Proceeding against any Transaction Party;     (iv) any Person becoming a Successor; and     (v) the receipt of written notice that (a) any license, permit, charter, registrationor approval necessary and material for the conduct of its business is to be, or may be,suspended or revoked and such suspension or revocation would be reasonably likely to have aMaterial Adverse Effect or (b) it is to cease and desist any practice, procedure or policyemployed by it in the conduct of its business, and such cessation would be reasonably likelyto have a Material Adverse Effect.          (d) Notice of Change. It shall give the Insurer not less than thirty (30) days’ priorwritten notice of any proposed change in its name, principal place of business or jurisdiction oforganization.          (e) Access to Records; Discussions with Officers and Accountants. As long as uponreasonable prior written notice of the Insurer, at any time, it shall permit the Insurer or itsauthorized agents:     (i) to inspect its books and its records as they may relate to the Transaction, theReceivables, the Other Conveyed Property, the Swap Agreement or any other assets in theTrust Estate, as the case may be, or its obligations under the Transaction Documents;     (ii) to discuss its affairs, finances and accounts with its principal executive officerand its principal financial officer; and     (iii) to discuss its affairs, finances and accounts with its independent accountants,provided that one of its officers shall have the right to be present during suchdiscussions.          Such inspections and discussions shall be conducted during normal business hours at Triad’scost and expense and shall not unreasonably disrupt the business of the Seller or the Servicer.Absent an Event of Default hereunder, any Default or Event of Default under the Indenture, aServicer Termination Event, a Trigger Event or an Insurance Agreement Repurchase Event, the Insurershall not conduct such inspections or discussions more often than annually, unless otherwisemutually agreed by the Insurer and Triad. If, however, an Event of Default hereunder or under theIndenture, a Servicer Termination Event, a Trigger Event, a Spread Cap
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Event or an Insurance Agreement Repurchase Event has occurred and is continuing, the Insurermay increase the frequency of such audits to semi-annual, quarterly, or otherwise as it deemsappropriate. Without limiting the foregoing, upon the occurrence of a Trigger Event an Event ofDefault hereunder or under the Indenture, a Servicer Termination Event, a Spread Cap Event or anInsurance Agreement Repurchase Event, Triad shall make its principal officers available to discussthe Transaction with representatives of the Insurer within 15 days of receipt by Triad of such arequest from the Insurer.          (f) Closing Documents. It shall provide or cause to be provided to the Insurer anexecuted original copy of each Transaction Document executed by it in connection with the closingof the Transaction within thirty (30) days of the Closing Date.          (g) Field Examination by Independent Public Accountants. Upon reasonable priorwritten notice of the Insurer at any time, it shall permit independent public accountantsdesignated by the Insurer, from time to time to conduct a field examination(s), and in connectiontherewith shall permit such independent public accountants without limitation:     (i) to inspect its books and records as they may relate to the Transaction, theReceivables, the Other Conveyed Property, the Swap Agreement or any other assets in theTrust Estate, as the case may be, or its obligations under the Transaction Documents;     (ii) to discuss its affairs, finances and accounts with its principal executive officerand its principal financial officer; and     (iii) to discuss its affairs, finances and accounts with its independent accountants,provided that one of its officers shall have the right to be present during suchdiscussions.          Such inspections and discussions shall be conducted during normal business hours at Triad’scost and expense and shall not unreasonably disrupt the business of the Seller or the Servicer.Absent an Event of Default hereunder or under the Indenture, a Servicer Termination Event, aTrigger Event, a Spread Cap Event or an Insurance Agreement Repurchase Event, the Insurer shall notconduct such inspections and discussion more often than annually, unless otherwise mutually agreedby the Insurer and Triad. If, however, an Event of Default hereunder or under the Indenture, aServicer Termination Event, a Trigger Event, a Spread Cap Event or an Insurance AgreementRepurchase Event has occurred and is continuing, the Insurer may increase the frequency of suchaudits to semi-annual, quarterly, or otherwise as it deems appropriate.          (h) Financial Reporting. Triad shall provide or cause to be provided to the Insurerthe following:     (i) Annual and Periodic Financial Statements; Other Reporting. Copies of the“Accountant’s Report” required to be delivered pursuant to Section 4.11 of the Sale andServicing Agreement and such notices, certificates, reports and other information deliveredby Triad under the Transaction Documents, as and when required pursuant to such sections oragreements, and any other reporting or financial information required to be provided to theInsurer pursuant to the terms of the Transaction Documents, including, without limitation,financial projections, as and when required pursuant to such terms.
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Such statements will be provided no later than thirty (30) days following each fiscalquarter.     (ii) Compliance Certificate. Together with the “Accountant’s Report” requiredunder Section 4.11 of the Sale and Servicing Agreement, a compliance certificate signed byits principal financial officer stating that to the best of such person’s knowledge, (a)each Triad Party is in compliance with its obligations hereunder and under the otherTransaction Documents, and (b) no Event of Default hereunder or under the Indenture orServicer Termination Event exists and no event which but for the lapse of time or the givingof notice, or both, would constitute an Event of Default hereunder or under the Indenture orServicer Termination Event or Trigger Event exists, or if an Event of Default hereunder orunder the Indenture or Servicer Termination Event or other such event exists, stating thenature and status thereof (including all relevant financial and other information andamounts used in determining whether such Event of Default hereunder or under the Indentureor Servicer Termination Event or Trigger Event or other such event exists).     (iii) S.E.C. Filings. Promptly after the filing thereof; copies of allregistration statements and annual, quarterly or other regular reports which Triad or anysubsidiary files with the Securities and Exchange Commission.     (iv) Shareholders Statements and Reports. Promptly after the furnishingthereof to its shareholders, copies of all financial statements, reports and proxystatements so furnished.     (v) Amendments to Servicing Policy and Procedures. Within ten (10) BusinessDays after the date of any material change or amendment to its Servicing Policy andProcedures, a true and complete copy of such change or amendment, and if requested by theInsurer, a copy of the Servicing Policy and Procedures then in effect. No such change oramendment shall become effective if the Insurer determines, in its sole discretion, thatsuch change or amendment will have a Material Adverse Effect; provided that suchchange or amendment shall become effective and continue to be effective if the Insurer hasnot objected to such change or amendment within ten (10) Business Days of receipt of writtennotice thereof.     (vi) Servicing Policy and Procedures. Within ninety (90) days after the end ofeach of its fiscal years, a true and complete copy of its Servicing Policy and Proceduresthen in effect.          (i) Public Debt Ratings. Promptly, but in any event within five (5) Business Daysafter the date of any change in its public debt ratings, if any, a written certification of itspublic debt ratings after giving effect to such change.          (j) Compliance with Securities Laws. It shall comply with the Securities Act and theSecurities Exchange Act and the regulations thereunder so as to permit the completion of the offerand sale of the Class A Notes as contemplated by the Underwriting Agreement.
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          (k) Disclosure Document. Each Offering Document delivered with respect to the Class ANotes shall clearly disclose that the insurance provided by the FSA Policy (and the Swap Policy, tothe extent such Offering Document contains substantive disclosure regarding the Swap Policy) is notcovered by the property/casualty insurance security fund specified in Article 76 of the New YorkInsurance Law.          (l) Other Information. It shall provide to the Insurer such other information(including non-financial information) in respect of the Receivables, the Other Conveyed Property orthe other assets in the Trust Estate, as the case may be, the Transaction and the TransactionDocuments and such other financial or operating information in respect of itself, the Depositor,the Issuer or any of their Affiliates, in each case, which the Insurer may from time to timereasonably request.          Section 2.3 Negative Covenants of the Seller and Servicer. Triad hereby agrees thatduring the term of this Insurance Agreement, unless the Insurer shall otherwise expressly consentin writing:          (a) Impairment of Rights. It shall not take any action, or fail to take any action,if such action or failure to take action (x) is reasonably likely to have a Material Adverse Effector (y) is reasonably likely to interfere with the enforcement of any rights of the Insurer under orwith respect to any of the Transaction Documents. It shall give the Insurer written notice of anysuch action or failure to act promptly prior to the date of consummation of such action or failureto act. It shall furnish to the Insurer all information requested by it that is reasonablynecessary to determine compliance with this paragraph.          (b) Amendments, Etc. It shall not modify, amend or waive, or consent to anymodification or amendment of, any of the terms, provisions or conditions of the TransactionDocuments to which it is a party without the prior written consent of the Insurer thereto.          (c) Change in Processing Bank. Except as provided in a Blocked Account Agreement, itshall not permit a change in the Lockbox Account or any Processing Bank designated in a BlockedAccount Agreement without the prior written consent of the Insurer, which consent shall not beunreasonably withheld; provided, however, that without limiting the foregoing, itshall be deemed reasonable for the Insurer to withhold its consent if the long term seniorunsecured debt of any new Processing Bank is not rated at least “A” by S&P and “A2” by Moody’s.          Section 2.4 Representations and Warranties of the Insurer. The Insurer represents andwarrants to the Indenture Trustee (on behalf of the Holders), the Issuer and each other TransactionParty as follows:          (a) Organization and Licensing. The Insurer is a financial guaranty insurancecorporation duly organized, validly existing and in good standing under the laws of the State ofNew York.          (b) Corporate Power. The Insurer has the corporate power and authority to issue theFSA Policy and the Swap Policy and execute and deliver this Insurance Agreement and to perform allof its obligations hereunder and thereunder.
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          (c) Authorization; Approvals. All proceedings legally required for the issuance ofthe FSA Policy and the Swap Policy and the execution, delivery and performance of this InsuranceAgreement have been taken and all licenses, orders, consents or other authorizations or approvalsof the Insurer’s Board of Directors or stockholders or any governmental boards or bodies legallyrequired for the enforceability of the FSA Policy and the Swap Policy have been obtained or are notmaterial to the enforceability of the FSA Policy or the Swap Policy.          (d) Enforceability. Each of the FSA Policy and the Swap Policy, when issued, willconstitute, and this Insurance Agreement constitutes, legal, valid and binding obligations of theInsurer, enforceable in accordance with their respective terms, subject to insolvency,reorganization, moratorium, receivership and other similar laws affecting creditors’ rightsgenerally and by general principles of equity and subject to principles of public policy limitingthe right to enforce the indemnification provisions contained therein and herein, insofar as suchprovisions relate to indemnification for liabilities arising under federal securities laws.          (e) No Conflict. The execution by the Insurer of this Insurance Agreement will not,and the satisfaction of the terms hereof will not, conflict with or result in a breach of any ofthe terms, conditions or provisions of the Certificate of Incorporation or By-Laws of the Insurer,or any restriction contained in any contract, agreement or instrument to which the Insurer is aparty or by which it is bound or constitute a default under any of the foregoing which wouldmaterially and adversely affect its ability to perform its obligations under the FSA Policy, theSwap Policy or this Insurance Agreement.          (f) Accuracy of Information. The Insurer Information included in the OfferingDocument is limited and does not purport to provide the scope of disclosure required to be includedin a prospectus with respect to a registrant in connection with the offer and sale of securities ofsuch registrant registered under the Securities Act. Within such limited scope of disclosure,however, as of the date of the Offering Document, the Insurer Information does not contain anuntrue statement of a material fact or omit to state a material fact necessary to make thestatements therein, in light of the circumstances in which they were made, not misleading.Nothing in this Agreement shall be construed as a representation or warranty by the Insurerconcerning the rating of its insurance financial strength by Moody’s or its insurer financialstrength by S&P or any other rating assigned by a rating agency. The Rating Agencies, in assigningsuch ratings, take into account facts and assumptions not described in the Offering Document andthe facts and assumptions which are considered by the Rating Agencies, and the ratings issuedthereby, are subject to change over time.          Section 2.5 Representations and Warranties of the Depositor and the Issuer. Each ofthe Depositor and the Issuer hereby makes, to and for the benefit of the Insurer, each of therepresentations and warranties made by the Depositor or the Issuer, as the case may be, in theTransaction Documents to which it is a party, including Section 3.2 of the Purchase Agreement andSection 7.1 of the Sale and Servicing Agreement (in the case of the Depositor). Suchrepresentations and warranties are incorporated herein by this reference as if fully set forthherein, and may not be amended except by an amendment complying with the terms of Section 6.1hereof. In addition, the Issuer represents and warrants as of the Closing Date as follows:
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          (a) Accuracy of Information. The information or statements contained in theTransaction Documents furnished to the Insurer by it, as amended, supplemented or superseded on orprior to the date hereof, taken as a whole, does not, if restated at and as of the date hereof,contain any untrue statement of a material fact or omit to state a material fact necessary to makesuch information or statements not misleading in any material respect.          (b) Compliance with Securities Laws. The Depositor will comply with the SecuritiesAct and the Securities Exchange Act and the regulations thereunder so as to permit the completionof the offer and sale of the Class A Notes as contemplated by the Underwriting Agreement. Theoffer and sale of the Class A Notes by the Issuer will comply in all material respects with allrequirements of law, including all registration requirements of applicable securities laws.Without limiting the foregoing, the Offering Document (other than the Insurer Information and theUnderwriter Information) does not contain any untrue statement of a material fact and does not omitto state a material fact necessary to make the statements made therein, in light of thecircumstances under which they were made, not misleading. Neither the offer nor the sale of theClass A Notes by the Issuer has been or will be in violation of the Securities Act or any otherfederal or state securities laws. The Depositor will satisfy all applicable information reportingrequirements of the Securities Exchange Act arising out of the Transaction to which it or the TrustEstate are subject. The Indenture has been duly qualified under the Trust Indenture Act of 1939,as amended.          (c) Swap Agreement. On the Closing Date, the Issuer has entered into the SwapAgreement.          Section 2.6 Affirmative Covenants of the Depositor and the Issuer. Each of theDepositor and the Issuer hereby makes, to and for the benefit of the Insurer, all of the covenantsof the Depositor or the Issuer, as the case may be, set forth in the Transaction Documents to whichit is a party, including the covenants contained in Article IV of the Purchase Agreement andSection 7.2 of the Sale and Servicing Agreement (in the case of the Depositor) and in Article IIIof the Indenture (in the case of the Issuer). Such covenants are incorporated herein by thisreference, and may not be amended except by an amendment complying with the terms of Section 6.1hereof. In addition, each of the Depositor and the Issuer hereby agrees that during the term ofthis Insurance Agreement, unless the Insurer shall otherwise expressly consent in writing:          (a) Compliance with Agreements and Applicable Laws. It shall comply with the termsand conditions of and perform its obligations under the Transaction Documents to which it is aparty and shall comply with any law, rule or regulation applicable to it, except where the failureto comply with any such law, rule or regulation is not reasonably likely to have a Material AdverseEffect.          (b) Existence. It shall maintain its existence as a limited liability company or astatutory trust, as the case may be, under the laws of the State of Delaware and shall at all timescontinue to be duly formed and validly existing in good standing under the laws of the State ofDelaware and duly qualified and duly authorized thereunder and shall conduct its business inaccordance with the terms of its Charter Documents. The Issuer shall cause the Receivables
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Files to be located at such location as specified in Section 3.3(c) of the Sale and ServicingAgreement.          (c) Access to Records; Discussions with Officers and Accountants. Upon reasonableprior written notice of the Insurer, at any time, it shall permit the Insurer or its authorizedagents:     (i) to inspect its books and records;     (ii) to discuss its affairs, finances and accounts with its principal executive officerand its principal financial officer; and     (iii) to discuss its affairs, finances and accounts with its independent accountants,provided that one of its officers and an officer of Triad shall have the right to bepresent during such discussions.          Such inspections and discussions shall be conducted during normal business hours at the costand expense of Triad and shall not unreasonably disrupt the Depositor’s or Issuer’s business, asthe case may be. Absent an Event of Default hereunder or under the Indenture, a ServicerTermination Event, a Trigger Event, a Spread Cap Event or an Insurance Agreement Repurchase Event,the Insurer shall not conduct such inspections or discussions more often than annually, unlessotherwise mutually agreed by the Insurer and Triad. If, however, an Event of Default hereunder orunder the Indenture, a Servicer Termination Event, a Trigger Event, a Spread Cap Event or anInsurance Agreement Repurchase Event has occurred and is continuing, the Insurer may increase thefrequency of such audits to semi-annual, quarterly, or otherwise as it deems appropriate. Withoutlimiting the foregoing, upon the occurrence of an Event of Default hereunder or under theIndenture, a Servicer Termination Event, a Trigger Event, a Spread Cap Event or an InsuranceAgreement Repurchase Event, the Depositor and the Issuer shall make their respective principalofficers available to discuss the Transaction with representatives of the Insurer within 15 days ofreceipt by the Depositor and the Issuer, as the case may be, of such a request from the Insurer.          (d) Notice of Material Events. It shall be obligated promptly (and, with respect toitem (ii) below, in any event not later than two (2) Business Days, and with respect to all otheritems below, not later than five (5) Business Days) following receipt of actual knowledge by aResponsible Officer thereof to inform the Insurer in writing of the occurrence of any of thefollowing:     (i) the submission of any claim or the initiation of any legal process, litigation oradministrative or judicial investigation, or disciplinary proceeding by or against it thatwould be reasonably likely to have a Material Adverse Effect or the promulgation of anyproceeding or any proposed or final ruling in connection with any such litigation,investigation or proceeding that would be reasonably likely to have a Material AdverseEffect;     (ii) the occurrence of an Event of Default hereunder, a Default or Event of Defaultunder the Indenture, a Servicer Termination Event, a Trigger Event or a Spread Cap Event;
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     (iii) the commencement of any Insolvency Proceeding against any Transaction Party; and     (iv) the receipt of written notice that (a) any license, permit, charter, registrationor approval necessary for the conduct of its business is to be, or may be, suspended orrevoked and such suspension or revocation would be reasonably likely to have a MaterialAdverse Effect or (b) it is to cease and desist any practice, procedure or policy employedby it in the conduct of its business, and such cessation would be reasonably likely to havea Material Adverse Effect.          (e) It shall give the Insurer not less than thirty (30) days’ prior written notice of anyproposed change in its name, principal place of business or jurisdiction of organization.          (f) Field Examination by Independent Public Accountants. Upon reasonable priorwritten notice of the Insurer at any time, it shall permit independent public accountantsdesignated by the Insurer, from time to time to conduct a field examination(s), and in connectiontherewith shall permit such independent public accountants, without limitation:     (i) to inspect its books and records;     (ii) to discuss its affairs, finances and accounts with its principal executive officerand its principal financial officer; and     (iii) to discuss its affairs, finances and accounts with its independent accountants;provided that one of its officers and an officer of the Depositor or the Issuer, asthe case may be, and one officer of Triad (if Triad is then the Servicer) shall have theright to be present during such discussions.          Such inspections and discussions shall be conducted during normal business hours at the costand expense of Triad and shall not unreasonably disrupt the business of the Depositor or theIssuer, as the case may be. Absent an Event of Default hereunder or under the Indenture, aServicer Termination Event, a Trigger Event, a Spread Cap Event or an Insurance AgreementRepurchase Event, the Insurer shall not conduct field examinations more often than annually, unlessotherwise mutually agreed by the Insurer and Triad. If, however, an Event of Default hereunder orunder the Indenture, a Servicer Termination Event, a Trigger Event, a Spread Cap Event or anInsurance Agreement Repurchase Event has occurred and is continuing, the Insurer may increase thefrequency of such audits to semi-annual, quarterly, or otherwise as it deems appropriate.          (g) Maintenance of Licenses. It shall maintain all licenses, permits, charters andregistrations, except for licenses, permits, charters and registrations the failure of which tomaintain is not reasonably likely to have a Material Adverse Effect.          (h) Financial Reporting. It shall provide or cause to be provided to the Insurer, assoon as practicable and in any event within 90 days after the end of each of its fiscal years, anannual balance sheet as at the end of such fiscal year and the notes thereto, and the relatedstatements of income and cash flows and the respective notes thereto for such fiscal year,certified by its principal financial officer.
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          (i) Financial Statements. Its financial statements and books and records will reflectits separate existence and will present fairly its financial position.          (j) Other Information. It shall provide to the Insurer such other information(including non-financial information) in respect of the Receivables, the Other Conveyed Property orthe other assets in the Trust Estate, as the case may be, the Transaction and the TransactionDocuments and such other financial or operating information in respect of itself and theReceivables which the Insurer may from time to time reasonably request.          (k) Operation. It shall:     (i) manage its day-to-day business without the involvement of any other TransactionParty except as required or permitted by the Transaction Documents or in connection withcertain administrative services provided to the Depositor by the Seller;     (ii) act solely in its own name in the conduct of its business, including businesscorrespondence and other communications, and shall conduct its business so as not to misleadothers as to the identity of the entity with which they are concerned;     (iii) ensure that, to the extent that it shares the same officers or other employees asany of its Affiliates, the salaries of and the expenses related to providing benefits tosuch officers and other employees shall be fairly allocated among such entities, and eachsuch entity shall bear its fair share of the salary and benefit costs associated with allsuch common officers and employees;     (iv) ensure that, to the extent that it jointly contracts with any of its Affiliates todo business with vendors or service providers or to share overhead expenses, the costsincurred in doing so shall be allocated fairly among such entities, and each such entityshall bear its fair share of such costs. To the extent that it contracts or does businesswith vendors or service providers when the goods and services provided are partially for thebenefit of any other Person, the costs incurred in so doing shall be fairly allocated to oramong such entities for whose benefit the goods and services are provided, and each suchentity shall bear its fair share of such costs. All material transactions between the otherTransaction Parties and its Affiliates shall only be on an arm’s-length basis;     (v) require that all of its full-time employees identify themselves as such and not asemployees of Triad or any other Triad Party (including, without limitation, by means ofproviding appropriate employees with business or identification cards identifying suchemployees as its employees); and     (vi) compensate all employees, consultants and agents directly, from its bank accounts,for services provided to it by such employees, consultants and agents, and, to the extentany of its employees, consultants or agents is also an employee, consultant or agent ofTriad (or any Affiliate thereof), allocate the compensation of such employee, consultant oragent between itself and Triad (or any Affiliate thereof) on a basis which reflects theservices rendered to itself and Triad (or such Affiliate thereof).          (l) Special Purpose Entity. In addition, the Depositor shall:
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     (i) ensure that its capital is adequate for the business and undertakings of theDepositor;     (ii) other than activities in connection with the Transaction, be restricted fromundertaking any activities other than purchasing automobile loans receivables andtransferring the proceeds to other special-purpose entities in connection with the issuanceof other asset-backed securities;     (iii) have at least one director, manager or member that is a person who is not, andwill not be, a director, officer, employee or holder of any equity securities of Triad orany of its affiliates or subsidiaries;     (iv) not commingle its funds and assets with the funds of any other person; and     (v) maintain (A) correct and complete minute books and records of account, and (B)minutes of the meetings and other proceedings of its board of managers, as provided in itslimited liability company agreement.          Section 2.7 Negative Covenants of the Depositor and the Issuer. Each of the Depositorand the Issuer hereby agrees that during the term of this Insurance Agreement, unless the Insurershall otherwise expressly consent in writing:          (a) Impairment of Rights. It shall not take any action, or fail to take any action,if such action or failure to take action (x) is reasonably likely to have a Material Adverse Effector (y) is reasonably likely to interfere with the enforcement of any rights of the Insurer under orwith respect to any of the Transaction Documents. It shall give the Insurer written notice of anysuch action or failure to act promptly prior to the date of consummation of such action or failureto act. It shall furnish to the Insurer all information requested by the Insurer that isreasonably necessary to determine compliance with this paragraph.          (b) Amendments, Etc. It shall not modify, amend or waive, or consent to anymodification, amendment or waiver of, any of the terms, provisions or conditions of the TransactionDocuments to which it is a party, or any of its Charter Documents without the prior written consentof the Insurer.          (c) Limitation on Mergers, Etc. It shall not consolidate with or merge with or intoany Person or liquidate or dissolve, or transfer all or substantially all of its assets to anyPerson except, in the case of the Issuer, by way of the grant of a lien to the Indenture Trusteepursuant to the Transaction Documents, or, except as expressly permitted by the TransactionDocuments, transfer any of its assets to any Person.          (d) Certain Other Limitations. It shall     (i) not be named as an insured on the insurance policy held by another Triad Party orcovering the property of any other Triad Party, except to the extent it shall bear itsallocable share of the expense thereof, or enter into an agreement with the holder of suchpolicy whereby in the event of a loss in connection with property not owned by the Issuer orthe Depositor, as the case may be, proceeds are paid to it.
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     (ii) be restricted from undertaking activities in connection with the issuance of theClass A Notes other than activities as set forth in its Charter Documents;     (iii) not be involved in the day-to-day management of any of the other Triad Partiesexcept as required by or permitted by the Transaction Documents or in connection withcertain administrative services provided to the Depositor by the Seller;     (iv) not incur, assume or guarantee any indebtedness except for such indebtedness asmay be incurred by the Issuer in connection with the issuance of the Class A Notes, or asotherwise expressly permitted by the Insurer or the Transaction Documents;     (v) not commingle its deposit accounts (and funds therein) or other assets with thedeposit accounts (and funds therein) or other assets of any other entity;     (vi) not act as an agent of any other Triad Party; and     (vii) not form, or cause to be formed, any subsidiaries; provided that the Depositormay form other special purpose entities in connection with the issuance of otherasset-backed securities to the extent the Insurer acts as an insurer in connection with suchtransactions.          (e) The Swap Agreement. The Issuer shall not take any action that would permit, orfail to take any action if a failure to take such action would permit, termination of the SwapAgreement by the Swap Provider, and shall not designate an “Early Termination Date” (as defined inthe Swap Agreement) to terminate the Swap Agreement, except with the prior written consent of theInsurer unless the Insurer has failed to make payments under the Swap Policy, or if termination ofthe Swap Agreement would be permitted pursuant to Section 5(b)(i) and Part 5(b)(v) of the SwapAgreement. The Issuer shall send to the Insurer a copy of each communication it sends under theSwap Agreement contemporaneously with its delivery thereof to the Swap Provider and shall notdeliver notice designating an “Early Termination Date” as a result of an “Event of Default” or“Termination Event” (as such terms are defined in the Swap Agreement) to any Swap Provider pursuantto the Swap Agreement without the prior written consent of the Insurer, except as permitted by theimmediately preceding sentence.**ARTICLE III****THE POLICIES; REIMBURSEMENT**          Section 3.1 Issuance of the Policies. The Insurer agrees to issue the FSA Policy andthe Swap Policy on the Closing Date subject to satisfaction of the conditions precedent set forthbelow:          (a) Payment of Expenses. The applicable parties shall have been paid their relatedfees and expenses payable in accordance with Sections 3.2(a) and (b);
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          (b) Receipt of Certain Documents. The Insurer shall have received a complete copy ofthe Servicing Policy and Procedures then in effect certified by the principal financial officer ofTriad;          (c) Representations and Warranties; Certificate. The representations and warrantiesof the Triad Parties set forth or incorporated by reference in this Insurance Agreement and therepresentations and warranties set forth by the Indenture Trustee in the Indenture are true andcorrect on and as of the Closing Date as if made on the Closing Date, and the Insurer has receiveda certificate of appropriate officers of the related Triad Party to that effect;          (d) No Litigation, Etc. No suit, action or other proceeding, investigation orinjunction, or final judgment relating thereto, is pending or, to any Transaction Party’sknowledge, threatened before any court, governmental or administrative agency or arbitrator inwhich it is sought to restrain or prohibit or to obtain damages or other relief in connection withany of the Transaction Documents or the consummation of the Transaction;          (e) Legality. No statute, rule, regulation or order has been enacted, entered ordeemed applicable by any government or governmental or administrative agency or court that wouldmake the Transaction illegal or otherwise prevent the consummation thereof,          (f) No Event of Default. No Event of Default hereunder, Default or Event of Defaultunder the Indenture, Trigger Event, Servicer Termination Event, Spread Cap Event or InsuranceAgreement Repurchase Event has occurred;          (g) Satisfaction of Conditions of the Underwriting Agreement. All conditions in theUnderwriting Agreement relating to the Underwriter’s obligation to offer and sell the Class A Noteshave been fulfilled to the satisfaction of the Insurer, with such satisfaction deemed to haveoccurred upon issuance of the FSA Policy and the Swap Policy. The Insurer has received copies ofeach of the documents, and shall be entitled to rely on each of the documents, required to bedelivered to the Underwriter pursuant to the Underwriting Agreement;          (h) Issuance of Ratings. The Insurer has received confirmation that the Class A-1Notes will be rated in the highest short-term rating category by at least two nationally recognizedstatistical rating agencies, that the Class A-2a Notes, the Class A-2b Notes, the Class A-3a Notes,the Class A-3b Notes, the Class A-4a Notes and the Class A-4b Notes will be rated in the highestlong-term rating category by at least two nationally recognized statistical rating agencies andthat, without the benefit of the FSA Policy, the Class A Notes will have a shadow rating of atleast “BBB” from S&P and “Baa3” from Moody’s;          (i) Approvals, Etc. The Insurer has received true and correct copies of allapprovals, licenses and consents, if any, required in connection with the Transaction;          (j) Fee Letter. The Insurer, the Indenture Trustee and the Issuer have executed theFee Letter;          (k) Certified Copies. The Insurer has received a fully executed copy of eachTransaction Document;
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          (l) Opinions. The Insurer has received opinions of counsel to the Issuer and Triadconcerning the perfection of the Indenture Trustee’s security interest in the Trust Estate andother matters under the laws of the United States, and has received copies of any opinionsdelivered to the Rating Agencies, the Noteholders and the Indenture Trustee, in each case addressedto, and in form and substance satisfactory to, the Insurer;          (m) Satisfactory Documentation. The Insurer and its counsel have determined that alldocuments, the Class A Notes and opinions to be delivered in connection with the Class A Notesconform to the terms of the Indenture, the Offering Document, the Underwriting Agreement, the Saleand Servicing Agreement, the Purchase Agreement and this Insurance Agreement; and          (n) Additional Items. The Insurer has received such other documents, instruments,approvals or opinions in form and substance reasonably satisfactory to the Insurer as arereasonably requested by the Insurer, including evidence reasonably satisfactory to the Insurer thatthe conditions precedent, if any, in the Transaction Documents have been satisfied.          Section 3.2 Payment of Fees and Premium.          (a) Legal and Accounting Fees. Triad shall pay or cause to be paid on the ClosingDate all reasonable legal fees, auditors’ fees and disbursements incurred by the Insurer inconnection with the issuance of the FSA Policy, the Swap Policy and the Transaction Documentsthrough the Closing Date. Additional fees of the Insurer’s counsel or auditors payable inconnection with the Transaction Documents incurred after the Closing Date shall be paid by Triad asprovided in Section 3.3 below.          (b) Rating Agency Fees. Triad shall promptly pay the initial fees of the RatingAgencies with respect to the Class A Notes and the transactions contemplated hereby followingreceipt of a statement with respect thereto, and shall pay or cause to be paid any subsequent feesof the Rating Agencies with respect to, and directly allocable to, the Class A Notes. The Insurershall not be responsible for any fees or expenses of the Rating Agencies. The fees for any otherrating agency shall be paid by the party requesting such other rating agency’s rating.          (c) Premium. In consideration of the issuance by the Insurer of the FSA Policy andthe Swap Policy, the Issuer shall pay or cause to be paid the Premiums to the Insurer as set forthin the Fee Letter in accordance with the Indenture and this Insurance Agreement and from the fundsspecified by Section 5.7 of the Sale and Servicing Agreement, commencing on the day the FSA Policyis issued, until the FSA Policy and the Swap Policy have each been terminated in accordance withtheir respective terms. The Premium paid pursuant to the Indenture and the Sale and ServicingAgreement shall be nonrefundable without regard to whether any notice required in the FSA Policy orthe Swap Policy is delivered to the Insurer requiring the Insurer to make any payment under the FSAPolicy or the Swap Policy or any other circumstances relating to the Class A Notes or provisionbeing made for payment of the Class A Notes prior to maturity.
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          Section 3.3 Reimbursement Obligation. (a) The Issuer agrees absolutely andunconditionally to reimburse the Insurer for any amounts paid by the Insurer under the FSA Policyand the Swap Policy, plus the amount of any other due and payable and unpaid Reimbursement Amounts,which reimbursement shall be due and payable, on the date that any such amount is paid thereunderin an amount equal to the amounts so paid and all amounts previously paid that remain unreimbursed,together (without duplication) with interest on any and all amounts remaining unreimbursed (to theextent permitted by law, if in respect of any unreimbursed amounts representing interest) from thedate such amounts became due until paid in full (after as well as before judgment), at a rate ofinterest equal to the Late Payment Rate.          (b) Each of the Issuer and Triad agrees, jointly and severally, to pay to the Insurer,promptly, but in no event later than 30 days after demand thereof, as follows: any and all charges,fees, costs and expenses, including reasonable attorneys’ and accountants’ fees and expenses, thatthe Insurer may pay or incur in connection with the Transaction Documents, including (i) theenforcement, defense or preservation of any rights in respect of any of the Transaction Documents,defending, monitoring or participating in any litigation or proceeding (including any insolvencyproceeding in respect of any Triad Party or any Affiliate thereof) relating to any of theTransaction Documents, any party to any of the Transaction Documents (in its capacity as such aparty) or the Transaction, the costs and fees of inspections by the Insurer or audits or fieldexaminations by accountants and the ongoing administration of the Transaction pursuant to theTransaction Documents, (ii) the prepayment of any borrowings made or implementation or cancellationof any financial contracts for limiting interest rate risk (including, without limitation, anyinterest rate swaps and hedges) entered into in connection with, or (following an Event of Default)in anticipation of, funding payments under the FSA Policy, or (iii) any amendment, waiver or othersimilar action with respect to, or related to, any Transaction Document, whether or not executed orcompleted.          (c) Each of the Issuer and Triad agrees, jointly and severally, to pay to the party to whomsuch amounts are owed on demand interest at the Late Payment Rate on any and all amounts describedin Sections 3.3(b) and 3.4 after the date such amounts become due and payable until payment thereofin full.          (d) The Insurer acknowledges that any amounts payable by the Issuer pursuant to Sections3.3(a), 3.3(b), 3.3(c) or 3.4(b) herein, are payable solely from amounts that are available to makesuch payments pursuant to clause FOURTH of Section 5.6(a) of the Indenture and Sections5.7(a)(vii), (viii) or (xi) of the Sale and Servicing Agreement, as applicable.          Section 3.4 Indemnification. (a) In addition to any and all of the Insurer’s rightsof reimbursement, indemnification or subrogation, and to any other rights of the Insurer pursuanthereto or under law or in equity, each of Triad and the Depositor agrees, jointly and severally, topay, and to protect, indemnify and save harmless, the Insurer and its officers, directors,shareholders, employees, agents and each Person, if any, who controls the Insurer within themeaning of either Section 15 of the Securities Act or Section 20 of the Securities Exchange Actfrom and against, any and all claims, losses, liabilities (including penalties), actions, suits,judgments, demands, damages, costs or expenses (including reasonable fees and expenses ofattorneys, consultants and auditors and reasonable costs of investigations) of any
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nature arising out of or relating to the transactions contemplated by the TransactionDocuments by reason of:     (i) any statement, omission or action (other than of the Insurer with respect to theInsurer Information, or of the Underwriter with respect to the Underwriter Information) inconnection with the offering, issuance, sale or delivery of any of the Class A Notes;     (ii) the negligence, bad faith, willful misconduct, misfeasance, malfeasance or theftcommitted by any director, officer, employee or agent of any Triad Party in connection withthe Transaction;     (iii) the violation by any Triad Party of any domestic or foreign law, rule orregulation, or any judgment, order or decree applicable to them;     (iv) the breach by any Triad Party of any representation, warranty or covenant underany of the Transaction Documents (without giving effect to any materiality qualifier orlimitation therein);     (v) the occurrence, in respect of Triad’s duties as the Servicer, under any of theTransaction Documents of any Servicer Termination Event or any event which, with the givingof notice or the lapse of time or both, would constitute any Servicer Termination Event; or     (vi) any untrue statement or alleged untrue statement of a material fact contained inthe Offering Document or any omission or alleged omission to state therein a material factrequired to be stated therein or necessary to make the statements therein, in light of thecircumstances under which they were made, not misleading, except insofar as suchclaims, losses, liabilities (including penalties), actions, suits, judgments, demands,damages, costs or expenses (including reasonable fees and expenses of attorneys, consultantsand auditors and reasonable costs of investigations) arise out of or are based upon anyuntrue statement or omission in the Offering Document in the information with respect to (x)the Insurer Information and (y) the Underwriter Information.          (b) In addition to any and all of the Insurer’s rights of reimbursement, indemnification orsubrogation, and to any other rights of the Insurer pursuant hereto or under law or in equity, theIssuer agrees to pay, and to protect, indemnify and save harmless, the Insurer and its officers,directors, shareholders, employees, agents and each Person, if any, who controls the Insurer withinthe meaning of either Section 15 of the Securities Act or Section 20 of the Securities Exchange Actfrom and against, any and all claims, losses, liabilities (including penalties), actions, suits,judgments, demands, damages, costs or expenses (including reasonable fees and expenses ofattorneys, consultants and auditors and reasonable costs of investigations) of any nature arisingout of or relating to the transactions contemplated by the Transaction Documents, including byreason of:     (i) any statement, omission or action (other than of the Insurer with respect to theInsurer Information, or of the Underwriter with respect to the Underwriter
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Information) in connection with the offering, issuance, sale or delivery of any of theClass A Notes;     (ii) the negligence, bad faith, willful misconduct, misfeasance, malfeasance or theftcommitted by any director, officer, employee or agent of any Transaction Party in connectionwith the Transaction;     (iii) the violation by any Transaction Party of any domestic or foreign law, rule orregulation, or any judgment, order or decree applicable to them;     (iv) the breach by any Transaction Party of any representation, warranty or covenantunder any of the Transaction Documents (without giving effect to any materiality qualifieror limitation therein); or     (v) any untrue statement or alleged untrue statement of a material fact contained inthe Offering Document or any omission or alleged omission to state therein a material factrequired to be stated therein or necessary to make the statements therein, in light of thecircumstances under which they were made, not misleading, except insofar as such claims,losses, liabilities (including penalties), actions, suits, judgments, demands, damages,costs or expenses (including reasonable fees and expenses of attorneys, consultants andauditors and reasonable costs of investigations) arise out of or are based upon any untruestatement or omission in the Offering Document in the information with respect to (x) theInsurer Information and (y) the Underwriter Information.          (c) The Insurer agrees to pay, and to protect, indemnify and save harmless each of Triad, theDepositor and the Issuer, and their respective officers, directors, shareholders, employees, agentsand each Person, if any, who controls Triad, the Depositor and the Issuer, within the meaning ofeither Section 15 of the Securities Act or Section 20 of the Securities Exchange Act from andagainst, any and all claims, losses, liabilities (including penalties), actions, suits, judgments,demands, damages, costs or expenses (including reasonable fees and expenses of attorneys,consultants and auditors and reasonable costs of investigations) of any nature arising out of or byreason of any untrue statement or alleged untrue statement of a material fact contained in theInsurer Information in any Offering Document or any omission or alleged omission to state therein amaterial fact required to be stated therein or necessary to make the statements therein, in lightof the circumstances under which they were made, not misleading.          (d) If any action or proceeding (including any governmental investigation) shall be brought orasserted against any Person (each, an “Indemnified Party”) in respect of which theindemnity provided in Section 3.4(a), (b) or (c) may be sought from Triad, the Depositor, theIssuer or the Insurer, as the case may be (the “Indemnifying Party”), each such IndemnifiedParty shall promptly notify the Indemnifying Party in writing, and the Indemnifying Party shallassume the defense thereof, including the employment of counsel reasonably satisfactory to theIndemnified Party and the payment of all expenses and legal fees; provided that failure tonotify the Indemnifying Party shall not relieve it from any liability it may have to suchIndemnified Party except to the extent that it shall be actually prejudiced thereby. The
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Indemnified Party shall have the right to employ separate counsel in any such action and toparticipate in the defense thereof at the expense of the Indemnified Party and may assume thedefense of any such action or claim in reasonable cooperation with, and with the reasonablecooperation of, the Indemnifying Party; provided, however, that the fees andexpenses of separate counsel to the Indemnified Party in any such proceeding shall be at theexpense of the Indemnifying Party if (i) the Indemnifying Party has agreed to pay such fees andexpenses, (ii) the Indemnifying Party shall have failed to assume the defense of such action orproceeding or employ counsel reasonably satisfactory to the Indemnified Party in any such action orproceeding within a reasonable time after the commencement of such action or (iii) the namedparties to any such action or proceeding (including any impleaded parties) include both theIndemnified Party and the Indemnifying Party, and the Indemnified Party shall have been advised bycounsel that there may be one or more legal defenses available to it which are different from oradditional to those available to the Indemnifying Party (in which case, if the Indemnified Partynotifies the Indemnifying Party in writing that it elects to employ separate counsel at the expenseof the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense ofsuch action or proceeding on behalf of such Indemnified Party, it being understood, however, thatthe Indemnifying Party shall not, in connection with any one such action or proceeding or separatebut substantially similar or related actions or proceedings in the same jurisdiction arising out ofthe same general allegations or circumstances, be liable for the reasonable fees and expenses ofmore than one separate firm of attorneys at any time for the Indemnified Parties, which firm shallbe designated in writing by the Indemnified Party). The Indemnifying Party shall not be liable forany settlement of any such action or proceeding effected without its written consent to the extentthat any such settlement shall be prejudicial to the Indemnifying Party, which consent shall not beunreasonably withheld or delayed, but, if settled with its written consent, or if there is a finaljudgment for the plaintiff in any such action or proceeding with respect to which the IndemnifyingParty shall have received notice in accordance with this subsection (d), the Indemnifying Partyagrees to indemnify and hold the Indemnified Parties harmless from and against any loss orliability by reason of such settlement or judgment.          (e) To provide for just and equitable contribution if the indemnification provided by theIndemnifying Party is determined to be unavailable or insufficient to hold harmless any IndemnifiedParty (other than due to application of this Section), each Indemnifying Party shall contribute tothe losses incurred by the Indemnified Party on the basis of the relative fault of the IndemnifyingParty, on the one hand, and the Indemnified Party, on the other hand. The relative fault of eachIndemnifying Party, on the one hand, and each Indemnified Party, on the other, shall be determinedby reference to, among other things, whether the breach or alleged breach is within the control ofthe Indemnifying Party or the Indemnified Party, and the parties relative intent, knowledge, accessto information and opportunity to correct or prevent such breach. No Person guilty of fraudulentmisrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled tocontribution from any person who was not guilty of such fraudulent misrepresentation.          Section 3.5 Payment Procedure. In the event of any payment by the Insurer for whichreimbursement is sought under Section 3.3, the Issuer, Triad and the Indenture Trustee agree toaccept the voucher or other evidence of payment as primafacie evidence of thepropriety thereof and the liability, if any, described in Section 3.3 therefor to the Insurer;
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provided, that with respect to claims for reimbursement of amounts other than amountspaid by the Insurer under the FSA Policy or the Swap Policy and any interest thereon made to Triadunder Section 3.3(b), the Insurer will also provide appropriate supporting documents to Triad forsuch claims. All payments to be made to the Insurer under this Insurance Agreement shall be madeto the Insurer (to such account as shall be specified by the Insurer in writing) by no later than3:00 p.m. (New York time) on the date when due in lawful currency of the United States of Americain immediately available funds or as the Insurer shall otherwise direct by written notice to theparty making such payment. In the event that the date of any payment to the Insurer or theexpiration of any time period hereunder occurs on a day that is not a Business Day, then suchpayment or expiration of time period shall be made or occur on the next succeeding Business Daywith the same force and effect as if such payment was made or time period expired on the scheduleddate of payment or expiration date.          Section 3.6 Subrogation. The parties hereto acknowledge that, to the extent of anypayment made by the Insurer pursuant to the FSA Policy or the Swap Policy, the Insurer shall befully subrogated to the extent of such payment and any interest due thereon, to the rights of theNoteholders to any moneys paid or payable in respect of the Class A Notes under the TransactionDocuments or otherwise subject to applicable law. The parties hereto agree to such subrogation andfurther agree to execute such instruments and to take such actions as, in the sole and reasonablejudgment of the Insurer, are necessary to evidence such subrogation and to perfect the rights ofthe Insurer to receive any such moneys paid or payable in respect of the Class A Notes or the SwapAgreement, under the Transaction Documents or otherwise.**ARTICLE IV****FURTHER AGREEMENTS**          Section 4.1 Effective Date; Term of the Insurance Agreement. This Insurance Agreementshall take effect on the Closing Date and shall remain in effect until the later of (a) such timeas the Insurer is no longer subject to a claim under the FSA Policy and the Swap Policy and eachsuch policy has been surrendered to the Insurer for cancellation and (b) such time as all amountspayable to the Insurer by the Triad Parties hereunder or under the Transaction Documents and theClass A Notes have been irrevocably paid and redeemed in full and such Class A Notes have beencancelled; provided, however, that the provisions of Sections 3.2, 3.3 and 3.4hereof shall survive any termination of this Insurance Agreement.          Section 4.2 Further Assurances and Corrective Instruments. (a) Unless an InsurerEvent of Default has occurred and is continuing, or except as the Indenture otherwise provides,none of the Indenture Trustee and none of the other Transaction Parties shall grant any waiver ofrights under any of the Transaction Documents to which any of them is a party without the priorwritten consent of the Insurer and any such waiver without prior written consent of the Insurershall be null and void and of no force or effect.          (b) Each of the parties hereto agrees that it will, from time to time, execute, acknowledgeand deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and suchfurther instruments and agreements and take such further actions as the Insurer may reasonablyrequest and as may be required in the Insurer’s reasonable judgment
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to effectuate the intent and purpose of this Insurance Agreement and the other TransactionDocuments. Without limiting the foregoing, to the extent such authorization shall be required bylaw, each Triad Party hereby authorizes the Indenture Trustee and the Insurer, at the expense ofthe Issuer, in the event the Issuer has failed to do so upon request (provided that no suchrequest shall be required if there exists any Insolvency Proceeding), to execute and file financingstatements covering the assets covered by any purchase or transfer pursuant to the TransactionDocuments or owned by the Issuer in such jurisdictions as may be required to confirm title theretoand perfect and maintain the lien thereon. In addition, each of the parties hereto agrees tocooperate with the Rating Agencies in connection with any review of the Transaction conductedduring normal business hours and in a manner that does not unreasonably disrupt the business of theTransaction Parties, that may be undertaken by the Rating Agencies after the date hereof upon priorwritten notice.          (c) None of the Transaction Parties shall cause or permit the Issuer to issue any notes orother evidences of indebtedness, or to otherwise incur any indebtedness, other than theindebtedness represented by the Class A Notes or other indebtedness expressly permitted under theTransaction Documents.          (d) Each Transaction Party shall concurrently provide the Insurer, as and when deliverythereof is required to be made pursuant to the Transaction Documents, with copies of all reports,notices, requests and demands delivered or required to be delivered by it pursuant to theTransaction Documents.          Section 4.3 Obligations Absolute. (a) The obligations of the Transaction Partieshereunder shall be absolute and unconditional and shall be paid or performed strictly in accordancewith this Insurance Agreement and the other Transaction Documents under all circumstancesirrespective of:     (i) any lack of validity or enforceability of, or any amendment or other modificationsof, or waiver with respect to, any of the Transaction Documents or the Class A Notes;     (ii) any exchange or release of any other obligations hereunder;     (iii) the existence of any claim, setoff, defense, reduction, abatement or other rightthat a Transaction Party which is a party to any of the Transaction Documents may have atany time against the Insurer or any other Person;     (iv) any document presented in connection with the FSA Policy or the Swap Policyproving to be forged, fraudulent, invalid or insufficient in any respect or any statementtherein being untrue or inaccurate in any respect;     (v) any payment by the Insurer under the FSA Policy or the Swap Policy againstpresentation of a certificate or other document that does not strictly comply with the termsof the FSA Policy or the Swap Policy, as applicable;     (vi) any failure of the Transaction Parties to receive the proceeds from the sale ofthe Class A Notes;
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     (vii) any Insolvency Event with respect to any Transaction Party; and     (viii) any other circumstances, other than payment in full, that might otherwiseconstitute a defense available to, or discharge of, such party in respect of any TransactionDocument.          (b) The Transaction Parties and any and all others who are now or may become liable for all orany part of the obligations of the Transaction Parties under this Insurance Agreement agree to bebound by this Insurance Agreement and (i) to the extent permitted by law, waive and renounce anyand all redemption and exemption rights and the benefit of all valuation and appraisementprivileges against the indebtedness and obligations evidenced by any Transaction Document or by anyextension or renewal thereof; (ii) waive presentment and demand for payment, notices of nonpaymentand of dishonor, protest of dishonor and notice of protest; (iii) waive all notices in connectionwith 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, all defenses, other thanpayment, and all rights of setoff or recoupment arising out of any breach under any of theTransaction Documents, by any party thereto or any beneficiary thereof, or out of any obligation atany time owing to any of the Transaction Parties; (v) agree that their liabilities hereunder shallbe unconditional and without regard to any setoff, counterclaim or the liability of any otherPersons for the payment hereof; (vi) agree that any consent, waiver or forbearance hereunder withrespect to an event shall operate only for such event and not for any subsequent event; (vii)consent to any and all extensions of time that may be granted by the Insurer with respect to anypayment hereunder or other provisions hereof and to the release of any security at any time givenfor any payment hereunder, or any part thereof, with or without substitution, and to the release ofany Person or entity liable for any such payment; and (viii) consent to the addition of any and allother makers, endorsers, guarantors and other obligors for any payment hereunder, and to theacceptance of any and all other security for any payment hereunder, and agree that the addition ofany such obligors or security shall not affect the liability of the parties hereto for any paymenthereunder.          (c) Nothing herein shall be construed as prohibiting any party hereto from pursuing any rightsor remedies it may have against any Person in a separate legal proceeding.          Section 4.4 Assignments; Reinsurance; Third-Party Rights. (a) This InsuranceAgreement shall be a continuing obligation of the parties hereto and shall be binding upon andinure to the benefit of the parties hereto and their respective successors and permitted assigns.None of the Transaction Parties may assign its rights under this Insurance Agreement, or delegateany of its duties hereunder, without the prior written consent of the Insurer. Any assignmentsmade in violation of this Insurance Agreement shall be null and void.          (b) The Insurer shall have the right to give participations in its rights under this InsuranceAgreement and to enter into contracts of reinsurance with respect to the FSA Policy and the SwapPolicy upon such terms and conditions as the Insurer may in its discretion determine;provided, however, that no such participation or reinsurance agreement orarrangement shall relieve the Insurer of any of its obligations hereunder or under the FSA Policyor the Swap Policy, and provided, further, that any reinsurer or participant willnot have any
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 rights against the Transaction Parties or the Holders and that none of the Transaction Partiesor the Holders shall have any obligation to have any communication or relationship with anyreinsurer or participant in order to enforce the obligations of the Insurer hereunder and under theFSA Policy or the Swap Policy.          (c) The Insurer shall be entitled to assign or pledge to any bank, other lender or reinsurerproviding liquidity or credit with respect to the Transaction or the obligations of the Insurer inconnection therewith, any rights of the Insurer under the Transaction Documents or with respect toany real or personal property or other interests pledged to the Insurer or in which the Insurer hasa security interest, in connection with the Transaction, subject in each case to the liens grantedpursuant to the Transaction Documents; provided that no such bank or other lender shallthereby obtain any direct right against Transaction Parties or the Holders, and further,provided; that no such assignment or pledge shall give any assignee the right to exerciseany discretionary authority that the Transaction Documents provide shall be exercisable by theInsurer or relieve the Insurer of any of its obligations hereunder or under the FSA Policy or theSwap Policy.          (d) Except as provided herein with respect to participants and reinsurers, nothing in thisInsurance Agreement shall confer any right, remedy or claim, express or implied, upon any Personnot a party hereto, including any Holders, other than the rights of the Insurer against theTransaction Parties and all the terms, covenants, conditions, promises and agreements containedherein shall be for the sole and exclusive benefit of the parties hereto and their successors andpermitted assigns. Neither the Indenture Trustee nor any Holders shall have any right to paymentfrom any Premiums paid or payable hereunder or under the Indenture or from any amounts paid by theIssuer or Triad pursuant to Sections 3.2, 3.3 or 3.4 hereof.          Section 4.5 Liability of the Insurer. Neither the Insurer nor any of its officers,directors or employees shall be liable or responsible for: (a) the use that may be made of the FSAPolicy or the Swap Policy by the Indenture Trustee or any other party or for any acts or omissionsof the Indenture Trustee or any other party in connection therewith; or (b) the validity,sufficiency, accuracy or genuineness of documents delivered to the Insurer in connection with anyclaim under the FSA Policy or the Swap Policy, or of any signatures thereon, even if such documentsor signatures should in fact prove to be in any or all respects invalid, insufficient, fraudulentor forged (unless the Insurer shall have actual knowledge thereof). In furtherance and not inlimitation of the foregoing, the Insurer may accept documents that appear on their face to be inorder, without responsibility for further investigation.          Section 4.6 Purchase of Replacement Swap Agreement. In the event that the SwapAgreement is terminated prior to its scheduled expiration in accordance with the terms of the SwapAgreement, the Issuer shall at the request of the Insurer enter into a replacement swap agreement(the “Replacement Swap Agreement”) in the form and substance satisfactory to the Insurer with areplacement Swap Provider acceptable to the Insurer on the same terms as the Swap Agreementexecuted on the Closing Date *mutatis mutandis*, or with such amendments to the terms as have beenapproved by S&P, Moody’s and the Insurer.          Section 4.7 Rights and Remedies. Each party to this Insurance Agreement hasacknowledged and agreed to, and hereby confirms its acknowledgement and agreement to, the
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 sale and assignment by the Seller to the Depositor, by the Depositor to the Issuer, and thepledge by the Issuer to the Indenture Trustee, of all of its right, title and interest in, to andunder the Trust Estate, and the Transaction Documents and all of the Issuer’s rights, remedies,powers and privileges and all claims of the Issuer or the Depositor, as the case may be, againstthe Seller, of the Issuer against the Depositor and of the Issuer against the Depositor or theSeller, under or with respect to the Transaction Documents (whether arising pursuant to the termsthereof or otherwise available at law or in equity), including without limitation (whether or notany of a Default or Event of Default under the Indenture, an Event of Default hereunder, a ServicerTermination Event, a Trigger Event or a Spread Cap Event has occurred and is continuing) (i) theright of the Issuer at any time to enforce the Transaction Documents against the Servicer, theDepositor or the Seller and the obligations of the Servicer, the Seller and the Depositorthereunder and (ii) the right at any time to give or withhold any and all consents, requests,notices, directions, approvals, demands, extensions or waivers under or with respect to anyTransaction Document or the obligations in respect of the Issuer, the Servicer, the Depositor orthe Seller thereunder, all of which rights, remedies, powers, privileges and claims may,notwithstanding any provision to the contrary by any of the Transaction Documents, be exercisedand/or enforced by the Indenture Trustee in lieu of and in the place and stead of the Depositor andthe Issuer to the same extent as the Depositor or the Issuer would otherwise do, and except to theextent a Transaction Document provides that the Insurer shall not have such a right upon an InsurerDefault that has occurred and is continuing, neither the Depositor nor the Issuer may exercise anyof the foregoing rights without the prior written consent of the Insurer. Each party heretofurther acknowledges and agrees that, unless an Insurer Default has occurred and is continuing, theIndenture Trustee will take or refrain from taking any action, and exercise or refrain fromexercising any rights under the Transaction Documents in its capacity as Indenture Trustee pursuantto the written direction of the Insurer; provided, however, that the obligations ofthe Indenture Trustee to take or refrain from taking, or to exercise or refrain from exercising,any such action or rights shall not apply to routine administrative tasks required to be performedby the Indenture Trustee pursuant to the Transaction Documents and shall be limited to thoseactions and rights that can be exercised or taken (or not exercised or taken, as the case may be)in full compliance with the provisions of the Transaction Documents and with applicable law.**ARTICLE V****DEFAULTS AND REMEDIES**          Section 5.1 Defaults. The occurrence of any of the following events shall constitutean “Event of Default” hereunder:          (a) Any representation or warranty made by any of the Transaction Parties hereunder or underthe Transaction Documents, or in any certificate furnished hereunder or under the TransactionDocuments, prove to be untrue or misleading in any material respect; provided,however, that if such Transaction Party effectively cures any such defect in anyrepresentation or warranty under any Transaction Document or certificate or report furnished underany Transaction Document, within the time period specified in the related Transaction Document asthe cure period therefor, such defect shall not in and of itself constitute an Event of Default;
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          (b) (i) Any Transaction Party fails to pay or deposit when due any amount required to be paidor deposited by it hereunder or under any other Transaction Document and such failure has continuedfor a period of at least two (2) Business Days or, if so specified in the applicable TransactionDocument, the applicable grace period set forth therein, or (ii) a legislative body has enacted anylaw that declares or a court of competent jurisdiction finds or rules that this Insurance Agreementor any other Transaction Document is not valid and binding on the Transaction Parties hereto orthereto;          (c) The occurrence and continuance of an Event of Default under the Indenture or ServicerTermination Event under the Sale and Servicing Agreement;          (d) Any failure on the part of any Transaction Party duly to observe or perform in anymaterial respect any other of the covenants or agreements on the part of such Transaction Partycontained in this Insurance Agreement or in any other Transaction Document which continuesunremedied beyond any cure period provided therein, or, in the case of this Insurance Agreement,for a period of 30 days after the earlier of the date on which written notice of such failure,requiring the same to be remedied, has been given to Triad by the Insurer (with a copy to theIndenture Trustee) or by the Indenture Trustee (with a copy to the Insurer), or a ResponsibleOfficer of such Transaction Party has actual knowledge thereof;          (e) The entry of a decree or order by a court or agency or supervisory authority havingjurisdiction in the premises for appointment of a conservator, receiver or liquidator or similarofficial for any Transaction Party which is a party to any Transaction Document in any bankruptcy,insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings orfor the winding up or liquidation of its respective affairs, and the continuance of any such decreeor order unstayed and in effect for a period of 30 consecutive days;          (f) The consent by any Transaction Party to the appointment of a conservator or receiver orliquidator or similar official in any bankruptcy, insolvency, readjustment of debt, marshaling ofassets and liabilities, or similar proceedings of or relating to such Transaction Party or relatingto all or substantially all of its respective property; or any such Transaction Party admits inwriting its inability to pay its debts generally as they become due, files a petition to takeadvantage of any applicable bankruptcy, insolvency or reorganization statute, make an assignmentfor the benefit of its creditors or voluntarily suspends payment of its obligations; or          (g) The Swap Agreement is terminated and a replacement swap agreement that is acceptable tothe Insurer is not entered into within 40 days of the “Early Termination Date” (as defined in theSwap Agreement); provided , however, that the occurrence of an Event of Default specified in thisclause (g) shall not result in a Servicer Termination Event under Section 9.1(f) of the Sale andServicing Agreement.          Section 5.2 Remedies; No Remedy Exclusive. (a) Upon the occurrence of an Event ofDefault hereunder, the Insurer may take whatever action at law or in equity as may appear necessaryor desirable in its judgment to collect the amounts, if any, then due under this InsuranceAgreement or any other Transaction Document or to enforce performance and observance of anyobligation, agreement or covenant of the Transaction Parties under this
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Insurance Agreement or any other Transaction Document, either in its own capacity or asControlling Party.          (b) Unless otherwise expressly provided, no remedy herein conferred or reserved is intended tobe exclusive of any other available remedy, but each remedy shall be cumulative and shall be inaddition to other remedies given under this Insurance Agreement or any other Transaction Document,or existing at law or in equity. No delay or omission to exercise any right or power accruingunder this Insurance Agreement or any other Transaction Document upon the happening of any eventset forth in Section 5.1 shall impair any such right or power or shall be construed to be a waiverthereof, but any such right and power may be exercised from time to time and as often as may bedeemed expedient. In order to entitle the Insurer to exercise any remedy reserved to the Insurerin this Article, it shall not be necessary to give any notice, other than such notice as may berequired by this Article.          (c) Each party to this Insurance Agreement hereby agrees that, in addition to any other rightsor remedies existing in its favor, it shall be entitled to specific performance and/or injunctiverelief in order to enforce any of its rights or any obligation owed to it under the TransactionDocuments.          Section 5.3 Waivers. (a) No failure by the Insurer to exercise, and no delay by theInsurer in exercising, any right hereunder shall operate as a waiver thereof. The exercise by theInsurer of any right hereunder shall not preclude the exercise of any other right, and the remediesprovided herein to the Insurer are declared in every case to be cumulative and not exclusive of anyremedies provided by law or equity.          (b) The Insurer shall have the right, to be exercised in its complete discretion, to waive anyEvent of Default hereunder, by a writing setting forth the terms, conditions and extent of suchwaiver signed by the Insurer and delivered to Triad and the Indenture Trustee. Unless such writingexpressly provides to the contrary, any waiver so granted shall extend only to the specific eventor occurrence which gave rise to the Event of Default so waived and not to any other similar eventor occurrence which occurs subsequent to the date of such waiver.**ARTICLEVI****MISCELLANEOUS**          Section 6.1 Amendments, Etc. This Insurance Agreement may be amended, modified,supplemented or terminated only by written instrument or written instruments signed by the partieshereto. No consent of any reinsurer or participant contracted with by the Insurer pursuant toSection 4.4(b) hereof shall be required hereunder for any amendment, modification, supplement ortermination hereof. Triad agrees to provide a copy of any amendment to this Insurance Agreementpromptly to the Rating Agencies. No act or course of dealing shall be deemed to constitute anamendment, modification, supplement or termination hereof. Unless an Insurer Event of Default hasoccurred and is continuing, the other Transaction Documents may be amended, modified orsupplemented only with the prior written consent of the Insurer and any amendment, modification orsupplement without such consent shall be null and void and of no force and effect.
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          Section 6.2 Notices. All demands, notices and other communications to be givenhereunder shall be in writing (except as otherwise specifically provided herein) and shall be (i)mailed by prepaid registered or certified mail, return receipt requested, or (ii) personallydelivered by messenger or overnight courier (with confirmation of receipt) and in either casetelecopied to the recipient as follows:           (a) To the Insurer:     Financial Security Assurance Inc.31 West 52nd StreetNew York, New York 10019Attention: Managing Director — Transaction OversightRe: Triad Automobile Receivables Trust 2007-BPolicy No.: 51886A-N or 51886B-NTelecopy No.: (212) 339-3518Confirmation: (212) 826-0100             (in each case in which notice or other communication to the Insurer refersto a Servicer Termination Event, an Event of Default hereunder, a Default orEvent of Default under the Indenture, a Trigger Event or a Spread Cap Event,a claim on the FSA Policy or the Swap Policy or any event with respect towhich failure on the part of the Insurer to respond shall be deemed toconstitute consent or acceptance, then a copy of such notice or othercommunication shall also be sent to the attention of the general counsel ofeach of the Insurer and the Indenture Trustee and shall be marked toindicate “URGENT MATERIAL ENCLOSED.”)           (b) To Triad:     Triad Financial Corporation7711 Center Avenue, Suite 100Huntington Beach, CA 92647Attention: Mike L. Wilhelms, Chief Financial OfficerTelephone: 714-373-3800, extension 22284Facsimile: 714-894-8617with a copy to the attention of:           Timothy O’Connor, General Counsel                                                             Telecopy No.: 714-934-6062           (c) To the Issuer:     Triad Automobile Receivables Trust 2007-Bin care of:                 Wilmington Trust Company, as Owner Trustee                                    1100 North Market Street                              Wilmington, DE 19890                              Attention: Corporate Trust Administration                              Telephone: (302) 651-1000                              Facsimile: (302) 636-4140
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           with a copy to the attention of: Triad Financial Corporation      7711 Center Avenue, Suite 100      Huntington Beach, CA 92647      Attention: Timothy O’Connor,      General Counsel      Telecopy No.: 714-934-6062         (d) To the Indenture Trustee:             Citibank, N.A.388 Greenwich Street, 14th FloorNew York, NY 10013Attention: Structured Finance Agency and Trust – Triad 2007-BPhone: 800-422-2066Facsimile: 212-816-5527A party may specify an additional or different address or addresses by writing mailed or deliveredto the other parties as aforesaid. All such notices and other communications shall be effectiveupon receipt.          Section 6.3 Severability. In the event that any provision of this Insurance Agreementis held invalid or unenforceable by any court of competent jurisdiction, the parties hereto agreethat such holding shall not invalidate or render unenforceable any other provision hereof. Theparties hereto further agree that the holding by any court of competent jurisdiction that anyremedy pursued by any party hereto is unavailable or unenforceable shall not affect in any way theability of such party to pursue any other remedy available to it.          Section 6.4 Governing Law. This Insurance Agreement shall be governed by andconstrued in accordance with the laws of the State of New York without regard to conflicts of lawsprovisions.          Section 6.5 Consent to Jurisdiction. (a) THE PARTIES HERETO HEREBY IRREVOCABLY SUBMITTO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK ANDANY COURT IN THE STATE OF NEW YORK LOCATED IN THE CITY AND COUNTY OF NEW YORK, AND ANY APPELLATECOURT FROM ANY THEREOF, IN ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND TO OR INCONNECTION WITH ANY OF THE TRANSACTION DOCUMENTS OR THE TRANSACTION OR FOR RECOGNITION ORENFORCEMENT OF ANY JUDGMENT RELATING THERETO, AND THE PARTIES HERETO HEREBY IRREVOCABLY ANDUNCONDITIONALLY AGREE THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING SHALL BE HEARD ORDETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT.THE PARTIES AGREE THAT A FINAL NONAPPEALABLE JUDGMENT IN ANY SUCH ACTION, SUIT OR PROCEEDING SHALLBE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHERMANNER PROVIDED BY LAW. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HEREBY WAIVE
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AND AGREE NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE IN ANY SUCH SUIT, ACTIONOR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, THATTHE 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 MAYNOT BE LITIGATED IN OR BY SUCH COURTS.          (b) To the extent permitted by applicable law, the parties shall not seek and hereby waive theright to any review of the judgment of any such court by any court of any other nation orjurisdiction which may be called upon to grant an enforcement of such judgment.          (c) Service on any party hereto may be made by mailing or delivering copies of the summons andcomplaint and other process which may be served in any suit, action or proceeding to such party atits address listed in Section 6.2 herein. Such address may be changed by the applicable party orparties by written notice to each of the other parties hereto.          (d) Nothing contained in this Insurance Agreement shall limit or affect any party’s right toserve process in any other manner permitted by law or to start legal proceedings relating to any ofthe Transaction Documents against any other party or its properties in the courts of anyjurisdiction.          Section 6.6 Consent of the Insurer. In the event that the consent of the Insurer isrequired under any of the Transaction Documents, the determination whether to grant or withholdsuch consent shall be made by the Insurer in writing and in its sole discretion except to theextent such consent of the Insurer pursuant to the terms of the applicable Transaction Document maynot be unreasonably withheld, and without any implied duty towards any other Person.          Section 6.7 Counterparts. This Insurance Agreement may be executed in counterparts bythe parties hereto, and all such counterparts shall constitute one and the same instrument.          Section 6.8 Headings. The headings of Articles and Sections and the Table of Contentscontained in this Insurance Agreement are provided for convenience only. They form no part of thisInsurance Agreement and shall not affect its construction or interpretation.          Section 6.9 Trial by Jury Waived. Each party hereby waives, to the fullest extentpermitted by law, any right to a trial by jury in respect of any litigation arising directly orindirectly out of, under or in connection with any of the Transaction Documents or any of thetransactions 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 hasbeen 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 behad against, and no personal liability shall attach to, any officer, employee, director,
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affiliate or shareholder of the Insurer or any other party hereto, as such, by the enforcementof any assessment or by any legal or equitable proceeding, by virtue of any statute or otherwise inrespect of any of the Transaction Documents (including the Class A Notes, the FSA Policy and theSwap Policy), it being expressly agreed and understood that each Transaction Document is solely acorporate obligation of each party hereto, and that any and all personal liability, either atcommon law or in equity, or by statute or constitution, of every such officer, employee, director,affiliate or shareholder for breaches of any party hereto of any obligations under any TransactionDocument is hereby expressly waived as a condition of and in consideration for the execution anddelivery of this Insurance Agreement.          Section 6.11 Entire Agreement: Facsimile Signatures. This Insurance Agreement, theFee Letter, the FSA Policy and the Swap Policy set forth the entire agreement between the partieswith respect to the subject matter hereof and thereof, and supersede and replace any agreement orunderstanding that may have existed between the parties prior to the date hereof in respect of suchsubject matter. Execution and delivery of this Insurance Agreement by facsimile signature shallconstitute execution and delivery of this Insurance Agreement for all purposes hereof with the sameforce and effect as execution and delivery of a manually signed copy hereof.          Section 6.12 Indenture Trustee. The Indenture Trustee hereby acknowledges and agreesto perform all its obligations and duties pursuant to the Transaction Documents to which it is aparty.          Section 6.13 Third-Party Beneficiary. Each of the parties hereto agrees that theInsurer shall have all rights of an intended third-party beneficiary in respect of each of theTransaction Documents, including, subject to the provisions of the Transaction Documents, the rightto enforce the respective obligations of the parties thereunder.          Section 6.14 No Proceedings. Each of the parties hereto agrees that it will notinstitute against the Issuer or the Depositor any involuntary proceeding or otherwise institute anybankruptcy, reorganization, arrangement, insolvency or liquidation proceeding or other proceedingunder any federal or state bankruptcy or similar law until the date which is one year and one dayor, if longer, the then applicable preference period plus one day, since the last day on which anyClass A Notes shall have been outstanding and all amounts payable to the Insurer hereunder shallhave been paid in full.          Section 6.15 Limitation of Owner Trustee Liability. It is expressly understood andagreed by the parties hereto that (a) this document is executed and delivered by Wilmington TrustCompany, not individually or personally, but solely as Owner Trustee, in the exercise of the powersand authority conferred and vested in it, pursuant to the Trust Agreement for Triad AutomobileReceivables Trust 2007-B, (b) each of the representations, undertakings and agreements herein madeon the part of the Issuer is made and intended not as personal representations, undertakings andagreements by Wilmington Trust Company but is made and intended for the purpose for binding onlythe Issuer, (c) nothing herein contained shall be construed as creating any liability on WilmingtonTrust Company, individually or personally, to perform any covenant either expressed or impliedcontained herein, all such liability, if any, being expressly waived by the parties hereto and byany person claiming by, through or under
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the parties hereto, and (d) under no circumstances shall Wilmington Trust Company bepersonally liable for the payment of any indebtedness or expenses of the Issuer or be liable forthe breach or failure of any obligation, representation, warranty or covenant made or undertaken bythe Issuer under this Agreement or any other related documents.**[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]**
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          IN WITNESS WHEREOF, the parties hereto have executed this Insurance Agreement, all as of theday and year first above mentioned.         FINANCIAL SECURITY ASSURANCE         INC., as Insurer         By:      /s/ Ravi R. Gandhi             Name: Ravi R. Gandhi      Title: Managing Director           TRIAD AUTOMOBILE RECEIVABLES       TRUST 2007-B, as Issuer         By: WILMINGTON TRUST COMPANY,      not in its individual capacity,      but solely as Owner Trustee           By:      /s/ Jeanne M. Oller             Name: Jeanne M. Oller      Title: Senior Financial Services Officer     TRIAD FINANCIAL SPECIAL PURPOSE       LLC, as Depositor         By:      /s/ Mike L. Wilhelms             Name: Mike L. Wilhelms      Title: Chief Financial Officer           TRIAD FINANCIAL CORPORATION,       as Seller and Servicer         By:      /s/ Mike L. Wilhelms             Name: Mike L. Wilhelms      Title: Senior Vice President and Chief      Financial Officer  
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      CITIBANK, N.A.