INSURANCE AND INDEMNITY AGREEMENT

EXHIBIT 10.2

INSURANCE AND INDEMNITY AGREEMENT
Dated as of October 18, 2006

AMBAC ASSURANCE CORPORATION,
as Insurer,

TRIAD AUTOMOBILE RECEIVABLES TRUST 2006-C,
as Issuing Entity,

TRIAD FINANCIAL CORPORATION,
as Sponsor and Servicer,

TRIAD FINANCIAL SPECIAL PURPOSE LLC,
as Depositor,

and

CITIBANK, N.A.
as Indenture Trustee

Triad Automobile Receivables Trust 2006-C
Class A Asset Backed Notes

TABLE OF CONTENTS

EXHIBITS

SCHEDULES

          INSURANCE AND INDEMNITY AGREEMENT (as it may be amended, modified or supplemented from time to time, this “ Insurance Agreement ”), dated as of October 18, 2006, by and among AMBAC ASSURANCE CORPORATION, as Insurer (the “ Insurer ”), TRIAD AUTOMOBILE RECEIVABLES TRUST 2006-C, as Issuing Entity (the “ Issuing Entity ”), TRIAD FINANCIAL CORPORATION (“ Triad ”), as Sponsor and Servicer (the “ Sponsor ” and “ Servicer ”, respectively), TRIAD FINANCIAL SPECIAL PURPOSE LLC, as Depositor (the “ Depositor ”) and CITIBANK, N.A. as Indenture Trustee (the “ Indenture Trustee ”).

PRELIMINARY STATEMENTS

          A. The Indenture, dated as of October 18, 2006, by and between the Issuing Entity and the Indenture Trustee (the “ Indenture ”), provides for, among other things, the issuance of the Triad Automobile Receivables Trust 2006-C Class A Asset Backed Notes.

          B. The parties hereto desire that the Insurer issue the Ambac Policy to the Indenture Trustee for the benefit of the Holders and to, among other things, specify the conditions precedent thereto, the premium in respect thereof and the indemnity, reimbursement, reporting and other obligations of the parties hereto other than the Insurer 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 shall have the meanings set forth below. Unless the context clearly requires otherwise, all capitalized terms used but not defined herein shall have the respective meanings assigned to them in the Ambac Policy or, if not defined therein, in the Indenture or, if not defined therein, in the Sale and Servicing Agreement, or, if not defined therein, in the Purchase Agreement, each as described below.

          “ Affiliate ” means, with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person. For the purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

          “ Ambac ” means Ambac Assurance Corporation, a Wisconsin domiciled stock insurance corporation.

          “ Ambac Policy ” means the Note Guaranty Insurance Policy No. AB1038BE dated October 18, 2006, including any endorsements thereto, issued by the Insurer to the

Indenture Trustee with respect to the Class A Notes, for the benefit of the Holders, in the form attached as Exhibit A to this Insurance Agreement.

          “ Certificate ” means the trust certificate evidencing the beneficial interest of the Certificateholder in the Trust.

          “ Charter Documents ” means, with respect to any Transaction Party, such entity’s organizational documents, including its trust agreement, certificate of trust, memorandum of association, articles of organization, certificate or articles of incorporation, by-laws and/or operating agreement.

          “ Class A Notes ” means the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes.

          “ Class A-1 Notes ” means the Class A-1 5.3409% Asset Backed Notes, issued pursuant to the Indenture and substantially in the form attached as an Exhibit to the Indenture.

          “ Class A-2 Notes ” means the Class A-2 5.40% Asset Backed Notes, issued pursuant to the Indenture and substantially in the form attached as an Exhibit to the Indenture.

          “ Class A-3 Notes ” means the Class A-3 5.26% Asset Backed Notes, issued pursuant to the Indenture and substantially in the form attached as an Exhibit to the Indenture.

          “ Class A-4 Notes ” means the Class A-4 5.31% Asset Backed Notes, issued pursuant to the Indenture and substantially in the form attached as an Exhibit to the Indenture.

          “ Closing Date ” means October 18, 2006.

          “ Collection Period ” means, (i) with respect to the first Distribution Date, the period beginning on the close of business on September 30, 2006 and ending on the close of business on October 31, 2006, and (ii) with respect to each subsequent Distribution Date, the period beginning on the opening of business on the first day of the immediately preceding calendar month and ending on the close of business on the last day of the immediately preceding calendar month. Any amount stated “as of the close of business on the last day of a Collection Period” shall give effect to the following calculations as determined as of the end of the day on such last day: (i) all applications of collections and (ii) all distributions.

          “ Consolidated Tangible Net Worth ” means, as of any date, the consolidated Stockholders’ Equity of any entity and its consolidated subsidiaries, less the consolidated net book value of all assets of such entity and its consolidated subsidiaries (to the extent reflected as an asset in the balance sheet of such entity or any consolidated subsidiary at such date) which will be treated as intangibles under GAAP, including without limitation, such items as deferred financing expenses, net leasehold improvements, good will, trademarks, trade names, service marks, copyrights, patents, licenses and unamortized debt discount and expense, all as determined as of such date, and calculated in accordance with the example set forth as Exhibit B; provided, that interest-only strips, residual interests or residual certificates issued in connection with a public or private securitization transaction (including rights to receive remaining amounts in spread accounts) owned by such entity or its consolidated subsidiaries shall not be treated as

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intangibles for purposes of this definition ; provided further, for purposes of this definition, the consolidated net book value of deferred financing expenses shall be deemed to equal the product of (1) the total consolidated net book value of deferred financing expenses and (2) 0.605. For purposes of this definition “Stockholders’ Equity” shall include GAAP retained earnings and any equity securities such as common stock or common stock equivalents, including, but not limited to, any non-coupon bearing instruments (other than in a liquidation preference) such as preferred stock, convertible stock or convertible preferred stock of Triad or its Successor. In addition, any coupon bearing stock equivalent (cash, Pay-In-Kind security or combination thereof), preferred or otherwise, will receive equity treatment (not to exceed 30% of total consolidated Stockholders’ Equity) so long as such instrument provides for the ability to defer cash coupon payments for a period not to exceed five years and the holder thereof is not entitled to commence bankruptcy, insolvency or similar proceedings against Triad or its Successor. In the event of any dispute among the parties, or any of them, regarding the calculation of Consolidated Tangible Net Worth or the valuation of any assets included in such calculation, which cannot be resolved by such parties, in good faith, within thirty (30) days of all 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 furnish the results of such calculation within thirty (30) days, such conclusion to be final and binding on the parties. Notwithstanding any provision in this Agreement to the contrary, if the valuation or other calculation made by such third party is 10% or more higher than the number put forth by the party promoting the lower valuation or other calculation, then the party promoting the lower valuation shall pay the costs of the third party, provided that, notwithstanding the foregoing, if the valuation or other calculation made by such third party is 10% or more higher than the number put forth by the party promoting the lower valuation or other calculation and is still less than the greater of (x) 7.5% of such entity’s Total Assets and (y) Tangible Net Worth Floor, then the party promoting such lower valuation shall not be required to pay the costs of the third party. If the valuation or other calculation by such third party is 10% or more lower than the number put forth by the party promoting the higher valuation, then that party shall pay the costs of the third party, even in the circumstance where such calculation results in a valuation or other 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 equally by the disputing parties.

          “ Cram Down Loss ” means, for any Receivable (other than a Purchased Receivable or a Liquidated Receivable), if a court of appropriate jurisdiction in an insolvency proceeding issued an order reducing the amount owed on the Receivable or otherwise modifying or restructuring the scheduled payments to be made on the Receivable, an amount equal to the excess of the Receivable’s Principal Balance immediately prior to the order over the Receivable’s Principal Balance as reduced.

          “ Cumulative Net Loss Ratio ” means the ratio, expressed as a percentage, computed by dividing: (a) the Cumulative Net Losses by (b) the Original Pool Balance.

          “ Cumulative Net Losses ” means the aggregate principal balance of all Net Liquidation Losses for each Collection Period from the Closing Date to and including the last day of the then-current Collection Period.

          “ Cut-off Date ” means September 30, 2006.

          “ Deemed Cured ” means, as of a Determination Date, that no Spread Cap Event shall have occurred and be continuing as of such Determination Date and with respect to the two consecutively preceding Determination Dates.

          “ Default ” means any occurrence that is, or with notice or the lapse of time or both would 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 Balance of all Receivables, other than Liquidated Receivables, for which all or more than 10% of a Scheduled Receivables Payment was 60 or more days delinquent as of the last day of the related Collection Period and (b) the denominator of which is equal to the Aggregate Principal Balance as of 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 Business Day preceding the Distribution Date in the next Collection Period.

          “ Distribution Date ” means, with respect to each Collection Period, the 12th day of the following Collection Period, of, if such day is not a Business Day, the immediately following Business Day, commencing November 13, 2006.

          “ 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 between the Issuing Entity and the Insurer and acknowledged by the Indenture Trustee setting forth certain fees and other matters referred to herein, as the same may be amended or supplemented from time to time in accordance therewith and with this Insurance Agreement.

          “ Financed Vehicle ” means an automobile or light-duty truck, together with all accessions thereto, securing an Obligor’s indebtedness under the respective Receivable.

          “ Holder ” has the meaning given thereto in the Ambac Policy.

          “ Indemnified Party ” has the meaning specified in Section 3.4 hereof.

          “ Indemnifying Party ” has the meaning specified in Section 3.4 hereof.

          “ Indenture ” means the Indenture dated as of October 18, 2006 between the Issuing Entity and Citibank, 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 any applicable reorganization, bankruptcy, liquidation, rehabilitation, insolvency or other similar law now or hereafter in effect or any proceeding in which a receiver, liquidator, conservator,

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trustee or similar official shall have been, or may be, appointed or requested for a person or any of its assets.

          “ Insurance Agreement ” has the meaning given such term in the initial paragraph hereof.

          “ Insurance Agreement Repurchase Event ” means, with respect to any Collection Period following six (6) months from the Closing Date, the repurchase of more than five (5) Receivables.

          “ Insurer ” means Ambac and any successor thereto, as issuer of the Ambac Policy.

          “ Insurer Information ” means the information furnished by the Insurer in writing expressly for use in the Offering Document and is limited to the information included under the headings “The Insurer” including any information incorporated therein by reference and “The Policy” in the Preliminary Prospectus Supplement and the Prospectus Supplement.

          “ Investment Company Act ” means the Investment Company Act of 1940, including, unless the 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 of interest 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 by Citibank, N.A.), plus 2% per annum and (ii) the then applicable highest rate of interest on the Class A Notes and (b) the maximum rate permissible under applicable usury or similar laws limiting interest rates. The Late Payment Rate shall be computed on the basis of the actual number of days elapsed over a year of 360 days.

          “ Liquidated Receivable ” means, with respect to any Collection Period, any Receivable with respect to which any of the following has occurred: (i) 10% or more of any Scheduled Receivable Payment is 120 days or more past due, except Receivables with respect to which the related Financed Vehicles have been repossessed within such 120 days; (ii) the earlier of (A) 90 days have elapsed since the Servicer repossessed the Financed Vehicle and (B) the sale of the related Financed Vehicle; or (iii) the Servicer has determined in good faith that all amounts it expects to be recovered have been received.

          “ Material Adverse Effect ” means, with respect to any event or circumstance, a material adverse effect on (a) the business, financial condition, operations or assets of the Issuing Entity (considered separately) or the Issuing Entity, the Sponsor, the Servicer and the Depositor (taken as a whole), (b) the ability of any Triad Party to perform its obligations under any Transaction Document to which it is a party, (c) the validity, enforceability of, or collectibility of, amounts payable 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 Issuing Entity or of the Indenture Trustee in the Trust Estate, (e) the validity, enforceability or collectibility of all or any portion of the Trust Estate with an aggregate value of at least $500,000 or (f) the ability of the Insurer to monitor the performance of the Receivables and compliance of the Triad Parties with

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the Transaction Documents 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, if any, by which (a) the sum of (i) the Principal Balance of all Receivables which became Liquidated Receivables during the related Collection Period, and (ii) the aggregate of all Cram Down Losses that occurred during such Collection Period, exceeds (b) the Net Liquidation Proceeds received during 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 related insurance proceeds; plus (3) other monies received from the Obligor that are allocable to principal and interest due under the Receivable, minus (4) the Servicer’s reasonable out-of-pocket costs, including repossession and resale expenses not already deducted from the proceeds, 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 as a percentage, the numerator of which is equal to the aggregate of the Net Liquidation Losses for such Collection Period and the denominator of which is the Aggregate Principal Balance as of the first day of such Collection Period.

          “ Obligor ” on a Receivable means the purchaser or co-purchaser(s) of the Financed Vehicle and any other Person who owes payments under the Receivable.

          “ Offering Document ” means, taken together, the Preliminary Prospectus Supplement, dated October 10, 2006 (the “ Preliminary Prospectus Supplement ”), the Preliminary Prospectus, dated October 10, 2006, the Prospectus Supplement, dated October 13, 2006 (the “ Prospectus Supplement ”), and the Prospectus, dated October 10, 2006, of the Issuing Entity, in respect of the offering and sales of the Class A Notes, any amendment or supplement thereto, and any other offering document in respect of the Class A Notes that makes reference to the Ambac Policy.

          “ Person ” means an individual, corporation, estate, partnership, joint venture, association, joint stock company, trust (including any beneficiary thereof), unincorporated organization or government or any agency or political subdivision thereof.

          “ Premium ” means the premium payable in accordance with the Fee Letter.

          “ Principal Balance ” means, for any Receivable as of any date of determination, (i) the Amount Financed; minus (ii) the sum of (a) that portion of all amounts received on or prior to that date and allocable to principal according to the Receivable’s terms, and (b) any Cram Down Losses for the Receivable accounted for as of that date.

          “ Purchase Agreement ” means the Purchase Agreement among Triad Financial Special Purpose LLC and Triad, dated as of October 18, 2006, as such Purchase Agreement may be amended or supplemented from time to time.

          “ Purchased Receivable ” means, with respect to any Collection Period, a Receivable purchased as of the close of business on the last day of the Collection Period by Triad or the servicer, as long as Citibank, N.A. is not acting as successor servicer, as the result of a breach of a covenant 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, installment loan contract or note and security agreement listed on the Schedule of Receivables attached as an Exhibit to the Sale and Servicing Agreement.

          “ Responsible Officer ” means any Vice President, Assistant Vice President, Assistant Treasurer, Assistant Secretary or any other officer of the relevant Transaction Party responsible for the performance of such Transaction Party’s obligations under the Transaction Documents and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject.

          “ Sale and Servicing Agreement ” means the Sale and Servicing Agreement, dated as of October 18, 2006, among the Issuing Entity, the Depositor, Triad as Servicer and Custodian, and the Indenture Trustee and 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 any Receivable, the amount set forth in the Receivable as required to be paid by the Obligor in the Collection Period. If, after the Closing Date, the Obligor’s obligation under a Receivable with respect to a Collection Period is modified so as to differ from the amount specified in the Receivable as a result of (i) the order of a court in an insolvency proceeding involving the Obligor, (ii) pursuant to the Servicemembers Civil Relief Act or (iii) modifications or 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 the Obligor’s payment obligation with respect to the Collection Period as so modified.

          “ Schedule of Receivables ” means the schedule of all motor vehicle retail installment sale contracts, installment loan contracts and note and security agreements originally held as part of 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 context otherwise requires, the rules and regulations promulgated thereunder, as amended from time to time.

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

          “ Servicer ” has the meaning specified in the recitals hereof.

          “ Servicer Termination Event ” has the meaning specified in Section 9.1 of the Sale and Servicing Agreement.

          “ Servicing Policy and Procedures ” means the policies and procedures set forth on Schedule 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 any successor thereto.

          “ Spread Cap Event ” means, with respect to any Determination Date, the occurrence of any of the following:

     (a) the Delinquency Rate with respect to such Determination Date shall exceed the rate provided 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 exceed the 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, there shall be no Spread Cap Event on such Determination Date.

          “ Sponsor ” has the meaning specified in the initial paragraph hereof.

          “ Successor ” means, following the merger or a consolidation of Triad with any other Person, or the conveyance, transfer or lease by Triad of all or substantially all of its assets to another 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 in Exhibit D attached hereto.

          “ Total Assets ” means, all receivables owned by Triad and all receivables serviced by Triad 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 and Servicing Agreement, the Certificate of Trust, the Trust Agreement, the Purchase Agreement, the Indenture and all other documents and certificates delivered in connection therewith except for the Ambac 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 Issuing Entity, Triad, the Servicer, the Depositor and the Holder of the Residual Certificate (collectively, the “ Triad Parties ”); provided , however , that solely with respect to the definition of “Triad Party” as such term is used in the Ambac Policy, “Triad Party” shall have the meaning as specified therein.

          “ Trigger Event ” means, with respect to any Determination Date, the occurrence of any of the following:

     (a) the Delinquency Rate with respect to such Determination Date shall exceed the rate provided for the related Collection Period, as set forth in Schedule C;

     (b) the Cumulative Net Loss Ratio with respect to such Determination Date shall exceed the 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 the greater of (x) 7.5% of its Total Assets and (y) the Tangible Net Worth Floor, as set forth in Exhibit C.

          “ Trust Agreement ” means the Trust Agreement dated as of June 9, 2006, among Triad, as Administrator, the Depositor and the Owner Trustee, as amended and restated as of October 18, 2006 as the same may be amended and supplemented from time to time.

          “ Underwriter Information ” means the information furnished by any Underwriter in writing 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 Prospectus Supplement.

          “ Underwriters ” shall mean Citigroup Global Markets Inc. and Goldman, Sachs & Co. as representatives of the several underwriters named in the Underwriting Agreement.

          “ Underwriting Agreement ” means the Underwriting Agreement, dated October 13, 2006 among the Underwriters 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 this Insurance Agreement as a whole and not to any particular provision of this Insurance Agreement, and Section, subsection, Schedule and Exhibit references are to this Insurance Agreement unless otherwise specified. The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. The words “include” and “including” shall be deemed to be followed by the phrase “without limitation.” Where a representation, warranty or covenant herein begins with the words “as to a Person only,” such representation, warranty or covenant is given by and as to such Person only.

ARTICLE II

REPRESENTATIONS, WARRANTIES AND COVENANTS

          Section 2.1 Representations and Warranties of the Sponsor and Servicer . Triad hereby makes, to and for the benefit of the Insurer, each of the representations and warranties made by it in each of the Transaction Documents to which it is a party, including Section 3.1 of the Purchase Agreement and Sections 4.6 and 8.1 of the Sale and Servicing Agreement. Such

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representations and warranties are incorporated herein by this reference as if fully set forth herein, and may not be amended 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 Issuing Entity comply in all material respects with all 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 Underwriter Information and the Insurer Information) does not contain any untrue statement of a material fact and does not omit to state a material fact necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading.

          (b) The Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended; the Issuing Entity is not required to be registered as an “investment company” under the Investment Company Act; and neither the offer nor the sale of the Class A Notes by the Issuing Entity will be in violation of the Securities Act or any other federal or state securities law. Triad shall satisfy any of the information reporting requirements of the Securities Exchange Act arising out of the Transaction to which it, the Depositor or the Issuing Entity 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 operations or financial condition of any of the Triad Parties (collectively, the “ Information ”), as amended, supplemented or superseded, furnished to the Insurer by such Triad Party contains any statement of a material fact which was untrue or misleading in any material respect when made. None of the Triad Parties has any knowledge of any circumstances that could reasonably be expected to have a Material Adverse Effect. Since the furnishing of the Information, there has been no change nor any development or event involving a prospective change known to any of the Triad Parties that would render any of the Transaction Documents untrue or misleading in any material respect.

          Section 2.2 Affirmative Covenants of Sponsor and Servicer . Triad hereby makes, to and for the benefit of the Insurer, all of the covenants made by it in the Transaction Documents to which it is a party, including Section 4.5 of the Purchase Agreement and Section 4.6 of the Sale and Servicing Agreement. Such covenants are hereby incorporated herein by this reference as if fully set forth herein, and may not be amended except by an amendment complying with the terms of the last sentence of Section 6.1. In addition, Triad hereby agrees that during the term of this Insurance Agreement, unless the Insurer shall otherwise expressly consent in writing:

          (a) Compliance with Agreements and Applicable Laws . It shall comply with the terms and conditions of and perform its obligations under the Transaction Documents to which it is a party and shall comply with any law, rule or regulation applicable to it, except where the failure to comply with any such law, rule or regulation is not reasonably likely to have a Material Adverse Effect.

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          (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 organized under 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 Documents and 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 a Material 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 not later than five (5) Business Days) following receipt of actual knowledge by a Responsible Officer thereof 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 or administrative or judicial investigation, or disciplinary proceeding by or against it that would be reasonably likely to have a Material Adverse Effect or the promulgation of any proceeding or any proposed or final ruling in connection with any such litigation, investigation or proceeding which would reasonably likely to have a Material Adverse Effect;

     (ii) the occurrence of any Event of Default hereunder, any Default or Event of Default under the Indenture, any Servicer Termination Event, any Trigger Event or any Spread Cap Event;

     (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, registration or 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 a Material Adverse Effect or (b) it is to cease and desist any practice, procedure or policy employed by it in the conduct of its business, and such cessation would be reasonably likely to have a Material Adverse Effect.

          (d) Notice of Change . It shall give the Insurer not less than thirty (30) days’ prior written notice of any proposed change in its name, principal place of business or jurisdiction of organization.

          (e) Access to Records; Discussions with Officers and Accountants . As long as upon reasonable prior written notice of the Insurer, at any time, it shall permit the Insurer or its authorized agents:

     (i) to inspect its books and its records as they may relate to the Transaction, the Receivables, the Other Conveyed Property or any other assets in the Trust 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 officer and 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 such discussions.

          Such inspections and discussions shall be conducted during normal business hours at Triad’s cost and expense and shall not unreasonably disrupt the business of the Sponsor or the Servicer. Absent an Event of Default hereunder, any Default or Event of Default under the Indenture, a Servicer Termination Event, a Trigger Event or an Insurance Agreement Repurchase Event, the Insurer shall not conduct such inspections or discussions more often than annually, unless otherwise mutually agreed by the Insurer and Triad. If, however, an Event of Default hereunder or under the Indenture, a Servicer Termination Event, a Trigger Event, a Spread Cap Event or an Insurance Agreement Repurchase Event has occurred and is continuing, the Insurer may increase the frequency of such audits to semi-annual, quarterly, or otherwise as it deems appropriate. Without limiting the foregoing, upon the occurrence of a Trigger Event an Event of Default hereunder or under the Indenture, a Servicer Termination Event, a Spread Cap Event or an Insurance Agreement Repurchase Event, Triad shall make its principal officers available to discuss the Transaction with representatives of the Insurer within 15 days of receipt by Triad of such a request from the Insurer.

          (f) Closing Documents . It shall provide or cause to be provided to the Insurer an executed original copy of each Transaction Document executed by it in connection with the closing of the Transaction within thirty (30) days of the Closing Date.

          (g) Field Examination by Independent Public Accountants . Upon reasonable prior written notice of the Insurer at any time, it shall permit independent public accountants designated by the Insurer, from time to time to conduct a field examination(s), and in connection therewith shall permit such independent public accountants without limitation:

     (i) to inspect its books and records as they may relate to the Transaction, the Receivables, the Other Conveyed Property or any other assets in the Trust 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 officer and 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 such discussions.

          Such inspections and discussions shall be conducted during normal business hours at Triad’s cost and expense and shall not unreasonably disrupt the business of the Sponsor or the Servicer. Absent an Event of Default hereunder or under the Indenture, a Servicer Termination Event, a Trigger Event, a Spread Cap Event or an Insurance Agreement Repurchase Event, the Insurer shall not conduct such inspections and discussion more often than annually, unless otherwise mutually agreed by the Insurer and Triad. If, however, an Event of Default hereunder

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or under the Indenture, a Servicer Termination Event, a Trigger Event, a Spread Cap Event or an Insurance Agreement Repurchase Event has occurred and is continuing, the Insurer may increase the frequency of such audits to semi-annual, quarterly, or otherwise as it deems appropriate.

          (h) Financial Reporting . Triad shall provide or cause to be provided to the Insurer the 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 and Servicing Agreement and such notices, certificates, reports and other information delivered by Triad under the Transaction Documents, as and when required pursuant to such sections or agreements, and any other reporting or financial information required to be provided to the Insurer pursuant to the terms of the Transaction Documents, including, without limitation, financial projections, as and when required pursuant to such terms. Such statements will be provided no later than thirty (30) days following each fiscal quarter.

     (ii) Compliance Certificate . Together with the “Accountant’s Report” required under Section 4.11 of the Sale and Servicing Agreement, a compliance certificate signed by its 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 other Transaction Documents, and (b) no Event of Default hereunder or under the Indenture or Servicer Termination Event exists and no event which but for the lapse of time or the giving of notice, or both, would constitute an Event of Default hereunder or under the Indenture or Servicer Termination Event or Trigger Event exists, or if an Event of Default hereunder or under the Indenture or Servicer Termination Event or other such event exists, stating the nature and status thereof (including all relevant financial and other information and amounts used in determining whether such Event of Default hereunder or under the Indenture or Servicer Termination Event or Trigger Event or other such event exists).

     (iii) S.E.C. Filings . Promptly after the filing thereof; copies of all registration statements and annual, quarterly or other regular reports which Triad or any subsidiary files with the Securities and Exchange Commission.

     (iv) Shareholders Statements and Reports . Promptly after the furnishing thereof to its shareholders, copies of all financial statements, reports and proxy statements so furnished.

     (v) Amendments to Servicing Policy and Procedure . Within ten (10) Business Days after the date of any material change or amendment to its Servicing Policy and Procedure, a true and complete copy of such change or amendment, and if requested by the Insurer, a copy of the Servicing Policy and Procedure then in effect. No such change or amendment shall become effective if the Insurer determines, in its sole discretion, that such change or amendment will have a Material Adverse Effect; provided that such change or amendment shall become effective and continue to be effective if the Insurer

has not objected to such change or amendment within ten (10) Business Days of receipt of written notice thereof.

     (vi) Servicing Policy and Procedure . Within ninety (90) days after the end of each of its fiscal years, a true and complete copy of its Servicing Policy and Procedure then in effect.

          (i) Public Debt Ratings . Promptly, but in any event within five (5) Business Days after the date of any change in its public debt ratings, if any, a written certification of its public debt ratings after giving effect to such change.

          (j) Compliance with Securities Laws . It shall comply with the Securities Act and the Securities Exchange Act and the regulations thereunder so as to permit the completion of the offer and sale of the Class A Notes as contemplated by the Underwriting Agreement.

          (k) Disclosure Document . Each Offering Document delivered with respect to the Class A Notes shall clearly disclose that the insurance provided by the Ambac Policy is not covered by the property/casualty insurance security fund specified in Article 76 of the New York Insurance 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 or the other assets in the Trust Estate, as the case may be, the Transaction and the Transaction Documents and such other financial or operating information in respect of itself, the Depositor, the Issuing Entity or any of their Affiliates, in each case, which the Insurer may from time to time reasonably request.

          Section 2.3 Negative Covenants of the Sponsor and Servicer . Triad hereby agrees that during the term of this Insurance Agreement, unless the Insurer shall 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 Effect or (y) is reasonably likely to interfere with the enforcement of any rights of the Insurer under or with respect to any of the Transaction Documents. It shall give the Insurer written notice of any such action or failure to act promptly prior to the date of consummation of such action or failure to act. It shall furnish to the Insurer all information requested by it that is reasonably necessary to determine compliance with this paragraph.

          (b) Amendments, Etc . It shall not modify, amend or waive, or consent to any modification or amendment of, any of the terms, provisions or conditions of the Transaction Documents 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, it shall not permit a change in the Lockbox Account or any Processing Bank designated in a Blocked Account Agreement without the prior written consent of the Insurer, which consent shall not be unreasonably withheld; provided , however , that without limiting the foregoing, it shall be deemed reasonable for the Insurer to withhold its consent if the long term

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senior unsecured 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 and warrants to the Indenture Trustee (on behalf of the Holders), the Issuing Entity and each other Transaction Party as follows:

          (a) Organization and Licensing . The Insurer is a stock insurance corporation duly organized, validly existing and in good standing under the laws of the State of Wisconsin.

          (b) Corporate Power . The Insurer has the corporate power and authority to issue the Ambac Policy and execute and deliver this Insurance Agreement and to perform all of its obligations hereunder and thereunder.

          (c) Authorization; Approvals . All proceedings legally required for the issuance of the Ambac Policy and the execution, delivery and performance of this Insurance Agreement have been taken and all licenses, orders, consents or other authorizations or approvals of the Insurer’s Board of Directors or stockholders or any governmental boards or bodies legally required for the enforceability of the Ambac Policy have been obtained or are not material to the enforceability of the Ambac Policy.

          (d) Enforceability . The Ambac Policy, when issued, will constitute, and this Insurance Agreement constitutes, legal, valid and binding obligations of the Insurer, enforceable in accordance with their respective terms, subject to insolvency, reorganization, moratorium, receivership and other similar laws affecting creditors’ rights generally and by general principles of equity and subject to principles of public policy limiting the right to enforce the indemnification provisions contained therein and herein, insofar as such provisions relate to indemnification for liabilities arising under federal securities laws.

          (e) No 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 of the 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 a party or by which it is bound or constitute a default under any of the foregoing which would materially and adversely affect its ability to perform its obligations under the Ambac Policy or this Insurance Agreement.

          (f) Accuracy of Information . The Insurer Information included in the Offering Document is limited and does not purport to provide the scope of disclosure required to be included in a prospectus with respect to a registrant in connection with the offer and sale of securities of such 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 an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances in which they were made, not misleading.

          Section 2.5 Representations and Warranties of the Depositor and the Issuing Entity . Each of the Depositor and the Issuing Entity hereby makes, to and for the benefit of the Insurer, each of the representations and warranties made by the Depositor or the Issuing Entity,

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as the case may be, in the Transaction Documents to which it is a party, including Section 3.2 of the Purchase Agreement and Section 7.1 of the Sale and Servicing Agreement (in the case of the Depositor). Such representations and warranties are incorporated herein by this reference as if fully set forth herein, and may not be amended except by an amendment complying with the terms of Section 6.1 hereof. In addition, the Issuing Entity represents and warrants as of the Closing Date as follows:

          (a) Accuracy of Information . The information or statements contained in the Transaction Docu