10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended October 31, 2005

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___ to ___

Commission file number 1-4146-1

NAVISTAR FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	36-2472404
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

425 N. Martingale Road, Schaumburg, IL 60173

(Address of principal executive offices, Zip Code)

(630) 753-4000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:  None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes o                               No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes o                               No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes o No x

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained , to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer o Non-accelerated filer x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes o                    No x

As of November 30, 2007 the number of shares outstanding of the registrant's common stock was 1,600,000.

Documents Incorporated by Reference: None

THE REGISTRANT IS A WHOLLY-OWNED SUBSIDIARY OF INTERNATIONAL TRUCK AND ENGINE CORPORATION, WHICH IS A WHOLLY-OWNED SUBSIDIARY OF NAVISTAR INTERNATIONAL CORPORATION, AND MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION I (1) (a) AND (b) OF FORM 10-K AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.

NAVISTAR FINANCIAL CORPORATION

AND SUBSIDIARIES

INDEX

		Page Reference
PART I.
Item 1.	Business (A)	2
Item1A.	Risk Factors	2
Item 1B.	Unresolved Staff Comments	5
Item 2.	Properties(A)	6
Item 3.	Legal Proceedings	6
Item 4.	Submission of Matters to a Vote of Security Holder (A)	6
PART II.
Item 5.	Market for the Registrant’s Common Equity and Related Stockholder Matters	7
Item 6.	Selected Financial Data (A)	7
Item 7.	Management's Discussion and Analysis of Results of Operations and Financial Condition	7
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 8.	Financial Statements and Supplementary Data	25
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	69
Item 9A.	Controls and Procedures	70
Item 9B.	Other Information	76
PART III.
Item 10.	Directors and Executive Officers of the Registrant (A)	77
Item 11.	Executive Compensation (A)	77
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Transactions (A)	77
Item 13.	Certain Relationships and Related Transactions (A)	77
Item 14.	Principal Accountant Fees and Services	77
PART IV.
Item 15.	Exhibits, Financial Statement Schedules and Reports on Form 8-K	78
Signatures		79

(A) -Omitted or amended or reduced as the registrant is a wholly-owned subsidiary of International Truck and Engine Corporation, which is a wholly-owned subsidiary of Navistar International Corporation, and meets the conditions set forth in General Instructions I (1) (a) and (b) of Annual Report on Form 10-K and is, therefore, filing this report with the reduced disclosure format.

1

PART I

EXPLANATORY NOTE

This Annual Report on Form 10-K for the year ended October 31, 2005 is our first filing with the United States Securities and Exchange Commission (“SEC”) that includes comprehensive financial statements since our Quarterly Report on Form 10-Q for the quarter ended July 31, 2005.  Unless otherwise stated, all financial information presented in this Annual Report on Form 10-K reflects restated consolidated financial statements for the years ended October 31, 2003 and 2004 and the first three quarters of the year ended October 31, 2005. The effect of the restatement on periods prior to 2003 has been presented as a reduction of Shareowner’s equity as of November 1, 2002, the beginning of our 2003 fiscal year.

Item 1.  Business

The registrant, Navistar Financial Corporation, was incorporated in Delaware in 1949 and is a wholly-owned subsidiary of International Truck and Engine Corporation (“International”), which is a wholly-owned subsidiary of Navistar International Corporation (“Navistar”).  As used herein, “us,” “we,” “our” or “NFC” refers to Navistar Financial Corporation and its wholly-owned subsidiaries, unless the context otherwise requires.

We are a commercial financing organization that provides wholesale, retail and lease financing in the United States for sales of new and used trucks sold by International and International’s dealers.  We also finance wholesale accounts and selected retail accounts receivable of International (“accounts”).  Sales of new products (including trailers) of other manufacturers are also financed regardless of whether they are designed or customarily sold for use with International’s truck products.

We also service the finance receivables we originate and purchase following their sale to unrelated third parties.  Our revenue components from these securitized receivables are primarily servicing fees and excess spread income (See Item 7, Management’s Discussion and Analysis of Results of Operation and Financial Condition, for an explanation of securitized receivables).

On November 30, 2001, we completed the sale of all of the stock of Harco National Insurance Company ("Harco"), a wholly-owned insurance subsidiary, to IAT Reinsurance Syndicate Ltd., a Bermuda reinsurance company.  The Harco insurance segment was accounted for as a discontinued operation, and accordingly, balances in our accompanying consolidated financial statements and notes thereto, for all periods affected, have been presented to recognize those discontinued operations.  For further information, see Note 4, Discontinued Operations, to the accompanying consolidated financial statements in Item 8, Financial Statements and Supplementary Data.

Item 1A.   Risk Factors

Forward-Looking Statements

This document contains forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act of 1934 (“Exchange Act”), and the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. You should not place undue reliance on those statements because they are subject to numerous uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control, and such forward-looking statements only speak as of the date hereof. Forward-looking statements include information concerning our possible or assumed future results of operations, including descriptions of our business strategy.  These statements often include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” or similar expressions.  These statements are based on assumptions that we have made in light of our experience in the industry as well as our perceptions of historical trends, current conditions, expected future developments, and other factors we believe are appropriate under the circumstances.  As you read and consider the information contained herein, you should understand that these statements are not guarantees of performance or results.  They involve risks, uncertainties, and assumptions.  Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual financial results and could cause these actual results to differ materially from those in the forward-looking statements. 

2

This section identifies specific risks that could adversely affect our business, results of operations or financial condition. The following information should be read in conjunction with Item 7, and the accompanying consolidated financial statements and related notes included in this report.

Risks that Relate to Our Delay in Filing Timely Reports with the SEC, the Restatement of Our Consolidated Financial Statements, and Accounting and Internal Controls:

Inability to Access Debt or Securitization Markets at Competitive Rates

The delay in filing required financial reports with the SEC and the downgrading of NFC and Navistar credit ratings has increased our borrowing costs. In response, we rely more extensively on securitization for the cost effective funding of our operations. Continued delay in filing required financial reports for subsequent periods could adversely limit our ability to access the debt or securitization markets. Our ability to sell our receivables may be dependent on the following factors: the volume and credit quality of receivables, the performance of previously securitized receivables, general demand for the type of receivables we offer, market capacity for our sponsored investments, accounting and tax changes, our debt ratings and our ability to maintain back-up liquidity facilities for certain securitization programs.  If as a result of any of these or other factors, the cost of securitized funding significantly increased or securitized funding was no longer available, there could be a material adverse effect on our results of operations, financial condition and liquidity.

Un-cured or un-waived violations or defaults under our servicing agreements could result in the replacement of NFC as servicer. We do not believe replacement as servicer on public transactions would have a material adverse impact on our results of operations, financial condition and liquidity.

Potential or Possible Lawsuits or Governmental Investigations in Relation to the Restatement of our Financial Statements

The restatement of our financial results may lead to lawsuits and/or governmental investigations. We are engaged in an ongoing dialogue with the SEC with respect to the current restatement process and the pending formal investigation of our earlier restatement.  For additional information regarding this matter see Item 3, Legal Proceedings.

Changes in Laws or Regulations

Aspects of our business as a lender and lessor are subject to state and federal laws and regulations including, but not limited to, (a) establishment of maximum interest rates, (b) collection, foreclosure and repossession procedures, (c) financial transaction structures and (d) the use and reporting of information relating to a borrower’s or lessee’s credit experience. Changes to such laws or regulations could have a material adverse effect on our results of operations, financial condition and liquidity.

Reduction in our Credit Rating

We may have difficulty maintaining existing business and may experience a reduction in our credit rating which could have a material adverse effect on us by, among other things, (a) reducing our revenues if existing and potential customers hesitate to, or decide not to, retain us, (b) increasing our costs or decreasing our liquidity if suppliers desire a change in existing payment terms and (c) increasing our borrowing costs or negatively affecting our ability to obtain new financings on acceptable terms or at all if rating agencies downgrade our credit ratings.

Risks that Relate to Business Operations and Liquidity:

Strategic Decisions of Navistar

As an indirect wholly-owned subsidiary of Navistar, we are subject to the effects of strategic decisions made from time to time by Navistar. The major share of our business consists of financing International vehicles and supporting their dealers.  Any extended reduction or suspension of International’s production or sale of vehicles for reasons discussed below would have an adverse effect on our business. Special-rate financing programs available though NFC, which may be independent or supported/reimbursed by International, increases our financing volume and share of financing sales of International vehicles. Since the majority of our business transactions originate with Navistar, significant changes in Navistar’s overall business strategy, product pricing and incentives or support of our financial products could have a material adverse effect on our results of operations, financial condition and liquidity. 

3

Economic Condition of the Trucking Industry

The secured value of our lease and loan portfolio and our ability to generate new business at competitive rates depends substantially on the economic condition of the trucking industry. To the extent future events such as increasing fuel price levels, fuel shortages or general economic downturn adversely affect the trucking industry, there could be an increase in customer defaults, impaired asset values and less competitive interest and lease rates. These events could have a material adverse impact on our results of operations, financial condition and liquidity.

The markets in which Navistar competes are subject to considerable cyclicality.  Their ability to generate business for us depends in part on the varying conditions in the truck, school bus, mid-range diesel engine, and service parts markets which are subject to cycles in the overall business environment and are particularly sensitive to the industrial sector, which generates a significant portion of the freight tonnage hauled.  Truck and engine demand is also dependent on general economic conditions, interest rate levels, and fuel costs, among other factors.

The North American truck market in which Navistar operates is highly competitive.  This competition results in price discounting and margin pressures throughout the industry and could adversely affect our business.  Banks or other financing institutions may attempt to capture an increased share of retail and wholesale financing of Navistar products.

Access to Capital

We traditionally obtain the funds to provide financing from sales of receivables, medium- and long-term debt, and equity capital and from short- and long-term bank borrowings.  If cash provided by operations, bank borrowings, continued sales and securitizations of receivables, and the placement of term debt does not provide the necessary liquidity, we may restrict financing of International products and to International dealers.

Credit Markets

In the late summer and early fall of 2007, the financial markets experienced a major correction linked primarily to the “sub-prime” mortgage lending market.  The asset backed securitization market used by us and our lending banks was affected by this correction.  Substantial increases in the spreads on borrowing rates were seen at all credit rating levels.  High quality and highly rated issuers saw their previous rates go from 0 to 15 basis points over LIBOR or treasuries to 30 to 50 basis points above.  The magnitude of the change at lower quality levels was in excess of 100 basis points.  As a result, future borrowings could be more costly than in the past.

Collection and Servicing Problems

Disruption of our servicing, such as a failure to maintain accurate account records or maintain access to such records, could have a significant negative impact on our ability to collect on our receivables and satisfy our customers.

All future written and oral forward-looking statements by us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to above.  Except for our ongoing obligations to disclose material information as required by the federal securities laws, we do not have any obligations or intention to release publicly any revisions to any forward-looking statements to reflect events or circumstances in the future or to reflect the occurrence of unanticipated events.

4

Item 1B.  Unresolved Staff Comments.

We received a letter dated September 27, 2005 containing SEC Division of Corporation Finance staff comments pertaining to our 2004 Form 10-K, which has been restated as part of this 10-K filing.  These comments and those contained in a follow-up letter from the SEC staff dated December 20, 2005, are un-resolved as of December 5, 2007.

The following is a brief summary of the comments and management’s response:

·   We were asked to clarify many of the terms used to identify the types of receivables, such as “finance receivables,” “components of ‘income related to sales of receivables’,” “finance leases,” “distinguish between the types of revenue”.  Clarification was specific to terms in Note 1, Summary of Accounting Policies, and several other footnotes such as the Allowance for Losses (“ALLL”).

We have modified our disclosures in the 2005 Form 10-K to respond to these comments and provided examples to the SEC staff.

·   In addition to clarification of terms the staff had several questions concerning the ALLL. We were asked “to revise disclosures to fully explain the reasons for changes in each element of our allowance for losses so that a reader can understand how changes in risks in the portfolio during each period relate to the allowance established at period-end; quantify and explain how changes in our estimation methods and assumptions affected the allowance; quantify and explain how changes in finance receivables and lease concentrations, quality, and terms that occurred during the period are reflected in our allowance; quantify our gross charge-offs and recoveries for each period presented.”

We have provided this information in both our footnotes and in Item 7.

·   Seven comments related to various components of accounting and disclosure under SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities (“SFAS No. 140”), such as key assumptions used in subsequently measuring the fair value of retained interests (including, at a minimum, quantitative information about discount rates, expected prepayments including the expected weighted-average life of pre-payable financial assets, and anticipated credit losses, including expected static pool losses).  The Staff also asked about the recognition of servicer assets or liabilities in connection with generally accepted accounting principles (“GAAP”).

These comments were directed to our various retail securitizations and are no longer relevant as the majority of retail securitizations were restated to secured borrowings as part of the 2005 Restatement (See Note 2, Restatement of Previously Issued Consolidated Financial Statements).  We did provide the requested information for the wholesale and the retail securitizations that continue to be accounted for as a sale in accordance with SFAS No. 140.  We also provided the requested information that we have no servicing assets or liabilities and that the fees received are just adequate to cover our costs in the 2005 Form 10-K.

·   One comment was a request to include an exhibit on fixed charge coverage in future filings.

We have included the exhibit beginning with the 2005 Form 10-K.

·   Comments related to the nature of a guaranty from (i) a sale of the insurance operation in 2001, (ii) certain derivatives and (iii) the debt of an affiliate.

We have informed the SEC about each guaranty and cited the accounting literature supporting the extent and basis of our disclosure.  To the extent that the guaranty was in existence at October 31, 2005, we have expanded our disclosure in the 2005 Form 10-K. For more information see Notes 3, Transactions with Affiliated Companies, Note 4, Discontinued Operations, and Note 12, Commitments and Contingencies.

·   A comment related to the booking of a lease residual.  While reviewing the accounting for this item so we could respond to the Staff we discovered several similar leases.

This is the restatement  issue discussed in Note 2 under Lease Transactions.

5

·   One comment concerned the increase in Paid-in capital when Navistar assumed $220 million of our debt and the basis for accounting for the increase at the date Navistar assumed the debt.

The assumption of debt by Navistar resulted in an increase to Paid-in capital as it was an intercompany transaction with our Parent. Also, during the 2005 Restatement we concluded that there was an embedded derivative that was not properly valued from the time the debt was issued in 2002 through the assumption in 2004.  This was one of the restatement issues and is discussed in Notes 2 and 3.

·   Finally the Staff asked about various swaps and caps and our use of hedge accounting.

In the 2005 Restatement and the 2005 Form 10-K, we expanded our disclosures on swaps and caps and our revised conclusion that hedge accounting was not appropriate.  Now all changes in fair value for these derivatives are reflected in operating income.

In conclusion, we believe that the issues raised by the SEC staff in their letters to us have been adequately addressed in this Form 10-K.  Further we believe that ultimate resolution of these comments will not have a material affect on the 2005 Form 10-K including the consolidated financial statements or related footnotes.

Periodic Reports Access

Navistar maintains a website with the address www.internationaldelivers.com.  NFC is not including the information contained on Navistar’s website as a part of, or incorporating it by reference into, this Annual Report on Form 10-K.  We make available, free of charge, through Navistar’s website our Annual Report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and amendments to these reports, if any, as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the SEC.

NFC has adopted the Code of Ethics posted on Navistar’s website.  This Code of Ethics applies to all employees, directors and officers, including the chief executive officer and principal financial officer.  NFC intends to disclose any amendments to, or waivers from, the Code of Ethics that are required to be publicly disclosed pursuant to the rules of the Securities and Exchange Commission.

Item 2.  Properties

NFC’s properties principally consist of office equipment and leased office space in Schaumburg, Illinois, Duluth, Georgia and Frisco, Texas. The office equipment owned and in use by us is not significant in relation to the total assets of NFC.

Item 3.  Legal Proceedings

In December 2004, we announced that we would restate our financial results for the fiscal years 2002 and 2003 and the first three quarters of fiscal 2004.  Our restated Annual Report on Form 10-K was filed in February 2005.  The SEC notified us on February 9, 2005, that it was conducting an informal inquiry into our restatement.  On March 17, 2005, we were advised by the SEC that the status of the inquiry had been changed to a formal investigation.  On November 8, 2006, we announced that we would restate our financial results for fiscal years 2002 through 2004 and for the first three quarters of fiscal 2005. We were subsequently informed by the SEC that it was expanding the investigation to include this current restatement. Since April of 2006, NFC and Navistar have been providing information to the SEC regarding the current restatement.  We are fully cooperating with the SEC on this investigation. Based on the status of the investigation, we are not able to predict its final outcome.

We are subject to various claims arising in the ordinary course of business, and are parties to various legal proceedings, which constitute ordinary, routine litigation incidental to our business.

Item 4.  Submission of Matters to a Vote of Security Holders

Intentionally omitted.  See the index page of this report for an explanation.

6

PART II

Item 5.  Market for the Registrant’s Common Equity and Related Stockholder Matters

As of October 31, 2005, International owned all shares of our issued and outstanding capital stock.  No shares are reserved for officers and employees, or for options, warrants, conversions and other rights.  NFC did not pay any dividends in fiscal 2005 or 2004. We paid $50.0 million in dividends to International during fiscal 2003, $175.0 million in February 2007, $100.0 million in July 2007 and $125.0 million in October 2007.

Item 6.  Selected Financial Data

Intentionally omitted.  See the index page of this report for explanation.

Item 7.  Management’s Discussion and Analysis of Results of Operations and Financial Condition

Restatement of previously issued consolidated financial statements

This Annual Report on Form 10-K for the year ended October 31, 2005 is our first filing with the SEC that includes comprehensive financial statements since our Quarterly Report on Form 10-Q for the quarter ended July 31, 2005. All information presented in this Annual Report on Form 10-K reflects restated consolidated financial statements for the years ended October 31, 2002 through 2004 and the first three quarters of the year ended October 31, 2005.

In January 2006, we announced the delay in filing our Annual Report on Form 10-K for the year ended October 31, 2005 until NFC and Navistar resolved a number of complex and technical accounting issues. In November 2006, we announced that our previously issued consolidated financial statements and the independent auditors’ reports thereon for the years ended October 31, 2002 through 2004, and all quarterly financial statements for periods after November 1, 2002, should no longer be relied upon because of errors in the financial reporting process. See Item 9A, Controls and Procedures.

We concluded in February 2007 that an element of effective control existed over certain transferred assets and as such did not meet the requirements for sale accounting treatment under paragraph 9 (c) of  SFAS No. 140,.  As a result, we have recorded the assets (note and lease receivables, net of allowance for loss) and liabilities (secured borrowings) related to certain transfers of assets, reversed the associated gains and losses previously recognized and recorded interest income and interest expense. The cumulative effect of the reversal of sale accounting treatment for retail securitizations was the major contributor to our restatement changes. The restatement adjustments in total resulted in a cumulative net increase to Shareowner’s equity of $8.3 million as of October 31, 2004, and an increase (reduction) in previously reported net income of $13.4 million and $(15.4) million for the years ended October 31, 2004 and 2003, respectively. We also increased our November 1, 2002 opening Retained earnings by $56.4 million, reduced Paid-in capital by $50.5 million and increased Accumulated other comprehensive loss by $12.4 million to recognize corrected items that relate to prior periods. More detail can be found in Note 2, Restatement of Previously Issued Consolidated Financial Statements.

Since the time of announcement, both Navistar and NFC have devoted substantial resources toward the completion of the restatement. We have also obtained assistance from a variety of resources, including technology and accounting consulting firms and outside counsel.

Guarantees

NFC periodically guarantees the outstanding debt of affiliates.  The guarantees allow for diversification of funding sources for the affiliates.  As of October 31, 2005, we had numerous guarantees related to Navistar's three Mexican finance subsidiaries, Navistar Financial, S.A. de C.V. SOFOM E.N.R (“NF”), Arrendadora Financiera Navistar, S.A. de C.V. SOFOM E.N.R (“Arrendadora”) and Navistar Comercial S.A. de C.V. As of October 31, 2005, our maximum exposure under these guarantees is the total amount of debt outstanding of $158.9 million. We have not recorded any liability related to these guarantees.

7

On April 29, 2005 and July 30, 2004, NFC, through its wholly-owned subsidiary Navistar Financial Retail Receivables Corporation (“NFRRC”), legally sold $417.7 million and $325.0 million, respectively, of retail note receivables to a bank conduit.  In order to match fund the fixed rate receivables with the variable rate debt of the conduit, the conduit entered into an interest rate swap agreement on the anticipated cash flows from the receivables.  NFC, as servicer, has indemnified the conduit for the impact any variance in those cash flows has on the swap settlement. As of October 31, 2005, the fair market value of the swap settlement was a loss of $0.8 million.

Contractual Obligations

The following table provides aggregate information about our outstanding contractual obligations and other long-term liabilities as of October 31 and includes asset-backed debt payable out of collections on the securitized receivables transferred to those entities. Such debt is the legal obligation of the consolidated subsidiary whereby there is no recourse to NFC (in millions):

Due in Fiscal	2006			2007-2008		2009-2010	After 2010		Total
Senior and subordinated debt (1)	$	120.7	$	762.3	$	1,966.4	$	1,112.7	$	3,962.1
Operating leases		1.7		2.6		2.0		4.0		10.3
Interest (2)		157.7		292.6		195.2		20.0		665.5
Total	$	280.1	$	1,057.5	$	2,163.6	$	1,136.7	$	4,637.9

⁽¹⁾Principal only

⁽²⁾  Amounts represent estimated contractual interest payments on long-term debt and the effect of our interest rate swaps. Rates in effect as of October 31, 2005, are used for variable rate debt.

Results from Continuing Operations

Results from continuing operations for the last three fiscal years were as follows (in millions):

	2005			2004 (Restated)			2003 (Restated)
Financing revenue	$	218.4		$	193.6		$	203.1
Operating lease revenue		39.6			57.8			68.3
Securitization income		74.5			54.4			47.1
Cost of borrowing		144.3			111.0			135.2
Credit, collection and administrative expenses		45.3			40.7			41.3
Provision for credit losses		5.7			7.8			12.9
Depreciation on operating leases		29.7			42.4			49.8
Income before taxes		123.4			113.7			71.7
Income from continuing operations		79.2			74.5			42.5
Income tax expense from continuing operations		44.2			39.2			29.2
Other Financial Data:
Return on average equity		16.8	%		19.4	%		11.7	%

Financing revenue includes interest revenue from retail notes, finance leases, wholesale notes and retail and wholesale accounts. Financing revenue in 2005 was 12.8% higher than 2004 resulting from higher interest rates and increased note and lease originations. Financing revenue in 2004 was 4.7% lower than 2003 reflecting steady interest rates being charged to customers and a marginal decrease in note and lease originations.

Operating lease revenue decreased by 31.5% in 2005 and 15.4% in 2004. This trend reflects the shift to a more attractive purchase financing environment for equipment users driven by better finance rates, incentives and stronger used vehicle values.

8

We also receive interest income from the Truck and Parts segments of International and corporate International relating to financing of wholesale notes, wholesale accounts, and retail accounts based upon contractual agreements. We receive interest income at agreed upon interest rates applied to the average outstanding balances less interest amounts paid by dealers on wholesale notes and wholesale accounts. Aggregate interest revenue provided by the Truck and Parts segments of International and corporate International was $89.6 million in 2005, $57.7 million in 2004, and $47.3 million in 2003.

Securitization income represents all revenue components resulting from off balance sheet sales of receivables including: excess spread income; servicing fees; initial gain or loss at time of sale; investment income and fair value adjustments to retained interests. Securitization income increased by 36.9% in 2005 and 15.5% in 2004. The increase in 2005 and 2004 directly corresponds to the increase in the aggregate off balance sheet portfolio as securitization has become a more cost effective funding source. As used herein, “balance sheet” refers to the accompanying consolidated statements of financial condition.

Cost of borrowing primarily includes interest expense on debt financing. Cost of borrowing in 2005 was 30.0% higher than 2004, as LIBOR interest rates rose throughout 2005 and we experienced increased funding requirements. Borrowing costs in 2004 were 17.9% lower than 2003, following the steady decline in interest rates experienced throughout 2004 that affected the rates charged on the debt we issued and slightly lower average funding needs. Our average interest rate on senior and subordinated debt was 3.7% in 2005, 2.8% in 2004 and 3.6% in 2003. The ratio of debt to equity was 7.7:1 as of October 31, 2005 and 2004.

Credit, collection and administrative expenses include costs relating to the management and servicing of receivables as well as general business expenses and wages. Such costs increased 11.3% from 2004 to 2005 as administrative employee headcount increased and building relocation expenses were incurred. Cost decreased 1.5% from 2003 to 2004 as there was no substantial change in administrative infrastructure or headcount.

Provision for credit losses on receivables totaled $5.7 million in 2005, a decrease of $2.1 million from the $7.8 million recognized in 2004.  Provision for credit losses on receivables in 2004 was $5.1 million lower than 2003. The decrease in both periods reflects overall improvement in portfolio performance and improved values in the used truck markets. The finance receivables in these pools are considered to be relatively homogenous.

The allocation of the Allowance for losses by receivable type is as follows at October 31 (in millions):

	2005		2004 (Restated)
Retail Notes and Finance Leases	$	13.2	$	13.2
Accounts		0.4		0.4
Total	$	13.6	$	13.6

NFC evaluates its Allowance for losses based on a pool method by asset type: retail notes and finance leases, and retail accounts.  The finance receivables in these pools are considered to be relatively homogenous.

NFC’s estimate of the required allowance is based on applying an estimated loss percentage to the finance receivables.  The estimated loss percentage is based on historical average annual losses as a percent of average finance receivable balances and an estimate of annual losses for the following year as percent of the average receivable balances.

The current year estimate of losses is developed by reviewing past due balances, current repossession frequency, recovery percentages on recently repossessed vehicles and current economic conditions.  The qualitative conditions include, but are not limited to, diesel fuel price changes, freight tonnage and freight carrier profitability.

In addition, when NFC identifies significant customers at probable risk of default, it segregates that customer’s receivables from the pools and separately evaluates the estimated losses based on the market value of the collateral and specific terms of the receivable contract.  NFC uses its experience in remarketing transportation equipment to estimate market values.

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Depreciation on operating leases decreased by 30.0% in 2005 and 14.9% in 2004.  This trend reflects the shift from operating leases to a more attractive purchase financing environment for equipment users driven by better finance rates, incentives and stronger used vehicle values. Retirements increased in 2005 to $119.8 million from $98.6 million in 2004.

Income tax expense from continuing operations includes federal and state income tax. Our effective tax rate was  35.8% in 2005, as compared to 34.5% for 2004 and 40.7% for 2003. The reduction in effective tax rate from 2003 resulted primarily from the elimination of a permanent tax difference upon Navistar’s assumption of our convertible debt in 2004.

Return on average equity decreased in 2005 to 16.8% despite an increase in net income resulting from higher financing revenue and securitization income partially offset by a higher cost of borrowing. The impact of the growth in retained earnings was disproportionately higher than the growth in net income. Return on average equity increased in 2004 to 19.4% as a result of an increase in net income on account of a lower cost of borrowing. The impact of the growth in retained earnings was partially offset by $50.0 million in dividends paid during 2003.

Financing Environment

Financing Volume and Finance Market Share

NFC’s net retail note and finance lease originations/purchases were $1.6 billion in fiscal 2005, $1.4 billion in fiscal 2004 and $1.3 billion in fiscal 2003. NFC provided 15.1% of retail and lease financing for the new International trucks sold in the U.S. at October 31, 2005, compared to 15.7% at October 31, 2004 and 15.8% at October 31, 2003. Although market share was down slightly as International increased its direct sales, originations increased primarily as a result of higher sales volume by International’s dealers.

NFC provided 96.2% of the wholesale financing of new trucks sold to International’s dealers in fiscal 2005, 95.4% in 2004 and 93.7% in 2003. Wholesale note originations/purchases were $5.3 billion in fiscal 2005, $4.3 billion in fiscal 2004 and $3.2 billion in fiscal 2003.

Serviced wholesale notes balances were $1.5 billion, $1.3 billion and $860.8 million as of October 31, 2005, 2004 and 2003, respectively.  These increases reflect International’s higher sales to its dealers in the United States.

Funds Management

We have traditionally obtained the funds to provide financing to International's dealers and retail customers from the financing of receivables in securitization transactions, short and long-term bank borrowings, and medium and long-term debt.  Given our debt ratings and the overall quality of our receivables, the financing of receivables in securitizations has been the most economical source of funding.

Credit Ratings

NFC’s debt ratings during the three years ended October 31, 2005, were as follows:

	Fitch	Moody’s	Standard and Poor’s
Senior unsecured debt	BB	Ba3	BB-
Outlook as of October 31, 2005	Stable	Stable	Stable

In July 2006, Moody’s withdrew its credit rating for both Navistar and NFC.  In January 2006, Standard and Poor’s changed its outlook to Negative from Stable.  These actions have caused current borrowing rates to be higher.

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Funding Facilities

We finance receivables through securitizations through the asset-backed public market and private placement sales. NFC, through these securitizations, despite a rising rate market, has been able to fund its operating needs at rates which are more economical than those available to NFC in the public unsecured bond market. We finance receivables using a process commonly known as securitization, whereby asset-backed securities are sold via public offering or private placement.   In a typical securitization transaction, NFC transfers a pool of finance receivables to a special purpose entity (“SPE”).  The SPE then transfers the receivables to a bankruptcy remote, legally isolated entity, generally a trust, in exchange for proceeds from interest bearing securities.  These securities are issued by the trust and are secured by future collections on the receivables sold to the trust. These transactions are considered sales from a legal standpoint but are subject to the provisions of SFAS No. 140 as to accounting treatment.  When we finance receivables we use various wholly-owned special purpose subsidiaries depending on the assets being sold. NFRRC finances retail notes and finance leases; ITLC finances operating leases and some terminal residual clause leases.

We securitized $1.9 billion and $968.0 million of retail notes and finance leases during fiscal 2005 and 2004, respectively, through on-balance sheet securitization arrangements through NFRRC.  As of October 31, 2005, the remaining shelf registration available to NFRRC for the public issuance of asset-backed securities was $2.5 billion.  The shelf registration expired March 31, 2006, without any further issuances pursuant to it since October 31, 2005.  We are in the process of preparing a new registration statement. Compliance with new SEC requirements for securitized debt offerings known as Regulation AB goes beyond preparing a registration statement. Processing and reporting are key aspects.  We expect a preliminary filing of the new registration statement in 2008.

We finance wholesale notes through our wholly-owned subsidiary Navistar Financial Securities Corporation (“NFSC”), which has in place a revolving wholesale note trust that provides for the funding of eligible wholesale notes.  As of October 31, 2005 and 2004, the trust owned $1.4 billion and $1.2 billion, respectively, of wholesale notes and marketable securities. Components of the wholesale note trust funding certificates as of October 31, 2005 were a $200.0 million tranche of investor certificates maturing in July 2008, three $212.0 million tranches of investor certificates and notes expected to mature equally on June 26, 2006, May 25, 2007 and February 25, 2010, variable funding certificates (“VFC”) with a maximum capacity of $400.0 million expected to mature December 26, 2005 and a seller’s subordinated interest of $202.1 million as of October 31, 2005 and $170.4 million as of October 31, 2004. On June 26, 2006, the wholesale note trust paid off $212.0 million of the investor certificates and on May 25, 2007 paid off $212.0 million of the investor notes. In May 2006 the VFC was increased to $600.0 million, then to $800.0 million in October 2006. In January 2007 the expiration date was extended from May 2007 to January 2008. In December 2007 funding under the VFC was extended from January 2008 to November 2008.

During the second quarter of 2004, our wholly-owned subsidiary, Truck Retail Accounts Corporation (“TRAC”) obtained financing for its retail accounts with a bank conduit that provides for the funding of up to $100.0 million of eligible retail accounts.  The sales of retail accounts receivable through TRAC constitute sales under SFAS No. 140, and therefore sold accounts are removed from NFC’s balance sheets and the investor’s interests are not reflected as liabilities.  The revolving retail account facility expired in August 2006, and was renewed and amended with an expiration date of August 8, 2008.  As of October 31, 2005, this facility was fully utilized.

Truck Engine Receivables Financing Co. (“TERFCO”), our wholly-owned subsidiary, had in place a trust to provide funding of $100.0 million of unsecured trade receivables generated by the sale of diesel engines and engine service parts from International to Ford Motor Company.  This facility was fully utilized as of October 31, 2005.  On December 15, 2005, the trust was fully repaid and is no longer used.

In June 2005, Truck Retail Instalment Paper Corp. (“TRIP”), a special purpose, wholly-owned subsidiary of NFC, entered into a new $500.0 million revolving facility to replace the 2000 facility that otherwise would have expired in October 2005.  The new notes mature in June 2010 and are subject to optional early redemption in full without penalty or premium upon satisfaction of certain terms and conditions on any date on or after April 15, 2010.  NFC uses TRIP to temporarily fund retail notes and retail leases, other than operating leases.  This facility is used primarily during the periods prior to a securitization of retail notes and finance leases. NFC retains a repurchase option against the retail notes and leases sold into TRIP; therefore, TRIP’s assets and liabilities are included in our consolidated statements of financial condition. As of October 31, 2005, NFC had $232.6 million in retail notes and finance leases in TRIP.  Restricted cash and cash equivalents as of October 31, 2005 included $267.4 million of the unused TRIP facility available as of that date.

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International Truck Leasing Corporation (“ITLC”), our wholly-owned subsidiary, was established to provide for the funding of certain leases.  During fiscal 2005, ITLC received proceeds of $42.1 million in the form of collateralized borrowings. As of October 31, 2005, the balance of ITLC’s collateralized borrowing secured by operating leases was $54.9 million.

On July 1, 2005, NFC entered into a Revolving Credit Agreement (“the Agreement”).  The new contractually committed credit facility has two primary components, a term loan ($400.0 million originally), and a revolving bank loan ($800.0 million). The latter has a Mexican sub-revolver ($100.0 million), which may be used by Navistar’s three Mexican subsidiaries.  The entire credit facility matures July 1, 2010, however, the term loan is to be repaid in 19 consecutive quarterly amounts of $1.0 million and a final payment of $381.0 million on July 1, 2010.  The first quarterly payment was paid on October 31, 2005.  As of October 31, 2005, NFC utilized $560.0 million of the revolver facility; $33.0 million was utilized by Navistar's Mexican finance subsidiaries. On March 28, 2007, NFC entered into a First Amendment to the Agreement increasing the term loan component by $220.0 million and increasing the maximum permitted consolidated leverage ratio from 6:1 to 7:1 through November 1, 2007, and from 6:1 to 6.5:1 for the period November 1, 2007, through April 30, 2008. After April 30, 2008, the ratio returns to 6:1 for all periods thereafter.

Certain affirmative covenants under the Agreement require that NFC file its Annual Report on Form 10-K for the period ended October 31, 2005 by January 31, 2006.  On January 17, 2006, NFC received a waiver of the existing defaults under the Agreement through May 31, 2006, including potential future defaults for failure to provide financial statements to the lenders.  This waiver permitted NFC to incur additional borrowings under the Agreement through May 31, 2006, provided no other un-waived defaults occurred.  On March 2, 2006, NFC received a Second Waiver and Consent through January 31, 2007, which extended the previous waiver covering a default or event of default created by NFC’s and Navistar’s failure to meet the filing requirements of Sections 13 and 15 of the Exchange Act of 1934, as amended, when NFC and Navistar failed to file its 2005 Annual Report on Form 10-K with the Securities and Exchange Commission, and further waived a default, if any, created by the right of the holders of our long-term debt to accelerate payment of such debt because of the late filing of required SEC reports.  In November 2006, NFC received a Third Waiver and Consent, which extended through October 31, 2007, and expanded the previous waivers which waive any default or event of default that would result solely from NFC and Navistar’s failure to meet the filing requirements of Sections 13 and 15 of the Exchange Act of 1934, as amended, with respect to their Annual Reports on Form 10-K for 2005 and 2006 and their quarterly reports on Form 10-Q for the periods from November 1, 2005, through July 31, 2007. On October 23, 2007, NFC received a Second Amendment and a Fourth Waiver.  The waiver extends through December 31, 2007, and expands the previous waivers which waive any default or event of default that would result solely from NFC’s and Navistar’s failure to meet the filing requirements mentioned in third waiver and including Sections 13 and 15 of the Exchange Act of 1934, as amended, with respect to their Annual Reports on Form 10-K for 2007.  During the period from November 1, 2007, until the waiver terminates, interest rate on certain loans under the Agreement shall be increased by 0.25%. In December 2007, NFC entered into a Fifth Waiver to the Agreement expanding the scope of certain default conditions covered by the waiver therein until November 30, 2008.

Several publicly funded retail and wholesale securitizations transactions, including TRIP, have similar covenants to the private transaction which requires us to provide financial statements.   If the investors substantiate that our failure is material, we could be replaced as servicer resulting in the loss of a portion of servicing revenueof approximately $10.0 million annually.  We are in regular contact with the trustees on the public deals and do not believe the investors will attempt to substantiate that the lack of the servicer report reported on by our independent accountants or our delayed filing of the Form 10-K constitutes a material adverse affect on them.  We are not aware of any investor attempting to make such a claim since our first announcement of the delay in January 2006. We do not believe loss of servicing or accelerated amortization would have a material adverse effect on us. Similar to the waivers obtained on the Agreement, we have obtained waivers for the private retail transactions and the private portion of the wholesale note transaction.  These waivers are similar in scope to those of the Agreement and expire on or about November 30, 2008.

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Prior to amending and restating the Agreement in July 2005, NFC had received waivers to cure default conditions on the original credit facility dated December 8, 2000, as amended. Specifically, on January 31, 2005, NFC received a waiver for failure to timely complete and deliver its Annual Report on Form 10-K for the year ended October 31, 2004. On March 15, 2005, NFC received a waiver for failure to timely complete and deliver its Quarterly Report on Form 10-Q for the three months ended January 31, 2005.

Critical Accounting Estimates

Our consolidated financial statements are prepared in accordance with GAAP in the United States. In connection with the preparation of our consolidated financial statements, we use estimates and make judgments and assumptions about future events that affect the reported amounts of assets, liabilities, revenue, expenses and the related disclosures. Our assumptions, estimates and judgments are based on historical experience, current trends and other factors we believe are relevant at the time we prepared our consolidated financial statements.

Our significant accounting policies are discussed in Note 1, Summary of Accounting Policies, to our accompanying consolidated financial statements. We believe that the following policies are the most critical in fully understanding and evaluating our reported results as they require us to make difficult, subjective and complex judgments.  In determining whether an estimate is critical we consider if:

·   the nature of the estimates or assumptions contain levels of subjectivity and judgment necessary to account  for highly uncertain matters or the susceptibility of such matters to change; and

·   the impact of the estimates and assumptions on financial condition or operating performance is material.

We have reviewed these critical accounting policies and related disclosures with the Audit Committee of our Board of Directors.

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Description	Judgments and Uncertainties	Effect if Actual Results Differ from Assumptions
Allowance for Losses
The allowance for losses is our estimate of losses incurred in our finance receivable portfolio. The portfolio consists of retail notes, finance leases, wholesale notes and accounts. The allowance is established through a charge to provision for losses. It is evaluated based on a pool method by type of receivable, primarily using historical and current net loss experience in conjunction with current portfolio trends in delinquencies and repossession frequency for each receivable type. Specific allowances are made for significant impaired receivables.	We exercise significant judgment about the timing, frequency and severity of losses and the impact of general economic conditions and current delinquency and repossession frequency. We evaluate the adequacy of the allowance for losses considering several risk factors for each type of receivable.  For retail notes, finance leases and retail accounts, the primary risk factors are the general economy, fuel prices, type of freight being hauled, length of freight movements, number of competitors our customers have in their lane of service, how extensively our customers use independent operators and the number and profitability of owner operators. To the extent our judgments about these risk factors and conditions are not accurate an adjustment to our allowance for losses may materially impact our results of operations, financial condition or cash flows.	If we were to adjust the estimated weighted average loss rate of 0.42% using the upper and lower limit of estimated weighted average loss percentages used by the company from 2002 through 2006, the required allowance would increase from $13.6 million to $21.3 million, and decrease to $12.4 million, respectively.
Amounts Due from Sales of Receivables (Including Fair Value Calculations)
Some of our securitization transactions qualify as sales under SFAS No. 140. Gains or losses on sales of receivables are credited or charged to securitization income in the periods in which the sales occur. Amounts due from sales of receivables, also known as retained interests, which include interest-only receivables, cash reserve accounts and subordinated certificates, are recorded at fair value in the periods in which the sales occur. The accretion of the discount related to the retained interests is recognized on an effective yield basis.	We estimate the payment speed for the receivables sold, the discount rate used to determine the present value of the retained interests, and the anticipated net losses on the receivables to calculate the gain or loss. The method for calculating the gain or loss aggregates the receivables into a homogeneous pool. Estimates are based upon historical and current experience, anticipated future portfolio performance, market-based discount rates and other factors and are made for each securitization transaction. In addition, we estimate the fair value of the retained interests on a quarterly basis and record the changes in operations.	The primary assumption used to estimate retained interests in sold receivables is the discount rate. An immediate adverse change in the discount rate used to estimate retained interests of 10% as of October 31, 2005, would result in a decrease in pre-tax income of $2.4 million.

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Description	Judgments and Uncertainties	Effect if Actual Results Differ from Assumptions
Net Investment in Operating Leases
We have investments in trucks, tractors and trailers that are leased to customers under operating lease agreements.   These vehicles are depreciated on a straight-line basis over the term of the lease in an amount necessary to reduce the leased asset to its estimated residual value at the end of the lease term.	The residual values of the equipment represent estimates of the values of the assets at the end of the lease contracts and are initially recorded based on estimates of future market values.  Realization of the residual values is dependent on our future ability to market the vehicles under then prevailing conditions. We review residual values periodically to determine that recorded amounts are appropriate and the equipment on operating lease assets has not been impaired.	Our estimated residual values impact the timing and amount of depreciation expense. An adverse change in the aggregate estimated residual value of equipment under operating leases of 5% as of October 31, 2005 would result in a cumulative decrease in pre-tax income of $3.1 million over the useful life of the equipment.
Pension and Other Postretirement Benefits
We provide postretirement benefits to a substantial portion of our employees. Accounting for these benefits require the use of our estimates and assumptions as well as third party actuarial data.	The primary assumptions include factors such as discount rates, health care cost trend rates, inflation, expected return on plan assets, retirement rates, mortality rates and other factors.	As of October 31, 2005, an increase in the discount rate of 0.5%, assuming inflation remains unchanged, would result in a decrease of $3.3 million in the pension obligations and a decrease of $0.2 million in the net periodic benefit cost. A 1% increase in the discount rate of the other postretirement plans will result in a decrease of $2.4 million for the obligation and a decrease of $0.2 million in the net periodic benefit cost. A decrease of 0.5% in the discount rate as of October 31, 2005, assuming inflation remains unchanged, would result in an increase of $3.7 million in the pension obligations and an increase of $0.2 million in the net periodic benefit cost. A decrease of 1% in the discount rate of the other postretirement benefit plans would result in an increase in other postretirement obligations of $2.9 million and an increase of $0.2 million in the net periodic benefit cost. The calculation of the expected return on plan assets is described in Note 11, Postretirement benefits, to the accompanying consolidated financial statements. The expected return on assets was 9.0% for 2005, 2004 and 2003. The expected return on assets is a long-term assumption whose accuracy can only be measured over a long time period based upon past experience.  A variation in the expected return on assets by 0.5% as of October 31, 2005 would result in a variation of approximately $0.3 million in the net periodic benefit cost.

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Description	Judgments and Uncertainties	Effect if Actual Results Differ from Assumptions
Income Taxes
We account for income taxes using the asset and liability method. Tax laws require certain items to be reported in tax filings at different times than the items are recognized in the consolidated financial statements. A current liability is recognized for the estimated taxes payable for the current year. Deferred income taxes represent the future consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. Deferred income taxes are adjusted for enacted changes in tax laws in the period such changes are enacted. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. Realization is dependent on generating sufficient future taxable income; changes in estimates of future taxable income could affect future evaluations.  Income tax is computed under a tax sharing agreement between us and our parent as if we were a separate taxpayer, as are tax payments and realization of tax assets.	The ultimate recovery of certain of our deferred tax assets is dependent upon the amount and timing of future taxable income and other factors such as the taxing jurisdiction in which the asset is to be recovered.  A high degree of judgment is required to determine if and the extent that valuation allowances should be recorded against deferred tax assets. We have provided valuation allowances at October 31, 2005, and October 31, 2004 aggregating ($0.7) and ($0.6) million, respectively for state deferred tax assets based upon our current assessment of factors described above. Contingent tax liabilities are based upon our assessment of the likelihood that we have incurred a liability. Such liabilities are reviewed based upon recent updates in tax laws and regulations including recent judicial rulings. As of October 31, 2005, we recorded a contingent tax liability of $5.8 million.	Although we believe that our approach to estimates and judgments as discussed herein are reasonable, actual results could differ and we may be exposed to increases or decreases in income tax expense that could be material.

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Description	Judgments and Uncertainties	Effect if Actual Results Differ from Assumptions
Contingent tax liabilities must be accounted for separately from deferred tax assets and liabilities; an accrual is recorded when we believe it is probable that a liability has been incurred for taxes and related interest and penalties, if any. It must be probable that a contingent tax benefit will be sustained before the contingent benefit is recognized for financial reporting.

New Accounting Pronouncements

In November 2007, the Staff of the SEC issued SAB No. 109, Written Loan Commitments Recorded at Fair Value through Earnings. SAB No. 109 provides guidance on the consideration of expected net future cash flows related to the servicing of written loan commitments that are accounted for at fair value. SAB No. 109 is effective for first fiscal quarter beginning after December 15, 2007. We will adopt SAB No. 109 as of February 1, 2008. We are currently evaluating if adoption of SAB No. 109 will have an impact on our consolidated financial condition, results of operations and cash flows.

In February 2007, the FASB issued Statement of Financial Accounting Standards (SFAS) No. 159, The Fair Value Option for Financial Assets and Financial Liabilities, which provides companies with an option to report selected financial assets and liabilities at fair value. The new standard also establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. It also requires companies to provide additional information that will help investors and other users of financial statements to more easily understand the effect of a company’s choice to use fair value on its earnings. The new Statement also requires entities to display the fair value of those assets and liabilities for which the company has chosen to use fair value on the face of the balance sheet. SFAS No. 159 does not eliminate disclosure requirements included in other accounting standards, including requirements for disclosures about fair value measurements included in SFAS No. 107, Disclosure about Fair Value of Financial Instruments, and SFAS No. 157, Fair Value Measurements.  SFAS No. 159 is effective as of the beginning of an entity’s first fiscal year beginning after November 15, 2007, which would be fiscal 2009 for us. Early adoption is permitted as of the beginning of the previous fiscal year provided that the entity makes that choice in the first 120 days of that fiscal year and also elects to apply the provisions of SFAS No. 157.  We have not yet commenced evaluating the potential impact, if any, of the adoption of SFAS No. 159 on our consolidated financial condition, results of operations, and cash flows.

In September 2006, the Staff of the SEC issued SAB No. 108, Considering the Effects of Prior-Year Misstatements when Quantifying Misstatements in Current Year Financial Statements.  SAB No. 108 provides guidance on the consideration of the effects of prior year misstatements in quantifying current year misstatements. SAB No. 108 is effective for fiscal years ending after November 15, 2006. We will adopt SAB No. 108 as of October 31, 2007. However, because of the restatement of previously issued financial statements we believe the adoption of SAB No. 108 should not have a material impact on our consolidated financial condition, results of operations and cash flows.

In September 2006, the FASB issued SFAS No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans,  which requires a company that sponsors one or more single-employer defined benefit pension and other postretirement benefit plans (benefit plans) to recognize in its balance sheet the funded status of a benefit plan, which is the difference between the fair value of plan assets and the benefit obligation, as a net asset or liability, with an offsetting adjustment to accumulated other comprehensive income in shareholders’ equity. SFAS No. 158 requires additional financial statement disclosure regarding certain effects on net periodic benefit cost. SFAS No. 158 requires prospective application and the recognition and disclosure requirements are effective for fiscal years ending after December 15, 2006, our fiscal 2007. We will adopt the provisions of SFAS No. 158 in fiscal 2007.  Based on the funded status of our pension and postretirement plans as of October 31, 2005, we believe the adoption of SFAS No. 158 would increase our postretirement benefits liability by $4.4 million, decrease Total assets by $6.1 million and decrease Shareowner’s equity by $10.5 million.

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In addition, SFAS No. 158 requires that a company measure defined benefit plan assets and obligations at its year-end balance sheet date. We currently use our year-end balance sheet date as our measurement date, and as a result, that new requirement does not affect us.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value under GAAP, and expands disclosures about fair value measurements. SFAS No. 157 applies to other accounting pronouncements that require or permit fair value measurements. The new guidance is effective for financial statements issued for fiscal years beginning after November 15, 2007, our fiscal 2009 and for interim periods within those fiscal years. We are currently evaluating if adoption of SFAS No. 157 will have an impact on our consolidated financial condition, results of operations and cash flows.

In June 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, which is effective for fiscal years beginning after December 15, 2006. FASB Interpretation No. 48 clarifies the accounting for uncertainty in income taxes recognized in the financial statements by prescribing a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FASB Interpretation No. 48 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. We will adopt the provisions of FASB Interpretation No. 48 effective November 1, 2007, however, we are still evaluating the potential impact, if any, of the adoption on our consolidated financial condition, results of operations, and cash flows.

In March 2006, the FASB issued SFAS No. 156, Accounting for Servicing of Financial Assets, which changes the accounting for all loan servicing rights which are recorded as the result of selling a loan where the seller undertakes an obligation to service the loan, usually in exchange for compensation. The Statement amends current accounting guidance by permitting the servicing right to be recorded initially at fair value and also permits the subsequent reporting of these assets at fair value. SFAS No. 156 is effective as of the beginning of a company’s first fiscal year that begins after September 15, 2006. We adopted SFAS No. 156 on November 1, 2006, and it did not have a material effect on our financial condition, results of operations, or cash flows.

In February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid Instruments.  The Statement provides companies with relief from having to separately determine the fair value of an embedded derivative that would otherwise be required to be bifurcated from its host contract in accordance with SFAS No.133, Accounting for Derivatives and Hedging Activities. SFAS No. 155 allows a company to make an irrevocable election to measure such a hybrid financial instrument at fair value in its entirety, with changes in fair value recognized in earnings.  The Statement also (1) clarifies which interest-only strips and principal-only strips are not subject to SFAS No. 133; (2) establishes a requirement for holders of securitized financial assets to evaluate whether the interest is a freestanding derivative or a hybrid financial instrument that contains an embedded derivative requiring bifurcation; (3) clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives; and (4) eliminates the prohibition on a qualifying special-purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument.  The Statement is effective for all financial instruments acquired, issued or subject to a re-measurement event occurring after the beginning of a company's first fiscal year that begins after September 15, 2006.  We adopted SFAS No. 155 on November 1, 2006, and it did not have a material effect on our financial condition, results of operations, or cash flows.

In May 2005, the FASB issued SFAS No.154, Accounting Changes and Error Corrections. This Statement replaces APB Opinion No. 20, Accounting Changes, and SFAS No. 3, Reporting Accounting Changes in Interim Financial Statements, and changes the requirements for the accounting for and reporting of a change in accounting principle. SFAS No.154 applies to all voluntary changes in accounting principle, and it applies to changes required by a new accounting pronouncement in the unusual instance that the pronouncement does not include specific transition provisions. The new standard requires retrospective application to prior periods’ financial statements of a voluntary change in accounting principle, unless it is impracticable. APB Opinion No. 20 previously required that most voluntary changes in accounting principle be recognized by including in net income of the period of the change the cumulative effect of changing to the new accounting principle. In addition, SFAS No. 154 requires that we account for a change in method of depreciation, amortization, or depletion for long-lived, non-financial assets as a change in accounting estimate that is affected by a change in accounting principle. APB Opinion No. 20 previously required that we report such a change as a change in accounting principle. SFAS No. 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. Earlier application is permitted for accounting changes and corrections of errors made occurring in fiscal years beginning after June 1, 2005. The Statement does not change the transition provisions of any existing accounting pronouncements, including those that are in a transition phase as of the effective date of this Statement.We will adopt this Statement in fiscal 2007 and apply its guidance for any changes in accounting principle, changes in accounting estimate and a correction of an error in previously issued financial statements.  However, because of the restatement of our previously issued financial statements we believe the adoption of this Statement should not have a material impact.

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In March 2005, the FASB issued FASB Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations. FASB Interpretation No. 47 clarifies that the term “conditional asset retirement obligation,” as used in SFAS Statement No. 143, Accounting for Asset Retirement Obligations, refers to a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the entity. The obligation to perform the asset retirement activity is unconditional even though uncertainties exist about the timing and/or method of settlement. Uncertainty about the timing and/or method of settlement of a conditional asset retirement obligation should be factored into the measurement of the liability when sufficient information exists. FASB Interpretation No. 47 also clarifies when a company would have sufficient information to reasonably estimate the fair value of an asset retirement obligation.  FASB Interpretation No. 47 is effective no later than the end of fiscal years ending after December 15, 2005.  NFC does not have any such asset retirement obligations at this time and, as a result, we do not expect that this Interpretation will have an impact on our consolidated financial condition, results of operations and cash flows.

In December 2004, the FASB issued SFAS No. 153, Exchange of Nonmonetary Assets, which amends APB Opinion No. 29, Accounting for Nonmonetary Transactions.  This Statement eliminates the exception to fair value in APB Opinion No. 29 for exchanges of similar productive assets and replaces it with a general exception for exchanges that do not have commercial substance. This Statement is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. The application of this Statement will not have an impact on our consolidated financial condition or results of operations.

We have determined that all other recently issued accounting pronouncements do not apply to our operations or will not have a material impact on our consolidated financial condition, results of operations or cash flows.

2005 Quarterly Results (Unaudited)

Certain selected quarterly financial information for the fiscal year ended October 31, 2005, are presented below.

The consolidated statements of income for the three month periods ended January 31, 2005, April 30, 2005, and July 31, 2005 have been restated from previously reported results.  Consolidated statements of financial condition as of January 31, 2005, April 30, 2005, and July 31, 2005 have also been restated from previously reported results. For additional information and a detailed discussion of the accounts restated, see Note 2 to the accompanying consolidated financial statements.

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Consolidated Statements of Income

	For the Three Months Ended
Millions of dollars	January 31, 2005					April 30, 2005				July 31, 2005
	Previously					Previously				Previously						October 31,
	Reported		Restated			Reported		Restated		Reported			Restated			2005
Revenues
Retail notes and finance lease	$	6.7	$	47.3		$	12.4	$	49.3	$	10.1		$	50.6		$	53.8
Operating leases revenue		11.6		11.2			11.1		10.9		10.1			9.7			7.8
Wholesale notes interest		11.2		2.5			11.0		2.5		12.7			3.5			3.4
Retail and wholesale accounts		5.7		1.3			8.5		1.4		7.5			1.4			1.4
Securitization income		26.8		15.0			18.6		17.6		20.4			20.8			21.1
Other revenues		2.7		4.0			2.6		3.0		3.9			5.8			8.7
Total revenues		64.7		81.3			64.2		84.7		64.7			91.8			96.2
Expenses
Cost of borrowing:
Interest expense		10.2		28.2			11.1		28.3		15.3			36.1			40.7
Other		1.5		2.7			1.7		2.5		1.7			2.5			3.3
Credit, collections and administrative		10.4		9.4			13.6		14.1		12.6			11.3			10.5
Provision for credit losses		2.5		1.3			4.1		1.8		2.4			2.2			0.4
Depreciation on operating leases		8.2		8.2			8.1		7.5		7.8			7.4			6.6
Derivative expense (income)		0.1		(0.5	)		1.0		0.5		(0.1	)		(0.2	)		(0.1	)
Other expenses		0.6		1.2			0.4		1.3		1.2			2.0			1.4
Total expenses		33.5		50.5			40.0		56.0		40.9			61.3			62.8
Income before taxes		31.2		30.8			24.2		28.7		23.8			30.5			33.4
Income tax expense		12.1		11.0			9.3		10.2		9.3			10.9			12.1
Net income	$	19.1	$	19.8		$	14.9	$	18.5	$	14.5		$	19.6		$	21.3

Revenue amounts previously reported under Income related to sales of finance receivables and Servicing income have been combined with Securitization income to conform to the current presentation. Amounts currently presented under Derivative expense (income) were previously reported as a component of Retail notes and finance lease revenue.

20

Consolidated Statements of Financial Condition

	As of
Millions of dollars	January 31, 2005						April 30, 2005						July 31, 2005
	Previously						Previously						Previously
	Reported			Restated			Reported			Restated			Reported			Restated
ASSETS
Cash and cash equivalents	$	40.4		$	49.8		$	26.3		$	34.9		$	34.3		$	47.6
Finance receivables:
Finance receivables		938.0			2,931.3			848.9			3,021.3			686.8			3,097.8
Finance receivables from affiliates		31.2			160.5			40.3			185.1			50.2			184.9
Allowance for losses		(3.9	)		(13.9	)		(3.1	)		(14.3	)		(3.2	)		(15.0	)
Finance receivables, net		965.3			3,077.9			886.1			3,192.1			733.8			3,267.7
Amounts due from sales of receivables		384.7			501.0			442.1			533.2			481.8			434.4
Net accounts due from affiliates		-			-			-			-			10.9			4.3
Net investment in operating leases		136.1			136.7			119.3			121.1			107.5			108.3
Vehicle inventory		6.0			24.5			3.1			18.7			3.6			14.5
Restricted cash and cash equivalents		315.7			529.6			507.8			740.8			1,013.9			1,636.7
Other assets		25.0			36.3			29.7			34.7			45.5			49.4
Total assets	$	1,873.2		$	4,355.8		$	2,014.4		$	4,675.5		$	2,431.3		$	5,562.9
LIABILITIES AND SHAREOWNER’S EQUITY
Net accounts due to affiliates	$	5.0		$	53.6		$	95.6		$	127.5		$	-		$	-
Senior and subordinated debt		1,297.4			3,737.9			1,317.1			3,933.1			1,825.9			4,931.7
Other liabilities		123.9			111.9			141.3			143.4			127.2			139.5
Total liabilities		1,426.3			3,903.4			1,554.0			4,204.0			1,953.1			5,071.2
Shareowner’s equity
Capital stock		1.6			1.6			1.6			1.6			1.6			1.6
Paid-in capital		181.3			139.6			181.3			139.6			181.3			139.6
Retained earnings		265.1			320.2			280.0			338.7			294.5			358.3
Accumulated other comprehensive loss		(1.1	)		(9.0	)		(2.5	)		(8.4	)		0.8			(7.8	)
Total shareowner’s equity		446.9			452.4			460.4			471.5			478.2			491.7
Total liabilities and shareowner’s equity	$	1,873.2		$	4,355.8		$	2,014.4		$	4,675.5		$	2,431.3		$	5,562.9

21

Quarter Ended January 31, 2005, Restated

For the quarter ended January 31, 2005, NFC recorded net revenues of $81.3 million. Restated Wholesale note interest declined from previously reported amounts as certain income components were presented in Securitization income.  Ending wholesale note balances were $97.8 million.

Retail securitizations were $750.0 million during the first quarter, primarily reflecting acquisitions from the prior year.  These receivables remained on the books as the transactions did not qualify for sale accounting under FAS 140.  Restated retail notes and finance lease income increased from previously reported amounts as a result of the error in accounting for securitization transactions.  These transactions now remain on NFC’s books; therefore, NFC continues to report the earnings from these receivables in its operating results.  Ending retail and lease balances were $2.7 billion

Restated securitization income declined from previously reported amounts.  As a result of the error in accounting for the securitization transactions NFC no longer earns servicing fees on its portfolio of securitized non-fleet retail note and finance lease receivables.  This decline was partially offset by amounts remapped from wholesale note interest.

Restated cost of borrowings and provision for credit losses increased from previously reported amounts as a result of the error in accounting for securitization transactions.  These transactions now remain on NFC’s books; therefore, NFC includes a provision for losses on these receivables as well as the interest costs incurred to fund these receivables in its operating results.  In addition, changes in the timing and amounts of credit losses recognized during the quarter impacted the provision for losses charge.

NFC recorded income before taxes of $30.8 million and net income of $19.8 million for the first quarter.  The effective tax rate for the quarter was 36%.

Quarter Ended April 30, 2005, Restated

For the quarter ended April 30, 2005, NFC recorded net revenues of $84.7 million. Restated wholesale note interest declined from previously reported amounts as certain income components were presented in securitization income.  Ending wholesale note balances were $123.3 million.

Retail securitizations were $418.0 million during the second quarter.  These receivables remained on the books as the transactions did not qualify for sale accounting under FAS 140.  Restated retail notes and finance lease income increased from previously reported amounts as a result of the error in accounting for securitization transactions.  These transactions now remain on NFC’s books, so NFC continues to report the earnings from these receivables in its operating results.  Ending retail and lease balances were $2.8 billion

Restated securitization income declined from previously reported amounts since NFC no longer earns servicing fees on its portfolio of securitized non-fleet retail note and finance lease receivables.  This is a result of the error in accounting for the securitization transactions.  The decline in securitization income was partially offset by amounts remapped from wholesale note interest.

Restated cost of borrowings and provision for credit losses increased from previously reported amounts as a result of the error in accounting for securitization transactions.  These transactions now remain on NFC’s books and therefore NFC includes a provision for losses on these receivables as well as the interest costs incurred to fund these receivables in its operating results.  Changes in the timing and amounts of credit losses recognized during the quarter also impacted the provision for losses charge.

NFC recorded income before taxes of $28.7 million and net income of $18.5 million for the second quarter.  The effective tax rate for the quarter was 36%.

22

Quarter Ended July 31, 2005, Restated

For the quarter ended July 31, 2005, NFC recorded net revenues of $91.8 million. Restated wholesale note interest declined from previously reported amounts as certain income components were presented in securitization income.  Ending wholesale note balances were $82.0 million.

Retail securitizations were $385.0 million during the third quarter.  These receivables remained on the books as the transactions did not qualify for sale accounting under FAS 140.  Restated retail notes and finance lease income increased from previously reported amounts as a result of the error in accounting for securitization transactions.  These transactions now remain on NFC’s books; therefore, NFC continues to report the earnings from these receivables in its operating results.  Ending retail and lease balances were $2.9 billion

Restated securitization income increased from previously reported amounts as a result of certain income components being remapped from wholesale note interest to securitization income. This increase was partially offset by the error in accounting for the securitization transactions.  NFC no longer earns servicing fees on its portfolio of securitized non-fleet retail note and finance lease receivables.

Restated cost of borrowings and provision for credit losses increased from previously reported amounts as a result of the error in accounting for securitization transactions.  These transactions now remain on NFC’s books, so NFC includes a provision for losses on these receivables as well as the interest costs incurred to fund these receivables in its operating results.  Changes in the timing and amounts of credit losses recognized during the quarter also impacted the provision for losses charge.

NFC recorded income before taxes of $30.5 million and net income of $19.6 million for the third quarter.  The effective tax rate for the quarter was 36%.

Quarter Ended October 31, 2005

For the quarter ended October 31, 2005, NFC recorded net revenues of $96.2 million. Wholesale note interest reflected the remapping of certain income components to securitization income.  Ending wholesale note balances were $98.1 million.

Retail securitizations were $365.0 million during the fourth quarter.  As these transactions did not qualify for sale accounting under FAS 140, they remained on the books.  Retail notes and finance lease income included income on securitized receivables as a result of the error in accounting for securitization transactions.  These transactions now remain on NFC’s books and NFC continues to report the earnings from these receivables in its operating results.  Ending retail and lease balances were $3.1 billion

Securitization income included the impact of certain income components being remapped from wholesale note interest to securitization income. Securitization income was also impacted by the error in accounting for the securitization transactions, which no longer allows NFC to earn servicing fees on its portfolio of securitized non-fleet retail note and finance lease receivables.

Cost of borrowings and provision for credit losses have been impacted by the error in accounting for securitization transactions. Since these transactions now remain on NFC’s books, NFC includes a provision for losses on these receivables as well as the interest costs incurred to fund these receivables in its operating results.  In addition, changes in the timing and amounts of credit losses recognized during the quarter impacted the provision for losses charge.

NFC recorded income before taxes of $33.4 million and net income of $21.3 million for the fourth quarter.  The effective tax rate for the quarter was 36%.

23

Quarterly Summary of Restatement Adjustments

The following table sets forth the effects of the restatement adjustments on our consolidated statements of income for the first three quarters of 2005 (in millions):

	For the Three Months Ended
	January 31,  2005			April 30,  2005			July 31, 2005
Income before tax, previously reported	$	31.2		$	24.2		$	23.8
Retail securitizations		(0.4	)		5.7			4.0
Retained interest valuation		(1.2	)		(1.7	)		1.6
Postretirement benefits		0.2			0.1			0.1
Other miscellaneous adjustments		1.0			0.4			1.0
Total restatement adjustments		(0.4	)		4.5			6.7
Income before tax, restated		30.8			28.7			30.5
Income tax expense, restated		(11.0	)		(10.2	)		(10.9	)
Net income, restated	$	19.8		$	18.5		$	19.6

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

Fluctuating interest rates are our primary market risk.  Interest rate risk arises when we fund a portion of the fixed rate receivables with floating rate debt.  NFC has managed this exposure to interest rate changes by funding floating rate receivables with floating rate debt and fixed rate receivables with fixed rate debt, floating rate debt and equity capital.  We have reduced the net exposure, which results from the funding of fixed rate receivables with floating rate debt by generally securitizing fixed rate receivables and by utilizing derivative financial instruments, primarily swaps, when appropriate.  NFC does not use derivative financial instruments for trading purposes.

NFC measures its interest rate risk by estimating the net amount by which the fair value of all interest rate sensitive assets and liabilities, including derivative financial instruments, would be impacted by selected hypothetical changes in market interest rates.  Fair value is estimated using a discounted cash flow analysis.  Assuming a hypothetical instantaneous 10% adverse change in interest rates as of October 31, 2005 and 2004, the estimated fair value of the net assets would decrease by approximately $36.8 million and $30.0 million, respectively.  NFC’s interest rate sensitivity analysis assumes a parallel shift in interest rate yield curves.  The model, therefore, does not reflect the potential impact of changes in the relationship between short-term and long-term interest rates.

24

Item 8.  Financial Statements and Supplementary Data

Index

Consolidated Financial Statements:	Page
Consolidated Statements of Income Fiscal years ended October 31, 2005, 2004 and 2003	26
Consolidated Statements of Shareowner’s Equity and Comprehensive Income Fiscal years ended October 31, 2005, 2004 and 2003	27
Consolidated Statements of Financial Condition October 31, 2005 and 2004	28
Consolidated Statements of Cash Flows Fiscal years ended October 31, 2005, 2004 and 2003	29
Notes to  Consolidated Financial Statements	30
Report of Independent Registered Public Accounting Firm	69

25

 Navistar Financial Corporation and Subsidiaries

 Consolidated Statements of Income

	For the years ended October 31
Millions of dollars	2005			2004 (Restated)			2003 (Restated)
Revenues
Retail notes and finance lease revenue	$	201.0		$	180.9		$	191.6
Operating leases revenue		39.6			57.8			68.3
Wholesale notes interest		11.9			8.5			6.7
Retail and wholesale accounts interest		5.5			4.2			4.8
Securitization income		74.5			54.4			47.1
Other revenues		21.5			6.8			9.6
Total revenues		354.0			312.6			328.1
Expenses
Cost of borrowing:
Interest expense		133.3			98.9			123.9
Other		11.0			12.1			11.3
Credit, collections and administrative		45.3			40.7			41.3
Provision for credit losses		5.7			7.8			12.9
Depreciation on operating leases		29.7			42.4			49.8
Derivative expense (income)		(0.3	)		(6.3	)		13.8
Other expenses		5.9			3.3			3.4
Total expenses		230.6			198.9			256.4
Income before taxes		123.4			113.7			71.7
Income tax expense from continuing operations		44.2			39.2			29.2
Income from continuing operations		79.2			74.5			42.5
Loss on disposal of discontinued operations, (net of tax $0, $0, and $1.5)		-			-			(2.4	)
Net income	$	79.2		$	74.5		$	40.1

See Notes to Consolidated Financial Statements

26

Navistar Financial Corporation and Subsidiaries

Consolidated Statements of Shareowner’s Equity and Comprehensive Income

Millions of dollars	Capital Stock		Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Total			Comprehensive Income
Balance at October 31, 2002 (restated)	$	1.6	$	118.9	$	235.8		$	(7.8	)	$	348.5
2003 Activity:
Net Income (restated)		-		-		40.1			-			40.1		$	40.1
Change in minimum pension liability (net of tax $0.4)		-		-		-			(0.7	)		(0.7	)		(0.7	)
Cash dividend paid to parent company		-		-		(50.0	)		-			(50.0	)		-
Balance at October 31, 2003 (restated)	$	1.6	$	118.9	$	225.9		$	(8.5	)	$	337.9		$	39.4
2004 Activity:
Net income (restated)		-		-		74.5			-			74.5			74.5
Assumption of debt by Navistar		-		20.7		-			-			20.7			-
Change in minimum pension liability (net of   tax $0.7)		-		-		-			(1.2	)		(1.2	)		(1.2	)
Balance at October 31, 2004 (restated)	$	1.6	$	139.6	$	300.4		$	(9.7	)	$	431.9		$	73.3
2005 Activity:
Net income		-		-		79.2			-			79.2			79.2
Change in minimum pension liability (net of tax $1.0)		-		-		-			1.8			1.8			1.8
Balance at October 31, 2005	$	1.6	$	139.6	$	379.6		$	(7.9	)	$	512.9		$	81.0

See Notes to Consolidated Financial Statements

27

Navistar Financial Corporation and Subsidiaries

Consolidated Statements of Financial Condition

	As of October 31
Millions of dollars	2005			2004 (Restated)
ASSETS
Cash and cash equivalents	$	23.0		$	22.8
Finance receivables:
Finance receivables		3,239.1			2,877.8
Finance receivables from affiliates		184.7			156.5
Allowance for losses		(13.6	)		(13.6	)
Finance receivables, net		3,410.2			3,020.7
Amounts due from sales of receivables		441.2			410.7
Net accounts due from affiliates		29.7			-
Net investment in operating leases		105.7			151.9
Vehicle inventory		8.4			26.6
Restricted cash and cash equivalents		543.8			274.6
Other assets		56.0			38.1
Total assets	$	4,618.0		$	3,945.4
LIABILITIES AND SHAREOWNER’S EQUITY
Net accounts due to affiliates	$	-		$	68.3
Senior and subordinated debt		3,962.1			3,319.4
Other liabilities		143.0			125.8
Total liabilities		4,105.1			3,513.5
Shareowner’s equity
Capital stock (par value $1.00, 2,000,000 shares authorized, 1,600,000 shares issued and outstanding)		1.6			1.6
Paid-in capital		139.6			139.6
Retained earnings		379.6			300.4
Accumulated other comprehensive loss		(7.9	)		(9.7	)
Total shareowner’s equity		512.9			431.9
Total liabilities and shareowner’s equity	$	4,618.0		$	3,945.4

See Notes to Consolidated Financial Statements

28

Navistar Financial Corporation and Subsidiaries  Consolidated Statements of Cash Flows
	For the years ended October 31
Millions of dollars	2005			2004 (Restated)			2003 (Restated)
Cash flow from operating activities:
Net income	$	79.2		$	74.5		$	40.1
Adjustments to reconcile net income to cash flow from operations:
Loss on disposal of discontinued operations, net of tax		-			-			2.4
Net loss on sales of finance receivables		2.1			6.8			6.4
Net loss (gain) on sale of equipment		0.8			-			-
Depreciation and amortization		39.1			56.1			65.1
Provision for credit losses		5.7			7.8			12.9
Net change in amounts due from sales of receivables		(30.5	)		(201.5	)		148.7
Net change in finance receivables - wholesale notes		29.7			(84.3	)		(7.5	)
Net change in finance receivables from affiliates - wholesale		26.5			(42.3	)		(0.5	)
Net change in accounts payable to (due from) affiliates		(98.0	)		65.6			(59.9	)
Net change in other assets and liabilities		7.0			(31.6	)		30.1
Net cash provided by (used in) operating activities		61.6			(148.9	)		237.8
Cash flow from investing activities:
Originations of retail notes and finance leases, includes affiliates		(1,592.6	)		(1,376.4	)		(1,262.1	)
Net change in restricted cash and cash equivalents		(269.2	)		688.8			(642.0	)
Collections on retail notes and finance lease receivables, net of change in unearned finance income, includes affiliates		1,068.3			1,067.2			1,198.0
Net change in finance receivables from affiliates  - accounts		(2.1	)		(0.3	)		(2.9	)
Net change in finance receivables - accounts		20.3			142.9			(170.4	)
Proceeds from sale of repossessed assets		70.8			48.1			72.9
Purchase of equipment leased to others		(31.0	)		(29.5	)		(34.8	)
Proceeds from sale of equipment		47.6			43.1			48.5
Net cash (used in) provided by investing activities		(687.9	)		583.9			(792.8	)
Cash flow from financing activities:
Net change in bank-revolving credit facility, net of issuance costs		(118.8	)		101.0			(11.0	)
Proceeds from issuance of long-term debt, net of issuance costs		497.1			-			-
Principal payments on long-term debt		(500.0	)		-			-
Proceeds from issuance of securitized debt, net of issuance costs		1,949.6			967.3			1,921.1
Payments on securitized debt		(1,201.4	)		(1,324.5	)		(1,326.5	)
Dividends paid to parent company		-			-			(50.0	)
Payoff of convertible debt		-			(170.0	)		-
Net cash provided by (used in) financing activities		626.5			(426.2	)		533.6
Change in cash and cash equivalents		0.2			8.8			(21.4	)
Cash and cash equivalents, beginning of year		22.8			14.0			35.4
Cash and cash equivalents, end of year	$	23.0		$	22.8		$	14.0
Supplemental cash flow information:
Interest paid	$	130.8		$	100.9		$	126.9
Paid-in capital from assumption of debt by Navistar		-			20.7			-
Income taxes paid, net of refunds		34.3			39.7			20.8
Transfers of loans and leases to vehicle inventory		52.6			39.9			68.3

See Notes to Consolidated Financial Statements

29

NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF ACCOUNTING POLICIES

Commencing in January 2006, Navistar undertook a comprehensive review of their previously issued consolidated financial statements. In November 2006, we undertook a similar comprehensive review. Navistar and NFC both determined that those consolidated financial statements were not prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). As a result of this review, we have restated our previously issued consolidated financial statements for the quarters ended July 31, 2005, April 30, 2005 and January 31, 2005. See Note 19, Selected quarterly financial data (unaudited), as well as the fiscal years ended October 31, 2004 and 2003 and retained earnings at November 1, 2002. The consolidated financial statements contained herein for the fiscal years ended October 31, 2004 and 2003 include the effects of these restatements. See Note 2 below.

This Annual Report on Form 10-K for the year ended October 31, 2005 is our first filing with the Securities and Exchange Commission (“SEC”) that includes comprehensive financial statements since our Quarterly Report on Form 10-Q for the quarter ended July 31, 2005.  Unless otherwise stated, all financial information presented in this Annual Report on Form 10-K reflects restated consolidated financial statements for the years ended October 31, 2003 and 2004 and the first three quarters of the year ended October 31, 2005. The effect of the restatement on periods prior to 2003 has been presented as an adjustment to Shareowner’s equity as of November 1, 2002, the beginning of our 2003 year.

Nature of Operations

Navistar Financial Corporation was incorporated in Delaware in 1949 and is a wholly-owned subsidiary of International Truck and Engine Corporation (“International”), which is a wholly-owned subsidiary of Navistar International Corporation (“Navistar”).  As used herein, “us,” “we,” “our” or “NFC” refers to Navistar Financial Corporation and its wholly-owned subsidiaries unless the context otherwise requires.  NFC is a commercial financing organization that provides retail, wholesale and lease financing of products sold by International and its dealers within the United States.  NFC also finances wholesale accounts and selected retail accounts receivable of International.  Sales of new products (including trailers) of other manufacturers are also financed regardless of whether they are designed or customarily sold for use with International’s truck products.

Revenue includes interest revenue from retail notes, finance leases, wholesale notes, retail accounts, wholesale accounts, securitization income and rental income from operating leases. Cost of borrowing includes interest expense on debt financing and amortization of debt issuance costs.

We have traditionally obtained the funds to provide financing to International's dealers and retail customers from the securitization of finance receivables, short and long-term bank borrowings, and medium and long-term debt.  We sell wholesales notes through our wholly-owned subsidiary NFSC, which has in place a revolving wholesale note trust that provides for the funding of eligible wholesale notes.  We finance non-fleet retail notes and finance leases through NFRRC and TRIP, our wholly-owned subsidiaries.  Fleet accounts receivables are financed via TRAC, our wholly-owned subsidiary.  TERFCO, our wholly-owned subsidiary, had in place a trust that terminated in December 2005 to provide funding of unsecured trade receivables generated by the sale of diesel engines and engine service parts from International to Ford Motor Company. ITLC, our wholly-owned subsidiary, was established to provide for the funding of certain leases.  See Securitization Transactions below.

Basis of Presentation and Consolidation

The consolidated financial statements include the accounts of Navistar Financial Corporation and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. We evaluate our performance and allocate resources based on a single segment concept. Accordingly, there are no separately identified material operating segments for which discrete financial information is available. We do not derive revenue from, or have assets located in foreign countries, nor do we derive revenues from any single customer that represents 10% or more of our total revenues.

30

NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Estimates

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Significant estimates and assumptions are used for, but are not limited to: (1) allowance for losses; (2) amounts due from sales of receivables (including fair value calculations); (3) net investment in operating leases; (4) income taxes; and (5) pension and other postretirement benefits. Future events and their effects cannot be predicted with certainty, and accordingly, our accounting estimates require the exercise of judgment. The accounting estimates used in the preparation of our consolidated financial statements will change as new events occur, as more experience is acquired, as additional information is obtained and as our operating environment changes. We evaluate and update our assumptions and estimates on an ongoing basis and may employ outside experts to assist in our evaluations for statistical models and pension and benefits. Actual results could differ from the estimates we have used.

Revenue Recognition

Finance Receivables

We recognize revenue from retail notes, finance leases, wholesale notes, retail accounts and wholesale accounts, including amounts received from International for reimbursement of interest income for various dealer and buyer incentives, as interest income using the effective interest method. Certain origination costs and fees are deferred and recognized as an adjustment to yield and are reported as part of interest income over the life of the receivable as specified by FASB Statement No. 91, Accounting for Nonrefundable Fees and Costs Associated with Originating or Acquiring Loans and Initial Direct Costs of Leases. Loans are considered to be impaired when we conclude there is a high likelihood the customer will not be able to make full payment after reviewing the customers’ financial performance, payment ability, capital raising potential, management style, economic situation, etc. The accrual of interest on such loans is discontinued when, in our opinion, the collection of the account becomes doubtful.  When interest accrual is discontinued, all unpaid accrued interest is reversed against interest revenue.  Interest income on these accounts is recognized only to the extent cash payments are received. We resume accruing interest on these accounts when payments are current according to the terms of the loans and future payments are reasonably assured.

Operating Leases

We recognize revenue on operating leases as rental income on a straight-line basis over the life of the lease.  Recognition of revenue is suspended when we determine the collection of future rental revenue is not probable.  Income recognition is resumed if collection doubts are removed.

Securitization Transactions

We finance receivables using a process commonly known as securitization, whereby asset-backed securities are sold via public offering or private placement.   In a typical securitization transaction, NFC sells a pool of finance receivables to a special purpose entity (“SPE”).  The SPE then transfers the receivables to a bankruptcy remote, legally isolated entity, generally a trust, in exchange for proceeds from interest bearing securities.  These securities are issued by the trust and are secured by future collections on the receivables sold to the trust. These transactions are subject to the provisions of FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities (“SFAS No. 140”) as to accounting treatment.  When we finance receivables we use various wholly-owned special purpose subsidiaries depending on the type of assets being financed. NFRRC finances retail notes and finance leases; ITLC finances operating leases and some terminal residual clause leases.   Both NFRRC and ITLC securitizations are accounted for as secured borrowings.  Wholesale notes are financed through NFSC and retail accounts and parts or special items or large fleet customers of International are financed through TRAC and TERFCO. Financing of receivables by NFSC, TRAC and TERFCO comply with the requirements of SFAS No. 140 and are accounted for as sales.

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

When we securitize receivables we may have retained interests in the receivables sold (transferred). The retained interests may include senior and subordinated securities, undivided interests in receivables used as over-collateralization, restricted cash held for the benefit of the trust and interest-only strips. Our retained interests are the first to absorb any credit losses on the transferred receivables because we have the most subordinated interests in the trust, including subordinated securities, the right to receive excess spread (interest-only strip), and any residual or remaining interests of the trust after all asset-backed securities are repaid in full.  Our exposure to credit losses on the transferred receivables is limited to our retained interests. The SPE’s assets are available to satisfy the creditors’ claims against the assets prior to such assets becoming available for the SPE’s own uses or to NFC or affiliated companies.  Since the transfer constitutes a legal sale, we are under no obligation to repurchase any transferred receivable that becomes delinquent in payment or otherwise is in default.  We are not responsible for credit losses on transferred receivables other than through our ownership of the lowest tranches in the securitization structures. We do not guarantee any securities issued by trusts. We, as seller and the servicer of the finance receivables are obligated to provide certain representations and warranties regarding the receivables.  Should any receivables fail to meet these representations and warranties, we, as servicer, are required to repurchase the receivables.

Off balance sheet securitizations:

For transactions that qualify as sales under SFAS No. 140, receivables and associated liabilities are removed from the consolidated statements of financial condition. Gains or losses from these sales are recognized at the time of sale based on the relative carrying value of the portion sold and the portion allocated to the retained interests are included in Securitization income. The gain or loss is determined by the difference between the proceeds received and the allocated carrying value of the sold receivables. We estimate the payment speeds for the receivables sold, the discount rate used to determine the present value of the retained interests and the anticipated net losses on the receivables in order to calculate the gain or loss.  Estimates are based on historical experience, anticipated future portfolio performance, market-based discount rates and other factors and are made separately for each securitization transaction.  In addition, we re-evaluate the fair value of the retained interests on a quarterly basis and recognize in current income changes as required.  The fair value of retained interests is based on present value estimates of expected cash flows using our key assumptions of payment speeds, discount rates and net losses.  The retained interests are classified as trading.

The trusts used for off balance sheet sales engage us as servicer for a servicing fee. The servicing duties include collecting payments on receivables and preparing monthly investor reports on the performance of the receivables that are used by the trustee to distribute monthly interest and principal payments to investors.  We apply the same servicing policies and procedures that are applied to our owned receivables.  The servicing income received by us is just adequate to compensate us for our servicing responsibilities. Therefore, no servicing asset or liability is recorded.

The following elements of income related to the off balance sheet securitizations are included in Securitization income in the consolidated statements of income and in operating activities in the consolidated statements of cash flows.

Fair value adjustments –

Gains or losses on changes in the estimated fair value of the retained interests.

Excess spread income –

Income generated by the receivables in off balance sheet securitization trusts, net of interest expense, credit losses and administrative expenses.

Servicing fee revenue –

Fees charged for collection and reporting on behalf of the investors.

Gains and losses on sale of receivables –

Proceeds less initial relative carrying value calculated in the period of sale.

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Investment income –

Interest income on cash reserve accounts.

On balance sheet securitizations:

For transactions that do not qualify as sales under SFAS No. 140, the financed receivables remain on our balance sheet net of allowance for losses and associated debt issued is recorded as secured borrowings in the consolidated statements of financial condition under Finance receivables and Senior and subordinated debt, respectively. Interest revenue and expense are recorded as earned or incurred on the consolidated statements of income and debt issuance costs are capitalized and included in Other assets and amortized on a level yield basis over the term of the debt. For these on balance sheet receivables, a provision for credit losses is recognized for probable losses.  There are no gains or losses recorded upon transfer and income is earned over the life of the assets transferred.

Income Taxes

Navistar and its domestic subsidiaries file a consolidated federal income tax return and both combined and separate state income tax returns.  We determine our provision for income taxes using the asset and liability approach for accounting for income taxes. Tax laws require certain items to be reported in tax filings at different times than the items are recognized in the consolidated financial statements. A current liability is recognized for the estimated taxes payable for the current year. Deferred income taxes represent the future consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. Deferred income taxes are adjusted for enacted changes in tax laws in the period such changes are enacted. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. Realization is dependent on generating sufficient future taxable income; changes in estimates of future taxable income could affect future evaluations. We recognize an accrual for tax exposures for uncertain tax positions. Income taxes are computed under a tax sharing agreement between us and our parent as if we were a separate taxpayer, as are tax payments and realization of tax assets.

Cash and Cash Equivalents

Cash and cash equivalents are defined as short-term, highly liquid investments with original maturities of 90 days or less.

Finance Receivables

In December 2001, the Accounting Standards Executive Committee issued SOP 01-6, Accounting by Certain Entities (Including Entities with Trade Receivables)that Lend to or Finance the Activities of Others. This SOP requires companies to report loans and trade receivables not held for sale on the balance sheet at outstanding principal adjusted for any charge offs, the allowance for losses, fees or costs on origination and any unamortized premiums or discounts on purchased loans. Loans held for sale are to be reported at the lower of cost or fair value. NFC’s retail notes, finance leases, retail accounts and wholesale accounts are not classified as held for sale, and are accounted for net of an allowance for losses.  Upon origination, wholesale notes are classified as held-for-sale and are valued at the lower of amortized cost or fair value on an aggregate basis. Finance receivables from affiliates include retail and wholesale notes. Our finance receivables consist of the following:

Retail Notes--

Retail notes primarily consist of fixed rate loans to commercial customers to facilitate their purchase of new and used trucks, trailers and related equipment.  At acquisition, we record the retail notes at their gross value (principal and interest) and record, as a reduction to the gross value, the amount of unearned interest.   Revenue is recorded over the term of the note using the effective interest method.

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Finance Leases --

Finance leases consist of direct financing leases to commercial customers to facilitate their acquisition of new and used trucks, trailers and related equipment.  Finance leases are recorded at origination as gross finance receivable, unearned income and the guaranteed residual value of the leased equipment.  Unearned income represents the excess of the gross receivable, plus the guaranteed residual value over the cost of the equipment. Revenue is recorded over the term of the lease using the effective interest method.

Wholesale Notes --

Wholesale notes primarily consist of variable rate loans to International's dealers for the purchase of new and used trucks, trailers and related equipment.

Retail Accounts --

Retail accounts purchased from International consist of short term accounts receivables related to the sale of products to retail customers.

Wholesale Accounts --

Wholesale accounts purchased from International consist of short term accounts receivables primarily related to the sales of items other than trucks, trailers and related equipment (e.g. service parts) to International’s dealers.

Allowance for Losses

The loss allowance for finance receivables is established through a charge to the provision for credit losses.  The allowance is an estimate of the amount required to absorb probable losses on the existing portfolio of finance receivables that may become uncollectible.  Finance receivables are charged off to the Allowance for losses when amounts due from the customers are determined to be uncollectible.

Troubled loan accounts are specifically identified and segregated from the remaining owned loan portfolio. The expected loss on troubled accounts is fully reserved in a separate calculation as a specific reserve. A specific reserve is set up if the past due balance exceeds $1.0 million and it is believed that there is a greater than 50% likelihood that the account could be impaired, and if the value of the underlying collateral is less than the principal balance of the loan. We calculate a general reserve on the remaining loan portfolio using loss ratios based on a pool method by asset type:  retail notes and finance leases, retail accounts and wholesale accounts. Loss ratios are determined using historical loss experience in conjunction with current portfolio trends in delinquencies and repossession frequency for each receivable or asset type.

Under various agreements, International and its dealers may be liable for a portion of customer losses or may be required to repurchase the repossessed collateral at the receivable principal value.  The amount of losses we record in our provision for credit losses does not include any amount for receivables covered under these agreements. Allocation of the losses on the portfolio between us, International and dealers is generally dependent on the type of collateral being financed and loss sharing percentages established at date of financing.  International’s proportion of total losses is typically higher in poor economic conditions as NFC’s allocation for new trucks financed is limited and in poor economic conditions, recovery values, as a percent of note balances, are lower.

When we evaluate the adequacy of the Allowance for losses, several risk factors are considered for each type of receivable.  For retail notes, finance leases and retail accounts the primary risk factors are the general economy, fuel prices, type of freight being hauled, length of freight movements, number of competitors our customers have in their service territory, how extensively our customers use independent operators, profitability of owner operators and expected value of the underlying collateral.

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In order to establish a specific reserve in the loss allowance for finance receivables, we look at many of the same factors listed above but also consider the financial strength of the customer or dealer and key management, the timeliness of payments, the number and location of satellite locations especially for the dealer, the number of dealers of competitor manufacturers in the market area, type of equipment normally financed (over the road or local use/delivery vehicles) and the seasonality of the business (e.g.. primarily a bus dealer). We may continue to collect payments on accounts with specific reserves as the amount of the reserve is reviewed at least quarterly.

Net Investment in Operating Leases

We have investments in trucks, tractors and trailers that are leased to customers under operating lease agreements.   These vehicles are depreciated on a straight-line basis over the term of the lease in an amount necessary to reduce the leased asset to its estimated residual value at the end of the lease term.  The residual values of the equipment represent estimates of the values of the assets at the end of the lease contracts and are initially recorded based on estimates of future market values.  Realization of the residual values is dependent on our future ability to market the vehicles under then prevailing conditions. We review residual values periodically to determine that recorded amounts are appropriate and the equipment on operating lease assets has not been impaired.  If the value of the equipment has declined the carrying value is reduced and charged to Other expenses.

 Vehicle Inventory

Losses arising from the repossession of collateral supporting finance receivables and operating leases are recognized upon repossession and charged to the Allowance for losses account.  We recognize repossessed assets at the lower of historical cost or fair value, less estimated costs to sell, and reclassify them from Finance receivables or Net investment in operating leases to Vehicle inventory. Once the repossessed assets are sold, the additional losses or gains, if any, are charged to Other expenses.

Restricted Cash and Cash Equivalents

Restricted cash and cash equivalents are primarily those held in designated bank accounts for our securitization facilities which are accounted for as secured borrowings. These amounts are used to pay interest expense, principal, or other amounts in accordance with the related securitization agreements.

The proceeds from the $500.0 million senior and subordinated floating rate asset-backed notes, issued by TRIP, finance a revolving retail warehouse facility to fund our retail notes and finance leases. NFC is required to maintain the revolving retail warehouse facility with collateral in the amount of $500.0 million.  In the event that retail note and lease balances pledged to the revolving retail warehouse facility fall below $500.0 million, the excess proceeds are invested in money market funds with maturities of three months or less.  The carrying value of these short-term marketable securities approximates their fair value. The excess proceeds for TRIP reported in Restricted cash and cash equivalents for October 31, 2005, was $267.4 million. There were no excess proceeds for TRIP as of October 31, 2004.  Interest income on short-term marketable securities which are restricted for on balance sheet securitizations are included in Other revenues.

Pension and Postretirement Benefits

We use various actuarial methods and assumptions to account for our defined benefit pension plans and our postretirement benefit plans.  Pension and postretirement benefit expense includes the actuarially computed cost of benefits earned during the current service period, the interest cost on accrued obligations, the expected return on plan assets are based on fair market value and the straight-line amortization of net actuarial gains and losses due to plan amendments.  Net actuarial gains and losses are generally amortized over the expected average remaining service lives of the employees.

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Derivative Financial Instruments

We recognize all derivatives as assets or liabilities in the consolidated statements of financial condition and measure them at fair value in accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended.  When certain criteria are met, the timing of gain or loss recognition on the derivative instrument is matched with the recognition of (a) the changes in the fair value or cash flows of the hedged asset or liability attributable to the hedged risk or (b) the earnings effect of the hedged forecasted transaction.Our policy prohibits the use of derivative financial instruments for speculative purposes.  We use derivative financial instruments to reduce our exposure to interest rate volatility. We may use forward starting swap or cap contracts to limit interest rate risk exposure on the notes and certificates related to an expected sale of receivables.  We may use interest rate swaps or caps to reduce exposure to interest rate changes when we sell fixed rate receivables on a variable rate basis. The fair value of these instruments is estimated based on quoted market prices and is subject to market risk as the instruments may become less valuable if market conditions or interest rates change. We do not use hedge accounting for any swaps or caps under SFAS No. 133, thus changes in fair value of these instruments are recognized in Derivative expense (income).

We recorded and bifurcated an embedded derivative that was a key component to the issuance of Exchangeable Notes in 2002.  The fair value of this derivative was determined at inception and subsequent changes in fair value each period from inception until the debt was assumed by Navistar in 2004 were charged to Derivative expense (income).

New Accounting Pronouncements

The following is a summary of the accounting pronouncements effective after October 31, 2005, and their potential impact on us.

SAB 109 - In November 2007 the Staff of the SEC issued SAB No. 109, Written Loan Commitments Recorded at Fair Value through Earnings. SAB No. 109 provides guidance on the consideration of expected net future cash flows related to the servicing of written loan commitments that are accounted for at fair value. SAB No. 109 is effective for first fiscal quarter beginning after December 15, 2007. We will adopt SAB No. 109 as of February 1, 2008. We are currently evaluating if adoption of SAB No. 109 will have an impact on our consolidated financial condition, results of operations and cash flows.

SFAS 159 - In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159 (SFAS 159), The Fair Value Option for Financial Assets and Financial Liabilities, which provides companies with an option to report selected financial assets and liabilities at fair value. The new standard requires entities to display the fair value of those assets and liabilities for which the company has chosen to use fair value on the face of the balance sheet. SFAS No. 159 is effective as of the beginning of an entity’s first fiscal year beginning after November 15, 2007; this would be fiscal 2009 for us.  We have not yet commenced evaluating the potential impact, if any, of the adoption of SFAS No. 159 on our consolidated financial condition, results of operations, and cash flows.

SAB 108 - In September 2006, the Staff of the SEC issued SAB No. 108, Considering the Effects of Prior-Year Misstatements when Quantifying Misstatements in Current Year Financial Statements.  SAB No. 108 provides guidance on the consideration of the effects of prior year misstatements in quantifying current year misstatements. SAB No. 108 is effective for fiscal years ending after November 15, 2006. We will adopt SAB No. 108 as of October 31, 2007. However, because of the restatement of previously issued financial statements we believe the adoption of SAB No. 108 should not have a material impact on our consolidated financial condition, results of operations and cash flows.

SFAS 158 - In September 2006, the FASB issued SFAS No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans,  which requires a company that sponsors one or more single-employer defined benefit pension and other postretirement benefit plans (benefit plans) to recognize in its balance sheet the funded status of a benefit plan. SFAS No. 158 requires prospective application and the recognition and disclosure requirements are effective for fiscal years ending after December 15, 2006, our fiscal 2007. We will adopt the provisions of SFAS No. 158 in fiscal 2007.  Based on the funded status of our pension and postretirement plans as of October 31, 2005, we believe the adoption of SFAS No. 158 would increase our postretirement benefits liability by $4.4 million, decrease Total assets by $6.1 million and decrease Shareowner’s equity by $10.5 million on the consolidated balance sheet.

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In addition, SFAS No. 158 requires that a company measure defined benefit plan assets and obligations at its year-end balance sheet date. We currently use our year-end balance sheet date as our measurement date, and as a result, this new requirement does not affect us.

SFAS 157 - In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value under GAAP, and expands disclosures about fair value measurements. The new guidance is effective for financial statements issued for fiscal years beginning after November 15, 2007, our fiscal 2009 and for interim periods within those fiscal years. We are currently evaluating the potential impact, if any, of the adoption of SFAS No. 157 on our consolidated financial condition, results of operations and cash flows.

FASB Interpretation No. 48 - In June 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, which is effective for fiscal years beginning after December 15, 2006. FASB Interpretation No. 48 clarifies the accounting for uncertainty in income taxes recognized in the financial statements by prescribing a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FASB Interpretation No. 48 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. We will adopt the provisions of FASB Interpretation No. 48 effective November 1, 2007, however, we are still evaluating the potential impact, if any, of the adoption on our consolidated financial condition, results of operations, and cash flows.

SFAS 156 - In March 2006, the FASB issued SFAS No. 156, Accounting for Servicing of Financial Assets, which changes the accounting for all loan servicing rights which are recorded as the result of selling a loan where the seller undertakes an obligation to service the loan, usually in exchange for compensation. The Statement amends current accounting guidance by permitting the servicing right to be recorded initially at fair value and also permits the subsequent reporting of these assets at fair value. SFAS No. 156 is effective as of the beginning of a company’s first fiscal year that begins after September 15, 2006. We adopted SFAS No. 156 on November 1, 2006, and it did not have a material effect on our financial condition, results of operations, or cash flows.

SFAS 155 - In February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid Instruments.  The Statement provides companies with relief from having to separately determine the fair value of an embedded derivative that would otherwise be required to be bifurcated from its host contract in accordance with SFAS No.133, Accounting for Derivatives and Hedging Activities. SFAS No. 155 allows a company to make an irrevocable election to measure such a hybrid financial instrument at fair value in its entirety, with changes in fair value recognized in earnings.  The Statement is effective for all financial instruments acquired, issued or subject to a re-measurement event occurring after the beginning of a company's first fiscal year that begins after September 15, 2006.  We adopted SFAS No. 155 on November 1, 2006, and it did not have a material effect on our financial condition, results of operations, or cash flows.

SFAS 154 - In May 2005, the FASB issued SFAS No.154, Accounting Changes and Error Corrections. This Statement replaces APB Opinion No. 20, Accounting Changes, and SFAS No. 3, Reporting Accounting Changes in Interim Financial Statements, and changes the requirements for the accounting for and reporting of a change in accounting principle. The new standard requires retrospective application to prior periods’ financial statements of a voluntary change in accounting principle, unless it is impracticable. SFAS No. 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. Earlier application is permitted for accounting changes and corrections of errors made occurring in fiscal years beginning after June 1, 2005. The Statement does not change the transition provisions of any existing accounting pronouncements, including those that are in a transition phase as of the effective date of this Statement.

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FASB Interpretation No. 47 - In March 2005, the FASB issued FASB Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations. FASB Interpretation No. 47 clarifies that the term “conditional asset retirement obligation,” as used in SFAS Statement No. 143, Accounting for Asset Retirement Obligations, refers to a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the entity. FASB Interpretation No. 47 is effective no later than the end of fiscal years ending after December 15, 2005.  NFC does not have any such asset retirement obligations at this time and, as a result, we do not expect that this Interpretation will have an impact on our consolidated financial condition, results of operations and cash flows.

SFAS 153 - In December 2004, the FASB issued SFAS No. 153, Exchange of Nonmonetary Assets, which amends APB Opinion No. 29, Accounting for Nonmonetary Transactions.  This Statement eliminates the exception to fair value in APB Opinion No. 29 for exchanges of similar productive assets and replaces it with a general exception for exchanges that do not have commercial substance. This Statement is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. The application of this Statement did not have an impact on our consolidated financial condition or results of operations considering our intermittent participation in exchanges of nonmonetary assets.

We have determined that all other recently issued accounting pronouncements will not have a material impact on our consolidated financial condition, results of operations or cash flows.

2. RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS

In January 2006, we announced the delay in filing our Annual Report on Form 10-K for the year ended October 31, 2005 until NFC and Navistar resolved a number of complex and technical accounting issues. On November 8, 2006, NFC announced that its previously issued consolidated financial statements for the years ended October 31, 2002 through 2004 and all issued quarterly financial statements for all periods after November 1, 2002 should no longer be relied upon because of errors in such financial statements.

Since January 2006, as a result of the identification of such errors, NFC and Navistar have undertaken a comprehensive review of our previously filed consolidated financial statements. We identified numerous matters requiring restatement or reclassification, including:

Retail securitizations

Lease transactions

Retained interest valuation

Exchangeable debt derivative

Postretirement benefits

Income taxes

    Other miscellaneous adjustments

As a result of the comprehensive review, we have restated our previously reported consolidated financial statements for the years ended October 31, 2004 and 2003. The restatement adjustments resulted in a cumulative net increase to Shareowner’s equity of $8.3 million as of October 31, 2004, and an increase (reduction) in previously reported net income by $13.4 million and $(15.4) million for the years ended October 31, 2004 and 2003, respectively. We also increased our November 1, 2002 opening Retained earnings by $56.4 million, reduced Paid-in capital by $50.5 million and increased Accumulated other comprehensive loss (net of tax) by $12.4 million to recognize corrected items that relate to prior periods. Except as otherwise specified, all information presented in the accompanying consolidated financial statements and the related notes are presented after inclusion of all such restatement adjustments.

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the effects of the restatement adjustments on revenue and Income before taxes in our consolidated statements of income for the years ended October 31 (in millions):

	2004						2003
	Revenue			Income before taxes			Revenue		Income before taxes
Previously Reported	$	239.1		$	102.3		$	262.5	$	98.8
Retail securitizations		67.3			4.5			56.4		(28.2	)
Lease transactions		5.4			0.5			6.2		0.3
Retained interest valuation		(0.9	)		(0.9	)		2.9		2.9
Exchangeable debt derivative		-			10.3			-		(3.3	)
Postretirement benefits		-			(1.4	)		-		0.4
Other miscellaneous adjustments		1.7			(1.6	)		0.1		0.8
Total adjustments		73.5			11.4			65.6		(27.1	)
Restated	$	312.6		$	113.7		$	328.1	$	71.7

The following table summarizes the cumulative effects of the restatement adjustments on components of Shareowner’s Equity as of October 31, 2002 (in millions):

	Retained earnings			Accumulated other comprehensive loss (net of tax)			Paid-in capital
Previously Reported	$	179.4		$	4.6		$	169.4
Retail securitizations		11.5			(6.5	)		-
Lease transactions		(0.8	)		-			-
Retained interest valuation		(3.5	)		-			-
Exchangeable debt derivative		34.6			-			(50.5	)
Postretirement benefits		(1.0	)		(5.9	)		-
Income Taxes		12.6			-			-
Other miscellaneous adjustments		3.0			-			-
Total adjustments		56.4			(12.4	)		(50.5	)
Restated	$	235.8		$	(7.8	)	$	118.9

A description of the significant components of our restatement adjustments and their impact on line items in our consolidated statements of financial condition and consolidated statements of income follows. The errors described within each restatement category represent the most significant items impacting the restatement of our consolidated statements of financial condition, consolidated statements of income and consolidated statements of cash flow.

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Retail Securitizations

During the restatement process, we determined that there existed an element of effective control over certain transferred assets underlying retail securitizations and as such these receivables did not meet the requirements for sale accounting treatment under paragraph 9 (c) of SFAS No. 140.  As a result, we have recorded the assets (note and lease receivables net of allowance for loss) and liabilities (secured borrowings) related to certain transfers of assets, reversed the associated gains or losses previously recognized and recorded interest income and interest expense, and provision for credit losses.  The impact was an increase in both assets and debt on the consolidated statement of financial condition as of October 31, 2004, in the amount of $2.0 billion, an increase in Income before taxes of $4.5 million for the year ended October 31, 2004, and a decrease in Income before taxes of $28.2 million for the year ended October 31, 2003.

Lease classification

We corrected the classification of a lease financing transaction entered into in fiscal 2000. The result of this correction was an increase in Net investment in operating leases, net of accumulated depreciation, and an increase in the capital lease obligation during fiscal 2000. We then recognized operating lease revenue and depreciation and interest expenses during the remaining life of the transaction through fiscal 2003 and 2004. The transaction terminated in 2004.

Retained Interest Valuation

We determined that retained interests in certain retail accounts securitization facilities and wholesale note securitizations should be reported at fair value in accordance with SFAS No. 140 as opposed to allocated cost. Gains and losses are included in Securitization income.

 Exchangeable Debt Derivative

When the Exchangeable Notes (“E Notes”) were originally issued in 2002, NFC recorded Unamortized Debt Discount of $50.5 million and debt issuance costs of $5.5 million.  We did not record the embedded conversion feature which permitted the holders of the E Notes to convert the E Notes into Navistar shares upon exchange. We determined that the conversion option held by the holders was an embedded derivative that required bifurcation.  A third party was engaged to calculate the fair value of the derivative and we recorded the derivative, upon issuance of the debt, at its fair value of $61.5 million.  NFC also adjusted the previously recorded debt discount accretion from issuance in March 2002 through the date of assumption by Navistar in June 2004 to reflect this new value. The assumption by Navistar was effective as of May 28, 2004, with settlement in June.  The changes in fair value from March 2002 through May 2004 were calculated by the third party and we recorded the changes in fair value in Derivative expense (income).

Initially a $50.5 million payment to Navistar on the date of issuance was considered to be the purchase of a call option and amortized. Upon subsequent review of the legal documents and discussions with counsel, management determined that the $50.5 million should not be classified as the purchase of a call option as no legal contract existed between NFC and Navistar. Since there was no legal contract, the payment to Navistar has been reflected as a capital transaction separately from the issuance of the E Notes and reflected as a reduction in Paid-in capital in 2002.

When the E Notes were assumed by Navistar, the difference between the cash paid to Navistar of $170.0 million and the carrying value of the debt of $173.1 million and the fair value of the embedded derivative was credited to Paid-in capital in the amount of $20.7 million compared to $11.9 million which was previously recorded.

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Postretirement benefits

We recorded restatement adjustments for pension and other post-employment benefits to correct pension expense, Other liabilities and Accumulated other comprehensive loss representing the impact on our consolidated financial statements for adjustments to Navistar administered plans. The adjustments related primarily to the selection of discount rates and the amortization periods for unrecognized gains and losses.

Income Taxes

We recorded adjustments to reflect the tax impact of the restatement of our consolidated financial statements which included a decrease in Retained earnings at October 31, 2002 of $2.0 million.  Additionally, as of October 31, 2002, such tax adjustments of $14.6 million were made to correct previously established contingent tax reserves which increased retained earnings.

Other Miscellaneous Adjustments

We also recorded other miscellaneous restatement adjustments generally representing the impact on our consolidated financial statements for errors in incentive accruals, intercompany transactions, and account reconciliations.

Reclassifications

The amount of outstanding checks drawn on controlled disbursement accounts were reclassified from Cash and cash equivalents to Other liabilities since the corresponding funds are not made available until the checks are presented for payment.  As of October 31, 2004, the reclassified amount was $12.4 million.

The following amounts previously reported in Wholesale notes interest and Accounts revenue relating to securitizations are now reported in Securitization income (in millions):

	2004		2003
Wholesale notes interest	$	32.5	$	30.9
Accounts revenue		18.1		12.9

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following tables summarize the effects of the restatement adjustments, previously discussed, on the consolidated statements of income items for the years ended October 31 (in millions):

2004	Previously Reported		Adjustment			Restated
Retail notes and finance lease revenue	$	51.0	$	129.9		$	180.9
Operating leases revenue		51.2		6.6			57.8
Wholesale notes interest		33.5		(25.0	)		8.5
Retail and wholesale accounts interest		22.4		(18.2	)		4.2
Securitization income		80.9		(26.5	)		54.4
Other revenues		3.5		3.3			6.8
Cost of borrowing		48.7		62.3			111.0
Credit, collections and administrative		39.8		0.9			40.7
Provision for credit losses		8.2		(0.4	)		7.8
Depreciation on operating leases		38.1		4.3			42.4
Derivative expense (income)		3.4		(9.7	)		(6.3	)
Other expenses		2.0		1.3			3.3
Income before taxes		102.3		11.4			113.7
Income tax expense from continuing operations		41.2		(2.0	)		39.2
Loss on disposal of discontinued operations, net of tax		-		-			-
Net income		61.1		13.4			74.5
Comprehensive income		59.3		14.0			73.3

2003	Previously Reported			Adjustment			Restated
Retail notes and finance lease revenue	$	60.3		$	131.3		$	191.6
Operating leases revenue		64.5			3.8			68.3
Wholesale notes interest		31.0			(24.3	)		6.7
Retail and wholesale accounts interest		17.7			(12.9	)		4.8
Securitization income		92.3			(45.2	)		47.1
Other revenue		5.4			4.2			9.6
Cost of borrowing		57.5			77.7			135.2
Credit, collections and administrative		41.2			0.1			41.3
Provision for credit losses		15.8			(2.9	)		12.9
Depreciation on operating leases		45.0			4.8			49.8
Derivative expense (income)		8.7			5.1			13.8
Other expenses		4.2			(0.8	)		3.4
Income before taxes		98.8			(27.1	)		71.7
Income tax expense from continuing operations		40.9			(11.7	)		29.2
Loss on disposal of discontinued operations, net of tax		(2.4	)		-			(2.4	)
Net income		55.5			(15.4	)		40.1
Comprehensive income		47.4			(8.0	)		39.4

Revenue amounts previously reported under Income related to sales of finance receivables and Servicing income have been combined with Securitization income to conform to the current presentation. Amounts currently presented under Derivative expense (income) were previously reported as a component of Retail notes and finance lease revenue. The tax effect of the restatement adjustments for the year ended October 31, 2004 was offset by a reduction of state tax liabilities. For the year ended October 31, 2003, the tax effect relates solely to the restatement adjustments.

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the effects of the restatement adjustments, previously discussed, on the consolidated statement of financial condition items as of October 31, 2004 (in millions):

	Previously Reported			Adjustment			Restated
Cash and cash equivalents	$	10.4		$	12.4		$	22.8
Finance receivables, net		1,269.1			1,751.6			3,020.7
Amounts due from sale of receivables		383.4			27.3			410.7
Net investment in operating leases		148.9			3.0			151.9
Vehicle inventory		20.5			6.1			26.6
Restricted cash and cash equivalents		63.0			211.6			274.6
Other assets		13.0			25.1			38.1
Total assets		1,908.3			2,037.1			3,945.4
Net accountsdue to affiliates		43.5			24.8			68.3
Senior and subordinated debt		1,325.2			1,994.2			3,319.4
Other liabilities		116.0			9.8			125.8
Total liabilities		1,484.7			2,028.8			3,513.5
Capital stock		1.6			-			1.6
Paid-in capital		181.3			(41.7	)		139.6
Retained earnings		246.0			54.4			300.4
Accumulated other comprehensive loss		(5.3	)		(4.4	)		(9.7	)
Total shareowner’s equity		423.6			8.3			431.9

Amounts currently presented under Vehicle inventory were previously reported as a component of Other assets.

The following table summarizes the impact of the restatement on the Shareowner’s equity as of October 31 (in millions):

	2004			2003
Ending shareowner’s equity, as previously reported	$	423.6		$	352.4
Effect of restatement adjustments on net income for the current period		13.4			(15.4	)
Cumulative adjustments to paid- in capital		(41.7	)		(50.5	)
Cumulative prior period adjustments to retained earnings		41.0			56.4
Cumulative adjustments to accumulated other comprehensive loss		(4.4	)		(5.0	)
Shareowner’s equity as restated	$	431.9		$	337.9

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the effects of the restatement adjustments on selected consolidated statements of cash flows items for the years ended October 31 (in millions):

	2004						2003
	Previously Reported			Restated			Previously Reported			Restated
Net cash provided by ( used in) operating activities	$	94.9		$	(148.9	)	$	38.2		$	237.8
Net cash provided by (used in) investing activities		43.9			583.9			86.0			(792.8	)
Net cash (used in) provided by financing activities		(128.4	)		(426.2	)		(156.2	)		533.6

The change in net cash related to operating activities is related primarily to the change in Amounts due from sales of receivables.  Historically this change had been shown in the Cash flow from investing activities section but has now been reflected in the Cash flow from operating activities section.  This change and, the balance of this line item have changed significantly as a result of the correction of accounting for retail securitizations.

The changes in net cash related to investing activities and net cash related to financing activities are related primarily to the correction of accounting for retail note and finance lease securitizations.  Since these transactions are now accounted for as secured borrowings, the proceeds from the initial securitizations are shown in the financing section instead of the investing section and the securitized debt payments are included in the financing section.  Previously, the debt payments were considered in the calculation of the Amounts due from sales of receivables.

3. TRANSACTIONS WITH AFFILIATED COMPANIES

Wholesale Notes, Wholesale Accounts and Retail Accounts

In accordance with the agreements between NFC and International relating to financing of wholesale notes, wholesale accounts and retail accounts, NFC receives interest income from International at prevailing market rates applied to the average outstanding balances less interest amounts paid by dealers on wholesale notes. Substantially all revenues earned on wholesale accounts and retail accounts are received from International.  Receivables purchased by NFC from International for the years ended October 31, 2005, 2004, 2003, were $6.6 billion, $5.4 billion and $4.0 billion, respectively. Aggregate interest revenue from International was $89.6 million in 2005, $57.7 million in 2004 and $47.3 million, in 2003.  The interest revenues are reported as components of Retail notes and finance lease revenue, Securitization income,Wholesale notes interest and Retail and wholesale accounts interest on the consolidated statements of income.

Finance Receivables and Operating Leases

In accordance with agreements between NFC and International, International may be liable for certain losses on finance receivables and investments in equipment on operating leases and may be required to repurchase the repossessed collateral at the receivable principal value.  Losses recorded by International on vehicles financed by NFC were $3.4 million in 2005, $4.6 million in 2004 and $14.1 million in 2003 .

Support Agreements

Under provisions of certain public and private financing arrangements and agreements, International and Navistar must make income maintenance payments if NFC’s consolidated income before interest expense and income taxes is less than 125.0% of its consolidated interest expense.  No income maintenance payments were required during the years ended October 31, 2005, 2004, 2003.

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Administrative Expenses

NFC pays a fee to International for data processing and other administrative services based on the cost of actual services performed.  The amount of the fee was $2.1 million, $1.9 million, and $1.9 million for the years ended October 31, 2005, 2004 and 2003, respectively.  The fee is reported in Credit, collection and administrative expenses on the consolidated statements of income.

Assumption of Debt

We issued $220.0 million of 4.75% Exchangeable Notes due 2009 in March 2002. At the same time we recorded a liability related to the embedded derivative created by the conversion option which allowed the note holders to convert the notes into shares of Navistar upon exchange.  This liability was valued at $61.5 million as of the note issuance date.  A key feature of these notes was the ability of Navistar to assume them at Navistar’s discretion. Navistar exercised this right effective May 28, 2004. The difference between the cash paid to Navistar of $170.0 million and the carrying value of the debt of $173.1 million and the fair value of the embedded derivative was credited to Paid-in capital in the amount of $20.7 million. The terms of the assumption resulted in a legal extinguishment of debt for NFC. The change in fair value of the embedded derivative recorded in Derivative expense (income) for the years ended October 31, 2004 and 2003 was $(11.0) million and $2.3 million, respectively.

Finance Receivables from Affiliates

Navistar has significant ownership interest, or is primary beneficiary of variable interest entities related to certain Dealcor dealers (“Dealcor” dealers) at October 31, 2005 and 2004. These dealers’ operations are consolidated with Navistar.  Other than being owned by Navistar, Dealcor dealers function and are treated on par with non-owned independent dealers. Total revenue in our consolidated statements of income includes revenue from Dealcor dealers of $10.7 million, $6.8 million and $5.0 million for the years ended October 31, 2005, 2004 and 2003, respectively. Included in our consolidated statements of financial condition are the following amounts due to or due from affiliates as of October 31, (in millions):

	2005		2004 (Restated)
Finance receivables from affiliates (Dealcor retail)	$	154.9	$	102.2
Finance receivables from affiliates (Dealcor wholesale)		29.8		54.3
Net accounts due from affiliates		29.7		-
Net accounts due to affiliates		-		68.3

4.  DISCONTINUED OPERATIONS

On November 30, 2001, NFC completed the sale of all of the stock of Harco National Insurance Company ("Harco"), a wholly-owned insurance subsidiary, to IAT Reinsurance Syndicate Ltd. (“IAT”), a Bermuda reinsurance company. The Harco insurance segment was accounted for as a discontinued operation, and accordingly, amounts in the consolidated financial statements and notes thereto, for all periods affected reflect discontinued operations accounting. As part of the sales agreement with IAT, NFC agreed to guarantee the adequacy of Harco's loss reserves. During fiscal 2006, all required payments were made and the guarantee was terminated. NFC has provided disclosures about this guarantee in Note 12, Commitments and Contingencies. The loss on disposal of $2.4 million recorded in the consolidated statement of income for the year ended October 31, 2003, represents payments made under the guarantee of $3.9 million, less the related deferred tax benefit of $1.5 million.

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5. FINANCE RECEIVABLES

Concentration of credit risk

Our primary business is to provide wholesale, retail and lease financing for new and used trucks sold by International and International’s dealers, and as a result, our receivables and leases have significant concentration in the trucking industry.  On a geographic basis, there is not a disproportionate concentration of credit risk in any region of the United States. We retain as collateral an ownership interest in the equipment associated with leases and, on behalf of the various trusts we maintain, a security interest in the equipment associated with wholesale notes and retail notes.

Financial instruments with potential credit risk consist primarily of Finance receivables. Finance receivables primarily represent receivables under retail finance contracts, receivables arising from leasing transactions and notes receivable.  We generally maintain a secured interest in the equipment financed and perform regular credit evaluations of our dealers and customers.  At October 31, 2005 and 2004, respectively, no single customer represented a significant concentration of credit risk. 

Finance receivables balances, as of October 31, are summarized as follows (in millions):

	2005			2004 (Restated)
Retail notes, net of unearned income	$	2,894.7		$	2,509.9
Finance leases, net of unearned income		170.2			143.7
Wholesale notes held for sale		98.1			127.7
Accounts (includes retail and wholesale)		76.1			96.5
Finance receivables from affiliates, net of unearned income		184.7			156.5
Total finance receivables		3,423.8			3,034.3
Allowance for losses		(13.6	)		(13.6	)
Total finance receivables, net	$	3,410.2		$	3,020.7

Contractual maturities of finance receivables as of October 31, 2005 are summarized as follows (in millions):

	Retail notes			Finance leases			Wholesale notes		Accounts		Affiliates
Due in fiscal year:
2006	$	955.8		$	15.6		$	98.1	$	76.1	$	74.7
2007		812.2			29.3			-		-		40.5
2008		657.2			33.1			-		-		32.8
2009		458.8			46.9			-		-		22.9
2010		251.1			54.7			-		-		12.5
Thereafter		68.9			13.7			-		-		3.4
Gross finance receivables		3,204.0			193.3			98.1		76.1		186.8
Unearned finance income		(309.3	)		(23.1	)		-		-		(2.1	)
Finance receivables, net of unearned income	$	2,894.7		$	170.2		$	98.1	$	76.1	$	184.7

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The actual cash collections from finance receivables may vary from the contractual cash flows because of sales, prepayments, extensions, delinquencies, credit losses, and renewals.  The contractual maturities, therefore, should not be regarded as a forecast of future collections.

6. ALLOWANCE FOR LOSSES

The Allowance for losses for finance receivables is summarized as follows for the fiscal years ended October 31 (in millions):

	2005			2004 (Restated)			2003 (Restated)
Allowance for losses, beginning of year	$	13.6		$	15.8		$	17.2
Provision for credit losses		5.7			7.8			12.9
Charge-offs charged to allowance		(5.7	)		(10.0	)		(14.3	)
Allowance for losses, end of year	$	13.6		$	13.6		$	15.8

The outstanding balance of finance receivables with specific loss reserves was $2.6 million and $0.5 million as of October 31, 2005 and 2004, respectively. Specific loss reserves were $0.3 million and $0.1 million as of October 31, 2005 and 2004, respectively. NFC continued to collect payments on these accounts. The outstanding balance of impaired finance receivables on which earnings had been suspended was $0.2 million and $1.3 million as of October 31, 2005 and 2004, respectively.  The average balance of impaired receivables for the years ended October 31, 2005, 2004 and 2003 were $7.7 million, $17.9 million and $47.5 million, respectively. Interest income on suspended earnings that were netted against unearned income for impaired finance receivables during the years ended October 31, 2005, 2004, and 2003 was less than $0.1 million. Balances with payments past due over 90 days on on-balance sheet finance receivables totaled $3.2 million and $3.6 million as of October 31, 2005 and 2004, respectively.

7. VEHICLE INVENTORY

NFC has inventory relating to asset repossessions of defaulted receivables and leases that it reports separately on the consolidated statements of financial condition. Net losses were $1.3 million, $1.3 million and $2.6 million for the years ended October 31, 2005, 2004 and 2003 respectively, and are included in Other expenses.

NFC’s Vehicle inventory is summarized as follows for the fiscal year ended October 31 (in millions):

	2005			2004 (Restated)
Vehicle inventory, beginning of year	$	26.6		$	34.8
Proceeds from sale of repossessed assets		(70.8	)		(48.1	)
Additions		52.6			39.9
Vehicle inventory, end of year	$	8.4		$	26.6

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8. NET INVESTMENT IN OPERATING LEASES

Net investment in operating leases at year-ended October 31 was as follows (in millions):

	2005			2004 (Restated)
Investment in operating leases	$	191.2		$	275.4
Less: Accumulated depreciation		(86.0	)		(124.0	)
Net investment in equipment under operating leases		105.2			151.4
Rent receivable net of reserve for past due operating leases		0.5			0.5
Net investment in operating leases	$	105.7		$	151.9

Future minimum rentals on operating leases are as follows: 2006, $19.2 million; 2007, $15.5 million; 2008, $12.2 million; 2009, $8.2 million; 2010, $4.2 million and $2.1 million thereafter.

9. INCOME TAXES

Taxes on income from continuing operations for the years ended October 31 are summarized as follows (in millions):

	2005			2004 (Restated)		2003 (Restated)
Current:
Federal	$	47.1		$	27.6	$	17.3
State and local		2.7			1.7		1.0
Total current		49.8			29.3		18.3
Deferred (primarily federal)		(5.6	)		9.9		10.9
Total income tax expense from continuing operations	$	44.2		$	39.2	$	29.2

A reconciliation of the statutory federal income tax rate from continuing operations is as follows:

	2005			2004 (Restated)			2003 (Restated)
Current:
Statutory federal income tax rate		35.0	%		35.0	%		35.0	%
State income taxes net of federal income taxes		1.0			1.8			1.6
Exchangeable note		-			(2.1	)		4.4
Other		(0.2	)		(0.2	)		(0.3	)
Effective income tax rate		35.8	%		34.5	%		40.7	%

NFC and its domestic subsidiaries are included in Navistar’s consolidated federal income tax returns.  Certain state income tax returns are required to be filed on a separate basis and others are included in various combined reports.  In accordance with its intercompany tax sharing agreement with Navistar, all federal income tax liabilities or credits are allocated to NFC and its domestic subsidiaries as if NFC filed its own consolidated return.  Total income tax payments made to Navistar during 2005, 2004 and 2003 were $33.7 million, $39.0 million, and $20.4 million, respectively.  The amount of federal and state income taxes payable to Navistar as of October 31, 2005 and 2004 were $36.7 million and $23.3 million, respectively.  Accrued income tax is included in Other liabilities on the consolidated statements of financial condition.

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Contingent tax liabilities are accounted for separately from deferred tax assets and liabilities. An accrual is recorded when we believe it is probable that additional taxes will be assessed and the amount can be reasonably estimated.  Contingent tax liabilities are reviewed based on recent changes in tax laws and regulations, including judicial rulings. As of October 31, 2005, we have $5.8 million of reserves for contingent tax liabilities included in Other liabilities on the consolidated statements of financial condition.

The net deferred tax asset from continuing operations is included in Other assets on the consolidated statements of financial condition.  The components of deferred tax assets and liabilities from continuing operations as of October 31 are as follows (in millions):

	2005			2004 (Restated)
Deferred tax assets:
Pension and other postretirement benefits	$	8.2		$	8.9
Allowance for losses		4.9			4.9
Secured borrowings		46.4			59.8
Other		6.8			5.9
Less valuation allowance		(0.7	)		(0.6	)
Total deferred tax assets	$	65.6		$	78.9
Deferred tax liabilities:
Lease transactions	$	(16.7	)	$	(20.8	)
Property, plant and equipment		(35.1	)		(47.8	)
Other		-			(1.0	)
Total deferred tax liabilities		(51.8	)		(69.6	)
Net deferred tax assets	$	13.8		$	9.3

We have incurred net operating losses in certain states where we file separately from Navistar.  As a result of those losses and our net deferred tax asset position, we assessed the need for a valuation allowance based on a determination of whether it is more likely than not that deferred tax benefits will be realized through the generation of future taxable income.  Appropriate consideration was given to all available evidence, both positive and negative, in assessing the need for a valuation allowance.  As a result of that assessment, a valuation allowance was established in the amount of ($0.7) million and ($0.6) million as of October 31, 2005 and 2004, respectively.  We believe that the remaining deferred tax assets will more likely than not be realized.

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10. SENIOR AND SUBORDINATED DEBT

Senior and subordinated debt outstanding as of October 31 is summarized as follows (dollars in millions):

					Weighted Average Interest Rate
	2005		2004 (Restated)		2005			2004
Bank revolving credit facility at variable rates due July 2010	$	560.0	$	672.0		5.9	%		3.1	%
Revolving retail warehouse facilities at variable rates between 4.2% and 4.5% due June 2010		500.0		500.0		4.3	%		2.2	%
Borrowing secured by asset-backed securities at variable rates between 2.2% to 4.8% due serially through 2014		2,778.6		1,992.0		3.6	%		2.9	%
Borrowings secured by operating and finance leases due serially through  June 2011 at rates between 3.2% to 5.8%		123.5		155.4		4.5	%		4.6	%
Total senior and subordinated debt	$	3,962.1	$	3,319.4		4.0	%		2.9	%

During 2005, NFC entered into a Revolving Credit Agreement (“Agreement”).  The new contractually committed credit facility has two primary components, a term loan ($400.0 million originally) and a revolving bank loan ($800.0 million).  The latter has a Mexican sub-revolver ($100.0 million), which may be used by Navistar’s three Mexican subsidiaries. At October 31, 2005, and 2004, total availability under the Agreement was $607.0 million and $123.0 million, respectively. The Mexican sub-revolver balance was $33.0 million and 25.0 million as of October 31, 2005 and 2004, respectively. The entire credit facility matures July 1, 2010, however, the term loan is to be repaid in 19 consecutive quarterly amounts of $1.0 million and a final payment of $381.0 million on July 1, 2010.  The first quarterly payment was paid on October 31, 2005.  Unlike the revolving portion, repayments of the term loan may not be re-borrowed.Under the terms of the Agreement, NFC is required to maintain a debt to tangible net worth ratio of no greater than 6.0 to 1.0, a twelve-month rolling fixed charge coverage ratio of no less than 1.25 to 1.0, and a twelve-month rolling combined retail/lease losses to liquidations ratio of no greater than 6%. As of October 31, 2005, the maximum amount of dividends that were available for distribution to International, our parent company, under the most restrictive covenants was $279.2 million. The Agreement grants security interests in substantially all of NFC’s unsold assets to the participants in the Agreement.  Compensating cash balances are not required. Facility fees of 0.375% are paid quarterly on the revolving loan portion only, regardless of usage.  On March 28, 2007, NFC entered into a First Amendment to the Agreement increasing the term loan component by $220.0 million, the quarterly repayment to $1.6 million and increasing the maximum permitted consolidated leverage ratio from 6:1 to 7:1 through November 1, 2007, and from 6:1 to 6.5:1 for the period November 1, 2007, through April 30, 2008. After April 30, 2008, the ratio returns to 6:1 for all periods thereafter. In addition, the First Amendment increased the amount of dividends permitted to be paid to our parent company to $400.0 million plus net income and any non-core asset sale proceeds from May 1, 2007, through the date of such payment.

Certain affirmative covenants under the Agreement require that NFC and Navistar file their Annual Report on Form 10-K for the period ended October 31, 2005 in accordance with SEC regulations.  On January 17, 2006, NFC received a waiver of the existing defaults under the Agreement through May 31, 2006, including potential future defaults for failure to provide financial statements to the lenders.  This waiver permitted NFC to incur additional borrowings under the Agreement through May 31, 2006, provided no other un-waived defaults occur.  On March 2, 2006, NFC received a Second Waiver and Consent, which  extended through January 31, 2007, the previous waiver covering a default or event of default created by NFC’s and Navistar’s failure to meet the filing requirements of Sections 13 and 15 of the Exchange Act of 1934, as amended, when NFC and its parent failed to file its 2005 Annual Report on Form 10-K with the Securities and Exchange Commission, and further waived a default, if any, created by the right of the holders of our long-term debt to accelerate payment of such debt because of the late filing of required SEC reports.  In November 2006, NFC received a Third Waiver and Consent, which extended through October 31, 2007, and extended the previous waivers which waive any default or event of default that would result solely from NFC and Navistar’s failure to meet the filing requirements of Sections 13 and 15 of the Exchange Act of 1934, as amended, with respect to their Annual Reports on Form 10-K for 2005 and 2006 and their quarterly reports on Form 10-Q for the periods from November 1, 2005, through July 31, 2007.  On October 23, 2007, NFC received a Second Amendment and Fourth Waiver.  The waiver extends through December 31, 2007, and expands the previous waivers which waive any default or event of default that would result solely from NFC’s and Navistar’s failure to meet the filing requirements mentioned in third waiver and including Sections 13 and 15 of the Exchange Act of 1934, as amended, with respect to their Annual Reports on Form 10-K for 2007.  During the period from November 1, 2007 until the waiver terminates, interest rate on certain loans under the Agreement shall be increased by 0.25%. In December 2007, NFC received a Fifth Waiver to the Agreement expanding the scope of certain default conditions covered by the waiver therein until November 30, 2008.

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In June 2005, TRIP, a special purpose, wholly-owned subsidiary of NFC, entered into a new $500.0 million revolving facility to replace the 2000 facility that otherwise would have expired in October 2005.  The new notes mature in June 2010 and are subject to optional early redemption in full without penalty or premium upon satisfaction of certain terms and conditions on any date on or after April 15, 2010.  NFC uses TRIP to temporarily fund retail notes and retail leases, other than operating leases.  This facility is used primarily during the periods prior to a securitization of retail notes and finance leases. NFC retains a repurchase option against the retail notes and leases sold into TRIP; therefore, TRIP’s assets and liabilities are included in our consolidated statements of financial condition. As of October 31, 2005, NFC had $232.6 million in retail notes and finance leases in TRIP.

The asset-backed debt is issued by consolidated SPEs and is payable out of collections on the finance receivables sold to the SPEs.  This debt is the legal obligation of the SPEs and not NFC. The balance outstanding was $2.8 billion and $2.0 billion as of October 31, 2005 and 2004, respectively. Similar to the waivers obtained on the Agreement, we have obtained waivers for the private retail transactions and the private portion of the wholesale note transaction.  These waivers are similar in scope to those of the Agreement and expire on or about November 30, 2008.

Failure to deliver audited financial statements could be declared a servicer default by the investors of various retail and wholesale securitizations. If default is declared, the remedy could be the replacement as servicer or accelerated debt amortization from assets in the trust. We do not believe the failure to deliver audited financials statements would be a material adverse event to the investors, as required for a servicer default. We have not obtained waivers on certain public securitizations including TRIP. No servicer defaults have been declared on these securitizations. Under the possible scenario of loss of servicing or accelerated amortization of debt, we do not believe these events would have a material adverse impact on us.

NFC enters into secured borrowing agreements involving vehicles subject to operating and finance leases with retail customers.  The balances are classified under Senior and subordinated debt as borrowings secured by leases. In connection with the securitizations and secured borrowing agreements of certain of its leasing portfolio assets, NFC and its wholly-owned subsidiary, Navistar Leasing Service Corporation (“NLSC”) have established Navistar Leasing Company (“NLC”), a Delaware business trust.  NLSC was formerly known as Harco Leasing Company, Inc. prior to its name change effective September 21, 2006. NLC holds legal title to leased vehicles and is the lessor on substantially all leases originated by NFC. NLSC owns beneficial interests in the titles held by NLC and has transferred other beneficial interests issued by NLC to purchasers under secured borrowing agreements and securitizations.  Neither the beneficial interests held by purchasers under secured borrowing agreements or the assets represented thereby, nor legal interest in any assets of NLC, are available to NLSC, NFC or its creditors.  The balance of all the above-mentioned secured borrowings issued by NLC totaled $68.6 million and $136.0 million as of October 31, 2005 and 2004, respectively.  The carrying amount of the finance and operating leases used as collateral was approximately $67.0 million as of October 31, 2005 and approximately $150.0 million as of October 31, 2004..

ITLC, a special purpose, wholly-owned subsidiary of NFC, was established in June 2004 to provide NFC with another vehicle to obtain borrowings secured by leases.  The balances are classified under Senior and subordinated debt as borrowings secured by leases.  ITLC’s assets are available to satisfy its creditors’ claims prior to such assets becoming available for ITLC’s use or to NFC or affiliated companies.  The balance of all the above-mentioned secured borrowings issued by ITLC totaled $54.9 million and $19.4 million as of October 31, 2005 and 2004, respectively.  The carrying amount of the finance and operating leases used as collateral was $51.2 million as of October 31, 2005 and $18.1 million as of October 31, 2004.

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Amortization of debt issue costs included in Cost of borrowing – other were $7.8 million, $8.1 million and $7.3 million for the years ended October 31, 2005, 2004 and 2003, respectively.

The future aggregate annual contractual maturities and required payments of senior and subordinated debt as of October 31, 2005 are as follows (in millions):

2006	$	120.7
2007		78.2
2008		684.1
2009		422.0
2010		1,544.4
Thereafter		1,112.7
Total	$	3,962.1

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11.  POSTRETIREMENT BENEFITS

 Defined Benefit Plans

We provide postretirement benefits to some employees. Costs associated with postretirement benefits include pension and postretirement health care expenses for employees, retirees, and surviving spouses and dependents. We use an October 31 measurement date for all of our defined benefit plans.

Generally, the plans are non-contributory. Our policy is to fund pension plans in accordance with applicable United States government regulations. As of October 31, 2005, all legal funding requirements had been met. We were not required to make contributions to our pension plans in 2006.

Net periodic postretirement benefits expense included on the consolidated statements of income is comprised of the following:

	Pension Benefits									Other Benefits
Millions of dollars	2005			2004			2003			2005			2004			2003
				(Restated)			(Restated)						(Restated)			(Restated)
Service cost for benefits earned during the period	$	.4		$	.5		$	.5		$	.2		$	.3		$	.3
Interest on obligation		3.9			3.8			3.8			1.4			1.5			1.7
Amortization of cumulative losses		1.5			1.1			1.0			.6			.6			.9
Other		.6			.5			-			-			-			-
Less expected return on assets		(4.8	)		(4.7	)		(4.3	)		(.7	)		(.7	)		(.5	)
Net postretirement benefits expense	$	1.6		$	1.2		$	1.0		$	1.5		$	1.7		$	2.4

“Other” includes the expense related to defined contribution plans, and other postretirement benefit costs. Cumulative gains and losses are amortized over the average remaining service life of active employees.  Plan amendments are amortized over the average remaining service lives of active employees.

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The funded status of our plans as of October 31, 2005 and 2004, and reconciliation with amounts recognized on our consolidated statements of financial condition are provided below.

	Pension Benefits						Other Benefits
Millions of dollars	2005			2004 (Restated)			2005			2004 (Restated)
Change in benefit obligation
Benefit obligation at beginning of year	$	72.3		$	67.2		$	26.3		$	29.9
Service cost		.4			.5			.2			.3
Interest on obligation		3.9			3.8			1.4			1.5
Actuarial net (gain) loss		(1.7	)		4.5			(.8	)		(4.0	)
Plan participants’ contributions		-			-			.3			-
Benefits paid		(4.0	)		(3.7	)		(1.6	)		(1.4	)
Benefit obligation at end of year	$	70.9		$	72.3		$	25.8		$	26.3
Change in plan assets
Fair value of plan assets at beginning of year	$	55.4		$	54.5		$	7.5		$	7.5
Actual return on plan assets		5.1			4.2			.7			.2
Employer contributions		-			-			.1			.2
Benefits paid		(3.5	)		(3.3	)		(.4	)		(.4	)
Fair value of plan assets at end of year	$	57.0		$	55.4		$	7.9		$	7.5
Unfunded status	$	(13.9	)	$	(17.0	)	$	(17.9	)	$	(18.8	)
Unrecognized actuarial net loss		16.5			20.0			6.5			8.0
Unrecognized prior service cost		-			.1			-			-
Net amount recognized	$	2.6		$	3.1		$	(11.4	)	$	(10.8	)

Amounts recognized in the consolidated statements of financial condition consist of
Prepaid benefit cost	$	6.0		$	6.0		$	-		$	-
Accrued benefit liability		(16.2	)		(18.6	)		(11.4	)		(10.8	)
Intangible asset		.1			.2			-			-
Accumulated other comprehensive loss		12.7			15.5			-			-
Net amount recognized	$	2.6		$	3.1		$	(11.4	)	$	(10.8	)

The accumulated benefit obligation for pension benefits, a measure which excludes the effect of salary and wage increases, was $67.2 million and $67.8 million as of October 31, 2005 and 2004, respectively.

The minimum pension liability adjustment included in Accumulated other comprehensive loss (net of tax) is net of deferred income taxes of $4.8 million and $5.8 million at October 31, 2005 and 2004, respectively.

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The weighted average rate assumptions used in determining benefit obligations were:

	Pension Benefits						Other Benefits
	2005			2004 (Restated)			2005			2004 (Restated)
Discount rate used to determine present value of  benefit obligation at end of year		5.6	%		5.5	%		5.6	%		5.4	%
Expected rate of increase in future compensation levels		3.5	%		3.5	%	N/A			N/A

The weighted average rate assumptions used in determining net postretirement benefit expense were:

	Pension Benefits									Other Benefits
	2005			2004 (Restated)			2003 (Restated)			2005			2004 (Restated)			2003 (Restated)
Discount rate		5.5	%		5.8	%		6.3	%		5.4	%		5.8%	%		6.3	%
Expected long-term rate of return on plan assets		9.0	%		9.0	%		9.0	%		9.0	%		9.0%	%		9.0	%
Expected rate of increase in future compensation levels		3.5	%		3.5	%		3.5	%	N/A			N/A			N/A

We determine our expected return on plan assets assumption by evaluating both historical returns as well as estimates of future returns.  Specifically, we analyzed the average historical broad market returns for various periods of time over the past 100 years for equities and over a 30 year period for fixed income securities, and adjusted the computed amount for any expected changes in the long-term outlook for both the equity and fixed income markets.  We consider the current asset mix as well as our targeted asset mix when establishing the expected return on plan assets.

As of October 31, 2005 and 2004, the weighted average percentage of plan assets by category is as follows:

	Pension Benefits									Other Benefits
Asset Category	Target Range			2005			2004 (1) (Restated)			Target Range			2005			2004 (Restated)
Equity securities
Navistar common stock					0	%		0	%					7	%		9	%
Other equity securities					69	%		48	%					67	%		67	%
Hedge funds					0	%		0	%					11	%		9	%
Total equity securities		60-80	%		69	%		48	%		75-85	%		85	%		85	%
Debt securities					31	%		52	%					14	%		14	%
Other, including cash					0	%		0	%					1	%		1	%
Total debt securities and other		20-40	%		31	%		52	%		15-25	%		15	%		15	%

(1)  In fiscal year 2005, the asset allocation target was changed to 70% equity and 30% debt. Prior to that change, the target had been 40% equity and 60% debt.

Our investment strategy is consistent with our policy to maximize returns while considering overall investment risk and the funded status of the plans relative to their benefit obligations. Our investment strategy takes into account the long-term nature of the benefit obligations, the liquidity needs of the plans and the expected risk/return tradeoffs of the asset classes in which the plans may choose to invest.  Asset allocations are established through an investment policy, which is updated periodically and reviewed by a fiduciary committee and the board of directors.  We believe that returns on common stock over the long term will be higher than returns from fixed-income securities as the historical broad market indices have shown. Equity and fixed-income investments are made across a broad range of industries and companies to provide protection against the impact of volatility in any single industry or company. The long-term performance of our funds generally has outperformed our long-term return assumptions.

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The actuarial assumptions used to compute the net periodic pension cost and postretirement benefit cost are based upon information available as of the beginning of the year, specifically, market interest rates, past experience and our best estimate of future economic conditions.  Changes in these assumptions may impact future benefit costs and obligations.  In computing future costs and obligations, we must make assumptions about such things as employee mortality and turnover, expected salary and wage increases, discount rates, expected returns on plan assets, and expected future cost increases.  Three of these items have a significant impact on the level of cost: (1) discount rates; (2) expected rates of return on plan assets; and (3) healthcare cost trend rates.

Prior to the 2005 year-end valuations, we estimated the discount rate for our pension and other post employment benefits (“OPEB”) obligations by reference to the average of the Moody’s AA Corporate Bond Index and the Merrill Lynch Ten Year + High Quality Corporate Bond Index.  Beginning with 2005 year-end valuations, we estimate the discount rate for our pension and OPEB obligations by matching anticipated future benefit payments for the plans to the Citibank yield curve to establish a weighted average discount rate for each plan.  This improved methodology, considered a change in estimate, was adopted because it was deemed superior to the previously applied methodology in that it provides for a matching of expected investment yields available considering the timing of future cash outflows.  Using this new methodology, we have established for the pension plans and the OPEB plan discount rates of 5.6% and 5.6%, respectively, for year-end 2005.

Health care cost trend rates are established through a review of actual recent cost trends and projected future trends.  Our retiree medical trend assumptions are the best estimate of expected inflationary increases to healthcare costs. The assumptions used are based upon both our specific trends and nationally expected trends.  Recently, our average increases have been lower than the nationally expected trends.

For 2006, the weighted average rate of increase in the per capita cost of post retirement health care benefits is projected to be 8.9%.  The rate is projected to decrease to 5% by the year 2011 and remain at that level each year thereafter.  The effect of changing the health care cost trend rate by one-percentage point for each future year is as follows, in millions:

	One-Percentage Point Increase		One-Percentage Point Decrease
Effect on total of service and interest cost components	$	-	$	-
Effect on postretirement benefit obligation	$	3.0	$	(3.0	)

On December 8, 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the Act) was signed into law.  The Act introduces a voluntary prescription drug benefit under Medicare as well as a federal subsidy to sponsors of retiree healthcare plans that provide prescription drug benefits that are at least actuarially equivalent to Medicare Part D.  This subsidy covers a defined portion of an individual beneficiary’s annual covered prescription drug costs, and is exempt from federal taxation.

In May 2004, the FASB issued FASB Staff Position No. FAS 106-2, Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003, which provides guidance on the accounting for the effects of the Act.  We adopted the provisions of FASB Staff Position No. FAS 106-2 in the third quarter of 2004, retroactive to December 8, 2003.  The retroactive application of the Medicare subsidy reduced our 2004 postretirement benefit expense by $0.6 million. Our accumulated postretirement benefit obligation (“APBO”) was reduced by $4.1 million at October 31, 2004, and $3.9 million at December 8, 2003 for the subsidy related to benefits attributed to past service. We

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

used a 5.8% discount rate to value the related APBO at December 8, 2003, which was the same discount rate used at October 31, 2003, and therefore caused no change in the APBO as of that date.

Our expected future benefit payments and federal subsidy receipts for the years ending October 31, 2006 through 2010 and the five years ending October 31, 2015, are estimated as follows:

Millions of dollars	Pension Benefit Payments		Other Postretirement Benefit Payments		Postretirement Benefit Subsidy Receipts
2006	$	4.4	$	1.6	$	.2
2007		4.6		1.7		.2
2008		4.7		1.8		.2
2009		4.9		1.9		.2
2010		5.0		2.0		.2
2011 through 2015		25.3		10.6		1.4

Defined Contribution Plans

The defined contribution plans cover a substantial portion of our employees. The defined contribution plans contain a 401(k) feature and provides a company match.  Defined contribution expense pursuant to these plans was $0.6 million, $ 0.5 million, and $ (0.0) in 2005, 2004, and 2003, respectively, which approximates the amount we fund.

12. COMMITMENTS AND CONTINGENCIES

Leases

NFC is obligated under non-cancelable operating leases for the majority of its office facilities.  These leases are generally renewable and provide that property taxes and maintenance costs are to be paid by the lessee.  As of October 31, 2005, future minimum lease commitments under non-cancelable operating leases with remaining terms in excess of one year are as follows:

Year Ended October 31 (in millions)
2006	$	1.7
2007		1.3
2008		1.3
2009		1.1
2010		0.9
2011 and beyond		4.0
Total	$	10.3

The total operating lease expense was $3.0 million,$1.6 million, and $2.0 million for the years ended October 31, 2005, 2004, 2003, respectively .

Guarantees of Debt

NFC periodically guarantees the outstanding debt of affiliates.  The guarantees allow for diversification of funding sources for the affiliates.  As of October 31, 2005, NFC has numerous guarantees related to Navistar's three Mexican finance subsidiaries, Navistar Financial, S.A. de C.V. SOFOM E.N.R. (“NF”), Arrendadora Financiera Navistar, S.A. de C.V. SOFOM E.N.R. (“Arrendadora”) and Navistar Comercial S.A. de C.V.  As of October 31, 2005, NFC’s maximum exposure under these guarantees is $158.9 million, the total amount outstanding at that date. During the years ended October 31, 2005, 2004, 2003, no fees were paid to us by the affiliates for the guarantees.

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the borrowings as of October 31, 2005 (in millions):

Type of Funding		Maturity	Maximum Amount of Guaranty		Outstanding Balance
Revolving credit facility	(2)	July 2010	$	100.0	$	33.0
Revolving credit facility	(1)	October 2008		18.5		18.5
Revolving credit facility	(1)	October 2010		11.1		14.1
Revolving credit facility	(1)	October 2010		18.5		17.3
Revolving credit facility	(1)	Jan 2006		11.6		11.6
Revolving credit facility	(1)	Dec 2005		9.3		9.2
Revolving credit facility	(1)	Nov 2005		4.6		4.6
Commercial Paper	(1)	September 2006		46.4		46.4
Retail Note Term Securitization	(1)	December 2007		11.1		4.2
		Total	$	231.1	$	158.9

(1)  Peso-denominated.

(2)  Revolving credit facility guaranteed jointly with Navistar.

Guarantees of Derivatives

As of October 31, 2005, NFC had guaranteed derivative contracts for foreign currency forwards and interest rate swaps related to NF and Arrendadora.  NFC is liable up to the fair market value of these derivative contracts only in cases of default by NF and Arrendadora.

The following table summarizes the guaranteed derivative contracts as of October 31, 2005 (in millions):

Instrument	Maturity	Outstanding Notional		Fair Value
Interest rate swaps (1)	September 2008	$	93.4	$	(0.8	)
Interest rate swaps (2)	September 2008	$	1.9	$	-

(1) Peso-denominated related to SOFOL and Arrendadora

(2) U.S. Dollar – denominated related to SOFOL and Arrendadora

The foreign currency conversion rate at October 31, 2005, of 10.8:1 was used by NFC to convert the peso-denominated guarantees to United States dollars.

NFC has not recognized a liability related to any of these guarantees since FASB Interpretation 45 Guarantor’s Accounting and Disclosure Requirements for Guarantees, including Indirect Guarantees of Indebtedness of Others does not apply to the measurement of a subsidiary’s guarantee of the debt owed to a third party by either its parent or another subsidiary of that parent.

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Other

On November 30, 2001, NFC completed the sale of all of the stock of Harco, a wholly-owned insurance subsidiary, to IAT Reinsurance Syndicate Ltd. (“IAT”), a Bermuda reinsurance company.  As part of its sales agreement with IAT, NFC has agreed to guarantee the adequacy of Harco's loss reserves at the time of sales.  There is no limit to the potential amount of future payments required by NFC related to this reserve.  The guarantee under the sales agreement was scheduled to expire in November 2008.  The carrying amount of NFC's liability under this guarantee was estimated at $1.0 million as of October 31, 2005 and is included in Other liabilities in the consolidated statements of financial condition. During fiscal 2006 all required payments were made and the guarantee was terminated without any gain or loss recognized.

13. SHAREOWNER’S EQUITY

The number of authorized shares of capital stock as of October 31, 2005 and 2004 was 2,000,000, of which 1,600,000 shares were issued and outstanding.  International owns all issued and outstanding capital stock.  No shares are reserved for officers and employees, or for options, warrants, conversions and other rights.

14. DERIVATIVE FINANCIAL INSTRUMENTS

NFC manages its exposure to fluctuations in interest rates by limiting the amount of fixed rate assets funded with variable rate debt.  This is accomplished by selling fixed rate receivables on a fixed rate basis and by utilizing derivative financial instruments.  These derivative financial instruments may include forward contracts, interest rate swaps, and interest rate caps.  The fair value of these instruments is estimated based on quoted market prices and is subject to market risk as the instruments may become less valuable in case of changes in market conditions or interest rates.  NFC manages exposure to counterparty credit risk by entering into derivative financial instruments with major financial institutions that can be expected to fully perform under the terms of such agreements.  NFC does not require collateral or other security to support derivative financial instruments, if any, with credit risk.  NFC’s counterparty credit exposure is limited to the positive fair value of contracts at the reporting date. Notional amounts of derivative financial instruments do not represent exposure to credit loss.

As discussed in Note 2, we valued an embedded derivative that was a key component to the issuance of Exchangeable Notes in 2002. All changes in fair value were recorded in Derivatives expense (income). The following table presents the various fair values during the life of the derivative included in Other liabilities (in millions):

	Fair Value
March 25, 2002 (Inception date)	$	61.5
October 31, 2002		26.3
October 31, 2003		28.6
May 28, 2004 (Termination date)		17.6

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of October 31, 2005, the notional amounts and fair values of NFC’s derivative financial instruments are summarized as follows (in millions):

Inception	Maturity	Instrument	Notional		Fair Value
October 2000	November 2012	Interest rate cap purchased	$	500.0	$	0.2
October 2000	November 2012	Interest rate cap sold		500.0		(0.2	)
July 2001	April 2006	Interest rate swap		12.4		-
October 2003	December 2006	Interest rate swap		54.7		(1.1	)
October 2003	December 2006	Interest rate swap		138.5		1.6
June 2005	June 2016	Interest rate cap purchased		500.0		5.8
June 2005	June 2016	Interest rate cap sold		500.0		(5.8	)

NFC’s derivatives are all accounted for as free standing derivatives with no hedge designation, whereas, the change in unrealized gains or losses are recorded against earnings each period. The fair values of unrealized gains and losses are recorded in Other assets and Other liabilities, respectively.

In October 2000, NFC’s wholly-owned subsidiary TRIP entered into a $500.0 million retail revolving facility as a method to fund retail notes and finance leases.  In June 2005, TRIP entered into a new $500.0 million revolving facility to replace the 2000 facility that expired in October 2005.  Under the terms of these agreements TRIP finances receivables through the issuance of commercial paper.  NFC purchased interest rate caps for the benefit of TRIP to protect it against the potential of rising commercial paper interest rates.  To offset the economic cost of these caps, NFC entered into interest rate caps which offset those purchased for the benefit of TRIP.

In July 2001, NFC entered into an interest rate swap agreement which has a remaining notional amount of $12.4 million to fix a portion of its floating rate revolving debt.

In October 2003, NFC entered into an interest rate swap agreement in connection with a sale of retail notes and finance leases receivables.  The purpose and structure of this swap was to convert the floating rate portion of the asset backed securities into fixed rate interest to match the interest basis of the receivables pool sold to the owner trust, and to protect NFC from interest rate volatility.  The notional amount of this swap is calculated as the difference between the actual pool balances and the projected pool balances.  The outcome of the swap results in NFC paying a fixed rate of interest on the projected balance of the pool.  To the extent that actual pool balances differ from the projected pool balances, NFC has retained interest rate exposure on this difference.

Derivative expense (income) includes swap (gains) and losses of $(0.3) million, $(4.7) million and $11.5 million for the years ended October 31, 2005, 2004 and 2003, respectively.

15. SECURITIZATION TRANSACTIONS

NFC finances receivables through NFRRC, NFSC, TRAC, TERFCO and ITLC, all special purpose, wholly-owned subsidiaries of NFC. In accordance with SFAS No. 140, these transactions are accounted for either as a sale with gain or loss recorded at the date of sale and a retained interest recorded, or as a secured borrowing. We provide limited recourse for all subordinated receivables. The recourse is limited to our subordinated interest and relates to credit risk only.

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Off balance sheet securitizations

NFC sold wholesales notes through NFSC, which has in place a revolving wholesale note trust that provides for the funding of eligible wholesale notes. As of October 31, 2005 and 2004, the trust owned $1.4 billion and $1.2 billion, respectively, of wholesale notes and marketable securities. Components of the wholesale note trust funding certificates as of October 31, 2005 were a $200.0 million tranche of investor certificates maturing in July 2008, three $212.0 million tranches of investor certificates and notes expected to mature equally on June 26, 2006, May 25, 2007 and February 25, 2010, variable funding certificates (“VFC”) with a maximum capacity of $400.0 million expected to mature December 26, 2005 and a seller’s subordinated interest of $202.1 million as of October 31, 2005 and $170.4 million as of October 31, 2004. On June 26, 2006, the wholesale note trust paid off $212.0 million of the investor certificates and on May 25, 2007 paid off $212.0 million of the investor notes. In May 2006 the VFC was increased to $600.0 million, then to $800.0 million in October 2006. In January 2007 the expiration date was extended from May 2007 to January 2008. In December 2007 funding under the VFC was extended from January 2008 to November 2008.

During the second quarter of 2004, TRAC obtained financing for its retail accounts with a bank conduit that provides for the funding of up to $100.0 million of eligible retail accounts. The revolving retail account facility expired on August 13, 2006 and was renewed with an expiration date, as amended, of August 8, 2008.  As of October 31, 2005, this facility was fully utilized. TRAC had a subordinated interest in the facility of $175.0 million as of October 31, 2005 and $167.9 million as of October 31, 2004.

TERFCO had in place a trust to provide funding of $100.0 million of unsecured trade receivables generated by the sale of diesel engines and engine service parts from International to Ford Motor Company.  This facility was fully utilized as of October 31, 2005.  TERFCO had a subordinated interest in the trust of $64.0 million as of October 31, 2005 and $72.4 million as of October 31, 2004.  On December 15, 2005, the trust was fully repaid and will no longer be used.

Retained interests

The SPEs’ assets are available to satisfy their creditors’ claims prior to such assets becoming available for the SPEs’ own uses or to NFC or affiliated companies. NFC is under no obligation to repurchase any sold receivable that becomes delinquent in payment or otherwise is in default.   The terms of receivable sales generally require NFC to provide credit enhancements in the form of over collateralizations and/or cash reserves with the trusts and conduits.  The use of such cash reserves by NFC is restricted under the terms of the securitized sales agreements.  The maximum exposure under all receivable sale recourse provisions was $441.2 million and $410.7 million as of October 31, 2005 and October 31, 2004, respectively. Our retained interests in the related trusts or assets held by the trusts are reflected on our consolidated statements of financial condition in Amounts due from sales of receivables.  The following is a summary of Amounts due from sales of receivables (in millions):

	2005		2004 (Restated)
Excess seller’s interests  (1)	$	401.8	$	385.2
Interest only strip		15.9		10.6
Restricted cash reserves		23.5		14.9
Total amounts due from sales of receivables	$	441.2	$	410.7

⁽¹⁾ Excess seller’s interest includes amounts contractually required to be retained of $ 35.6 million and excess collateral of $142.5 million as of October 31, 2005 and $ 31.0 million and $ 119.2 million, respectively, as of October 31, 2004.

We estimate the payment speed for the receivables sold, expected net credit losses and the discount rate used to determine the fair value of the retained interests.  Estimates of payment speeds, expected credit losses, and discount rates are based on historical experience, anticipated future portfolio performance and other factors and are made separately for each securitization transaction.  In addition, we estimate the fair value of the retained interests on a quarterly basis utilizing updated estimates of these factors.

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The key economic assumptions as of October 31, 2005, and the sensitivity of the current fair values of residual cash flows to an immediate adverse change of 10 and 20 percent in that assumption are as follows (dollars in millions):

		Fair Value Change at October 31, 2005
	2005	Adverse 10%		Adverse 20%
Discount rate (annual)	9.2  to 17.8  %	$	2.4	$	4.7
Estimated credit losses	0 to 0.18  %		0.1		0.2
Payment speed (percent of portfolio per month)	10.3  to  80.0  %		0.2		0.4

The lower end of the discount rate assumption range and the upper end of the payment speed assumption range were used to value the retained interests in the TRAC and TERFCO retail account securitizations. No percentage for estimated credit losses were assumed for TERFCO or TRAC as no losses have been incurred to date. The upper end of the discount rate assumption range and the lower end of the payment speed assumption range were used to value the retained interests in the wholesale note securitization facility.

These sensitivities are hypothetical and should be used with caution. The effect of a variation of a particular assumption on the fair value of the retained interests is calculated without changing any other assumption.  In reality, changes in one factor may result in changes in another which might magnify or counteract these reported sensitivities.

The following tables reconcile the total serviced portfolio to the on balance sheet portfolio, net of unearned income, as of October 31 (in millions):

2005	Retail Notes		Finance Leases		Wholesale Notes			Accounts		Affiliates		Total
Serviced portfolio	$	2,894.7	$	170.2	$	1,454.4		$	76.1	$	184.7	$	4,780.1
Less sold receivables - off balance sheet		-		-		(1,356.3	)		-		-		(1,356.3	)
Total on balance sheet	$	2,894.7	$	170.2	$	98.1		$	76.1	$	184.7	$	3,423.8

2004 (Restated)	Retail Notes		Finance Leases		Wholesale Notes			Accounts		Affiliates		Total
Serviced portfolio	$	2,509.9	$	143.7	$	1,260.1		$	96.5	$	156.5	$	4,166.7
Less sold receivables – off balance sheet		-		-		(1,132.4	)		-		-		(1,132.4	)
Total on balance sheet	$	2,509.9	$	143.7	$	127.7		$	96.5	$	156.5	$	3,034.3

For sold receivables, wholesale notes balances past due over 90 days were $0.7 million and $1.0 million, respectively, as of October 31, 2005, and 2004. There were no past due retail balances for TERFCO or TRAC at either date.

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table sets forth the activity related to off balance sheet securitizations reported in Securitization income on the consolidated statements of income (in millions):

	2005			2004 (Restated)			2003 (Restated)
Fair value adjustments	$	(6.5	)	$	(1.1	)	$	(1.4	)
Excess spread income		62.0			45.3			41.3
Servicing fees revenue		14.4			11.4			8.9
Losses on sales of receivables		(2.1	)		(4.7	)		(6.4	)
Investment income		6.7			3.5			4.7
Securitization income	$	74.5		$	54.4		$	47.1

Cash flows from off balance sheet securitization transactions are as follows (in millions):

	2005		2004 (Restated)		2003 (Restated)
Proceeds from sales of finance receivables	$	8,715.6	$	6,705.8	$	5,220.9
Servicing fees		14.2		11.2		8.9
Cash from net excess spread		63.1		45.4		41.8
Investment income		4.5		1.9		2.5
Net cash from securitization transactions	$	8,797.4	$	6,764.3	$	5,274.1

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

16. FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts and estimated fair values of our financial instruments as of October 31 were as follows (in millions):

	2005				2004 (Restated)
	Carrying Value		Fair Value		Carrying Value			Fair Value
Financial assets:
Cash and cash equivalents	$	23.0	$	23.0	$	22.8		$	22.8
Finance receivables:
Retail notes		2,894.7		2,648.8		2,509.9			2,325.3
Affiliates		184.7		175.9		156.5			153.3
Accounts (wholesale & retail)		76.1		76.1		96.5			96.4
Wholesale notes		98.1		98.1		127.7			127.8
Restricted cash and cash  equivalents		543.8		543.8		274.6			274.6
Amounts due from sales of receivables		441.2		441.2		410.7			410.7
Financial liabilities:
Senior and subordinated debt		3,962.1		3,899.1		3,319.4			3,298.7
Derivative financial instruments		0.5		0.5		(0.7	)		(0.7	)

The estimated fair values for all other financial instruments approximate their carrying values as the result of the short-term nature or variable interest terms inherent in the financial instruments.

The fair value of Retail notes and finance leases is estimated by discounting the future contractual cash flows using an estimated discount rate reflecting interest rates currently being offered for notes with similar terms.

The majority of derivatives are valued by our derivative counterparty. For all others we use a discounted cash flow methodology.

The fair values of the Amounts due from the sales of receivables are estimated by discounting the probable future cash flows using an estimated discount rate that reflects the inherent risk of the underlying assets.

17. LEGAL PROCEEDINGS

We are subject to various claims arising in the ordinary course of business, and are parties to various legal proceedings, which constitute ordinary, routine litigation incidental to our business.  In our opinion, the disposition of these proceedings and claims will not have a material adverse effect on the business or our results of operations, cash flows or financial condition.

In December 2004, we announced that we would restate our financial results for the fiscal years 2002 and 2003 and the first three quarters of fiscal 2004.  Our restated Annual Report on Form 10-K was filed in February 2005.  The SEC notified us on February 9, 2005, that it was conducting an informal inquiry into our restatement.  On March 17, 2005, we were advised by the SEC that the status of the inquiry had been changed to a formal investigation.  We were subsequently informed by the SEC that it was expanding the investigation to include this current restatement. On November 8, 2006, we announced that we would restate our financial results for fiscal years 2002 through 2004 and for the first three quarters of fiscal 2005.  Since April of 2006, we have been providing information to the SEC regarding the current restatement.  We are fully cooperating with the SEC on this investigation.  Based on the status of the investigation, we are not able to predict its final outcome.

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

18. SUBSEQUENT EVENTS

Beginning in January 2006 with the Annual Report on Form 10-K for the period ended October 31, 2005, NFC and Navistar have failed to file the required annual and quarterly reports as outlined in Sections 13 and 15 of the Exchange Act of 1934, as amended.  However, both companies have filed the required notice of non-filing.  In each notice of non-filing, each registrantstated they would be unable to file the required report because Navistar and its registered independent public accountants were investigating numerous significant and complex accounting issues and it was not possible to estimate when the items would be resolved.

Failure to file the 2005 reports required NFC to obtain waivers from the lenders under its $1.2 billion Credit Agreement (see Note 10), Senior and subordinated debt so as to cure an Event of Default for failure to file financial statements timely. The waiver was set to expire at the earlier of May 31, 2006 or when the holders of any of the outstanding debt of Navistar had the right to accelerate payment in accordance with the term of the indenture under which the debt was issued.

Navistar was notified by the requisite number of holders of several of its outstanding debt issuance that it was in default and the debt holders intended to request acceleration.  Navistar responded by negotiating an unsecured $1.5 billion credit facility so as to either make a tender offer for the outstanding public debt or pay the debt holders in case of an approved acceleration.  These developments forced NFC to obtain a Second Waiver and Consent on March 2, 2006, from its lenders to extend the expiration date of the first waiver until January 31, 2007.  The Second Waiver and Consent also established a five day cure period for Navistar to respond to acceleration claims before NFC’s Credit Agreement would be in default and thus, subject to immediate payment.

On April 12, 2006, NFC and Navistar filed a current report on Form 8-K announcing the dismissal of their long term independent registered public accounting firm.  On that date, the Audit Committee of the Board of Directors of NFC also announced the approval of the retention of KPMG LLP (“KPMG”) as the company’s independent registered public accounting firm with respect to the audit of the company’s financial statements for its fiscal years ended October 31, 2005 and October 31, 2006.

On November 8, 2006, with the concurrence of its Audit Committee, NFC announced that the company’s previously issued audited financial statements and the independent auditors' reports thereon for the years ended October 31, 2002 through 2004, and all quarterly financial statements for periods after November 1, 2002 should no longer be relied upon because of errors in such financial statements.

In November 2006, NFC obtained a Third Waiver and Consent which expired upon the earlier of October 31, 2007 or the date on which date NFC and Navistar shall have timely filed a report on Form 10-K or 10-Q with the Securities Exchange Commission.

On March 28, 2007, NFC entered into a First Amendment to the Amended and Restated Credit Agreement providing for additional term loans in the amount of $220.0 million to be used for general corporate purposes including payment of a dividend to International.

On October 23, 2007, NFC received a Second Amendment and Fourth Waiver.  The waiver extends through December 31, 2007, and expands the previous waivers which waive any default or event of default that would result solely from NFC’s and the company’s failure to meet the filing requirements mentioned in third waiver and including Sections 13 and 15 of the Exchange Act of 1934, as amended, with respect to their Annual Reports on Form 10-K for 2007.  During the period from November 1, 2007 until the waiver terminates, interest rate on certain loans under the Agreement shall be increased by 0.25%.

In December 2007, NFC received a Fifth Waiver to the Agreement expanding the scope of certain default conditions covered by the waiver therein until November 30, 2008.

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In November 2007, NFC obtained waivers for the private retail securitizations and the private portion of the wholesale note securitizations.  These waivers are similar in scope to those of the Agreement and expire on or about November 30, 2008.

19. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

We have restated our condensed consolidated financial statements for the quarters ended January 31, 2005, April 30, 2005, and July 31, 2005. The following tables present selected financial data derived from those restated financial statements. We did not undertake to prepare restated condensed consolidated financial statements for quarters within the year ended October 31, 2004. Accordingly, we have not presented selected quarterly financial data for 2004 as required by Item 302(a) of Regulation S-K. For additional information and a detailed discussion of the nature of the restatement adjustments see Note 2,

Quarterly condensed consolidated statements of income data (in millions):

	Three months ended January 31, 2005				Three months ended April 30, 2005
	Previously Reported		Restated		Previously Reported		Restated
Revenue	$	64.7	$	81.3	$	64.2	$	84.7
Interest expense		10.2		28.2		11.1		28.3
Credit, collection and administrative		10.4		9.4		13.6		14.1
Depreciation on operating leases		8.2		8.2		8.1		7.5
Net income		19.1		19.8		14.9		18.5

	Three months ended July 31, 2005				Three months ended October 31, 2005
	Previously Reported		Restated
Revenue	$	64.7	$	91.8		$	96.2
Interest expense		15.3		36.1			40.7
Credit, collection and administrative		12.6		11.3			10.5
Depreciation on operating leases		7.8		7.4			6.6
Net income		14.5		19.6			21.3

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Quarterly condensed consolidated statements of financial condition data (in millions):

	As of January 31, 2005				As of April 30, 2005
	Previously Reported		Restated		Previously Reported		Restated
Finance receivables, net	$	965.3	$	3,077.9	$	886.1	$	3,192.1
Amounts due from sales of receivables		394.7		501.0		442.1		533.2
Restricted cash and cash equivalents		315.7		529.6		507.8		740.8
Total assets		1,873.2		4,355.8		2,014.4		4,675.5
Senior and subordinated debt		1,297.4		3,737.9		1,317.1		3,933.1
Total liabilities and shareowner’s equity		1,873.2		4,355.8		2,014.4		4,675.5

	As of July 31, 2005				As of October 31, 2005
	Previously Reported		Restated
Finance receivables, net	$	733.8	$	3,267.7		$	3,410.2
Amounts due from sales of receivables		481.8		434.4			441.2
Restricted cash and cash equivalents		1,013.9		1,636.7			543.8
Total assets		2,431.3		5,558.6			4,618.0
Senior and subordinated debt		1,825.9		4,931.7			3,962.1
Total liabilities and shareowner’s equity		2,431.3		5,558.6			4,618.0

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NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareowner

Navistar Financial Corporation:

We have audited the accompanying consolidated statements of financial condition of Navistar Financial Corporation and subsidiaries (the Company) as of October 31, 2005 and 2004, and the related consolidated statements of income, shareowner’s equity and comprehensive income and cash flows for each of the years in the three-year period ended October 31, 2005.  These consolidated financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Navistar Financial Corporation’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 2 to the accompanying consolidated financial statements, the Company has restated its consolidated statement of financial condition as of October 31, 2004, and the related consolidated statements of income, shareowner’s equity and comprehensive income and cash flows for the years ended October 31, 2004 and 2003, which were previously audited by other auditors.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Navistar Financial Corporation and subsidiaries as of October 31, 2005 and 2004, and the results of their operations and their cash flows for each of the years in the three-year period ended October 31, 2005, in conformity with U.S. generally accepted accounting principles.

The Company has not presented the 2004 selected quarterly financial data, as specified by Item 302(a) of Regulation S-K, that the Securities and Exchange Commission requires as supplementary information to the basic financial statements.

/s/ KPMG LLP

Chicago, Illinois

December 7, 2007

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Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

In April 2006, the Audit Committee of the Board of Directors dismissed our former independent registered public accounting firm, Deloitte & Touche LLP (“Deloitte”).

The audit reports of Deloitte on our financial statements as of and for the two years ended October 31, 2004 and October 31, 2003 neither contained any adverse opinion or disclaimer of opinion, nor, were such reports qualified or modified as to uncertainty, audit scope or accounting principles, except as described in the following sentence.  The audit report of Deloitte on our consolidated financial statements for the year ended October 31, 2004 indicated that, as described in Note 2 to such consolidated financial statements, the consolidated financial statements for the two years ended October 31, 2003 and October 31, 2002 had been restated.

During the two years ended October 31, 2005 and October 31, 2004, and during the subsequent interim period through April 7, 2006, there was no “Disagreement” as that term is described in Item 30(a)(1)(iv) of Regulation S-K between us and Deloitte on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure that, if not resolved to Deloitte’s satisfaction, would have caused Deloitte to make reference to the subject matter of the disagreement in connection with its audit report.

There were no “reportable events” as that term is described in Item 304(a)(1)(v) of Regulation S-K during the years ended October 31, 2005 and October 31, 2004, or during the subsequent interim period through April 7, 2006, except as described in the following paragraphs.

Deloitte previously identified the following deficiencies in our internal controls that existed on October 31, 2004 and that in Deloitte’s judgment were considered to be material weaknesses: (i) the design of internal controls to appropriately apply certain generally accepted accounting principles at NFC that resulted in a restatement of the financial statements; and, (ii) the lack of timely resolution of outstanding reconciling items in NFC’s collection (suspense) account reconciliations.

On February 16, 2006, Navistar’s Board of Directors reassigned their former Controller, who was also one of our directors.  The reassignment of the former Controller was in response to Deloitte having advised the Audit Committee that Deloitte was no longer willing to rely on the representations of the former Controller.

Simultaneously with this reassignment, we also reassigned our former Treasurer to a position within Navistar’s treasury department in response to Deloitte’s request that the former Treasurer no longer serve as one of our officers.

In connection with our ongoing review of accounting matters in connection with the preparation of our financial statements for 2005, Deloitte identified a number of accounting issues that warranted further review primarily at Navistar.  The outcome of such review might or might not have led Deloitte to expand the scope of its audit had it continued as our independent registered public accounting firm.

In accordance with Item 4.01 of form 8-K and Item 304 of Regulation S-K, we provided Deloitte with a copy of our disclosures to the SEC announcing Deloitte’s dismissal and requesting that Deloitte furnish us with a letter addressed to the SEC stating whether or not it agreed with the statements made by us.  On April 26, 2006, we received Deloitte’s response letter.

In its letter, Deloitte stated that there was no “disagreement as that term is described in Item 304(a)(l)(iv) of Regulation S-K between us and Deloitte on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure that if not resolved to Deloitte’s satisfaction, would have caused Deloitte to make reference to the subject matter of the disagreement in connection with its audit report.

Deloitte also made certain statements in its letter regarding “reportable events” as that term is described in Item 304(a)(l)(v) of Regulation S-K.  Deloitte stated in its letter that our disclosure contained “inaccurate or incomplete descriptions of significant matters which had already led us to substantially expand our audit scope prior to our dismissal.”  Those statements are summarized below:

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Accounting Matters

The accounting matters that had been identified by us and discussed with the Company and the Audit Committee in connection with our incomplete audit of the Company’s fiscal 2005 financial statements included, but were not limited to the following:

· Appropriateness of sale accounting for certain transactions with leaseback terms, including certain transactions which also involved International; whether certain leases should have been accounted for as capital leases rather than as operating leases; the appropriateness of revenue recognition at International and related implications to us; and, the existence of unreconciled differences in reconciliations of inter-company accounts.

· It is possible that the ultimate resolution of the above matters could also affect the Company’s financial statements for fiscal years prior to 2005.  None of these accounting matters were resolved to our satisfaction prior to our dismissal.

Internal Controls Over Financial Reporting

In our February 20, 2006 meeting with the Audit Committee and other independent members of the Board of Directors, we informed these individuals that we were concerned with the appropriateness of certain aspects of the Company’s internal control environment, including management’s commitment to effective internal control and accurate financial reporting and the lack of personnel with appropriate qualifications and training within the financial reporting and closing process.  We had not reached a final conclusion as to whether or not such concerns represented material weaknesses in internal control over financial reporting as we were dismissed prior to the completion of our audit.

In April, 2006, the Audit Committee approved the engagement of KPMG LLP (“KPMG”) as our independent registered public accounting firm.  We did not consult with KPMG in the past regarding the application of accounting principles to a specified transaction to the type of audit opinion that might be rendered on our consolidated financial statements, or as to any disagreement or reportable event as described in Item 30(a)(l)(iv) of Regulation S-K.

We authorized Deloitte to respond fully to the inquiries of KPMG concerning the subject matter of the foregoing.

Item 9A.  Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our evaluation of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act was performed under the supervision and with the participation of our senior management, including our Chief Executive Officer and Chief Financial Officer. The purpose of disclosure controls and procedures is to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.

Based on the material weaknesses identified below, our Chief Executive Officer and Chief Financial Officer have concluded that, as of October 31, 2005, our disclosure controls and procedures were not effective.  The following material weaknesses were identified:

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Material Weakness Description

Remediation Actions

1.Control Environment: As of October 31, 2005, management had not established a strong consciousness regarding the application of ethics across all areas of the Company and the importance of internal controls over financial reporting including adherence to generally accepted accounting principles. This weakness in the control environment likely contributed to many of the other material weaknesses disclosed herein.  As identified by an independent investigation initiated by Navistar’s Board of Directors, certain members of management and other employees, in place at that time, were involved in instances of intentional misconduct.  With respect to these instances, these individuals are no longer employed by the Company.

We are committed to strengthening our control environment and reemphasizing the importance of ethics, integrity and internal control overall and especially related to financial reporting. We are actively engaged in the planning for, and implementation of, remediation efforts to address the control deficiencies. Herein we describe specific activities we are implementing which are designed to strengthen our overall control environment. More specifically related to ethics and integrity, we are performing the following: ·We have strengthened our finance and accounting team as described in detail under Accounting Personnel below. ·We are actively refreshing and disseminating the Code of Conduct developed by Navistar.  Under our process training will be refreshed, and 100 percent of our employees will be trained and will sign the code of conduct. ·Our top leaders will continue to reinforce the importance of conducting business and accounting activities in compliance with the code of conduct, with the highest integrity and ethical behavior, and living up to our Company’s core values.  They also will meet with the top 200 leaders throughout Navistar on   a regular basis to discuss these values and other topics. ·Our company’s core values expect our people to do the right thing.  We are enhancing our communication and the visibility of our core values through group meetings and other communication efforts such as training, posters, desk reminders, information pamphlets, etc.  We will also be refreshing some of the definitions of the core values to ensure that they reflect contemporary challenges and issues. Our efforts are designed to ensure that the values become a more visible and sustainable foundation of what we do and how we behave. ·We are investigating approaches to design a robust finance/accounting organization, including the appropriate number of people, the right skill sets and certifications, technology, and training/education.   We will implement greater oversight and monitoring of accounting policies and procedures in all critical accounting areas, including areas involving management judgment and discretion. ·We will increase our efforts to educate our people as to their obligations to report inappropriate behavior, and enhance communication and support for doing the right thing even if it’s unpopular.  We will reemphasize and invigorate our communications to all our employees regarding the availability of our Employee Hotline, through which all employees at all levels can anonymously submit information or express concerns regarding accounting, financial reporting, or other irregularities they have become aware of or have observed.  In addition, these communications will emphasize the existence and availability of other reporting avenues or forums for all employees, such as their management chain, their Human Resources representatives, International’s Compliance Office, the Legal Department, Navistar’s Internal Audit Department and direct contact with the Chief Financial Officer of the Company or International or the Company’s or Navistar’s Audit Committee. ·International is evaluating the best practices for the role of Chief Ethics and Compliance Officer. International will make a decision around filling the role, and as part of this effort, they will determine the appropriate responsibilities and monitoring programs. ·International has launched a new website designed to heighten our people’s awareness of internal controls. The site is a portal to many of the company’s policies and procedures, internal control training documents, contact references for inquiries about internal controls, and reemphasize’s the importance of the company’s core values. ·Our General Counsel, Assistant General Counsel, and CFO are members of Navistar’s Disclosure Committee.  These individuals and our Controller constitute our Disclosure Committee.  Navistar’s Disclosure Committee charter was benchmarked against best practices and appropriate revisions were made.

71

Material Weakness Description

Remediation Actions

2.Accounting Personnel: As set forth in the Company’s Form 10-K for fiscal year 2004 and in the Company’s Form 10-Q’s for the first three quarters of 2005, there was a material weakness concerning the lack of sufficient specialized securitization accounting personnel.  We did not have a sufficient number of accounting personnel with an appropriate level of accounting knowledge, experience and training in the application of generally accepted accounting principles (“GAAP”).  This includes a previously identified material weakness, disclosed in fiscal 2004, which related to accounting for receivable securitization transactions. This weakness resulted in an inadequate segregation of duties and an insufficient review of information pertaining to securitization accounting. There was also a material weakness related to the accounting for allowance for losses.  We did not maintain effective controls to properly account for the timing of losses associated with repossessed assets and the calculation of loss factors used in determining the allowance for losses.  Specifically, we did not record the loss at the time that the repossession occurred and instead recorded the loss when the repossessed asset was sold.

We have hired additional accounting personnel with appropriate levels of accounting knowledge, experience and training, and retained outside consultants to supplement our staff. We increased education in GAAP accounting especially in the area of securitization accounting for our staff and executive management. We will continue to focus on increasing and improving skill sets through training. Additionally, we hired an independent organization to assist in the development of various models necessary to value the various assets created as a result of a securitization transaction. We established control procedures to require that losses associated with repossessed assets be recorded at the time the repossession occurs and changed procedures related to loss recoveries, loss sharing between us and International and other factors used in the calculation to determine the allowance for loss.

72

Material Weakness Description	Remediation Actions
3.Accounting Policies and Procedures:  As set forth in the Company’s Form 10-K for fiscal year 2004, there were material weaknesses concerning a misapplication of GAAP related to securitization accounting and an associated lack of timely resolution of outstanding reconciling items in certain collection accounts.    Also, we did not have a formalized process for monitoring, updating, disseminating, and implementing GAAP-compliant accounting policies and procedures.	The Financial Reporting group of our parent, International Truck and Engine Corporation (“International”), has been enhanced to include experienced technical accounting personnel to provide guidance about, and help ensure compliance with, GAAP.  The group has been updating policies and procedures, confirming they are GAAP–compliant and conducting related training for our accounting personnel. They have implemented procedures for tracking new accounting pronouncements, evaluating their impact on our financial reporting and refreshing policies as needed.  The group will be instrumental in helping our accounting staff with critical accounting areas, including areas involving management judgment and discretion and non-routine transactions. We will continue to update our policies and procedures, and our Sarbanes-Oxley Compliance department and the Corporate Audit and Consulting department of International will help verify that our accounting personnel are complying with the revised policies and procedures.
4.Internal Audit: We utilize Navistar’s corporate internal audit function in lieu of having a separate department. Navistar’s internal audit department was not an effective monitoring control over financial reporting for Navistar and its subsidiaries.	Navistar’s corporate internal audit function now reports directly to the Chair of the Navistar Audit Committee. NFC is a wholly-owned subsidiary of International Truck and Engine Corporation, which is a wholly-owned subsidiary of Navistar. Under Navistar’s Audit Committee’s direction, the new Vice President of the Corporate Audit and Consulting department has developed and implemented many specific action plans to improve the effectiveness of the internal audit function. Specifically, the annual risk assessment and strategic planning process has been revised to include additional qualitative and financial reporting-related risk factors and will be kept current; standard periodic management and Audit Committee communications, including new audit report formats and status updates, have been developed and implemented; the department has been reorganized, including increased minimum technical and audit experience requirements for each position; outside consultants have been engaged to augment the current mix of skill sets and additional recruiting efforts are underway; and a new formal recommendation follow-up process has been developed and implemented including a database to maintain, track and report the results of follow-up activity to management and the Audit Committee.  Finally, the charter of the internal audit function has been updated to reflect these changes.

73

Material Weakness Description	Remediation Actions
5.Information Technology (IT): Our IT general controls over computer program development, computer program changes, computer operations and system user access to programs and data were ineffectively designed. Additionally, we concluded that computer application controls were unreliable and ineffective.	We have hired additional information technology resources. International has formed an IT Remediation team that includes employees from our IT Department, which created specific action plans to address the deficiencies identified and develop new policies and procedures. An outside consulting firm was engaged to help with remediation efforts and, along with the internal audit function, to help evaluate the effectiveness of the corrective actions taken.  In December 2006, computer application and operational change management disciplines were implemented which have enhanced our systems development life cycle and computer program change management. In March 2007, we established the requirement for semi-annual system user access reviews, restricting access to sensitive financial system transactions and data. A significant effort is underway to address system user access deficiencies. Also in March 2007, user administration policies and procedures were enhanced to establish proper management approvals and timeliness of user additions, deletions and access changes. International also hired a new Chief Information Officer in October 2007.
6.Pension Accounting: We utilize the services of the pension and benefits group at International to address our pension accounting needs. International did not maintain effective controls to accurately estimate the total entity pension and OPEB obligations. Specifically, the application of the methodology used to determine historical discount rates was not properly documented and reviewed and lacked proper support for other assumptions used in accounting for the obligations.	International’s pension and benefits group has transitioned to an accepted model for discount rates to reduce the judgment necessary in calculating our pension and OPEB obligations. Additionally, International’s pension and benefits group now utilize external actuaries to perform the computations, modeling and reporting.  Prior to issuing our 2005 consolidated financial statements, International has invested considerable resources and performed appropriate analysis to accurately account for and disclose our pension and OPEB matters.

74

Material Weakness Description	Remediation Actions
7.Income Tax Accounting: We utilize the services of the corporate tax group at International to address our tax accounting needs.  International did not retain detailed supporting documentation for our tax liabilities.	International has developed detailed schedules supporting all tax liability requirements, and has taken steps to ensure they follow the corporate record retention policies.
8.Journal Entries: We did not maintain effective controls over review and approval of journal entries.  Specifically, journal entries were not reviewed thoroughly and approved by the appropriate level of management to ensure the accuracy and appropriateness of the accounts used when entries were recorded.	Prior to issuing our 2005 financial statements, we performed extensive quality control procedures to minimize the risk of errors and ensure the restatement journal entries were properly reviewed and approved.  We also implemented quality control procedures to minimize the risk of errors and ensure that journal entries are properly reviewed and approved going forward.

In February 2006, in connection with the review of accounting matters identified during the preparation of our financial statements for fiscal year 2005, Navistar’s Audit Committee, with the assistance of independent counsel and forensic accountants, initiated an investigation into the propriety of accounting and auditing confirmation matters relating to vendor rebates. The investigation was subsequently expanded to include a review of various accounting issues that arose during the course of working on the financial restatements of fiscal years 2003 and 2004 and the first three quarters of fiscal year 2005.

On December 29, 2006, Navistar’s Board of Directors formed an Investigatory Oversight Special Committee of independent directors to oversee and assist its Audit Committee in its investigation.  Independent counsel for Navistar’s Audit Committee provided regular updates on the status of the investigation to the staff of the Division of Enforcement of the SEC.

Navistar’s Audit Committee’s extensive investigation identified various accounting errors, instances of intentional misconduct and certain weaknesses in our internal controls.  Navistar’s Audit Committee’s investigation found that we did not have the organizational accounting expertise during the fiscal years 2003 through 2005 to effectively determine whether our financial statements were accurate. The investigation found that we did not have such expertise because we did not adequately support and invest in accounting functions, did not sufficiently develop our own expertise in technical accounting, and as a result, we relied more heavily than appropriate on our then outside auditor. The investigation also found that during the financial restatement period, this environment of weak financial controls and under supported accounting functions allowed accounting errors to occur, some of which arose from certain instances of intentional misconduct to improve the financial results. Navistar’s Audit Committee has discussed its findings and various recommended remediation procedures with the Investigatory Oversight Special Committee of Navistar’s Board of Directors, management and KPMG LLP.  As part of our commitment to strengthening our overall internal control over financial reporting, we have implemented various personnel actions, including hiring accounting personnel with appropriate levels of accounting knowledge, experience and training, and numerous other remediation actions that include the employees involved in the intentional misconduct being no longer employed by the Company.  Management also has implemented measures to improve the effectiveness of communications concerning the importance of ethics, integrity and internal control over financial reporting.  For additional information and a detailed description of our restatement, see Note 2 to the accompanying consolidated financial statements and within Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

75

Changes in Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act.  Along with the specific remediation actions we described above, to strengthen our disclosure controls and procedures we have made the following changes:

· Established an Audit Committee specifically for Navistar Financial Corporation and appointed an independent member of the Board of Directors to chair the committee;

· Re-designed our management certification process in June 2007 to help identify any matters that might require disclosure and to require sub-certifications from multiple levels of management throughout the company. We utilized this process as part of the preparation of our fiscal year 2005 Annual Report on Form 10-K.

We believe the above measures have strengthened our accounting and financial reporting controls.  We intend to continue to take the necessary actions to remediate and eliminate our material weaknesses. We are committed to providing timely, thorough, and accurate financial reporting. Most importantly, prior to filing our fiscal year 2005 Annual Report on Form 10-K, we have made significant efforts to review our financial results in light of the aforementioned weaknesses to conclude that the financial statements included herein fairly present, in all material respects, our financial position, results of operations, and cash flows for the periods presented in conformity with GAAP.

Item 9B.  Other Information

None.

76

PART III

Items 10, 11, 12 and 13

Intentionally omitted.  See the index page of this Report for explanation.

Item 14.  Principal Accountant Fees and Services

Deloitte & Touche LLP ("Deloitte") was our independent registered public accounting firm in 2004 and 2005.  On April 7, 2006, our Audit Committee of the Board of Directors dismissed Deloitte and approved the engagement of KPMG LLP (“KPMG”) as our independent registered public accounting firm.  As a result of Deloitte’s dismissal, Deloitte did not complete its audit of our financial statements for 2005.  The following table presents aggregate fees billed by Deloitte including associated out-of-pocket costs for both audit and non-audit services rendered for the years ended October 31, 2005 and 2004, on our behalf.

(Amounts in thousands)	2005		2004
Audit Fees
Basic Audit Fees(a)	$	519.5	$	918.6
Audit Related Fees (b)		352.5		192.5
Total Audit Fees	$	872.0	$	1,111.1
Tax Fees	$	----	$	----
All Other Fees	$	----	$	----

(a) In 2004, includes fees for the restatement of NFC’s financial statements for fiscal years 2003 and 2002.

(b) Includes fees for (i) examination reports on NFC’s minimum servicing standards for its securitization transactions, (ii) Sarbanes Oxley Section 404 readiness, and (iii) data verification and agreed-upon procedures related to asset securitizations.

All fees payable to KPMG related to the audit of the consolidated financial statements for the three year period ended October 31, 2005, have been billed to Navistar. Fees paid or payable to KPMG relating to audit related fees rendered to us for the year ending October 31, 2007 and 2006 were $158.0 thousand and $116.0 thousand, respectively.

Audit Committee pre-approval policy

Information required by Item 14 of this Form and the audit committee’s pre-approval policies and procedures regarding the engagement of the principal accountant are incorporated herein by reference from Navistar’s definitive Proxy Statement for the March 23, 2005, Annual Meeting of Shareowners under the caption “Audit Committee Report – Independent Auditor Fees”.

As part of this pre-approval process, our audit committee reviews the type of and fees for agreed upon procedures to be performed by our principal accountants and makes recommendations to Navistar’s audit committee.

77

PART IV

Item 15.  Exhibits, and Financial Statement Schedules and Report on Form 8K

Exhibits, Including Those Incorporated By Reference and Financial Statement Schedules

Exhibits Index:

3	Articles of Incorporation and By-Laws	E-1
4	Instruments Defining Rights of Security Holders, including Indentures	E-2
10	Material Contracts	E-3
12	Calculation of Ratio of Earnings to Fixed Charges	E-428
15	Financial Statement Schedules	E-429
21	Subsidiaries of the Registrant	E-432
31.1	CEO Certification Pursuant to Rule 13a-14(a) and 15d-14(a)	E-433
31.2	CFO Certification Pursuant to Rule 13a-14(a) and 15d-14(a)	E-435
32	CEO and CFO Certification Pursuant to Section 1350 of Chapter 1350 of Chapter 63 of Title 18 of the United States Code	E-437

Financial Statements

See Index to Financial Statements in Item 8.

Reports on Form 8-K

78

SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Navistar Financial Corporation
	(Registrant)
Date:  December 7, 2007	By:  /s/	JOHN V. MULVANEY, SR.
		John V. Mulvaney, Sr.
		VP, CFO, & Treasurer
		(Principal Financial Officer)

79

NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

Exhibit 24

POWER OF ATTORNEY

Each person whose signature appears below does hereby make, constitute and appoint Pamela Turbeville, John V. Mulvaney, Sr. and David Derfelt and each of them acting individually, true and lawful attorneys-in-fact and agents with power to act without the other and with full power of substitution, to execute, deliver and file, for and on such person’s behalf, and in such person’s name and capacity or capacities as stated below, any amendment, exhibit or supplement to the Form 10-K Report making such changes in the report as such attorney-in-fact deems appropriate.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

	Signature	Title	Date
/s/	JOHN V. MULVANEY, SR. John V. Mulvaney, Sr.	Vice President, Chief Financial Officer and Treasurer; Director (Principal Financial Officer and Principal Accounting Officer)	December 7, 2007
/s/	PAMELA J. TURBEVILLE Pamela J. Turbeville	Chief Executive Officer; Director (Principal Executive Officer)	December 7, 2007
/s/	TERRY M. ENDSLEY Terry M. Endsley	Director	December 7, 2007
/s/	RICHARD C. TARAPCHAK Richard C. Tarapchak	Director	December 7, 2007
/s/	WILLIAM A. CATON William A.  Caton	President; Director	December 7, 2007
/s/	DAVID L.  DERFELT David L. Derfelt	Vice President and Controller	December 7, 2007
/s/	ALICE M. PETERSON Alice M. Peterson	Director	December 7, 2007

80

EX-3

Exhibit 3

NAVISTAR FINANCIAL CORPORATION

AND SUBSIDIARIES

ARTICLES OF INCORPORATION AND BY-LAWS

The following documents of Navistar Financial Corporation are incorporated herein by reference:

3.1 Restated Certificate of Incorporation of Navistar Financial Corporation (as amended and in effect on December 15, 1987).  Filed on Form 8-K dated December 17, 1987.  Commission File No.  001-04146.

3.2 The By-Laws of Navistar Financial Corporation (as amended February 29, 1988).  Filed on Form 10-K dated January 19, 1989.  Commission File No.  001-04146.

3.3 Amendment to the By-Laws of Navistar Financial Corporation.  Filed as Exhibit 3.1 on Form 10-K dated December 18, 2003.  Commission File No.  001-04146.

E-1

EX-4

Exhibit 4

NAVISTAR FINANCIAL CORPORATION

AND SUBSIDIARIES

INSTRUMENTS DEFINING RIGHTS OF SECURITY HOLDERS,

INCLUDING INDENTURES

None.

E-2

EX-10.1

Exhibit 10

NAVISTAR FINANCIAL CORPORATION

AND SUBSIDIARIES

MATERIAL CONTRACTS

The following documents of Navistar Financial Corporation (“the Corporation”) are incorporated herein by reference:

10.01   Master Inter-company Agreement dated as of April 26, 1993, between the Corporation and International.  Filed on the Corporation’s Form 8-K on April 30, 1993.  Commission File No.  001-04146.

10.02   First Amendment to the Master Inter-company Agreement dated as of September 30, 1996, between the Corporation and International.  Filed as Exhibit 10.60 to the Corporation's Form 10-Q on September 10, 2004.  Commission File No. 001-04146.

10.03   Second Amendment to the Master Inter-company Agreement dated as of August 16, 2000, between the Corporation and International.  Filed as Exhibit 10.61 to the Corporation's Form 10-Q on September 10, 2004.  Commission File No. 001-04146.

10.04   Third Amendment to the Master Inter-company Agreement dated as of March 2002, between the Corporation and International.  Filed as Exhibit 10.62 to the Corporation's Form 10-Q on September 10, 2004.  Commission File No. 001-04146.

10.05   Fourth Amendment to the Master Inter-company Agreement dated as of February 17, 2004, between the Corporation and International.  Filed as Exhibit 3.1 to the Corporation’s Form 10-Q on March 8, 2004.  Commission File No.  001-04146.

10.06   Amended and Restated Master Intercompany Agreement, dated April 1, 2007, between the Corporation and International. Filed as Exhibit 10.2 to the Corporation’s Form 8-K on April 3, 2007. Commission File No. 001-04146.

10.07   Amended and Restated Credit Agreement dated as of July 1, 2005 between the Corporation, Arrendadora Financiera Navistar, S.A. de C. V., Servicios Financieros Navistar, S.A. de C.V., and Navistar Comerical, S.A. de C.V., as Borrowers, and JPMorgan Chase Bank, N.A. as Administrative Agent, Bank of America, N.A., as Syndication agent, and the Bank of Nova Scotia, as Documentation Agent, J.P. Morgan Securities Inc. and Banc of America Securities, LLC, as Joint Book Managers and Joint Lead Arrangers, with respect to $1,200,000,000 Revolving Credit and Competitive Advance Facility.  Filed as Exhibit 10.01 to the Corporation’s Form 8-K on September 1, 2005.  Commission File No. 001-04146.

10.08   Amended and Restated Security, Pledge and Trust Agreement dated as of July 1, 2005, between the Corporation and Deutsche Bank Trust Company Americas, as Trustee, pursuant to the terms of the Credit agreement.  Filed as Exhibit 10.02 to the Corporation’s Form 8-K on September 1, 2005.   Commission File No. 001-04146.

E-3

10.09   Pooling and Servicing Agreement dated as of June 8, 1995, among the Corporation, as Servicer, Navistar Financial Securities Corporation, as Seller, Chemical Bank, as 1990 Trust Trustee, and The Bank of New York, as Master Trust Trustee.  Filed as Exhibit 4.1 to Navistar Financial Securities Corporation’s Form 8-K on December 12, 2003.  Commission File No. 033-87374.

10.10   Fourth Amendment to the Pooling and Servicing Agreement dated as of June 2, 2000, among the Corporation, as Servicer, Navistar Financial Securities Corporation, as Seller, and The Bank of New York, as Master Trust Trustee.  Filed as Exhibit 4.7 to Navistar Financial Securities Corporation’s Form S-3/A dated June 12, 2000.  Commission File No. 333-32960.

10.11   Fifth Amendment to the Pooling and Servicing Agreement dated as of July 13, 2000, among the Corporation, as Servicer, Navistar Financial Securities Corporation, as Seller, and The Bank of New York, as Master Trust Trustee.  Filed as Exhibit 4.2 to Navistar Financial Dealer Note Master Trust’s Form 8-K on July 14, 2000.  Commission File No. 033-36767-03.

10.12   Sixth Amendment to the Pooling and Servicing Agreement dated as of October 31, 2003, among the Corporation, as Servicer, Navistar Financial Securities Corporation, as Seller, and The Bank of New York, as Master Trust Trustee.  Filed as Exhibit 4.7 to Navistar Financial Dealer Note Master Owner Trust’s Form S-3/A dated December 23, 2003.  Commission File No. 333-104639-01.

10.13   Seventh Amendment to the Pooling and Servicing Agreement dated as of June 10, 2004, among the Corporation, as Servicer, Navistar Financial Securities Corporation, as Seller, and The Bank of New York, as Master Trust Trustee.  Filed as Exhibit 4.6 to Navistar Financial Dealer Note Master Owner Trust’s Form 8-K on June 14, 2004.  Commission File No. 333-104639-01.

10.14   Series 1998-1 Supplement to the Pooling and Servicing Agreement dated as of July 17, 1998, among the Corporation, as Servicer, Navistar Financial Securities Corporation, as Seller, and the Bank of New York, as Master Trust Trustee on behalf of the Series 1998-1 Certificateholders.  Filed as Exhibit 4.1 to Navistar Financial Securities Corporation’s Form 8-K on December 4, 2003.  Commission File No. 033-87374.

10.15   Series 2000-VFC Supplement to the Pooling and Servicing Agreement, dated as of January 28, 2000, among the Corporation, as Servicer, Navistar Financial Securities Corporation, as Seller, and the Bank of New York, as Master Trust Trustee on behalf of the Series 2000-VFC Certificateholders. Filed as Exhibit 10.71 to the Corporation's Form 10-Q on April 19, 2005.  Commission File No. 001-04146.

10.16   Amendment No. 1 to the Series 2000-VFC Supplement to the Pooling and Servicing Agreement, dated as of January 22, 2003, by and among the Corporation, as Servicer, Navistar Financial Securities Corporation, as Seller, and the Bank of New York, as Master Trust Trustee. Filed as Exhibit 10.72 to the Corporation's Form 10-Q on April 19, 2005.  Commission File No. 001-04146.

10.17   Certificate Purchase Agreement, dated as of January 28, 2000, among the Corporation, as Servicer, Navistar Financial Securities Corporation, as Seller, Receivables Capital Corporation, as the Conduit Purchaser, Bank of America, National Association, as Administrative Agent for the Purchasers, and as a Committed Purchaser. Filed as Exhibit 1.1 to Navistar Financial Securities Corporation’s Form 8-K on February 24, 2000. Commission File No. 033-87374.

E-4

10.18   Amended and Restated Certificate Purchase Agreement, dated as of December 27, 2004, among Corporation, as Servicer, Navistar Financial Securities Corporation, as Seller, Kitty Hawk Funding Corporation, as a Conduit Purchaser, Liberty Street Funding Corp., as a Conduit Purchaser, Bank of America, National Association, as Administrative Agent for the Purchasers, a Managing Agent, and as a Committed Purchaser and the Bank of Nova Scotia, as a Committed Purchaser and as a Managing Agent. Filed as Exhibit 10.73 to the Corporation's Form 10-Q on April 19, 2005.  Commission File No. 001-04146.

10.19   Series 2000-1 Supplement to the Pooling and Servicing Agreement dated as of July 13, 2000, among Navistar Financial Corporation, as Servicer, Navistar Financial Securities Corporation, as Seller, and the Bank of New York, as Master Trust Trustee on behalf of the Series 2000-1 Certificateholders.  Filed as Exhibit 4.1 to Navistar Financial Securities Corporation’s Form 8-K on July 14, 2000.  Commission File No. 033-87374.

10.20   Series 2003-1 Supplement to the Pooling and Servicing Agreement, dated as of July 13, 2003, among the Corporation, as Servicer, Navistar Financial Securities Corporation, as Seller, and the Bank of New York, as Master Trust Trustee on behalf of the Series 2003-1 Certificateholders.  Filed as Exhibit 4.1 to Navistar Financial Securities Corporation’s Form 8-K on July 11, 2003.  Commission File No. 033-87374.

10.21   Series 2004-1 Supplement to the Pooling and Servicing Agreement, dated as of June 10, 2004, among the Corporation, as Servicer, Navistar Financial Securities Corporation, as Seller, and the Bank of New York, as Master Trust Trustee on behalf of the Series 2004-1 Certificateholders.  Filed as Exhibit 4.1 to Navistar Financial Dealer Note Master Owner Trust’s Form 8-K on June 14, 2004.  Commission File No. 333-104639-01.

10.22   Master Owner Trust Agreement dated as of June 10, 2004, between Navistar Financial Securities Corporation, as Seller and Chase Manhattan Bank USA, N.A. as Master Owner Trust Trustee.  Filed as Exhibit 4.11 to Navistar Financial Dealer Note Master Owner Trust’s Form 8-K on June 14, 2004.  Commission File No. 333-104639-01.

10.23   Indenture, dated as of June 10, 2004, between Navistar Financial Dealer Note Master Owner Trust, as Issuer, and The Bank of New York, as Indenture Trustee.  Filed as Exhibit 4.2 to Navistar Financial Dealer Note Master Owner Trust’s Form 8-K on June 14, 2004.  Commission File No. 333-104639-01.

10.24   Series 2004-1 Indenture Supplement dated as of June 10, 2004, between Navistar Financial Dealer Note Master Owner Trust, as Issuer, and The Bank of New York, as Indenture Trustee.  Filed as Exhibit 4.3 to Navistar Financial Dealer Note Master Owner Trust’s Form 8-K on June 14, 2004.  Commission File No. 333-104639-01.

10.25   Series 2005-1 Indenture Supplement to the Indenture, dated as of February 28, 2005, between Navistar Financial Dealer Note Master Owner Trust, as Issuer, and The Bank of New York, as Indenture Trustee.  Filed as Exhibit 4.1 to Navistar Financial Dealer Note Master Owner Trust’s Form 8-K on February 28, 2005.  Commission File No. 333-104639-01.

E-5

10.26   Receivables Purchase Agreement dated as of October 16, 2000, between Truck Retail Installment Paper Corp. and the Corporation.  Filed as Exhibit 10.02 to the Corporation's Form 10-Q on March 15, 2001.  Commission File No. 001-04146.

10.27   Servicing Agreement dated as of October 16, 2000, between the Corporation, as Servicer, and Navistar Leasing Company, Harco Leasing Company, Inc., Truck Retail Installment Paper Corp., The Bank of New York as Collateral Agent, and Bank One National Association, as Portfolio Trustee.  Filed as Exhibit 10.01 to the Corporation's Form 10-Q on March 15, 2001.  Commission File No. 001-04146.

10.28   Indenture Agreement dated as of October 16, 2000, between Truck Retail Installment Paper Corp., as Issuer, and The Bank of New York, as Indenture Trustee.  Filed as Exhibit 10.03 to the Corporation's Form 10-Q on March 15, 2001.  Commission File No. 001-04146

10.29   Series 2005-1 Supplement dated as of June 29, 2005, to the Indenture also dated October 16, 2000 between Truck Retail Installment Paper Corp., as Issuer, and The Bank of New York, as Indenture Trustee.  Filed as Exhibit 10.03 to the Corporation’s Form 8-K on September 1, 2005.   Commission File No. 001-04146.

10.30   Supplement No. 1, dated as of July 24, 2001, to Indenture agreement dated October 16, 2000, among Truck Retail Installment Paper Corp., as Issuer, and The Bank of New York, as Indenture Trustee, to amend the Indenture to (i) revise the definition of "Series 2000-1 Loss Reserve Specified Balance", and (ii) revise the Amortization Events. Filed as Exhibit 10 to the Corporation’s Form 8-K on August 6, 2001.  Commission File No. 001-04146.

10.31   Supplement No. 2, dated as of July 31, 2002, to Indenture agreement dated October 16, 2000, among Truck Retail Installment Paper Corp., as Issuer, and The Bank of New York, as Indenture Trustee, to amend the Indenture to (i) revise the definition of “Series 2000-1 Loss Reserve Specified Balance,” (ii) revise the definition of “Reserve Account Trigger Event.”, and (iii) revise the definition of “Receivable Sale Closing Conditions.”  Filed on the Corporation’s Form 8-K on November 27, 2002.  Commission File No. 001-04146.

10.32   Receivables Purchase Agreement dated as of November 21, 2000, among Truck Engine Receivables Financing Co., as Buyer and the Corporation, as Seller and as Servicer.  Filed as Exhibit 10.66 to the Corporation's Form 10-Q on September 10, 2004.  Commission File No. 001-04146.

10.33   Trust Sale and Servicing Agreement dated as of November 21, 2000, among the Corporation, as Servicer, Truck Engine Receivables Financing Co., as Seller, and Truck Engine Receivables Master Trust, as Trust.  Filed as Exhibit 10.65 to the Corporation's Form 10-Q on September 10, 2004.  Commission File No. 001-04146.

10.34   Indenture, dated as of November 21, 2000, between Truck Engine Receivables Master Trust and The Bank of New York, as Indenture Trustee.  Filed as Exhibit 10.63 to the Corporation's Form 10-Q on September 10, 2004.  Commission File No. 001-04146.

10.35   Series 2000-1 Indenture Supplement dated as of November 21, 2000, among Truck Engine Receivables Master Trust, as Issuer, and The Bank of New York, as Indenture Trustee.  Filed as Exhibit 10.67 to the Corporation's Form 10-Q on September 10, 2004.  Commission File No. 001-04146.

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10.36   Trust Agreement dated as of November 21, 2000, between Truck Engine Receivables Financing Co., as Transferor, and Chase Manhattan Bank USA, National Association, as Owner Trustee.  Filed as Exhibit 10.64 to the Corporation's Form 10-Q on September 10, 2004.  Commission File No. 001-04146.

10.37   Purchase Agreement dated as of April 30, 2002, between the Corporation and Navistar Financial Retail Receivables Corporation, with respect to Navistar Financial 2002-A Owner Trust.  Filed as Exhibit 99.1 to Navistar Financial Retail Receivables Corporation’s Form 8-K on May 3, 2002.  Commission File No. 033-50291.

10.38   Pooling and Servicing Agreement dated as of April 30, 2002, among the Corporation, as Servicer, Navistar Financial Retail Receivables Corporation, as Seller, and Chase Manhattan Bank USA, N.A. as Owner Trustee.  Filed as Exhibit 4.1 to Navistar Financial Retail Receivables Corporation’s Form 8-K on May 3, 2002.  Commission File No. 033-50291.

10.39   Trust Agreement dated as of April 30, 2002, between Navistar Financial Retail Receivables Corporation, as Seller, and Chase Manhattan Bank USA, National Association, as Owner Trustee, with respect to Navistar Financial 2002-A Owner Trust.  Filed as Exhibit 4.3 to Navistar Financial Retail Receivables Corporation’s Form 8-K on May 3, 2002.  Commission File No. 033-50291.

10.40   Indenture dated as of April 30, 2002, between Chase Manhattan Bank USA, N.A. as Owner Trustee and The Bank of New York, as Indenture Trustee, with respect to Navistar Financial 2002-A Owner Trust.  Filed as Exhibit 4.2 to Navistar Financial Retail Receivables Corporation’s Form 8-K on May 3, 2002.  Commission File No. 033-50291.

10.41   Purchase Agreement dated as of November 19, 2002, between the Corporation and Navistar Financial Retail Receivables Corporation, with respect to Navistar Financial 2002-B Owner Trust,.  Filed as Exhibit 99.1 to Navistar Financial Retail Receivables Corporation’s Form 8-K on November 25, 2002.  Commission File No. 033-50291.

10.42   Pooling Agreement dated as of November 19, 2002, among Navistar Financial Retail Receivables Corporation, as Seller, and Navistar Financial 2002-B Owner Trust, as Issuer.  Filed as Exhibit 4.1 to Navistar Financial Retail Receivables Corporation’s Form 8-K on November 25, 2002.  Commission File No. 033-50291.

10.43   Servicing Agreement dated as of November 19, 2002, between the Corporation, as Servicer, Navistar Leasing Company, Harco Leasing Company, Inc., Navistar Financial Retail Receivables Corporation, The Bank of New York as Collateral Agent and as Indenture Trustee, Bank One National Association, as Portfolio Trustee, and Navistar Financial 2002-B Owner Trust, as Issuer.  Filed as Exhibit 99.3 to Navistar Financial Retail Receivables Corporation’s Form 8-K on November 25, 2002.  Commission File No. 033-50291.

10.44   Trust Agreement dated as of November 19, 2002, between Navistar Financial Retail Receivables Corporation, as Seller, and Chase Manhattan Bank USA, National Association, as Owner Trustee, with respect to Navistar Financial 2002-B Owner Trust.  Filed as Exhibit 4.3 to Navistar Financial Retail Receivables Corporation’s Form 8-K on November 25, 2002.  Commission File No. 033-50291.

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10.45   Indenture dated as of November 19, 2002, between Navistar Financial 2002-B Owner Trust, as Issuer and The Bank of New York, as Indenture Trustee, with respect to Navistar Financial 2002-B Owner Trust.  Filed as Exhibit 4.2 to Navistar Financial Retail Receivables Corporation’s Form 8-K on November 25, 2002.  Commission File No. 033-50291.

10.46   Purchase Agreement dated as of June 5, 2003, between the Corporation and Navistar Financial Retail Receivables Corporation, with respect to Navistar Financial 2003-A Owner Trust,.  Filed as Exhibit 99.1 to Navistar Financial Retail Receivables Corporation’s Form 8-K on June 11, 2003.  Commission File No. 033-50291.

10.47   Pooling Agreement dated as of June 5, 2003, Navistar Financial Retail Receivables Corporation, as Seller, and Navistar Financial 2003-A Owner Trust, as Issuer.  Filed as Exhibit 4.1 to Navistar Financial Retail Receivables Corporation’s Form 8-K on June 11, 2003.  Commission File No. 033-50291.

10.48   Servicing Agreement dated as of June 5, 2003, between the Corporation, as Servicer, Navistar Leasing Company, Harco Leasing Company, Inc., Navistar Financial Retail Receivables Corporation, The Bank of New York as Collateral Agent and as Indenture Trustee, Bank One National Association, as Portfolio Trustee, and Navistar Financial 2003-A Owner Trust, as Issuer.  Filed as Exhibit 99.3 to Navistar Financial Retail Receivables Corporation’s Form 8-K on June 11, 2003.  Commission File No. 033-50291.

10.49   Trust Agreement dated as of June 5, 2003, between Navistar Financial Retail Receivables Corporation, as Seller, and Chase Manhattan Bank USA, National Association, as Owner Trustee, with respect to Navistar Financial 2003-A Owner Trust.  Filed as Exhibit 4.3 to Navistar Financial Retail Receivables Corporation’s Form 8-K on June 11, 2003.  Commission File No. 033-50291.

10.50   Indenture dated as of June 5, 2003, between Navistar Financial 2003-A Owner Trust and The Bank of New York, as Indenture Trustee, with respect to Navistar Financial 2003-A Owner Trust.  Filed as Exhibit 4.2 to Navistar Financial Retail Receivables Corporation’s Form 8-K on June 11, 2003.  Commission File No. 033-50291.

10.51   Purchase Agreement dated as of October 31, 2003, between the Corporation and Navistar Financial Retail Receivables Corporation, with respect to Navistar Financial 2003-B Owner Trust.  Filed as Exhibit 99.1 to Navistar Financial Retail Receivables Corporation’s Form 8-K on November 5, 2003.  Commission File No. 033-50291.

10.52   Pooling Agreement dated as of October 31, 2003, Navistar Financial Retail Receivables Corporation, as Seller, and Navistar Financial 2003-B Owner Trust, as Issuer.  Filed as Exhibit 4.1 to Navistar Financial Retail Receivables Corporation’s Form 8-K on November 5, 2003.  Commission File No. 033-50291.

10.53   Servicing Agreement dated as of October 31, 2003, between the Corporation, as Servicer, Navistar Leasing Company, Harco Leasing Company, Inc., Navistar Financial Retail Receivables Corporation, The Bank of New York as Collateral Agent and as Indenture Trustee, Bank One National Association, as Portfolio Trustee, and Navistar Financial 2003-B Owner Trust, as Issuer.  Filed as Exhibit 99.3 to Navistar Financial Retail Receivables Corporation’s Form 8-K on November 5, 2003.  Commission File No. 033-50291.

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10.54   Trust Agreement dated as of October 31, 2003, between Navistar Financial Retail Receivables Corporation, as Seller, and Chase Manhattan Bank USA, National Association, as Owner Trustee, with respect to Navistar Financial 2003-B Owner Trust.  Filed as Exhibit 4.3 to Navistar Financial Retail Receivables Corporation’s Form 8-K on November 5, 2003.  Commission File No. 033-50291.

10.55   Indenture dated as of October 31, 2003, between Navistar Financial 2003-B Owner Trust and The Bank of New York, as Indenture Trustee, with respect to Navistar Financial 2003-B Owner Trust.  Filed as Exhibit 4.2 to Navistar Financial Retail Receivables Corporation’s Form 8-K on November 5, 2003.  Commission File No. 033-50291.

10.56   Purchase Agreement dated as of April 1, 2004, between the Corporation and Navistar Financial Retail Receivables Corporation, with respect to Navistar Financial 2004-A Owner Trust.  Filed as Exhibit 99.1 to Navistar Financial Retail Receivables Corporation Owner Trust 2004-A’s Form 8-K on April 5, 2004.  Commission File No. 333-67112-01.

10.57   Pooling Agreement dated as of April 1, 2004, Navistar Financial Retail Receivables Corporation, as Seller, and Navistar Financial 2004-A Owner Trust, as Issuer.  Filed as Exhibit 4.1 to Navistar Financial Retail Receivables Corporation Owner Trust 2004-A’s Form 8-K on April 5, 2004.  Commission File No. 333-67112-01.

10.58   Servicing Agreement dated as of April 1, 2004, between the Corporation, as Servicer, Navistar Leasing Company, Harco Leasing Company, Inc., Navistar Financial Retail Receivables Corporation, The Bank of New York as Collateral Agent and as Indenture Trustee, JP Morgan Trust Company National Association, (as successor-in-interest to Bank One, National Association),as Portfolio Trustee, and Navistar Financial 2004-A Owner Trust, as Issuer.  Filed as Exhibit 99.3 to Navistar Financial Retail Receivables Corporation Owner Trust 2004-A’s Form 8-K on April 5, 2004.  Commission File No. 333-67112-01.

10.59   Trust Agreement dated as of April 1, 2004, between Navistar Financial Retail Receivables Corporation, as Seller, and Chase Manhattan Bank USA, National Association, as Owner Trustee, with respect to Navistar Financial 2004-A Owner Trust.  Filed as Exhibit 4.3 to Navistar Financial Retail Receivables Corporation Owner Trust 2004-A’s Form 8-K on April 5, 2004.  Commission File No. 333-67112-01.

10.60   Indenture dated as of April 1, 2004, between Navistar Financial 2004-A Owner Trust and The Bank of New York, as Indenture Trustee, with respect to Navistar Financial 2004-A Owner Trust.  Filed as Exhibit 4.2 to Navistar Financial Retail Receivables Corporation Owner Trust 2004-A’s Form 8-K on April 5, 2004.  Commission File No. 333-67112-01.

10.61   Purchase Agreement dated as of November 17, 2004, between the Corporation and Navistar Financial Retail Receivables Corporation, with respect to Navistar Financial 2004-B Owner Trust.  Filed as Exhibit 99.1 to Navistar Financial Retail Receivables Corporation Owner Trust 2004-B’s Form 8-K on November 17, 2004.  Commission File No. 333-67112-06.

10.62   Pooling Agreement dated as of November 17, 2004, Navistar Financial Retail Receivables Corporation, as Seller, and Navistar Financial 2004-B Owner Trust, as Issuer.  Filed as Exhibit 4.1 to Navistar Financial Retail Receivables Corporation Owner Trust 2004-B’s Form 8-K on November 17, 2004.  Commission File No. 333-67112-06.

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10.63   Servicing Agreement dated as of November 17, 2004, between the Corporation, as Servicer, Navistar Leasing Company, Harco Leasing Company, Inc., Navistar Financial Retail Receivables Corporation, The Bank of New York as Collateral Agent and as Indenture Trustee, JP Morgan Trust Company, National Association, (as successor-in-interest to Bank One, National Association),as Portfolio Trustee, and Navistar Financial 2004-B Owner Trust, as Issuer.  Filed as Exhibit 99.3 to Navistar Financial Retail Receivables Corporation Owner Trust 2004-B’s Form 8-K on November 17, 2004.  Commission File No. 333-67112-06.

10.64   Trust Agreement dated as of November 17, 2004, between Navistar Financial Retail Receivables Corporation, as Seller, and Chase Manhattan Bank USA, National Association, as Owner Trustee, with respect to Navistar Financial 2004-B Owner Trust.  Filed as Exhibit 4.3 to Navistar Financial Retail Receivables Corporation Owner Trust 2004-B’s Form 8-K on November 17, 2004.  Commission File No. 333-67112-06.

10.65   Indenture dated as of November 17, 2004, between Navistar Financial 2004-B Owner Trust and The Bank of New York, as Indenture Trustee, with respect to Navistar Financial 2004-B Owner Trust.  Filed as Exhibit 4.2 to Navistar Financial Retail Receivables Corporation Owner Trust 2004-B’s Form 8-K on November 17, 2004.  Commission File No. 333-67112-06.

10.66   Receivables Sale Agreement dated as of July 30, 2004, between Navistar Financial Retail Receivables Corporation and the Corporation.  Filed as Exhibit 10.68 to the Corporation's Form 10-Q on September 10, 2004.  Commission File No. 001-04146.

10.67   Receivables Purchase Agreement dated as of July 30, 2004, between Navistar Financial Retail Receivables Corporation, as Seller, the Corporation, as Servicer, Thunder Bay Funding, LLC, as Company, and Royal Bank of Canada, as Agent.  Filed as Exhibit 10.69 to the Corporation's Form 10-Q on September 10, 2004.  Commission File No. 001-04146.

10.68   Receivables Sale Agreement dated as of April 29, 2005, between Navistar Financial Retail Receivables Corporation and the Corporation.   Filed as Exhibit 99.1 to Navistar Financial Retail Receivables Corporation Owner Trust Form 8-K on May 31, 2005.  Commission File No. 333-67112.

10.69   Receivables Purchase Agreement dated as of April 29, 2005, between Navistar Financial Retail Receivables Corporation, as Seller, the Corporation, as Servicer, Thunder Bay Funding, LLC, as Company, and Royal Bank of Canada, as Agent.  Filed as Exhibit 99.2 to Navistar Financial Retail Receivables Corporation Owner Trust Form 8-K on May 31, 2005.  Commission File No.333-67112.

10.70   Purchase Agreement dated as of July 27, 2005, between the Corporation and Navistar Financial Retail Receivables Corporation, with respect to Navistar Financial 2005-A Owner Trust.  Filed as Exhibit 99.1 to Navistar Financial Retail Receivables Corporation Owner Trust 2005-A’s Form 8-K on July 27, 2005.  Commission File No. 333-115716-01.

10.71   Pooling Agreement dated as of July 27, 2005 among Navistar Financial Retail Receivables Corporation, as Seller, and Navistar Financial 2005-A Owner Trust, as Issuer.  Filed as Exhibit 4.1 to Navistar Financial Retail Receivables Corporation Owner Trust 2005-A Form 8-K on July 27, 2005.   Commission File No.  333-115716-01.

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10.72   Servicing Agreement dated as of July 27, 2005, between the Corporation, as Servicer, Navistar Leasing Company, Harco Leasing Company, Inc., Navistar Financial Retail Receivables Corporation, The Bank of New York as Collateral Agent and as Indenture Trustee, JP Morgan Trust Company, National Association, (as successor-in-interest to Bank One, National Association),as Portfolio Trustee, and Navistar Financial 2005-A Owner Trust, as Issuer.  Filed as Exhibit 99.3 to Navistar Financial Retail Receivables Corporation Owner Trust 2005-A’s Form 8-K on July 27. 2005.   Commission File No. 333-115716-01.

10.73   Trust Agreement dated as of July 27, 2005, between Navistar Financial Retail Receivables Corporation, as Seller, and Chase Bank USA, National Association, as Owner Trustee, with respect to Navistar Financial 2005-A Owner Trust.    Filed as Exhibit 4.3 to Navistar Financial Retail Receivables Corporation Owner Trust 2005-A’s Form 8-K on July 27, 2005.  Commission File No.  333-115716-01.

10.74   Indenture dated as of July 27, 2005, between Navistar Financial 2005-A Owner Trust and The Bank of New York, as Indenture Trustee, with respect to Navistar Financial 2005-A Owner Trust.  Filed as Exhibit 4.2 to Navistar Financial Retail Receivables Corporation Owner Trust 2005-A’s Form 8-K on July 27, 2005.  Commission File No. 333-115716-01.

10.75   Purchase Agreement dated as of February 27, 2006, between the Corporation and Navistar Financial Retail Receivables Corporation, with respect to Navistar Financial 2006-BOA Owner Trust. Filed as Exhibit 10.5 to the Corporation’s Form 8-K on April 5, 2006. Commission File No. 001-04146.

10.76   Pooling Agreement dated as of February 27, 2006 among Navistar Financial Retail Receivables Corporation, as Seller, and Navistar Financial 2006-BOA Owner Trust, as Issuer. Filed as Exhibit 10.2 to the Corporation’s Form 8-K on April 5, 2006. Commission File No. 001-04146.

10.77   Servicing Agreement dated as of February 27, 2006, between the Corporation, as Servicer, Navistar Financial Retail Receivables Corporation, The Bank of New York as Indenture Trustee, and Navistar Financial 2006-BOA Owner Trust, as Issuer. Filed as Exhibit 10.6 to the Corporation’s Form 8-K on April 5, 2006. Commission File No. 001-04146.

10.78   Trust Agreement dated as of February 27, 2006, between Navistar Financial Retail Receivables Corporation, as Seller, and Chase Bank USA, National Association, as Owner Trustee, with respect to Navistar Financial 2006-BOA Owner Trust. Filed as Exhibit 10.4 to the Corporation’s Form 8-K on April 5, 2006. Commission File No. 001-04146.

10.79   Indenture dated as of February 27, 2006, between Navistar Financial 2006-BOA Owner Trust and The Bank of New York, as Indenture Trustee, with respect to Navistar Financial 2006-BOA Owner Trust. Filed as Exhibit 10.3 to the Corporation’s Form 8-K on April 5, 2006. Commission File No. 001-04146.

10.80   Purchase Agreement dated as of September 1, 2006, between the Corporation and Navistar Financial Retail Receivables Corporation, with respect to Navistar Financial 2006-ARC Owner Trust. Filed as Exhibit 10.5 to the Corporation’s Form 8-K on September 8, 2006. Commission File No. 001-04146.

10.81   Pooling Agreement dated as of September 1, 2006 among Navistar Financial Retail Receivables Corporation, as Seller, and Navistar Financial 2006-ARC Owner Trust, as Issuer. Filed as Exhibit 10.2 to the Corporation’s Form 8-K on September 8, 2006. Commission File No. 001-04146.

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10.82   Servicing Agreement dated as of September 1, 2006, between the Corporation, as Servicer, Navistar Leasing Company, Harco Leasing Company, Inc., Navistar Financial Retail Receivables Corporation, The Bank of New York as Collateral Agent, LaSalle Bank National Association, as Indenture Trustee, JP Morgan Trust Company, National Association, (as successor-in-interest to Bank One, National Association), as Portfolio Trustee, and Navistar Financial 2006-ARC Owner Trust, as Issuer. Filed as Exhibit 10.6 to the Corporation’s Form 8-K on September 8, 2006. Commission File No. 001-04146.

10.83   Trust Agreement dated as of September 1, 2006, between Navistar Financial Retail Receivables Corporation, as Seller, and Chase Bank USA, National Association, as Owner Trustee, with respect to Navistar Financial 2006-ARC Owner Trust. Filed as Exhibit 10.4 to the Corporation’s Form 8-K on September 8, 2006. Commission File No. 001-04146..

10.84   Indenture dated as of September 1, 2006, between Navistar Financial 2006-ARC Owner Trust and LaSalle Bank National Association, as Indenture Trustee, with respect to Navistar Financial 2006-ARC Owner Trust. Filed as Exhibit 10.3 to the Corporation’s Form 8-K on September 8, 2006. Commission File No. 001-04146.

10.85   Purchase Agreement dated as of October 20, 2006, between the Corporation and Navistar Financial Retail Receivables Corporation, with respect to Navistar Financial 2006-RBC Owner Trust. Filed as Exhibit 10.5 to the Corporation’s Form 8-K on October 25, 2006. Commission File No. 001-04146.

10.86   Pooling Agreement dated as of October 20, 2006 among Navistar Financial Retail Receivables Corporation, as Seller, and Navistar Financial 2006-RBC Owner Trust, as Issuer. Filed as Exhibit 10.2 to the Corporation’s Form 8-K on October 25, 2006. Commission File No. 001-04146.

10.87   Servicing Agreement dated as of October 20, 2006, between the Corporation, as Servicer, Navistar Financial Retail Receivables Corporation, The Bank of New York as Indenture Trustee, and Navistar Financial 2006-RBC Owner Trust, as Issuer. Filed as Exhibit 10.6 to the Corporation’s Form 8-K on October 25, 2006. Commission File No. 001-04146.

10.88   Trust Agreement dated as of October 20, 2006, between Navistar Financial Retail Receivables Corporation, as Seller, and Chase Bank USA, National Association, as Owner Trustee, with respect to Navistar Financial 2006-RBC Owner Trust. Filed as Exhibit 10.4 to the Corporation’s Form 8-K on October 25, 2006. Commission File No. 001-04146.

10.89   Indenture dated as of October 20, 2006, between Navistar Financial 2006-RBC Owner Trust and The Bank of New York, as Indenture Trustee, with respect to Navistar Financial 2006-RBC Owner Trust. Filed as Exhibit 10.3 to the Corporation’s Form 8-K on October 25, 2006. Commission File No. 001-04146.

10.90   Purchase Agreement dated as of February 16, 2007, between the Corporation and Navistar Financial Retail Receivables Corporation, with respect to Navistar Financial 2007-JPM Owner Trust. Filed as Exhibit 10.5 to the Corporation’s Form 8-K on February 23, 2007. Commission File No. 001-04146.

10.91   Pooling Agreement dated as of February 16, 2007 among Navistar Financial Retail Receivables Corporation, as Seller, and Navistar Financial 2007-JPM Owner Trust, as Issuer. Filed as Exhibit 10.2 to the Corporation’s Form 8-K on February 23, 2007. Commission File No. 001-04146.

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10.92   Servicing Agreement dated as of February 16, 2007, between the Corporation, as Servicer, Navistar Financial Retail Receivables Corporation, The Bank of New York as Indenture Trustee, and Navistar Financial 2007-JPM Owner Trust, as Issuer.  Filed as Exhibit 10.6 to the Corporation’s Form 8-K on February 23, 2007. Commission File No. 001-04146.

10.93   Trust Agreement dated as of February 16, 2007, between Navistar Financial Retail Receivables Corporation, as Seller, and Deutsche Bank Trust Company Delaware, as Owner Trustee, with respect to Navistar Financial 2007-JPM Owner Trust.  Filed as Exhibit 10.4 to the Corporation’s Form 8-K on February 23, 2007. Commission File No. 001-04146.

10.94   Indenture dated as of February 16, 2007, between Navistar Financial 2007-JPM Owner Trust and The Bank of New York, as Indenture Trustee, with respect to Navistar Financial 2007-JPM Owner Trust. Filed as Exhibit 10.3 to the Corporation’s Form 8-K on February 23, 2007. Commission File No. 001-04146.

10.95   Purchase Agreement dated as of June 22, 2007, between the Corporation and Navistar Financial Retail Receivables Corporation, with respect to Navistar Financial 2007-BNS Owner Trust. Filed as Exhibit 10.5 to the Corporation’s Form 8-K on June 27, 2007. Commission File No. 001-04146.

10.96   Pooling Agreement dated as of June 22, 2007 among Navistar Financial Retail Receivables Corporation, as Seller, and Navistar Financial 2007-BNS Owner Trust, as Issuer. Filed as Exhibit 10.2 to the Corporation’s Form 8-K on June 27, 2007. Commission File No. 001-04146.

10.97   Servicing Agreement dated as of June 22, 2007, between the Corporation, as Servicer, Navistar Financial Retail Receivables Corporation, The Bank of New York as Indenture Trustee, and Navistar Financial 2007-BNS Owner Trust, as Issuer. Filed as Exhibit 10.6 to the Corporation’s Form 8-K on June 27, 2007. Commission File No. 001-04146.

10.98   Trust Agreement dated as of June 22, 2007, between Navistar Financial Retail Receivables Corporation, as Seller, and Deutsche Bank Trust Company Delaware, as Owner Trustee, with respect to Navistar Financial 2007-BNS Owner Trust. Filed as Exhibit 10.4 to the Corporation’s Form 8-K on June 27, 2007. Commission File No. 001-04146.

10.99   Indenture dated as of June 22, 2007, between Navistar Financial 2007-BNS Owner Trust and The Bank of New York, as Indenture Trustee, with respect to Navistar Financial 2007-BNS Owner Trust. Filed as Exhibit 10.3 to the Corporation’s Form 8-K on June 27, 2007. Commission File No. 001-04146.

10.100   Waiver dated January 17, 2006, to the Amended and Restated Credit Agreement dated as of July 1, 2005 between the Corporation, Arrendadora Financiera Navistar, S.A. de C. V., Servicios Financieros Navistar, S.A. de C.V., and Navistar Comerical, S.A. de C.V., as Borrowers, and JPMorgan Chase Bank, N.A. as Administrative Agent, Bank of America, N.A., as Syndication agent, and the Bank of Nova Scotia, as Documentation Agent, J.P. Morgan Securities Inc. and Banc of America Securities, LLC, as Joint Book Managers and Joint Lead Arrangers, with respect to $1,200,000,000 Revolving Credit and Competitive Advance Facility.  Filed as Exhibit 99.1 to the Corporation’s Form 8-K on March 8, 2006.  Commission File No. 001-04146.

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10.101   Second Waiver and Consent dated March 2, 2006, to the Amended and Restated Credit Agreement dated as of July 1, 2005 between the Corporation, Arrendadora Financiera Navistar, S.A. de C. V., Servicios Financieros Navistar, S.A. de C.V., and Navistar Comerical, S.A. de C.V., as Borrowers, and JPMorgan Chase Bank, N.A. as Administrative Agent, Bank of America, N.A., as Syndication agent, and the Bank of Nova Scotia, as Documentation Agent, J.P. Morgan Securities Inc. and Banc of America Securities, LLC, as Joint Book Managers and Joint Lead Arrangers, with respect to $1,200,000,000 Revolving Credit and Competitive Advance Facility.  Filed as Exhibit 99.2 to the Corporation’s Form 8-K on March 8, 2006.  Commission File No. 001-04146.

10.102   Third Waiver and Consent dated November 10, 2006, to the Amended and Restated Credit Agreement dated as of July 1, 2005 between the Corporation, Arrendadora Financiera Navistar, S.A. de C. V., Servicios Financieros Navistar, S.A. de C.V., and Navistar Comerical, S.A. de C.V., as Borrowers, and JPMorgan Chase Bank, N.A. as Administrative Agent, Bank of America, N.A., as Syndication agent, and the Bank of Nova Scotia, as Documentation Agent, J.P. Morgan Securities Inc. and Banc of America Securities, LLC, as Joint Book Managers and Joint Lead Arrangers, with respect to $1,200,000,000 Revolving Credit and Competitive Advance Facility.  Filed as Exhibit 10.1 to the Corporation’s Form 8-K on November 20, 2006.  Commission File No. 001-04146.

10.141   First Amendment dated March 28, 2007, to the Amended and Restated Credit Agreement dated as of July 1, 2005 among the Corporation, Arrendadora Financiera Navistar, S.A. de C. V., Organizacion Auxiliar del Credito, a Mexican corporation, Servicios Financieros Navistar, S.A. de C.V., Sociedad Financiera de Objeto Limitado, a Mexican corporation and Navistar Comerical, S.A. de C.V., the Lenders party thereto, JPMorgan Chase Bank, N.A. as Administrative Agent, Bank of America, N.A., as Syndication agent, and the Bank of Nova Scotia, as Documentation Agent. Filed as Exhibit 10.1 to the Corporation’s Form 8-K on April 3, 2007. Commission File No. 001-04146.

10.142   Second Amendment and Fourth Waiver dated October 23, 2007 to the Amended and Restated Credit Agreement dated as of July 1, 2005 among the Corporation, Arrendadora Financiera Navistar, S.A. de C. V., Organizacion Auxiliar del Credito, a Mexican corporation, Servicios Financieros Navistar, S.A. de C.V., Sociedad Financiera de Objeto Limitado, a Mexican corporation and Navistar Comerical, S.A. de

C.V., the Lenders party thereto, JPMorgan Chase Bank, N.A. as Administrative Agent, Bank of America, N.A., as Syndication agent, and the Bank of Nova Scotia, as Documentation Agent.  Filed as Exhibit 10.1 to the Corporation’s Form 8-K on October 5, 2007. Commission File No. 001-04146.

10.143   Series 1995-1 Supplement dated as of June 8, 1995, to the Pooling and Servicing Agreement dated June 8, 1995, among the Corporation, as Servicer, Navistar Financial Securities Corporation, as Seller, Chemical Bank, as 1990 Trust Trustee, and The Bank of New York, as Master Trust Trustee.  Filed as Exhibit 4.1 to Navistar Financial Securities Corporation’s Form 8-K on December 4, 2003.  Commission File No. 033-87374.

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10.170   Note Purchase Agreement, dated as of February 27, 2006, among Navistar Financial Retail Receivables Corporation, as Seller, Navistar Financial Corporation, as Servicer, Bank of America,, as Agent for the Investors, Administrator and as an alternate investor, Kitty Hawk Funding Corporation, as the Conduit Investor.  Filed as Exhibit 10.1 to the Corporation’s Form 8-K on April 5, 2006. Commission File No. 001-04146.

10.171   Note Purchase Agreement, dated as of September 1, 2006, among Navistar Financial Retail Receivables Corporation, as Seller, Navistar Financial Corporation, as Servicer, ABN AMRO Bank N.V,’, as Funding Agent for the Investors and as an alternate investor, Amsterdam Funding Corporation, as Conduit Investor.  Filed as Exhibit 10.1 to the Corporation’s Form 8-K on September 8, 2006. Commission File No. 001-04146.

10.172   Note Purchase Agreement, dated as of October 20, 2006, among Navistar Financial Retail Receivables Corporation, as seller, Navistar Financial Corporation, as Servicer, Royal Bank of Canada, as Agent for the Investors, and Thunder Bay Funding LLC, as Conduit Investor.  Filed as Exhibit 10.1 to the Corporation’s Form 8-K on October 25, 2006. Commission File No. 001-04146.

10.173   Note Purchase Agreement, dated as of February 16, 2007, among Navistar Financial Retail Receivables Corporation, as Seller, Navistar Financial Corporation, as Servicer, JPMorgan Chase, N.A., as Agent for the Investors, and Jupiter Securitization Company LLC and Falcon Asset Securitization Company LLC, Collectively, as the Conduit Investor.   Filed as Exhibit 10.1 to the Corporation’s Form 8-K on February 23, 2007. Commission File No. 001-04146.

10.174   Note Purchase Agreement, dated June 22, 2007, among Navistar Financial Retail Receivables Corporation, as Seller, Navistar Financial Corporation, as Servicer, The Bank of Nova Scotia, as Agent for the Investors, and Liberty Street Funding LLC, as the Conduit Investor.  Filed as Exhibit 10.1 to the Corporation’s Form 8-K on June 22, 2007. Commission File No. 001-04146.

10.175   Note Purchasing Agreement, dated as of November 28, 2007, among Navistar Financial Retail Receivables Corporation, as Seller, Navistar Financial Corporation, individually and as Servicer, Citicorp North America, Inc., as Agent for the Investors, CAFCO, LLC and CRC Funding, LLC as the Conduit Investors, and Citibank, N.A., as Committed Investor.   Filed as Exhibit 10.1 to the Corporation’s Form 8-K on November 28, 2007. Commission File No. 001-04146.

10.176   Pooling Agreement dated as of November 28, 2007 between Navistar Financial Retail Receivables Corporation, as Seller, and Navistar Financial 2007-C Owner Trust, as Issuer.  Filed as Exhibit 10.2 to the Corporation’s Form 8-K on November 28, 2007. Commission File No. 001-04146.

10.177   Indenture dated as of November 28, 2007, between Navistar Financial 2007-C Owner Trust, as Issuer, and The Bank of New York, as the Indenture Trustee.   Filed as Exhibit 10.3 to the Corporation’s Form 8-K on November 28, 2007. Commission File No. 001-04146.

10.178   Trust Agreement, dated as of November 28, 2007, between Navistar Financial Retail Receivables Corporation, as Seller, and Deutsche Bank Trust Company Delaware, as Owner Trustee.   Filed as Exhibit 10.4 to the Corporation’s Form 8-K on November 28, 2007. Commission File No. 001-04146.

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10.179   Purchase Agreement, dated November 28, 2007, among Navistar Financial Retail Receivables Corporation, The Bank of New Your, as Indenture Trustee, Navistar Financial 2007-C Owner Trust, as Issuer, and Navistar Financial Corporation, as Servicer.  Filed as Exhibit 10.5 to the Corporation’s Form 8-K on November 28, 2007. Commission File No. 001-04146.

10.180   Servicing Agreement, dated November 28, 2007, among Navistar Financial Retail Receivables Corporation, The Bank of New Your, as Indenture Trustee, Navistar Financial 2007-C Owner Trust, as Issuer and Navistar Financial Corporation, as Servicer.  Filed as Exhibit 10.6 to the Corporation’s Form 8-K on November 28, 2007. Commission File No. 001-04146.

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The following documents of Navistar Financial Corporation are filed herewith:

10.103   First Amendment to the Pooling and Servicing Agreement dated as of September 12, 1995, among the Corporation, as Servicer, Navistar Financial Securities Corporation, as Seller, and The Bank of New York, as Master Trust Trustee.

10.104   Second Amendment to the Pooling and Servicing Agreement dated as of March 27, 1996, among the Corporation, as Servicer, Navistar Financial Securities Corporation, as Seller, and The Bank of New York, as Master Trust Trustee.

10.105   Third Amendment to the Pooling and Servicing Agreement dated as of July 17, 1998, among the Corporation, as Servicer, Navistar Financial Securities Corporation, as Seller, and The Bank of New York, as Master Trust Trustee.

10.106   Extension to the Certificate Purchase Agreement, dated as of January 25, 2001, among the Corporation, as Servicer, Navistar Financial Securities Corporation, as Seller, Receivables Capital Corporation, as the Conduit Purchaser, Bank of America, National Association, as a Committed Purchaser.

10.107   Extension and Amendment to the Certificate Purchase Agreement, dated as of January 23, 2002, among the Corporation, as Servicer, Navistar Financial Securities Corporation, as Seller, Receivables Capital Corporation, as the Conduit Purchaser, Bank of America, National Association, as a Committed Purchaser.

10.108   First Amendment to Certificate Purchase Agreement, dated as of January 27, 2003, among the Corporation, as Servicer, Navistar Financial Securities Corporation, as Seller, Receivables Capital Corporation, as the Conduit Purchaser, Bank of America, National Association, as Administrative Agent for the Purchasers, and as a Committed Purchaser.

10.109   Extension to Amended and Restated Certificate Purchase Agreement, dated as of December 19, 2005, among the Corporation, as Servicer, Navistar Financial Securities Corporation, as Seller, Kitty Hawk Funding Corporation, as a Conduit Purchaser, Liberty Street Funding Corp., as a Conduit Purchaser, Bank of America, National Association, as Administrative Agent for the Purchasers, a Managing Agent, and as a Committed Purchaser and the Bank of Nova Scotia, as a Committed Purchaser and as a Managing Agent.

10.110   Amendment, Waiver, and Extension to Amended and Restated Certificate Purchase Agreement, dated as of May 26, 2006, among the Corporation, as Servicer, Navistar Financial Securities Corporation, as Seller, Kitty Hawk Funding Corporation, as a Conduit Purchaser, Liberty Street Funding Corp., as a Conduit Purchaser, Bank of America, National Association, as Administrative Agent for the Purchasers, a Managing Agent, and as a Committed Purchaser and the Bank of Nova Scotia, as a Committed Purchaser and as a Managing Agent.

10.111   Amendment, Waiver, and Extension to Amended and Restated Certificate Purchase Agreement, dated as of January 31, 2007, among the Corporation, as Servicer, Navistar Financial Securities Corporation, as Seller, Kitty Hawk Funding Corporation, as a Conduit Purchaser, Liberty Street Funding Corp., as a Conduit Purchaser, Bank of America, National Association, as Administrative Agent for the Purchasers, a Managing Agent, and as a Committed Purchaser and the Bank of Nova Scotia, as a Committed Purchaser and as a Managing Agent.

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10.112   Receivables Purchase Agreement, dated as of April 8, 2004, among Truck Retail Accounts Corporation, as Seller, the Corporation, as Servicer, Bank One, NA, as Agent, and Jupiter Securitization Corporation, as Conduit.

10.113   Receivables Sale Agreement, dated as of April 8, 2004, between the Corporation, as Transferor, and Truck Retail Accounts Corporation, as Transferee.

10.114   Waiver No. 1 to Receivables Purchase Agreement, dated as of January 28, 2005, among Truck Retail Accounts Corporation, as Seller, the Corporation, as initial Servicer, Bank One, NA, as Agent, and Jupiter Securitization Corporation, as Conduit.

10.115   Waiver No. 2 to Receivables Purchase Agreement, dated as of March 14, 2005, among Truck Retail Accounts Corporation, as Seller, the Corporation, as initial Servicer, Bank One, NA, as Agent, and Jupiter Securitization Corporation, as Conduit.

10.116   Waiver No. 3 to Receivables Purchase Agreement, dated as of April 14, 2005, among Truck Retail Accounts Corporation, as Seller, the Corporation, as initial Servicer, JP Morgan Chase Bank, N.A.(successor by merger to Bank One, NA), as Agent, and Jupiter Securitization Corporation, as Conduit.

10.117   Waiver No. 4 to Receivables Purchase Agreement, dated as of July 20, 2005, among Truck Retail Accounts Corporation, as Seller, the Corporation, as initial Servicer, JP Morgan Chase Bank, N.A.(successor by merger to Bank One, NA), as Agent, and Jupiter Securitization Corporation, as Conduit.

10.118   Waiver No. 5 to Receivables Purchase Agreement, dated as of January 17, 2006, among Truck Retail Accounts Corporation, as Seller, the Corporation, as initial Servicer, JP Morgan Chase Bank, N.A.(successor by merger to Bank One, NA), as Agent, and Jupiter Securitization Corporation, as Conduit.

10.119   Waiver No. 6 to Receivables Purchase Agreement, dated as of March 21, 2006, among Truck Retail Accounts Corporation, as Seller, the Corporation, as initial Servicer, JP Morgan Chase Bank, N.A.(successor by merger to Bank One, NA), as Agent, and Jupiter Securitization Corporation, as Conduit.

10.120   Waiver No. 7 to Receivables Purchase Agreement, dated as of January 31, 2007, among Truck Retail Accounts Corporation, as Seller, the Corporation, as initial Servicer, JP Morgan Chase Bank, N.A.(successor by merger to Bank One, NA), as Agent, and Jupiter Securitization Corporation, as Conduit.

10.121   Waiver No. 1 to Receivables Sale Agreement, dated as of March 21, 2006, among the Corporation, as Transferor and Truck Retail Accounts Corporation, as Transferee.

10.122   Waiver No. 2 to Receivables Sale Agreement, dated as of January 31, 2007, among the Corporation, as Transferor and Truck Retail Accounts Corporation, as Transferee.

10.123   Amendment No. 1 to Receivables Purchase Agreement, dated as of March 31, 2005, among Truck Retail Accounts Corporation, as Seller, the Corporation, as initial Servicer, Bank One, NA, as Agent, and Jupiter Securitization Corporation, as Conduit.

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10.124   Amendment No. 2 to Receivables Purchase Agreement, dated as of August 14, 2005, among Truck Retail Accounts Corporation, as Seller, the Corporation, as initial Servicer, JP Morgan Chase Bank, N.A.(successor by merger to Bank One, NA), as Agent, and Jupiter Securitization Corporation, as Conduit.

10.125   Amendment No. 3 to Receivables Purchase Agreement, dated as of August 11, 2006, among Truck Retail Accounts Corporation, as Seller, the Corporation, as initial Servicer, JP Morgan Chase Bank, N.A.(successor by merger to Bank One, NA), as Agent, and Jupiter Securitization Corporation, as Conduit.

10.126   Amendment No. 1 to the Pooling Agreement, dated as of January 31, 2007, among Navistar Financial Retail Receivables Corporation (the “Seller”), and Navistar Financial 2006-ARC Owner Trust, as Issuer.

10.127   Amendment No.1 to the Pooling Agreement, dated as of May 31, 2007, among Navistar Financial Retail Receivables Corporation (the “Seller”), and Navistar Financial 2006-RBC Owner Trust, as Issuer.

10.128   Amendment No. 4 dated August 10, 2007 to the Receivables Purchase Agreement, dated as of April 8, 2004, among Truck Retail Accounts Corporation, as Seller, the Corporation, as Servicer, JP Morgan Chase Bank, N.A. (successor by merger to Bank One, NA), as Agent, and Jupiter Securitization Corporation, as Conduit.

10.129   Not used

10.130   Waiver dated January 31, 2007 to (i) the Indenture dated as of September 1, 2006 between Navistar Financial 2006-ARC Owner Trust, a Delaware statutory trust, and LaSalle Bank National Association, a national banking association, as Indenture Trustee, (ii) the Note Purchase Agreement dated as of September 1, 2006, among Navistar Financial Retail Receivables Corporation, as Seller, Navistar Financial Corporation, Amsterdam Funding Corporation, as a Conduit Investor, and ABN AMRO Bank, N.V., as Funding Agent and an Alternate Investor, (iii) the Servicing Agreement dated as of September 1, 2006, among Navistar Leasing Company, Harco Leasing Company, Inc., Navistar Financial Retail Receivables Corporation, The Bank of New York Trust Company, N.A., as Collateral Agent, JP Morgan Trust Company, National Association, (as successor-in-interest to Bank One, National Association), as Portfolio Trustee, Navistar Financial 2006-ARC Owner Trust, as Issuer, NFC, as Servicer, and LaSalle Bank, National Association, as Indenture Trustee, and (iv) the ISDA Master Agreement dated as of September 1, 2006 between LaSalle Bank National Association and Navistar Financial Corporation..

10.131   Waiver dated January 31, 2007 to the Receivables Purchase Agreement, dated as of July 30, 2004, between Navistar Financial Retail Receivables Corporation, as Seller, the Corporation, as Servicer, Thunder Bay Funding, LLC, as Company, and Royal Bank of Canada, as Agent.

10.132   Amendment dated October 31, 2006 to the Amended and Restated Certificate Purchase Agreement, dated as of December 27, 2004, among Corporation, as Servicer, Navistar Financial Securities Corporation, as Seller, Kitty Hawk Funding Corporation, as a Conduit Purchaser, Liberty Street Funding Corp., as a Conduit Purchaser, Bank of America, National Association, as Administrative Agent for the Purchasers, a Managing Agent, and as a Committed Purchaser and the Bank of Nova Scotia, as a Committed Purchaser and as a Managing Agent.

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10.133   Amendment, waiver and extension dated March 24, 2006 to the Amended and Restated Certificate Purchase Agreement, dated as of December 27, 2004, among Corporation, as Servicer, Navistar Financial Securities Corporation, as Seller, Kitty Hawk Funding Corporation, as a Conduit Purchaser, Liberty Street Funding Corp., as a Conduit Purchaser, Bank of America, National Association, as Administrative Agent for the Purchasers, a Managing Agent, and as a Committed Purchaser and the Bank of Nova Scotia, as a Committed Purchaser and as a Managing Agent.

10.134    Extension dated February 20, 2004 to the Certificate Purchase Agreement, dated as of January 28, 2000, among the Corporation, as Servicer, Navistar Financial Securities Corporation, as Seller, Kitty Hawk Funding Corporation, as conduit purchaser and assignee of Receivables Capital Corporation, and Bank of America, National Association, as Administrative Agent for the Purchasers, and as a Committed Purchaser.

10.135   Amendment No. 5 dated August 15, 2007 to the Receivables Purchase Agreement, dated as of April 8, 2004, among Truck Retail Accounts Corporation, as Seller, the Corporation, as Servicer, JP Morgan Chase Bank, N.A. (successor by merger to Bank One, NA), as Agent, Jupiter Securitization Company, LLC, and JS Siloed Trust, as Trust.

10.136   Waiver dated January 31, 2007 to the Receivables Purchase Agreement, dated as of April 29, 2005, between Navistar Financial Retail Receivables Corporation, as Seller, the Corporation, as Servicer, Thunder Bay Funding, LLC, as Company, and Royal Bank of Canada, as Agent.

10.137   Waiver dated March 31, 2007 to (i) the Note Purchase Agreement, dated as of October 20, 2006, among Navistar Financial Retail Receivables Corporation, as Seller, Navistar Financial Corporation, individually and as Servicer, Thunder Bay Funding, LLC., as Conduit Investor, and Royal Bank of Canada, as Agent and (ii) the Servicing Agreement, dated as of October 20, 2006, among Navistar Financial Retail Receivables, Navistar Financial 2006-RBC Owner Trust, as issuer, Navistar Financial Corporation, as Servicer, and The Bank of New York, as Indenture Trustee.

10.138   First Amended Control Agreement, dated as of February 20, 2007, among Truck Retail Accounts Corporation, as Seller, the Corporation, as Servicer, JP Morgan Chase Banks N.A. (successor by merger to Bank One, N.A.), as Agent, and The Bank of New York (successor to JP Morgan Chase Bank, N.A.), as Securities Intermediary.

10.139   Amendment dated January 31, 2007 to the Note Purchase Agreement, dated as of February 27, 2006, among Navistar Financial Retail Receivables Corporation, as Seller, the Corporation, as Servicer, Kitty Hawk Funding Corporation, as Conduit Investor, and Bank of America, National Association, as Agent.

10.140   Waiver dated January 8, 2007 to the Master Purchase Agreement, dated as of June 30, 2004, among International Truck Leasing Corp. and Banc of America Leasing & Capital LLC.

10.144   Series 1997-1 Supplement dated as of August 19, 1997, to the Pooling and Servicing Agreement dated June 8, 1995, among the Corporation, as Servicer, Navistar Financial Securities Corporation, as Seller, and The Bank of New York, as Master Trust Trustee.

10.145   Amendment No. 1, dated March 27, 1996, to the Series 1995-1 Supplement to the Pooling and Servicing Agreement dated June 8, 1995, among the Corporation, as Servicer, Navistar Financial Securities Corporation, as Seller, Chemical Bank, as 1990 Trust Trustee, and The Bank of New York, as Master Trust Trustee.

10.146   Amendment No. 2, dated August 19, 1997, to Series 1995-1 Supplement to the Pooling and Servicing Agreement dated June 8, 1995, among the Corporation, as Servicer, Navistar Financial Securities Corporation, as Seller, and The Bank of New York, as Master Trust Trustee.

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10.147   Amended and Restated Certificate Purchase Agreement dated as of October 23, 2007 to the amended and restated Certificate dated December 27, 2004  between Navistar Financial Securities Corporation, as Seller and Navistar Financial Corporation, as Servicer, Kitty Hawk Funding Corporation, as a Conduit Purchaser, Liberty Street Funding Corp., as a Conduit Purchaser, Bank of America, National Association, as Administrative Agent for the Purchasers, a Managing Agent, and as a Committed Purchaser and the Bank of Nova Scotia, as a Committed Purchaser and as a Managing Agent.

10.148   Amended and Restated Fee Letter dated October 23, 2007, to the Restated Fee Letter dated May 26, 2006 amended and restated Certificate Purchase Agreement dated December 27, 2004 between Navistar Financial Securities Corporation, as Seller, Navistar Financial Corporation, as Servicer, Bank of America, National Association and The Bank of Nova Scotia, Kitty Hawk Funding Corporation, as a Conduit Purchaser, Liberty Street Funding LLC, as a Conduit Purchaser, The Bank of Nova Scotia, as a Managing Agent and as a Committed Purchaser, Bank of America, National Association, as Administrative Agent, and Bank of America, National Association, as a Committed Purchaser and a Managing Agent.

10.149   Amendment No. 2 dated October 25, 2007 to the Series 2000-VFC Supplement to the Pooling and Servicing Agreement dated January 28, 2000, among Navistar Financial Securities Corporation, as Seller, Navistar Financial Corporation, as Servicer, The Bank of New York, a New York banking corporation, as Master Trust Trustee.

10.150   Waiver No. 8 dated as of October 23, 2007 to the Receivables Purchase Agreement dated as of April 8, 2004 among Truck Retail Accounts Corporation, as Seller,Navistar Financial Corporation, as initial Servicer, JS Siloed Trust as assignee of Jupiter Securitization Company LLC, and JPMorgan Chase Bank, N.A. (successor by merger to Bank One, NA), as agent.

10.151   Waiver No. 3 dated as of October 23, 2007 to the Receivables Sale Agreement dated as of April 8, 2004 among Navistar Financial Corporation, a Delaware corporation, as Transferor, and Truck Retail Accounts Corporation, as Transferee.

10.152   Waiver dated October 23, 2007 to the Receivables Purchase Agreement, dated as of July 30, 2004 among Navistar Financial Retail Receivables Corporation, as Seller, Navistar Financial Corporation, as Servicer, Thunder Bay Funding, LLC, as Company, and Royal Bank of Canada, as Agent.

10.153   Waiver dated October 23, 2007 to the Receivables Purchase Agreement, dated as of April 29, 2005 among Navistar Financial Retail Receivables Corporation, as Seller, Navistar Financial Corporation, as Servicer, Thunder Bay Funding, LLC, as Company, and Royal Bank of Canada, as Agent.

10.154   Waiver dated October 23, 2007 to (i) the indenture dated as of September 1, 2006 between Navistar Financial 2006-ARC Owner Trust, a Delaware statutory trust, and LaSalle Bank National Association, a national banking association, as indenture trustee (ii) the Note Purchase Agreement dated as of September 1, 2006, among Navistar Financial Retail Receivables Corporation, as the Seller, Navistar Financial Corporation , Amsterdam Funding Corporation, as a Conduit Investor, and ABN AMRO Bank, N.V., as Funding Agent and an Alternate Investor, (iii) the Servicing Agreement dated as of September 1, 2006 (the “Servicing Agreement”), among Navistar Leasing Company, Harco Leasing Company, Inc., Navistar Financial Retail Receivables Corporation, The Bank of New York Trust Company, N.A., as Collateral Agent, JP Morgan Trust Company, National Association (as successor-in-interest to Bank One, National Association), as Portfolio Trustee, Navistar Financial 2006-ARC Owner Trust, as Issuer, Navistar Financial Corporation, as Servicer, and LaSalle Bank, National Association, as Indenture Trustee, and (iv) the ISDA Master Agreement dated as of September 1, 2006 between LaSalle Bank National Association (in such capacity, the “Swap Counterparty”) and Navistar Financial Corporation..

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10.155   Waiver dated October 23, 2007 to (i) the Note Purchase Agreement, dated as of October 20, 2006 among Navistar Financial Retail Receivables Corporation, as Seller, Navistar Financial Corporation, individually and as Servicer, Thunder Bay Funding, LLC, as Conduit Investor, and Royal Bank of Canada, as Agent and (ii) the Servicing Agreement, dated as of October 20, 2006, among Navistar Financial Retail Receivables Corporation, Navistar Financial 2006-RBC Owner Trust, as Issuer, Navistar Financial Corporation , as Servicer, and The Bank of New York, as Indenture Trustee.

10.156   Waiver dated October 23, 2007 to (i) the Note Purchase Agreement dated as of June 22, 2007 among Navistar Financial Retail Receivables Corporation, as Seller, Navistar Financial Corporation, individually and as Servicer, Liberty Street Funding, LLC, as the Conduit Investor, and The Bank of Nova Scotia, as Agent for the Investors, and (ii) the Servicing Agreement, dated as of June_22, 2007, among Navistar Financial Retail Receivables Corporation, Navistar Financial 2007-BNS Owner Trust, as Issuer, Navistar Financial, as Servicer, and The Bank of New York, as Indenture Trustee.

10.157   Amendment to Note Purchase Agreement dated as of October 23, 2007, between Navistar Financial Retail Receivables Corporation, as Seller, Navistar Financial Corporation, as Servicer, Kitty Hawk Funding Corporation, as a Conduit Investor, and Bank of America, National Association, as Agent, the Administrator and an Alternate Investor.

10.158   Waiver dated October 22, 2007 to the Master Purchase Agreement dated as of June 30, 2004 among Banc of America Leasing & Capital LLC and International Truck Leasing Corp.

10.159   Waiver dated October 23, 2007 to (i) the Note Purchase Agreement, dated as of February 16, 2007 among Navistar Financial Retail Receivables Corporation, as Seller, Navistar Financial Corporation, individually and as Servicer, Falcon Asset Securitization Company, LLC, and Park Avenue Receivables Company, LLC, as the Conduit Investor, and JP Morgan Chase Bank, as Agent for the Investors and (ii) the Servicing Agreement, dated as of February 16, 2007, among NFRRC, Navistar Financial 2007-JPM Owner Trust, as Issuer, Navistar Financial Corporation, as Servicer, and The Bank of New York, as Indenture Trustee.

10.160 thru 10.169  Not used

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EX-10.103

AMENDMENT NO. 1 TO THE

POOLING AND SERVICING AGREEMENT

THIS AMENDMENT NO. 1 (this "Amendment") is made as of September 12, 1995, by and among Navistar Financial Securities Corporation, a Delaware corporation ("NFSC"), Navistar Financial Corporation, a Delaware corporation ("NFC"), and The Bank of New York, as Master Trust Trustee (the "Master Trust Trustee").

NFSC, as Seller, NFC, as Servicer, Chemical Bank, as 1990 Trust Trustee, and the Master Trust Trustee are parties to a Pooling and Servicing Agreement, dated as of June 8, 1995 (the "Pooling and Servicing Agreement").  In order to clarify that the Seller maintains an interest in the Master Trust prior to the 1990 Trust Termination Date and pursuant to Section 13.01(a) of the Pooling and Servicing Agreement, the Seller, the Servicer and the Master Trust Trustee have agreed to amend the Pooling and Servicing Agreement in the manner set forth herein.  Capitalized terms used herein but not otherwise defined have the meanings set forth in the Pooling and Servicing Agreement.

1.           Amendment.   The definition of "Master Trust Seller's Interest" in Section 1.01 of the Pooling and Servicing Agreement is hereby amended and restated to read in its entirety as follows:

"Master Trust Seller's Interest" shall mean, with respect to any Business Day prior to the 1990 Trust Termination Date, the interest of the Seller in the Master Trust, and with respect to any Business Day  after the 1990 Trust Termination Date, shall equal the aggregate principal amount of Dealer Notes, plus the aggregate amount of funds on deposit in the Excess Funding Account, plus the aggregate amount of funds on deposit in all Series Principal Accounts (and funds being held for deposit therein), each as of such Business Day, minus the Trust Invested Amount on such Business Day (or as of the Distribution Date on or immediately preceding such Business Day).

2.           Miscellaneous.  This Amendment shall be construed in accordance with the internal laws of the State of Illinois, without reference to its conflict of law provisions, except that the obligations, rights and remedies of the Master Trust Trustee shall be determined in accordance with the internal laws of the State of New York, without regard to conflict of law provisions.  This Amendment may be executed in two or more counterparts, each of which shall be an original, but all of which together constitute one and the same instrument.  The provisions of this Amendment shall be deemed to be incorporated in, and made a part of, the Pooling and Servicing Agreement; and the Pooling and Servicing Agreement, as amended by this Amendment, shall be read, taken and construed as one and the same instrument.  Promptly after the execution of this Amendment the Master Trust Trustee shall furnish written notification of the substance of this Amendment to each Investor Certificateholder.

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to the Pooling and Servicing Agreement to be duly executed by their respective officers as of the date first written above.

NAVISTAR FINANCIAL SECURITIES CORPORATION

as Seller

By:  ______________________________________

Its:  ______________________________________

NAVISTAR FINANCIAL CORPORATION

as Servicer

By:  ______________________________________

Its:  ______________________________________

THE BANK OF NEW YORK

as Master Trust Trustee

By:  ______________________________________

Its:  ______________________________________

E-24

EX-10.104

AMENDMENT NO. 2 TO THE

POOLING AND SERVICING AGREEMENT

THIS AMENDMENT NO. 2 (this "Amendment") is made as of  March 27, 1996, by and among Navistar Financial Securities Corporation, a Delaware corporation ("NFSC"), Navistar Financial Corporation, a Delaware corporation ("NFC"), and The Bank of New York, as Master Trust Trustee (the "Master Trust Trustee").

NFSC, as Seller, NFC, as Servicer, Chemical Bank, as 1990 Trust Trustee, and the Master Trust Trustee are parties to a Pooling and Servicing Agreement, dated as of June 8, 1995, and amended by Amendment No. 1 dated as of September 12, 1995 (as amended, the "Pooling and Servicing Agreement").   In order to (i) include with the definition of an Eligible Dealer Note a Dealer Note which finances any used medium or heavy-duty truck, bus or trailer, (ii) ensure that the Master Trust Trustee has sufficient funds to pay Monthly Interest to the Series 1995-1 Certificateholders and (iii) provide a mechanism for funds owing to the Seller to be paid to the Seller, the Seller, the Servicer and the Master Trust Trustee have agreed to amend the Pooling and Servicing Agreement in the manner set forth herein.  Capitalized terms used herein but not otherwise defined have the meanings set forth in the Pooling and Servicing Agreement.

1.           Amendment to Section 1.01.    Section 1.01 of the Pooling and Servicing Agreement is hereby amended as follows:

1.1           The following definition is added immediately after the definition of "1990 Trust Agreement":

'"1990 Trust Excess Servicing Amounts" means the amounts specified in  Sections 4.03(d)(i)(D), 4.03(d)(i)(F), 4.03(e)(i)(D) and 4.03(e)(i)(J) of the 1990 Trust Agreement as payable to the Seller, the rights to receive such amounts having been conveyed to the Master Trust pursuant to Section 2.01 of this Agreement.

1.2           Clause (v) of the definition of "Eligible Dealer Note" is deleted in its entirety and replaced with the following:

"(v)           which finances a new medium or heavy-duty truck, bus or trailer produced by or for a member of the Navistar Group or an OEM Supplier or a used medium or heavy-duty truck, bus or trailer."

2.           Section 4.07.  The following new Section 4.07 is added to the Pooling and Servicing Agreement:

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"SECTION 4.07        Payments to Seller.  Except as otherwise provided in this Agreement or any Supplement, all payments required to be made to the Seller or the holder of the 1990 Trust Seller's Certificate pursuant to the 1990 Trust Agreement (the right to receive such payments having been conveyed to the Master Trust pursuant to Section 2.01 of this Agreement) shall be paid to the Seller at the times specified in the 1990 Trust Agreement."

3.           Miscellaneous.  This Amendment shall be construed in accordance with the internal laws of the State of Illinois, without reference to its conflict of law provisions, except that the obligations, rights and remedies of the Master Trust Trustee shall be determined in accordance with the internal laws of the State of New York, without regard to conflict of law provisions.  This Amendment may be executed in two or more counterparts, each of which shall be an original, but all of which together constitute one and the same instrument.  The provisions of this Amendment shall be deemed to be incorporated in, and made a part of, the Pooling and Servicing Agreement; and the Pooling and Servicing Agreement, as amended by this Amendment, shall be read, taken and construed as one and the same instrument.  Promptly after the execution of this Amendment the Master Trust Trustee shall furnish written notification of the substance of this Amendment to each Investor Certificateholder.

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to the Pooling and Servicing Agreement to be duly executed by their respective officers as of the date first written above.

NAVISTAR FINANCIAL SECURITIES CORPORATION

as Seller

By:  ______________________________________

Its:  ______________________________________

NAVISTAR FINANCIAL CORPORATION

as Servicer

By:  ______________________________________

Its:  ______________________________________

THE BANK OF NEW YORK

as Master Trust Trustee

By:  ______________________________________

Its:  ______________________________________

E-27

EX-10.105

AMENDMENT NO. 3 TO THE

POOLING AND SERVICING AGREEMENT

THIS AMENDMENT NO. 3 (this "Amendment") is made as of July 17, 1998, by and among Navistar Financial Securities Corporation, a Delaware corporation ("NFSC"), Navistar Financial Corporation, a Delaware corporation ("NFC"), and The Bank of New York, as Master Trust Trustee (the "Master Trust Trustee").

NFSC, as Seller, NFC, as Servicer, The Chase Manhattan Bank (formerly known as Chemical Bank), as 1990 Trust Trustee, and the Master Trust Trustee are parties to a Pooling and Servicing Agreement, dated as of June 8, 1995, and amended by Amendment No. 1, dated as of September 12, 1995 and by Amendment No. 2, dated March 27, 1996 (as amended, the "Pooling and Servicing Agreement").   In order to (i) include within the definition of Eligible Investments certain additional investments and (ii) change the concentration of Eligible Investments allowed in the Series Principal Account, Excess Funding Account, Negative Carry Account and the Liquidity Reserve Account, the Seller, the Servicer and the Master Trust Trustee have agreed to amend the Pooling and Servicing Agreement in the manner set forth herein.  Capitalized terms used herein but not otherwise defined have the meanings set forth in the Pooling and Servicing Agreement.

1.           Amendment to Section 1.01.   The definition of "Eligible Investments" in Section 1.01 of the Pooling and Servicing Agreement is hereby deleted in its entirety and replaced with the following:

“Eligible Investments” shall mean

       (a)     book-entry securities, negotiable instru­ments or securities represented by instruments in bearer or regis­tered form having (except in the case of clauses (iv) or vii)  below) remaining maturities occurring not later than the Distribution Date next succeeding the Master Trust Trustee's acquisition thereof, except as otherwise described herein or the related Supplement, that evidence:

( i )           direct obligations of, and obligations fully guaran­teed as to timely payment by, the United States of America;

(ii)           demand deposits, time deposits or certificates of deposit of, or bankers' acceptances issued by, any depository institution or trust company incorporated under the laws of the United States of America or any state thereof (or any domestic branch of a foreign bank) and subject to supervision and examination by federal or state banking or depository institution authorities; provided, however, that at the time of the Master Trust's investment or contractual commitment to invest therein, the commercial paper or other short-term unsecured debt obligations (other than such obligations the rating of which is based on the credit of a person or entity other than such depository institution or trust company) of such depository institution or trust company shall have a credit rating not lower than the highest investment category for short term unsecured debt obligations granted by the applicable Rating Agency from each Rating Agency then Rating the affected Series of Investor Certificates;

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(iii)           com­mer­cial paper having, at the time of the Master Trust's investment or contractual commitment to invest therein, a rating not lower than the highest investment category for short term unsecured debt obligations granted by the applicable Rating Agency from each Rating Agency then Rating the affected Series of Investor Certificates;

(iv)           except during an Investment Period, investments in money market funds or common trust funds having a rating not lower than the highest investment category for short term unsecured debt obligations granted by the applicable Rating Agency from each Rating Agency then Rating the affected Series of Investor Certificates or otherwise approved in writing by each of such Rating Agencies (including funds for which the Master Trust Trustee or the 1990 Trust Trustee or any of their respective affiliates is investment manager or advisor, so long as such fund shall have such rating);

(v)           repurchase obligations (x) with respect to any security that is a direct obligation of, or fully guaranteed by, the United States of America or any agency or instrumentality thereof the obligations of which are backed by the full faith and credit of the United States of America, in either case, entered into with a depository institution or trust company (acting as principal) described in clause (ii) or (y) the counterparty for which has a rating not lower than the highest investment category for short term unsecured debt obligations granted by the applicable Rating Agency from each Rating Agency then Rating the affected Series of Investor Certificates, the collateral for which is held by a custodial bank for the benefit of the Trust or the Indenture Trustee, is marked to market daily and is maintained in an amount that exceeds the amounts of such repurchase obligation, and which required liquidation of the collateral immediately upon the amount of such collateral being less than the amount of such repurchase obligation (unless the counterparty immediately satisfies the repurchase obligation upon being notified of such shortfall); or

(vi )  commercial paper master notes where the issuer has, at the time of the Master Trust’s investment or contractual commitment to invest therein, a rating not lower than the highest investment category for short term unsecured debt obligations granted by the applicable Rating Agency from each Rating Agency then Rating the affected Series of Investor Certificates; or

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(vii ) with respect to the Excess Funding Account only, obligations of a trust (the assets of which consist solely of Investor Certificates issued by the Master Trust and of one or more liquidity swap arrangements for the benefit of investors in such trust) having, at the time of the Master Trust’s investment or contractual commitment to invest therein, a rating not lower than the highest rating category for short term unsecured debt obligations granted by the applicable Rating Agency from each Rating Agency then Rating the affected Series of Investor Certificates; and

(b)  any other investment consisting of a financial asset that by its terms converts to cash within a finite period of time, provided that the Rating Agency Condition is satisfied.

Unless the Rating Agency Condition is satisfied, Eligible Investments of funds in the Series Principal Account, Excess Funding Account, Negative Carry Reserve Fund and the Liquidity Reserve Account will be subject to the following additional restrictions:  (x) no more than the greater of (A) $1,000,000 and (B) 20% of the aggregate Eligible Investments in all such accounts collectively shall be obligations of or investments in any single issuer (except that such 20% limitation shall not apply to Eligible Investments of the type specified in clause (a)(i) or, with respect to the Excess Funding Account, Eligible Investments of the type specified in clauses (a)(iv) or (a)(vii)); and (y) each Eligible Investment shall be denominated and be payable solely in U.S. dollars, shall bear interest at a specified rate that is, or is based upon, LIBOR or a commercial paper rate, shall entitle the holder to a fixed principal amount at maturity and shall have a yield that is not inversely or disproportionately affected by changes in interest rates.

2.           Amendment to Section 4.02.  Clause (b)(ii) of Section 4.02 of the Pooling and Servicing Agreement is deleted in its entirety and replaced with the following:

"(ii )           Funds on deposit in the Excess Funding Account overnight or for a longer period shall at all times be invested by the Master Trust Trustee in Eligible Investments at the direction of the Servicer or its agent, subject to the restrictions set forth below and in Section 4.06.  Except as otherwise permitted by the Rating Agencies then rating the Investor Certificates and except for Eligible Investments of the type specified in clause (vii) of the definition of Eligible Investments, any Eligible Investments with a stated maturity shall mature no later than the following Transfer Date.  Net interest and earnings (less investment expenses) on funds on deposit in the Excess Funding Account shall be included in the calculation of Investment Income for the relevant Due Period."

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3.           Miscellaneous.  This Amendment shall be construed in accordance with the internal laws of the State of Illinois, without reference to its conflict of law provisions, except that the obligations, rights and remedies of the Master Trust Trustee shall be determined in accordance with the internal laws of the State of New York, without regard to conflict of law provisions.  This Amendment may be executed in two or more counterparts, each of which shall be an original, but all of which together constitute one and the same instrument.  The provisions of this Amendment shall be deemed to be incorporated in, and made a part of, the Pooling and Servicing Agreement; and the Pooling and Servicing Agreement, as amended by this Amendment, shall be read, taken and construed as one and the same instrument.  Promptly after the execution of this Amendment the Master Trust Trustee shall furnish written notification of the substance of this Amendment to each Investor Certificateholder.

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to the Pooling and Servicing Agreement to be duly executed by their respective officers as of the date first written above.

NAVISTAR FINANCIAL SECURITIES CORPORATION

as Seller

By:  ______________________________________

Its:  ______________________________________

NAVISTAR FINANCIAL CORPORATION

as Servicer

By:  ______________________________________

Its:  ______________________________________

THE BANK OF NEW YORK

as Master Trust Trustee

By:  ______________________________________

Its:  ______________________________________

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EX-10.106

January 25, 2001

Receivables Capital Corporation

c/o AMACAR

6525 Morrison Boulevard,

Suite 318

Charlotte, NC 28211

Bank of America,

National Association Global Asset Securitization

231 South LaSalle St.

Chicago, IL 60697

Please be advised that per Section 2.04 of the Certificate Purchase Agreement, among Navistar Financial Securities Corporation, as Seller; Navistar Financial Corporation as Servicer; Receivables Capital Corporation, as the Conduit Purchaser; Bank of America, National Association, as Administrative Agent and Bank of America, National Association, as Committed Purchaser,dated January 28, 2000, theSeller and the Servicerherebyrequest an extension of the Purchase Expiration Date until January 23, 2002.

Your signature hereto shall constitute an agreement in writing among the parties to the Certificate Purchase Agreement effective, under the terms of Section 2.04 of the Certificate Purchase Agreement, to extend the Purchase Expiration Date until January 23, 2002.

[Signatures Continueonthe Next Page]

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Sincerely,

NAVISTAR FINANCIAL SECURITIES CORPORATION,

as Seller

By:     /s/  R. W. CAIN

Name:       R. Wayne Cain

Title:         Vice President and Treasure

NAVISTAR FINANCIAL CORPORATION,

as Service

By:    /s/  R. W. CAIN

Name:      R. Wayne Cain

Title:        Vice President and Treasurer

Consented and Agreed:

RECEIVABLES CAPITAL CORPORATION,

As the Conduit Purchaser

By:   /s/  EVELYN ECHEVARRIA

Name:     Evelyn Echevarria

Title:       Vice President

BANK OF AMERICA, NATIONAL ASSOCIATION,

As Committed Purchaser and as Administrative Agent

By:     /s/  ERLE R.L. ARCHER

Name:       Erle R. L. Archer

Title:         Principal

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EX-10.107

January 23, 2002

Receivables Capital Corporation

 c/o AMACAR

6525 Morrison Boulevard,

Suite 318

Charlotte, NC 28211

Bank of America, National Association

Global Asset-Backed Securitization

231 South LaSalle St.

Chicago, IL 60697

Please be advised that per Section 2.04 of the Certificate Purchase Agreement, among Navistar Financial Securities Corporation, as Seller; Navistar Financial Corporation as Servicer; Receivables Capital Corporation, as the Conduit Purchaser; Bank of America, National Association, as Administrative Agent and Bank of America, National Association, as Committed Purchaser, datedJanuary 28, 2000, the Seller and the Servicer hereby request an extension of the Purchase Expiration Date until January 22, 2003.

Additionally, the Seller and Servicer herebyrequest perSection 2.05 of the CertificatePurchase Agreement, that the Maximum Funded Amount for the Navistar Financial Dealer Note Master Trust Series 2000-VFC be permanently reduced to $25,000,000.00, effective as of the date of this letter.

Your signature hereto shall constitute an agreement in writing among the parties to the Certificate Purchase Agreement effective, under the terms of Section 2.04 of the Certificate Purchase Agreement, to extend the Purchase Expiration Date until January 22, 2003 and under the terms of Section 2.05 of the Certificate Purchase Agreement, to reduce the Maximum Funded Amount of the Navistar Financial Dealer Note Master Trust Series 2000-VFC to $25,000,000.

(Signatures Continued on the Next Page]

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Sincerely,

NAVISTAR FINANCIAL SECURITIES CORPORATION,

As Seller

By:  /s/  R. W. CAIN

Name:   R. Wayne Cain

Title:     Senior Vice President Finance

NAVISTAR FINANCIAL CORPORATION,

as Servicer

By:  /s/  R.W. CAIN

Name:   R. Wayne Cain

Title:     Senior Vice President Finance

Consented and Agreed:

RECEIVABLES CAPITAL CORPORATION,

As the Conduit Purchaser

By:      /s/  EVELYN ECHEVARRIA

Name:        Evelyn Echevarria

Title:          Vice President

BANK OF AMERICA, NATIONAL ASSOCIATION,

As Committed Purchaser and as Administrative Agent

By:      /s/  MARIANNE MIHALIK

Name:        Marianne Mihalik

Title:          Principal

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EX-10.108

FIRST AMMENDMENT TO CERTIFICATE PURCHASE AGREEMENT

THIS FIRST AMENDMENT TO CERTIFICATE PURCHASE AGREEMENT (this "Amendment")  dated  as  of  January  22,  2003, is  entered  into  among NAVISTAR   FINANCIAL  SECURITIES  CORPORATION, as  seller  (the "Seller"), NAVISTAR FINANCIAL CORPORATION, as servicer (the "Servicer"), RECEIVABLES CAPITAL CORPORATION, as conduit purchaser (the "Conduit Purchaser"), BANK OF AMERICA, NATIONAL ASSOCIATION, as a committed purchaser (the "Committed Purchaser") and BANK OF AMERICA, NATIONAL ASSOCIATION, as administrative agent for the Purchasers (in such capacity, the "Administrative Agent").

RECITALS

A.The Seller, the Servicer, the Conduit Purchaser, the Committed Purchaser and theAdministrative Agent are parties to that certain Certificate Purchase Agreement, dated as of January 28, 2000 (as amended, supplemented or otherwise modified through the date hereof, the "Agreement").

B.Such parties desire to amend the Agreement as hereafter set forth.

C.NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.           Certain Defined Terms. Capitalized terms which are used herein without definition and that are defined in the Agreement shall have the samemeanings herein as in the Agreement.

2.           Amendments to Agreement. By their signatures hereto, each of the parties hereto hereby agrees to the following amendments to the Agreement:

2.1           The definition of "Alternate Rate" contained in Section 1.01 of the Agreement is hereby amended by replacing the percentage "0.625%" contained therein with the percentage "1.15%".

2.2           The definition of "Maximum Funded Amount" contained in Section 1.01 of the Agreement is hereby amended by replacing the amount "$25,000,000" contained therein (after giving effect to the letter dated as of January 23, 2002 from the Seller and the Servicer to the Administrative Agent, the Conduit Purchaser and the Committed Purchaser) with the amount "$200,000,000".

     2.3           The definition of "Tranche Rate" contained in Section. 1.01 of the Agreement is hereby deleted in its entirety and replaced with the following:

"Tranche Rate" means for any Fixed Period, with respect to any Funding Tranche, a per annum rate equal to the sum of (i) the applicable Funding Rate for such Fixed Period plus(ii ) if such Funding Tranche is funded at the CP Rate, the weighted average of the Program Rates applicable to such Fixed Period.

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2.3          Section 1.01 of the Agreement is hereby amended by inserting in the appropriate alphabetical location therein the following new definition:

"Official Body" means any U.S government or political subdivision or any U.S. agency, authority, bureau, central bank, commission, department or instrumentality of any such government or political subdivision, or any U.S. court, tribunal, grand jury or arbitrator, or any accounting board or authority (whether or not a part of government) which is responsible for the establishment or interpretation of U.S. accounting principles.

2.4          The first paragraph of Section 9.04(a) is hereby deleted in its entirety and replaced by the following:

"SECTION 9.04  Indemnity for Taxes, Reserves and Expenses. (a) If after the date

hereof, the adoption of any applicable law, rule, standard or regulation by any Official Body or any amendment or change in the interpretation of any existing or future applicable law, rule, standard or regulation by any Official Body charged with the administration, interpretation or application thereof (including, but not limited to, any interpretation of Accounting Research Bulletin No.51by the Financial Accounting Standards Board) or the compliance with any directive of any Official Body (whether or not having the force of a Governmental Rule):"

2.5          Section 9.04(b) is hereby deleted in its entirety and replaced by the following.

"(b) If anyIndemnified Party shall have determined that, after the date hereof, the adoption of any applicable law, rule, standard or regulation by any Official Body regarding or related to capital adequacy, or any change therein, or any change in the interpretation thereof by any Official Body, or any directive regarding or related to capital adequacy (whether or not having the force of a Governmental Rule) of any such Official Body, has or would have the effect of reducing the rate of' return on capital of such Indemnified Party (or its parent) as a consequence of such Indemnified Party's obligations hereunder or with respect hereto to a level below that which such Indemnified Party (or its parent) could have achieved but for such adoption, change, request or directive (taking into consideration its policies with respect to capital adequacy) by an amount deemed by such Indemnified Party to be material, then from time to time, such additional amount or amounts as will compensate such Indemnified Party (or its parent) for such reduction shall be payable to such Indemnified Party in accordance with Section 9.05(c). For avoidance of doubt, any interpretation of Accounting Research Bulletin No.51 by the Financial Accounting Standards Board shall constitute an adoption, change, request or directive subject to this Section 9.04(b)."

3.           Effect of Amendment.  All provisions of the Agreement, as amended by this

Amendment, remain in full force and effect. After this Amendment becomes effective, all

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references in the Agreement (or in any other document governing the Seller's securitization program) to "this Agreement", "hereof", "herein" or words of similar effect referring to the Agreement shall be deemed to be references to the Agreement as amended by this Amendment. This Amendment shall not be deemed to expressly or impliedly waive, amend or supplement any provision of the Agreement other than as set forth herein.

4.           Counterparts.   This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, and each counterpart shall be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

5.           Governing Law.  This Amendment shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to any otherwise applicable principles of conflicts of law.

6.Section, Headings.  The various headings of this Amendment are inserted for convenience only and shall not affect the meaning or interpretation of this amendment or the Agreement or any provision hereof or thereof.

7.Extension.  By its signature hereto, each of the parties hereto hereby consents and agrees in writing to the extension of the Purchase Expiration Date out to January 21, 2004, and agrees that such extension shall take effect pursuant to Section 2.04 of the Agreement effective as of the date hereof.

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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.

NAVISTAR FINANCIAL SECURITIES CORPORATION

as Seller

By:  /s/ ANDREW J. CEDEROTH

Name:  Andrew J. Cederoth

Title:    Vice President and Treasurer

NAVISTAR FINANCIAL CORPORATION

as Servicer

By:  /s/ ANDREW J. CEDEROTH

Name:  Andrew J. Cederoth

Title:    Vice President and Treasurer

RECEIVABLES CAPITAL CORPORATION, as Conduit Purchaser

By:  /s/ EVELYN ECHEVARRIA

Name:  Evelyn Echevarria

Title:    Vice President

BANK OF AMERICA, NATIONAL ASSOCIATION

as Committed Purchaser

By:  /s/ KAREN P. LOUIE

Name:  Karen P. Louie

Title:    Vice President

BANK OF AMERICA, NATIONAL ASSOCIATION

as Administrative Agent

By:  /s/ KAREN P. LOUIE

Name:  Karen P. Louie

Title:    Vice President

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EX-10.109

EXTENSION TO AMENDED AND RESTATED

CERTIFICATE PURCHASE AGREEMENT

THIS EXTENSION TO AMENDED AND RESTATED CERTIFICATE PURCHASE AGREEMENT (this "Extension") dated as of December 19, 2005, is entered into among Navistar Financial Securities Corporation (the "Seller"), Navistar Financial Corporation ("Servicer"), Kitty Hawk Funding Corporation, ("KFFC"), as a ConduitPurchaser, Liberty Street Funding Corp. ("Liberty Street"), as a Conduit Purchaser, the Bank of Nova Scotia ("BNS") as a Managing Agent and a Committed Purchaser and Bank of America, National Association (Bank of America"), as a Managing Agent, the Administrative Agent and a Committed Purchaser.

RECITALS

A.The Seller, the Servicer, KHFC. Liberty Street, BNS and Bank of America are parties to that certain Amended and Restated Certificate Purchase Agreement, dated as of December 27, 2004 (as amended, supplemented or otherwise modified through the date hereof, the "Agreement").

B.Such parties desire to modify the Purchase Expiration Date under (and as defined in) the Agreement in accordance with Section 2.04 of the Agreement.

C.NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.Extension. The Purchase Expiration Date is extended to March 26, 2006, or, if earlier, the date specified in clause (ii) of the definition of Purchase Expiration Date in the Agreement as originally executed.

2.Effect of Extension. All provisions of the Agreement, as extended by this Extension, remain in full force andeffect. After this Extension becomes effective, all references in the Agreement to "this Agreement" "hereof" "herein" or words of similar effect referring to the Agreement in the Agreement or in anyother document relating to the Seller's securitization program shall be deemed to be references to the Agreement as extended by this Extension. This Extension shall not be deemed to expressly or impliedly waive, amend or supplement any provision of the Agreement other than as set forth herein.

3.Counterparts. This Extension may be executed in any number of counterparts and by different parties on separate counterparts, and each counterpart shall be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

4.Governing Law. This Extension shall be governed by, and construed in accordance with, the internal laws of the State of New York without regardto any otherwise applicable principles of conflicts of law.

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5.           Section Headings. The various headings of this Extension are inserted for convenience only and shall not affect the meaning or interpretation of this Extension or the Agreement or any provision hereof or thereof.

[signatures on next page]

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IN WITNESS WHEREOF, the parties have caused this Extension to be executed by their respective officers thereunto duly authorized, as of the date first above written.

NAVISTAR FINANCIAL SECURITIES CORPORATION,

as Seller

By:      /s/  PAUL MARTIN

Name:        Paul Martin

Title:          V.P. & Treasurer

NAVISTAR FINANCIAL CORPORATION,

as Servicer

By:     /s/   PAUL MARTIN

Name:        Paul Martin

Title:          V.P. & Treasurer

KITTY HAWK FUNDING CORPORATION,

as a Conduit Purchaser for the KHFC Purchaser Group

By:    /s/   JILL A. GORDON

Name:       Jill A. Gordon

Title:         Vice President

BANK OF AMERICA NATIONAL ASSOCIATION,

as Administrative Agent

By:    /s/   WILLEM VAN BEEK

Name:       Willem Van Beek

Title:         Principal

BANK OF AMERICA, NATIONAL ASSOCIATION,

as a Committed Purchaser and Managing Agent for the KHFC Purchaser Group

By:     /s/   WILLEM VAN BEEK

Name:        Willem Van Beek

Title:          Principal

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THE BANK OF NOVA SCOTIA,

as a Committed Purchaser and Managing Agent for the Liberty Street Purchaser Group

By:     /s/    NORMAN LAST

Name:         Norman Last

Title:           Managing Director

LIBERTY STREET FUNDING CORP.,

as a Conduit Purchaser for the Liberty Street Purchaser Group

By:    /s/     BERNARD J. ANGELO

Name:         Bernard J. Angelo

Title:           Vice President

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EX-10.110

Execution Copy

AMENDMENT, WAIVER AND EXTENSION TO

AMENDED AND RESTATED

CERTIFICATE PURCHASE AGREEMENT

THIS AMENDMENT, WAIVER AND EXTENSION TO AMENDED AND RESTATED CERTIFICATE PURCHASE AGREEMENT (this "Amendment") dated as of May 26, 2006, is entered into among Navistar Financial Securities Corporation (the "Seller"), Navistar Financial Corporation ("Servicer"), Kitty Hawk Funding Corporation, ("KHFC"), as a Conduit Purchaser, Liberty Street Funding Corp. ("Liberty Street"), as a Conduit Purchaser, the Bank of Nova Scotia ("BNS"), as a Managing Agent and a Committed Purchaser, and Bank of America, National Association ("Bank of America"), as a Managing Agent, the Administrative Agent and a Committed Purchaser.

RECITALS

A.The Seller, the Servicer, KHFC, Liberty Street, BNS and Bank of America are parties to that certain Amended and Restated Certificate Purchase Agreement, dated as of December 27, 2004 (as amended, supplemented or otherwise modified through the date hereof, the "Agreement"),

                B.Such parties desire to amend the Agreement as hereafter set forth.

C.Prior to giving effect to the amendment to Section 7A.01(c) of the Agreement set forth in Section 1 below, Section 7A.01 of the Agreement required that NFC furnish to the Administrative Agent as soon as available and in any event within 45 days after the end of each of the first three fiscal quarters of any fiscal year and 120 days after the end of the last fiscal quarter of any fiscal year, copies of the interim or annual, as applicable, financial statements of NFC, prepared in conformity with generally accepted accounting principles consistently applied. NFC has requested a waiver of any Default (defined below) arising from its failure to deliver copies of the annual and interim financial statements of the fiscal year ending October 2005 and the fiscal quarters ending January 31, April 30 and July 31 of 2006 on a timely basis (such failure, the "Reporting Default"). The parties hereto hereby agrees to waive the occurrence of any Default to the extent described below.

D.Such parties desire to modify the Purchase Expiration Date under (and as defined in) the Agreement in accordance with Section 2.04 of the Agreement.

E.NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.            Amendments to Agreement. By their signatures hereto, each of the parties hereto hereby agrees to the following amendments to the Agreement:

                (i )            The Agreement is hereby amended by amending and restating Section 7A.0 1(c) of the Agreement in its entirety to read as follows:

E-45

(c) (1) as soon as available and in any event within (i) 45 days after the end of each of the first three fiscal quarters of any fiscal year and (ii) 120 days after the end of the last fiscal quarter of any fiscal year, copies of the interim or annual, as applicable, financial statements of NFC, prepared in conformity with generally accepted accounting principles consistently applied; provided, however that NFC shall not be required to deliver its financial statements for fiscal year 2005 and for the fiscal quarters ending January 31, April 30 and July 31 of 2006 until the earlier to occur of January 31, 2007 and five (5) Business Days after the filing thereof with the SEC and (2) as soon as available and in any event within 30 days after the end of each month, the monthly management financial reports required to be delivered pursuant to the Amended and Restated Credit Agreement dated as of July 1, 2005, among the Servicer, Bank of America, and BNS, among others; provided, however, that such reporting shall not be required so long as the Servicer's parent has filed all reports with the Securities and Exchange Commission required pursuant to Section 13 of the Exchange Act.

(ii )The definition of "Maximum Funded Amount" contained in Section 1.01 of the Agreement is hereby amended by replacing the amount "$400,000,000" contained therein with the amount "$600,000,000"; and

(iii)the Purchaser Percentage and Commitment for the Committed Purchasers are amended and restated to read as set forth on the signature page to this Amendment.

2.            Waiver. By their signatures hereto, each of the parties hereto waives any condition or covenant that has not been satisfied, the breach of any representation or warranty made or deemed made, and any occurrence of an EarlyAmortization Event, event of default, event of termination or similar event (in each case, with respect to all of the foregoing, whether such event is matured or unmatured and collectively referred to herein as a "Default"), under the Agreement, solely to the extent such Default was caused directly by or resulted directly from (a) the Reporting Default, (b) a breach of any representation or warranty in Section 5.01(1) or 5.020(j) of the Agreement resulting from or arising out of any restatement, in connection with the audit conducted for the fiscal year ended October 2005, of any financial statements of NFC or any of its affiliates for any period ending on or before July 31, 2005, or any reports, financial statements, certificates or other information containing similar or derived information therefrom with respect to such periods or (c) the failure of NFC, as Servicer, to deliver the reports contemplated by, and due on or about April 15, 2006 pursuant to, Section 3.06(a) and (b) of the Pooling and Servicing Agreement (as defined in the Agreement) by April 15, 2006; provided that such reports shall be delivered on or before January 31, 2007. Each party (other than NFC and the Seller) hereto hereby expressly reserves, and nothing herein shall be construed as a waiver of NFC's failure to comply with Section 7A.01(c), as amended hereby, any Event of Default (as defined in the Pooling and Servicing Agreement) occurring as a result of the failure referred to in clause (c) without the consent of, or at the direction of, KHFC, Liberty Street, BNS or Bank of America, or NFC's failure to deliver the reports referred to in the immediately

E-46

preceding sentence on or before the earlier of (i ) five (5) Business Days after the filing thereof with the SEC and (ii) January 31, 2007.

3.Extension. The Purchase Expiration Date is extended to May 24, 2007, or, if earlier, the date specified in clause (ii) of the definition of Purchase Expiration Date in the Agreement as originally executed.

4.Representations and Warranties. The Seller hereby represents and warrants to KHFC, Liberty Street, BNS and Bank of America that, after giving effect to this Amendment, no Early Amortization Event has occurred and is now continuing, and NFC hereby represents and warrants that, after giving effect to this Amendment, no Early Amortization Eventor Servicer Termination Event has occurred and is now continuing.

5.Effect of Amendment. All provisions of the Agreement, as extended by this Amendment, remain in full force and effect. After this Amendment becomes effective, all references in the Agreement to "this Agreement", "hereof", "herein" or words of similar effect referring to the Agreement in the Agreement or in any other document relating to the Seller's securitization program shall be deemed to be references to the Agreement as extended by this Amendment. This Amendment shall not be deemed to expressly or impliedly waive, amend or supplement any provision of the Agreement other than as set forth herein.

6.Conditions Precedent. The effectiveness of this Amendment is subject to the satisfaction of the following conditions:

(i )each fee specified in the Fee Letter as being due on or prior to the date hereof shall have been paid; and

(ii)the Seller shall have furnished to the Administrative Agent and the Managing Agent bring-down opinions to each of the opinions delivered on or about December 27, 2004, and such other information, certificates and documents as the Administrative Agent and the Managing Agents may reasonably requests.

7.Counterparts. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, and each counterpart shall be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

8.Governing Law. This Amendment shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to any otherwise applicable principles of conflicts of law.

9.Section Headings. The various headings of this Amendment are inserted for convenience only and shall not affect the meaning or interpretation of this Amendment or the Agreement or any provision hereof or thereof.

[signatures on next pages]

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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.

NAVISTAR FINANCIAL SECURITIES CORPORATION,

as Seller

By:      /s/  JOHN V. MULVANEY, SR.

Name:        John V. Mulvaney, Sr.

Title:          V. P. Controller

NAVISTAR FINANCIAL CORPORATION,

as Service

By:     /s/   JOHN V. MULVANEY, SR.

Name:        John V. Mulvaney, Sr.

Title:          V. P. Controller

KITTY HAWK FUNDING CORPORATION,

as a Conduit Purchaser for the KHFC Purchaser Group

By:      /s/  JILL A. GORDON

Name:        Jill A. Gordon

Title:         Vice President

BANK OF AMERICA, NATIONAL ASSOCIATION,

By:     /s/  WILLEM VAN BEEK

Name:       Willem Van Beek

Title:         Principal

BANK OF AMERICA, NATIONAL ASSOCIATION,

as a Committed Purchaser and Managing Agent for the KHFC Purchaser Group

By:    /s/   WILLEM VAN BEEK

Name:       Willem Van Beek

Title:         Principal

Purchase Percentage:  33 1/3%

Commitment:  $200,000,000

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THE BANK OF NOVA SCOTIA,

as a Committed Purchaser and Managing Agent for the Liberty Street Purchase Group

By:   /s/   NORMAN LAST

Name:      Norman Last

Title:        Managing Director

Purchaser Percentage:  66 2/3%

Commitment:  $400,000,000

LIBERTY STREET FUNDING CORP.

As a conduit Purchaser for the Liberty Street Purchaser Group

By:    /s/   TONY WONG

Name:       Tony Wong

Title:         Vice President

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EX-10.111

EXECUTION COPY

AMENDMENT, WAIVER AND EXTENSION TO

AMENDED AND RESTATED

CERTIFICATE PURCHASE AGREEMENT

THIS AMENDMENT, WAIVER AND EXTENSION TO AMENDED AND RESTATED CERTIFICATE PURCHASE AGREEMENT (this "Amendment") dated as of January 31, 2007, is entered into among Navistar Financial Securities Corporation (the "Seller"), Navistar Financial Corporation ("Servicer"), Kitty Hawk Funding Corporation, ("KHFC"), as a Conduit Purchaser, Liberty Street Funding Corp. ("Liberty Street"), as a Conduit Purchaser, The Bank of Nova Scotia ("BNS"), as a Managing Agent and a Committed Purchaser, and Bank of America, National Association ("Bank of America"), as a Managing Agent, the Administrative Agent and a Committed Purchaser.

RECITALS

A.The Seller, the Servicer, KHFC, Liberty Street, BNS and Bank of America are parties to that certain Amended and Restated Certificate Purchase Agreement, dated as of December 27, 2004 (as amended, supplemented or otherwise modified through the date hereof, the "Agreement").

B.Such parties desire to amend the Agreement as hereafter set forth.

C.Prior to giving effect to the amendment to Section 7A.01(c) of the Agreement set forth in Section 1 below, Section 7A.01 of the Agreement required that NFC furnish to the Administrative Agent as soon as available and in any event within 45 days after the end of each of the first three fiscal quarters of any fiscal year and 120 days after the end of the last fiscal quarter of any fiscal year, copies of the interim or annual, as applicable, financial statements of NFC, prepared in conformity with generally accepted accounting principles consistently applied. NFC has requested a waiver of any Default (defined below) arising from its failure to deliver copies of the annual and interim financial statements of the fiscal year ending October 2005, the fiscal quarters ending January 31, April 30 and July 31 of 2006, the fiscal year ending October 2006, and the fiscal quarters ending January 31, April 30 and July 31, 2007 on a timely basis (such failure, the "Reporting Default"). The parties hereto hereby agrees to waive the occurrence of any Default to the extent described below.

D.Such parties desire to modify the Purchase Expiration Date under (and as defined in) the Agreement in accordance with Section 2.04 of the Agreement.

E.NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.            Amendments to Agreement. By their signatures hereto, each of the parties hereto hereby agrees that the Agreement is hereby amended by amending and restating Section 7A.01(c) of the Agreement in its entirety to read as follows:

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(c) (1) as soon as available and in any event within (i) 45 days after the end of each of the first three fiscal quarters of any fiscal year and (ii) 120 days after the end of the last fiscal quarter of any fiscal year, copies of the interim or annual, as applicable, financial statements of NFC, prepared in conformity with generally accepted accounting principles consistently applied; provided, however that NFC shall not be required to deliver its financial statements for fiscal years 2005 and 2006 and for the fiscal quarters ending January 31, April 30 and July 31 of 2006 and for the fiscal quarters ending January 31, April 30 and July 31 of 2007 until the earlier to occur of October 31, 2007 and five (5) Business Days after the filing thereof with the SEC and (2) as soon as available and in any event within 30 days after the end of each month, the monthly management financial reports required to be delivered pursuant to the Amended and Restated Credit Agreement dated as of July 1, 2005, and the Third Waiver and Consent, dated as of November 20, 2006, among the Servicer, Bank of America, and BNS, among others; provided, however, that such reporting shall not be required so long as the Servicer's parent has filed all reports with the Securities and Exchange Commission required pursuant to Section 13 of the Exchange Act.

2.            Waiver. By their signatures hereto, each of the parties hereto waives any condition or covenant that has not been satisfied, the breach of any representation or warranty made or deemed made, and any occurrence of an Early Amortization Event, event of default, event of termination or similar event (in each case, with respect to all of the foregoing, whether such event is matured or unmatured and collectively referred to herein as a "Default"), under the Agreement, solely to the extent such Default was caused directly by or resulted directly from (a) the Reporting Default, (b) a breach of any representation or warranty in Section 5.01(l) or 5.02(j) of the Agreement resulting from or arising out of any restatement, in connection with the audit conducted for the fiscal year ended October 2005, or October 31, 2006, of any financial statements of NFC or any of its affiliates for any period ending on or before the expiration of the waiver contemplated herein, or any reports, financial statements, certificates or other information containing similar or derived information therefrom with respect to such periods or (c) the failure of NFC, as Servicer, to deliver the reports contemplated by, and due on or about April 15, 2006 and to be due April 15, 2007 pursuant to, Section 3.06(a) and (b) of the Pooling and Servicing Agreement (as defined in the Agreement) by April 15, 2006 and April 15, 2007, respectively, provided that each such report shall be delivered on or before October 31, 2007. Each party (other than NFC and the Seller) hereto hereby expressly reserves, and nothing herein shall be construed as a waiver of NFC's failure to comply with Section 7A.01(c), as amended hereby, any Event of Default (as defined in the Pooling and Servicing Agreement) occurring as a result of the failure referred to in clause (c) without the consent of, or at the direction of, KHFC, Liberty Street, BNS or Bank of America, or NFC's failure to deliver the reports referred to in the immediately preceding sentence on or before the earlier of (i ) five (5) Business Days after the filing thereof with the SEC and (ii) October 31, 2007.

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3. Extension. The Purchase Expiration Date is extended to January 30, 2008, or, if earlier, the date specified in clause (ii) of the definition of Purchase Expiration Date in the Agreement as originally executed.

4.Representations and Warranties. The Seller hereby represents and warrants to KHFC, Liberty Street, BNS and Bank of America that, after giving effect to this Amendment, no Early Amortization Event has occurred and is now continuing, and NFC hereby represents and warrants that, after giving effect to this Amendment, no Early Amortization Event or Servicer Termination Event has occurred and is now continuing.

5.Effect of Amendment. All provisions of the Agreement, as extended by this Amendment, remain in full force and effect. After this Amendment becomes effective, all references in the Agreement to "this Agreement", "hereof', "herein" or words of similar effect referring to the Agreement in the Agreement or in any other document relating to the Seller's securitization program shall be deemed to be references to the Agreement as extended by this Amendment. This Amendment shall not be deemed to expressly or impliedly waive, amend or supplement any provision of the Agreement other than as set forth herein.

6.Conditions Precedent. The effectiveness of this Amendment is subject to the receipt of each fee specified in the fee letter, dated as of the date hereof, and the effectiveness of the extension of the Purchase Expiration Date set forth in Section 3 hereof is subject to the receipt by each Managing Agent no later than February 15, 2007 (or such later date as each Managing Agent shall have agreed in writing) of the agreed upon procedures report of KPMG LLP, dated not earlier than the date hereof, and if such report shall not be reasonably acceptable to each Managing Agent, no later than March 15, 2007 (or such later date as each Managing Agent shall have agreed in writing), a revised agreed upon procedures report of KPMG LLP, dated not earlier than the date hereof, reasonably acceptable to each Managing Agent.

7.Counterparts. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, and each counterpart shall be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

8.Governing Law. This Amendment shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to any otherwise applicable principles of conflicts of law.

9.Section Headings. The various headings of this Amendment are inserted for convenience only and shall not affect the meaning or interpretation of this Amendment or the Agreement or any provision hereof or thereof.

[signatures on next page]

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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.

NAVISTAR FINANCIAL SECURITIES CORPORATION, as Seller

By:      /s/ JOHN V. MULVANEY, SR.

Name:       John V. Mulvaney, Sr.

Title:         V.P, CFO & Treasurer

NAVISTAR FINANCIAL CORPORATION, as Servicer

By:     /s/ JOHN V. MULVANEY, SR.

Name:      John V. Mulvaney, Sr.

Title:        V.P., CFO & Treasurer

KITTY HAWK FUNDING CORPORATION,

     as a Conduit Purchaser for the KHRC Purchaser Group

By:     /s/ AMY S. KEITH

Name:     Amy S. Keith

Title:       Vice President

BANK OF AMERICA, NATIONAL ASSOCIATION,

   as Administrative Agent

By:     /s/  WILLEM VAN BEEK

Name:       Willem Van Beek

Title:         Principal

BANK OF AMERICA, NATIONAL ASSOCIATION,

as a Committed Purchaser and Managing Agent for the KHFC Purchaser Group

By:     /s/  WILLEM VAN BEEK

Name:       Willem Van Beek

Title:          Principal

Purchaser Percentage: 50%

Commitment: $400,000,000

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BANK OF NOVA SCOTIA,

as Committed Purchaser and Managing Agent for the Liberty Street Purchaser Group

By:    /s/  DARREN WARD

Name:      Darren Ward

Title:        Director

Purchaser Percentage: 50%

Commitment: $400,000,000

LIBERTY STREET FUNDING CORP.

as a Conduit Purchaser for the Liberty Street Purchaser Group

By:      /s/ JILL A. GORDON

Name:       Jill A. Gordon

Title:         Vice President

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EX-10.112

EXECUTION COPY

RECEIVABLES PURCHASE AGREEMENT

DATED AS OF April 8, 2004

Among

TRUCK RETAIL ACCOUNTS CORPORATION, AS SELLER,

NAVISTAR FINANCIAL CORPORATION, AS SERVICER,

JUPITER SECURITIZATION CORPORATION, AS CONDUIT

and

BANK ONE, NA (MAIN OFFICE CHICAGO),

AS AGENT

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RECEIVABLES PURCHASE AGREEMENT

THIS RECEIVABLES PURCHASE AGREEMENT dated as of April 8, 2004 is among Truck Retail Accounts Corporation, a Delaware corporation ("Seller"), Navistar Financial Corporation, a Delaware corporation ("Navistar"), as initial Servicer (Navistar, together with Seller, the "Seller Parties" and each a "Seller Party"), the entities listed on Schedule A to this Agreement (together with any of their respective successors and assigns hereunder, the "Financial Institutions"), Jupiter Securitization Corporation ("Conduit') and Bank One, NA (Main Office Chicago), as agent for the Purchasers hereunder or any successor agent hereunder (together with its successors and assigns hereunder, the "Agent"). Unless defined elsewhere herein, capitalized terms used in this Agreement shall have the meanings assigned to such terms in Exhibit I.

PRELIMINARY STATEMENTS

Seller desires to transfer and assign Purchaser Interests to the Purchasers from time to time.

Conduit may, in its absolute and sole discretion, purchase Purchaser Interests from Seller from time to time.

In the event that Conduit declines to make any purchase, the Financial Institutions shall, at the request of Seller, purchase Purchaser Interests from time to time. In addition, the Financial Institutions have agreed to provide a liquidity facility to Conduit in accordance with the terms hereof.

Bank One, NA (Main Office Chicago) has been requested and is willing to act as Agent on behalf of Conduit and the Financial Institutions in accordance with the terms hereof.

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I.

PURCHASE ARRANGEMENTS

     Section 1.1               Purchase Facility.

(a)            Upon the terms and subject to the conditions hereof, Seller may, at its option, sell and assign Purchaser Interests to the Agent for the benefit of one or more of the Purchasers. In accordance with the terms and conditions set forth herein, Conduit may, at its option, instruct the Agent to purchase on behalf of Conduit, or if Conduit shall decline to purchase, the Agent shall purchase, on behalf of the Financial Institutions, Purchaser Interests from time to time during the period from the date hereof to but not including the Facility Termination Date in an aggregate amount not to exceed at such time the lesser of (i) the Purchase Limit and (ii) the aggregate amount of the Commitments then outstanding.

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(b)            Seller may, upon at least 10 Business Days' notice to the Agent, terminate in whole or reduce in part, ratably among the Financial Institutions, the unused portion of the Purchase Limit; provided that each partial reduction of the Purchase Limit shall be in an amount equal to $5,000,000 or an integral multiple thereof.

Section 1.2                                Increases. Seller shall provide the Agent with at least two (2) Business Days' prior notice in a form set forth as Exhibit II hereto of each Incremental Purchase (a "Purchase Notice"). Each Purchase Notice shall be subject to Section 6.2 hereof and, except as set forth below, shall be irrevocable and shall specify the requested Purchase Price (which shall not be less than $1,000,000) and date of purchase and, in the case of an Incremental Purchase to be funded by the Financial Institutions, the requested Discount Rate and Tranche Period. Following receipt of a Purchase Notice, the Agent will determine whether Conduit agrees to make the purchase. If Conduit declines to make a proposed purchase, Seller may cancel the Purchase Notice or, in the absence of such a cancellation, the Incremental Purchase of the Purchaser Interest will be made by the Financial Institutions. On the date of each Incremental Purchase, upon satisfaction of the applicable conditions precedent set forth in Article VI, Conduit or the Financial Institutions, as applicable, shall deposit to the Facility Account, in immediately available funds, no later than 12:00 noon (Chicago time), an amount equal to (i) in the case of Conduit, the aggregate Purchase Price of the Purchaser Interests Conduit is then purchasing or (ii) in the case of a Financial Institution, such Financial Institution's Pro Rata Share of the aggregate Purchase Price of the Purchaser Interests the Financial Institutions are purchasing. Only five (5) Purchase Notices may be presented in any calendar month; provided, however, at any time daily settlement is occurring, a Purchase Notice for each Business Day may be presented.

Section 1.3                                Decreases. Seller shall provide the Agent with prior written notice in conformity with the Required Notice Period in the form set forth as Exhibit XII hereto (a "Reduction Notice") of any proposed reduction of Aggregate Capital from Collections or the Facility Account. Such Reduction Notice shall designate (i) the date (the "Proposed Reduction Date") upon which any such reduction of Aggregate Capital shall occur (which date shall give effect to the applicable Required Notice Period), and (ii) the amount of Aggregate Capital to be reduced which shall be applied ratably to the Purchaser Interests of Conduit and the Financial Institutions in accordance with the amount of Capital (if any) owing to Conduit, on the one hand, and the amount of Capital (if any) owing to the Financial Institutions (ratably, based on their respective Pro Rata Shares), on the other hand (the "Aggregate Reduction "). Only one (1) Reduction Notice shall be outstanding at any time.

Section 1.4                                Payment Requirements. All amounts to be paid or deposited by any Seller Party pursuant to any provision of this Agreement shall be paid or deposited by such Seller Party or its agent in accordance with the terms hereof no later than 11:00 a.m. (Chicago time) on the day when due in immediately available funds, and if not received before 11:00 a.m. (Chicago time) shall be deemed to be received on the next succeeding Business Day. If such amounts are payable to a Purchaser they shall be paid to the Agent, for the account of such Purchaser, at 1 Bank One Plaza, Chicago, Illinois 60670 until otherwise notified by the Agent.

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All computations of Yield, per annum fees calculated as part of any CP Costs, per annum fees hereunder and per annum fees under the Fee Letter shall be made on the basis of a year of 360 days for the actual number of days elapsed; provided, however, that any interest computed using the Prime Rate shall be calculated on the basis of a 365 or 366 day year, as applicable, and the actual number of days elapsed. If any amount hereunder shall be payable on a day which is not a Business Day, such amount shall be payable on the next succeeding Business Day.

ARTICLE II.

PAYMENTS AND COLLECTIONS

Section 2.1                                Payments. Notwithstanding any limitation on recourse contained in this Agreement, Seller shall immediately pay to the Agent when due on a full recourse basis, (i) such fees as set forth in the Fee Letter (the fees of Financial Institutions shall not exceed and shall be paid by Agent from the fees set forth in the Fee Letter except as otherwise specified hereunder), (ii) all CP Costs, (iii) all amounts payable as Yield, (iv) all amounts payable as Deemed Collections (which shall be immediately due and payable by Seller and applied to reduce outstanding Aggregate Capital hereunder in accordance with Sections 2.2 and 2.3 hereof), (v) all amounts required pursuant to Section 2.6, (vi) all amounts payable pursuant to Article X, if any, (vii) all Servicer costs and expenses, including the Servicing Fee, in connection with servicing, administering and collecting the Receivables (which shall be distributed by Agent in accordance with Section 2.4), (viii) all Broken Funding Costs and (ix) all Default Fees (collectively, the "Obligations"). If Seller fails to pay any of the Obligations when due, Seller agrees to pay, on demand, the Default Fee in respect thereof until paid, such Default Fee shall not be applicable with respect to the failure to pay CP Costs and Yield unless and until the Agent shall have provided any notice with respect to CP Costs and Yield as required herein. Notwithstanding the foregoing, no provision of this Agreement or the Fee Letter shall require the payment or permit the collection of any amounts hereunder in excess of the maximum permitted by applicable law. If at any time Seller receives any Collections or is deemed to receive any Collections, Seller shall immediately pay such Collections or Deemed Collections to the Servicer for application in accordance with the terms and conditions hereof and, at all times prior to such payment, such Collections or Deemed Collections shall be held in trust by Seller for the exclusive benefit of the Purchasers and the Agent and, with respect to the Servicer costs, the Servicer. Upon payment of Deemed Collections in cash with respect to any Receivable for which such Deemed Collections paid in cash equals the Outstanding Balance of such Receivable, such Receivable shall be deemed to be transferred to the Seller and shall become the property of the Seller for all purposes. With respect to any Receivable for which such Deemed Collections paid in cash are less than the Outstanding Balance of such Receivable, the Seller shall be entitled to any Collections received with respect to such Receivable in excess of the Outstanding Balance of such Receivable not offset by a Deemed Collection.

Section 2.2                           Collections Prior to Amortization. Prior to the Amortization Date, any Collections and/or Deemed Collections received by the Servicer shall be set aside and held in trust by the Servicer for the payment of any accrued and unpaid Aggregate Unpaids or for a Reinvestment as provided in this Section 2.2. If at any time any Collections are received by the Servicer prior to the Amortization Date, (i) the Servicer shall set aside the Termination

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Percentage (hereinafter defined) of Collections evidenced by the Purchaser Interests of each Terminating Financial Institution and (ii) Seller hereby requests and the Purchasers (other than any Terminating Financial Institutions) hereby agree to make, simultaneously with such receipt, a reinvestment (each a "Reinvestment") with that portion of the balance of collections received by the Servicer that is part of any Purchaser Interest (other than any Purchaser Interests of Terminating Financial Institutions), such that after giving effect to such Reinvestment, the amount of Capital of such Purchaser Interest immediately after such receipt and corresponding Reinvestment shall be equal to the amount of Capital immediately prior to such receipt and such amounts shall be remitted from the Servicer to Seller on such date. On each Weekly Settlement Date prior to the occurrence of the Amortization Date, the Servicer shall remit to the Agent's account the amounts set aside during the preceding week that have not been subject to a Reinvestment and apply such amounts (if not previously paid in accordance with Section 2.1), to reduce the Capital of all Purchaser Interests of Terminating Financial Institutions, applied ratably to each Terminating Financial Institution according to its respective Termination Percentage. If such Capital shall be reduced to zero, any additional Collections received by the Servicer (i) if applicable, shall be remitted to the Agent's account no later than 12:00 noon (Chicago time) to the extent required to fund any Aggregate Unpaids on such Weekly Settlement Date and (ii) any balance remaining thereafter shall be remitted from the Servicer to Seller on such Weekly Settlement Date. On each Monthly Settlement Date prior to the occurrence of the Amortization Date, the Servicer shall remit to the Agent's account the amounts set aside during the preceding Settlement Period that have not been subject to a Reinvestment and apply such amounts (if not previously paid in accordance with Section 2.1) first, to reduce unpaid CP Costs, Yield and other Obligations and second, to reduce the Capital of all Purchaser Interests of Terminating Financial Institutions, applied ratably to each Terminating Financial Institution according to its respective Termination Percentage. If such Capital, CP Costs, Yield and other Obligations shall be reduced to zero, any additional Collections received by the Servicer (i) if applicable, shall be remitted to the Purchasers' account no later than 11:00 a.m. (Chicago time) to the extent required to fund any Aggregate Unpaids on such Monthly Settlement Date and (ii) any balance remaining thereafter shall be remitted from the Servicer to Seller on such Monthly Settlement Date. Each Terminating Financial Institution shall be allocated a ratable portion of Collections from the date of any assignment by Conduit pursuant to Section 13.6 (the "Termination Date') until such Terminating Financing Institution's Capital shall be paid in full. This ratable portion shall be calculated on the Termination Date of each Terminating Financial Institution as a percentage equal to (i) Capital of such Terminating Financial Institution outstanding on its Termination Date, divided by (ii) the Aggregate Capital outstanding on such Termination Date (the "Termination Percentage"). Each Terminating Financial Institution's Termination Percentage shall remain constant prior to the Amortization Date. On and after the Amortization Date, each Termination Percentage shall be disregarded, and each Terminating Financial Institution's Capital shall be reduced ratably with all Financial Institutions in accordance with Section 2.3.

Section 2.3                                Collections Following Amortization. On the Amortization Date and on each day thereafter, the Servicer shall set aside and hold in trust, for the holder of each Purchaser Interest, all Collections received on such day and any additional amount received from Seller for the payment of any accrued and unpaid Obligations owed by Seller and not previously paid by Seller in accordance with Section 2.1. On and after the Amortization Date, the Servicer shall, at any time upon the request from time to time by (or pursuant to standing instructions from) the

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Agent (i) remit to the Agent's account the amounts set aside pursuant to the preceding sentence, and (ii) apply such amounts to reduce the Capital associated with each such Purchaser Interest and any other Aggregate Unpaids.

Section 2.4                                Application of Collections. If there shall be insufficient funds on deposit for the Servicer to distribute funds in payment in full of the aforementioned amounts pursuant to Section 2.2 or 2.3 (as applicable), the Servicer shall distribute funds:

first,to the payment of the Servicer's reasonable out-of-pocket costs and expenses in connection with servicing, administering and collecting the Receivables, including the Servicing Fee, if Seller or one of its Affiliates is not then acting as the Servicer,

second,to the reimbursement of the Agent's costs of collection and enforcement of this Agreement,

third, ratably to the payment of all accrued and unpaid fees under the Fee Letter, CP Costs and Yield,

fourth, (to the extent applicable) to the ratable reduction of the Aggregate Capital (without regard to any Termination Percentage),

fifth,for the ratable payment of all other unpaid Obligations, provided that to the extent such Obligations relate to the payment of Servicer costs and expenses, including the Servicing Fee, when Seller or one of its Affiliates is acting as the Servicer, such costs and expenses will not be paid until after the payment in full of all other Obligations, and

sixth,after the Aggregate Unpaids have been indefeasibly reduced to zero, to Seller.

Collections applied to the payment of Aggregate Unpaids shall be distributed in accordance with the aforementioned provisions, and, giving effect to each of the priorities set forth above in this Section 2.4, shall be shared ratably (within each priority) among the Agent and the Purchasers in accordance with the amount of such Aggregate Unpaids owing to each of them in respect of each such priority.

Section 2.5                               Payment Rescission. No payment of any of the Aggregate Unpaids shall be considered paid or applied hereunder to the extent that, at any time, all or any portion of such payment or application is rescinded by application of law or judicial authority, or must otherwise be returned or refunded for any reason. Seller shall remain obligated for the amount of any payment or application so rescinded, returned or refunded, and shall promptly pay to the Agent (for application to the Person or Persons who suffered such rescission, return or refund) the full amount thereof, plus the Default Fee from the date of any such rescission, return or refunding.

Section 2.6                                Maximum Purchaser Interests. Seller shall ensure that the Purchaser Interests of the Purchasers shall at no time exceed in the aggregate 100%. If the aggregate of the Purchaser Interests of the Purchasers exceeds 100%, Seller shall pay to the Agent within two (2) Business Days an amount to be applied to reduce the Aggregate Capital (as allocated by the Agent), such that after giving effect to such payment the aggregate of the Purchaser Interests equals or is less than 100%.

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Section 2.7                                Clean Up Call. In addition to Seller's rights pursuant to Section 1.3, Seller shall have the right (after providing written notice to the Agent in accordance with the Required Notice Period), at any time following the reduction of the Aggregate Capital to a level that is less than 10.0% of the original Purchase Limit, to repurchase from the Purchasers all, but not less than all, of the then outstanding Purchaser Interests. The purchase price in respect thereof shall be an amount equal to the Aggregate Unpaids through the date of such repurchase, payable in immediately available funds. Such repurchase shall be without representation, warranty or recourse of any kind by, on the part of, or against any Purchaser or the Agent.

ARTICLE III.

CONDUIT FUNDING

Section 3.1                                CP Costs. Seller shall pay CP Costs with respect to the Capital associated with each Purchaser Interest of Conduit for each day that any Capital in respect of such Purchaser Interest is outstanding. Each Purchaser Interest funded substantially with Pooled Commercial Paper will accrue CP Costs each day on a pro rata basis, based upon the percentage share the Capital in respect of such Purchaser Interest represents in relation to all assets held by Conduit and funded substantially with related Pooled Commercial Paper.

Section 3.2                                CP Costs Payments. On each Monthly Settlement Date, Seller shall pay to the Agent (for the benefit of Conduit) an aggregate amount equal to all accrued and unpaid CP Costs in respect of the Capital associated with all Purchaser Interests of Conduit for the immediately preceding Accrual Period in accordance with Article II.

Section 3.3                              Calculation of CP Costs. On the second Business Day after each Accrual Period, Conduit shall calculate the aggregate amount of CP Costs allocated to the Capital of the Purchaser Interests for the applicable Accrual Period and shall notify Seller of such aggregate amount.

ARTICLE IV.

FINANCIAL INSTITUTION FUNDING

Section 4.1                                Financial Institution Funding. Each Purchaser Interest of the Financial Institutions shall accrue Yield for each day during its Tranche Period at either the LIBO Rate or the Prime Rate in accordance with the terms and conditions hereof. Until Seller gives notice to the Agent of another Discount Rate in accordance with Section 4.4, the initial Discount Rate for any Purchaser Interest transferred to the Financial Institutions by Conduit pursuant to the terms and conditions hereof shall be the Prime Rate. If the Financial Institutions acquire by assignment from Conduit any Purchaser Interest pursuant to Article XIII, each Purchaser Interest so assigned shall be deemed to have a new Tranche Period commencing on the date of any such assignment.

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Section 4.2                               Yield Payments. On the Monthly Settlement Date for each Purchaser Interest of the Financial Institutions, Seller shall pay to the Agent (for the benefit of the Financial Institutions) an aggregate amount equal to the accrued and unpaid Yield for the entire Tranche Period of each such Purchaser Interest in accordance with Article II.

             Section 4.3                              Selection and Continuation of Tranche Periods.

(a)  With consultation from (and approval by) the Agent, Seller shall from time to time request Tranche Periods for the Purchaser Interests of the Financial Institutions, provided that, if at any time the Financial Institutions shall have a Purchaser Interest, Seller shall always request Tranche Periods such that at least one Tranche Period shall end on the date specified in clause (A) of the definition of Monthly Settlement Date.

(b)  Seller or the Agent, upon notice to and consent by the other received at least three (3) Business Days prior to the end of a Tranche Period (the "Terminating Tranche") for any Purchaser Interest, may, effective on the last day of the Terminating Tranche: (i) divide any such Purchaser Interest into multiple Purchaser Interests, (ii) combine any such Purchaser Interest with one or more other Purchaser Interests that have a Terminating Tranche ending on the same day as such Terminating Tranche or (iii) combine any such Purchaser Interest with a new Purchaser Interest to be purchased on the day such Terminating Tranche ends, provided, that in no event may a Purchaser Interest of Conduit be combined with a Purchaser Interest of the Financial Institutions.

Section 4.4                                Financial Institution Discount Rates. Seller may select the LIBO Rate or the Prime Rate for each Purchaser Interest of the Financial Institutions. Seller shall by 11:00 a.m. (Chicago time): (i) at least three (3) Business Days prior to the expiration of any Terminating Tranche with respect to which the LIBO Rate is being requested as a new Discount Rate and (ii) at least one (1) Business Day prior to the expiration of any Terminating Tranche with respect to which the Prime Rate is being requested as a new Discount Rate, give the Agent irrevocable notice of the new Discount Rate for the Purchaser Interest associated with such Terminating Tranche. Until Seller gives notice to the Agent of another Discount Rate, the initial Discount Rate for any Purchaser Interest transferred to the Financial Institutions pursuant to the terms and conditions hereof shall be the Prime Rate.

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Section 4.5                                Suspension of the LIBO Rate. If any Financial Institution notifies the Agent that (i) funding its Pro Rata Share of the Purchaser Interests of the Financial Institutions at a LIBO Rate would violate any applicable law, rule, regulation, or directive of any governmental or regulatory authority, whether or not having the force of law, (ii) deposits of a type and maturity appropriate to match fund its Purchaser Interests at such LIBO Rate are not available or (iii) such LIBO Rate does not accurately reflect the cost of acquiring or maintaining a Purchaser Interest at such LIBO Rate for such Financial Institution, then the Agent shall suspend the availability of such LIBO Rate for such Financial Institution and require Seller to select the Prime Rate for any Purchaser Interest accruing Yield at such LIBO Rate for such Financial Institution.

ARTICLE V.

REPRESENTATIONS AND WARRANTIES

Section 5.1                                Representations and Warranties of The Seller Parties. Each Seller Party hereby represents and warrants to the Agent and the Purchasers, as to itself, as of the date hereof and as of the date of each Incremental Purchase and the date of each Reinvestment that:

(a)  Corporate Existence and Power. Such Seller Party is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation. Such Seller Party is duly qualified to do business and is in good standing as a foreign corporation, and has and holds all corporate power and all governmental licenses, authorizations, consents and approvals required to carry on its business in each jurisdiction in which its business is conducted except where the failure to so qualify or so hold would not reasonably be expected to have a Material Adverse Effect.

(b)  Power and Authority; Due Authorization, Execution and Delivery. The execution and delivery by such Seller Party of this Agreement and each other Transaction Document to which it is a party, and the performance of its obligations hereunder and thereunder and, in the case of Seller, Seller's use of the proceeds of purchases made hereunder, are within its corporate powers and authority and have been duly authorized by all necessary corporate action on its part. This Agreement and each other Transaction Document to which such Seller Party is a party has been duly executed and delivered by such Seller Party.

(c)  No Conflict. The Transactions do not contravene or violate (i) such Seller Party's certificate or articles of incorporation or by-laws, (ii) any law, rule or regulation applicable to such Seller Party, (iii) any restrictions under any agreement, contract or instrument to which such Seller Party is a party or by which it or any of such Seller Party's property is bound, or (iv) any order, writ, judgment, award, injunction or decree binding on or affecting such Seller Party or such Seller Party's property, and do not result in the creation or imposition of any Adverse Claim on assets of such Seller Party or its Subsidiaries (except as created hereunder and, with respect to clauses (ii), (iii) and (iv), except as would not reasonably be expected to result in a Material Adverse Effect); and no transaction contemplated hereby requires any action to be taken to comply with any bulk sales act or similar law.

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(d)  Governmental Authorization. The Transactions do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except (A) such as have been obtained or made and are in full force and effect, (B) routine renewals of existing licenses and permits of each Seller Party in the ordinary course of business, (C) such filings as may be required under federal and state securities laws for purposes of disclosure and (D) such as will not have a Material Adverse Effect.

(e)  Actions, Suits. There are no actions, suits or proceedings pending, or to such Seller Party's knowledge, threatened, against or affecting such Seller Party, or any of its properties, in or before any court, arbitrator or other body, that would reasonably be expected to have a Material Adverse Effect. Such Seller Party is not in default with respect to any order of any court, arbitrator or governmental body the result of which default would reasonably be expected to have a Material Adverse Effect.

(f)  Binding Effect. This Agreement and each other Transaction Document to which such Seller Party is a party constitute the legal, valid and binding obligations of such Seller Party enforceable against such Seller Party in accordance with their respective terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

(g)  Accuracy of Information. All information heretofore furnished by such Seller Party or any of its Affiliates to the Agent or the Purchasers for purposes of or in connection with this Agreement, any of the other Transaction Documents or any transaction contemplated hereby or thereby is, and all such information hereafter furnished by such Seller Party or any of its Affiliates to the Agent or the Purchasers will be, true and accurate in all material respects on the date such information is stated or certified and does not and will not contain a material misstatement of fact or omit to state a material fact necessary to make the statements contained therein not misleading.

(h)  Use of Proceeds. No proceeds of any purchase hereunder will be used (i) for a purpose that violates, or would be inconsistent with any law, rule or regulation applicable to Seller, or (ii) to acquire any security in any transaction which is subject to Sections 13 or 14 of the Securities Exchange Act of 1934, as amended.

(i)  Good Title. Immediately prior to each purchase hereunder, Seller shall be the legal and beneficial owner of the Receivables and Related Security with respect thereto, free and clear of any Adverse Claim, except as created by the Transaction Documents. There have been duly filed all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect Seller's ownership interest in each Receivable, its Collections and the Related Security to the extent such interests can be perfected by filing financing statements under Article 9 of the UCC.

(j)  Perfection. This Agreement, together with the filing of the financing statements contemplated hereby, is effective to, and shall, upon each purchase hereunder, transfer to the Agent for the benefit of the relevant Purchaser or Purchasers (and the Agent for the benefit of such Purchaser or Purchasers shall acquire from Seller) a valid and perfected first

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priority undivided percentage ownership or security interest in each Receivable existing or hereafter arising and in the Related Security and Collections with respect thereto to the extent such interest can be perfected by filing financing statements under Article 9 of the UCC, free and clear of any Adverse Claim, except as created by the Transactions Documents. There have been duly filed all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect the Agent's (on behalf of the Purchasers) ownership or security interest in the Receivables, the Related Security and the Collections to the extent such interest can be perfected by filing financing statements under Article 9 of the UCC.

(k)            Places of Business and Locations of Records. The state of organization, principal places of business and chief executive office of such Seller Party and the offices where it keeps all of its Records (other than those in transit to such locations) are located at the addresses listed on Exhibit III or such other locations of which the Agent has been notified in accordance with Section 7.2(a) in jurisdictions where all action required by Section 14.4(a) has been taken and completed. Seller's Federal Employer Identification Number and Organizational Identification Number are correctly set forth on Exhibit III.

(1)            Collections. Such Seller Party has complied in all material respects with the conditions and requirements set forth in Section 7.1(j) and Section 8.2 applicable to it. The names and addresses of all Lock-Box Banks and Blocked Account Banks, together with the account numbers of the Lock-Box Accounts of Navistar at each Lock-Box Bank and Blocked Accounts of Seller at each Blocked Account Bank and the post office box number of each Lock-Box, are listed on Exhibit W. Seller and Navistar each represents that it has not granted any Person, other than the Agent as contemplated by this Agreement, dominion and control of any Lock-Box or Lock-Box Account, or the right to take dominion and control of any such Lock-Box or Lock-Box Account at a future time or upon the occurrence of a future event.

(m)  Material Adverse Effect. (i) The initial Servicer represents and warrants that since the last day of the most recent fiscal year for which it has filed a Form 10-K, no event has occurred that would have a material adverse effect on the financial condition or operations of the initial Servicer and its Subsidiaries, taken as a whole, or the ability of the initial Servicer to perform its obligations under this Agreement, and (ii) Seller represents and warrants that since the date of this Agreement, no event has occurred that would have a material adverse effect on (A) the financial condition or operations of Seller, (B) the ability of Seller to perform its obligations under the Transaction Documents, or (C) the collectibility of the Receivables generally or any material portion of the Receivables.

(n)  Names. In the past five (5) years, such Seller Party has not used any corporate names, trade names or assumed names other than the name in which it has executed this Agreement and as listed on Schedule 5.1(n).

(o)  Ownership of Seller. Transferor owns, directly or indirectly, 100% of the issued and outstanding capital stock of Seller, free and clear of any Adverse Claim other than any Adverse Claim on such stock granted in connection with the Transferor Credit Agreement. Such capital stock is validly issued, fully paid and nonassessable, and there are no options, warrants or other rights to acquire securities of Seller.

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(p)  Not a Holding Company or an Investment Company. Such Seller Party is not a "holding company" or a "subsidiary holding company" of a "holding company" within the meaning of the Public Utility Holding Company Act of 1935, as amended, or any successor statute. Such Seller Party is not an "investment company" within the meaning of the Investment Company Act of 1940, as amended, or any successor statute.

(q)  Compliance with Law. Such Seller Party has complied in all respects with all applicable laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect. Each Receivable, together with the Contract related thereto, does not contravene any laws, rules or regulations applicable thereto (including, without limitation, laws, rules and regulations relating to truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy), and no part of such Contract is in violation of any such law, rule or regulation.

(r)  Compliance with Credit and Collection Policy. Such Seller Party has complied in all material respects with the Credit and Collection Policy with regard to each Receivable and the related Contract, and has not made any change to such Credit and Collection Policy, except such changes as to which the Agent has been notified in accordance with Section 7.1(a)(vii) and as permitted by Section 7.2(c).

(s)  Payments to Transferor. With respect to each Receivable transferred to Seller under the Receivables Sale Agreement, Seller has given reasonably equivalent value to Transferor in consideration therefor and such transfer was not made for or on account of an antecedent debt. No transfer by Transferor of any Receivable under the Receivables Sale Agreement is or may be voidable under any section of the Bankruptcy Reform Act of 1978 (11 U.S.C. §§ 101 et seq.), as amended.

(t)  Enforceability of Contracts. Each Contract with respect to each Receivable is effective to create, and has created, a legal, valid and binding obligation of the related Obligor to pay the Outstanding Balance of the Receivable created thereunder and any accrued interest thereon, enforceable against the Obligor in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

(u)  Eligible Receivables. Each Receivable included in the Net Receivables Balance as an Eligible Receivable was an Eligible Receivable on the date of its purchase under the Receivables Sale Agreement.

(v)  Net Receivables Balance. Seller has determined that, immediately after giving effect to each purchase hereunder, the Net Receivables Balance is at least equal to the sum of (i) the Aggregate Capital, plus (ii) the Aggregate Reserves.

(w)  Obligor Litigation. No Obligor is immune from civil and commercial law and suit on the grounds of sovereignty otherwise from any legal action, suit or proceeding such that Agent or its designees would be unable to litigate any claim against such Obligor in respect of any Receivable.

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(x)            Default. No material default is in existence pursuant to the Transfer Agreement relating to the Receivables or that would adversely effect the transfer of the Receivables from the Originator to the Transferor.

                  Section 5.2             Financial Institution Representations and Warranties. Each Financial Institution hereby represents and warrants to the Agent, Conduit and each Seller Party that:

(a)  Existence and Power. Such Financial Institution is a corporation or a banking association duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization, and has all corporate power to perform its obligations hereunder.

(b)  No Conflict. The execution and delivery by such Financial Institution of this Agreement and the performance of its obligations hereunder are within its corporate powers, have been duly authorized by all necessary corporate action, do not contravene or violate (i) its certificate or articles of incorporation or association or by-laws, (ii) any law, rule or regulation applicable to it, (iii) any restrictions under any agreement, contract or instrument to which it is a party or any of its property is bound, or (iv) any order, writ, judgment, award, injunction or decree binding on or affecting it or its property, and do not result in the creation or imposition of any Adverse Claim on its assets. This Agreement has been duly authorized, executed and delivered by such Financial Institution.

(c)  Governmental Authorization. No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution and delivery by such Financial Institution of this Agreement and the performance of its obligations hereunder.

(d)  Binding Effect. This Agreement constitutes the legal, valid and binding obligation of such Financial Institution enforceable against such Financial Institution in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors' rights generally and by general principles of equity (regardless of whether such enforcement is sought in a proceeding in equity or at law).

(e)  Authority; Due Authorization, Execution and Delivery. The execution and delivery by such Financial Institution of this Agreement and each other Transaction Document to which it is a party, and the performance of its obligations hereunder and thereunder have been duly authorized by all necessary corporate action on its part. This Agreement and each other Transaction Document to which such Financial Institution is a party has been duly executed and delivered by such Financial Institution.

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ARTICLE VI.

CONDITIONS OF PURCHASES

 Section 6.1                                Conditions Precedent to Initial Incremental Purchase. The initial Incremental Purchase of a Purchaser Interest under this Agreement is subject to the conditions precedent that (a) the Agent shall have received on or before the date of such purchase those documents listed on Schedule B and (b) the Agent shall have received all fees and expenses required to be paid on such date pursuant to the terms of this Agreement and the Fee Letter.

Section 6.2                                  Conditions Precedent to All Purchases and Reinvestments. Each purchase of a Purchaser Interest (other than pursuant to Section 13.1) and each Reinvestment shall be subject to the further conditions precedent that (a) in the case of each such purchase or Reinvestment: (i) the Servicer shall have delivered to the Agent on or prior to the date of such purchase, in form and substance satisfactory to the Agent, all Monthly Reports and Weekly Reports as and when due under Section 8.5 and (ii) upon the Agent's request, the Servicer shall have delivered to the Agent at least two (2) days prior to such purchase or Reinvestment an interim Weekly Report showing the amount of Eligible Receivables; (b) the Facility Termination Date shall not have occurred; (c) the Agent shall have received such other approvals, opinions or documents as it may reasonably request as are customary in similar transactions in order to protect the interests of Agent and the Purchasers under or as contemplated in the Transaction Documents and (d) on the date of each such Incremental Purchase or Reinvestment, the following statements shall be true (and acceptance of the proceeds of such Incremental Purchase or Reinvestment shall be deemed a representation and warranty by Seller that such statements are then true):

(i)  the representations and warranties set forth in Section 5.1 are true and correct on and as of the date of such Incremental Purchase or Reinvestment as though made on and as of such date;

(ii)  no event has occurred and is continuing, or would result from such Incremental Purchase or Reinvestment, that will constitute an Amortization Event, and no event has occurred and is continuing, or would result from such Incremental Purchase or Reinvestment, that would constitute a Potential Amortization Event; and

(iii)  the Aggregate Capital does not exceed the Purchase Limit and the aggregate Purchaser Interests do not exceed 100%.

It is expressly understood that each Reinvestment shall, unless otherwise directed by the Agent or any Purchaser, occur automatically on each day that the Servicer shall receive any Collections without the requirement that any further action be taken on the part of any Person and notwithstanding the failure of Seller to satisfy any of the foregoing conditions precedent in respect of such Reinvestment. Unless waived in writing by Agent, the failure of Seller to satisfy any of the foregoing conditions precedent in respect of any Reinvestment shall give rise to a right of the Agent, which right may be exercised at any time on demand of the Agent, to rescind the related purchase and direct Seller to pay to the Agent for the benefit of the Purchasers an amount equal to the Collections prior to the Amortization Date that shall have been applied to the affected Reinvestment.

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ARTICLE VII.

COVENANTS

Section 7.1                                Affirmative Covenants of the Seller Parties. Until the date on which the Aggregate Unpaids have been indefeasibly paid in full and this Agreement terminates in accordance with its terms, each Seller Party hereby covenants, as to itself, as set forth below:

(a)            Financial Reporting. Such Seller Party will maintain a system of accounting established and administered in accordance with GAAP, and furnish or cause to be furnished to the Agent:

(i)  Annual Reporting. Within 90 days after the close of each fiscal year of the Parent and Transferor, (A) the Parent's and Transferor's Form 10-K for such fiscal year, which shall include its respective audited consolidated statement of financial condition and related statements of consolidated income and retained earnings and consolidated cash flow as of the end of and for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by Deloitte & Touche, LLP or other independent public accountants of recognized national standing (without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations and cash flow of the Parent and Transferor and its respective consolidated Subsidiaries on a consolidated basis in accordance with GAAP, consistently applied and (B) the Seller's unaudited consolidated statement of financial condition and related statements of consolidated income and retained earnings as of the end of such year, certified by one of Seller's Authorized Officers as presenting fairly in all material respects the financial condition and results of operation of Seller in accordance with GAAP, consistently applied subject to normal year-end audit adjustments and absence of footnotes.

(ii)  Quarterly Reporting. Within 45 days after the end of each of the first three fiscal quarters of each fiscal year of Parent and Transferor, the Parent's and Transferor's Form 10-Q for such fiscal quarter, which shall include its consolidated statement of financial condition and related statements of consolidated income and retained earnings and respective consolidated cash flow as of the end of and for the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the correspondence period or periods of (or, in the case of the statement of financial condition, as of the end of) the previous fiscal year, all certified by one of its respective Authorized Officers as presenting fairly in all material respects the financial condition and results of operations and cash flow of the Parent and Transferor and its respective consolidated Subsidiaries on a consolidated basis in accordance with GAAP,

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consistently applied, subject to normal year-end audit adjustments and the absence of footnotes.

(iii)  Compliance Certificate. Together with the financial statements required hereunder, a compliance certificate in substantially the form of Exhibit V signed by an Authorized Officer of the Seller.

(iv)  Transferor Credit Agreement Compliance Certificate. At the same time as delivered under the Transferor Credit Agreement, a copy of the compliance certificate delivered pursuant to Section 7.01(c) of the Transferor Credit Agreement.

                              (v)  [Intentionally Omitted]

(vi)  Copies of Notices. Promptly upon its receipt of any notice, request for consent, financial statements, certification, report or other communication under or in connection with any Transaction Document from any Person other than the Agent or Conduit, copies of the same.

(vii)  Change in Credit and Collection Policy. At least ten (10) days prior to the effectiveness of any material change in or material amendment to the Credit and Collection Policy, a copy of the Credit and Collection Policy then in effect and a notice indicating such change or amendment, provided that if such proposed change or amendment would be reasonably likely to materially and adversely affect the collectibility of the Receivables or materially decrease the credit quality of any newly created Receivables, such change shall not be effective without the Agent's consent thereto, which consent shall not be unreasonably withheld and such consent or refusal to consent shall be given within fifteen (15) Business Days of the acknowledgment of receipt of such request, as acknowledged in writing, electronically or otherwise, by a Responsible Agent Party.

(viii)  Other Information. Promptly, from time to time, such other information, documents, records or reports relating to the Receivables or the condition or operations, financial or otherwise, of such Seller Party as the Agent may from time to time reasonably request as such information, documents, records or reports are necessary or reasonably desirable to determine the capability of such Seller Party to perform its obligations under any Transaction Document to which it is a party and in order to protect the interests of the Agent and the Purchasers under or as contemplated by this Agreement.

(b)            Notices. Such Seller Party will notify the Agent in writing of any of the following promptly upon learning of the occurrence thereof, describing the same and, if applicable, the steps being taken with respect thereto:

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(i)  Amortization Events or Potential Amortization Events. The occurrence of each Amortization Event and each Potential Amortization Event, by a statement of an Authorized Officer of such Seller Party.

(ii)  Judgment and Proceedings. The entry of any judgment or decree or the filing or commencement of any litigation or any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting the Servicer, any Subsidiary or any Affiliate thereof that would reasonably be expected to result in a Material Adverse Effect.

(iii)  [Intentionally Omitted]

(iv)  Termination Date. The occurrence of the "Termination Date" under and as defined in the Receivables Sale Agreement.

(v)  Defaults. The occurrence of a default or an event of default under any other financing arrangement with obligations in an aggregate principal amount equal to or in excess of $50,000,000 pursuant to which such Seller Party is a debtor or an obligor.

(vi)  Downgrade of Transferor. Any downgrade in the rating of any Indebtedness of Transferor by Standard & Poor's Ratings Group or by Moody's Investors Service, Inc., setting forth the Indebtedness affected and the nature of such change.

(c)  Compliance with Laws and Preservation of Corporate Existence. Such Seller Party will comply in all respects with all applicable laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject, except where the failure to so comply would not reasonably be expected to have a Material Adverse Effect. Such Seller Party will preserve and maintain its corporate existence, rights, franchises and privileges in the jurisdiction of its incorporation, and qualify and remain qualified in good standing as a foreign corporation in each jurisdiction where its business is conducted, except where the failure to so preserve and maintain or qualify would not reasonably be expected to have a Material Adverse Effect.

(d)  Audits. Such Seller Party will furnish to the Agent from time to time such information with respect to it and the Receivables as the Agent may reasonably request to the extent such information is necessary or reasonably desirable to determine the capability of such Seller Party to perform its obligations under any Transaction Document to which it is a party. Such Seller Party will, from time to time during regular business hours as requested by the Agent upon reasonable notice and at the sole cost of such Seller Party, permit the Agent, or its agents or representatives (and shall cause Transferor to permit the Agent or its agents or representatives), (i) to examine and make copies of and abstracts from all Records in the possession or under the control of such Person relating to the Receivables and the Related Security, including, without limitation, the related Contracts, and (ii) to visit the offices and properties of such Person for the purpose of examining such materials described in clause (i) above, and to discuss matters relating to the Receivables and the Related Security or any Person's performance under any of

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the Transaction Documents or any Person's performance under the Contracts and, in each case, with any of the Authorized Officer's of Seller or the Servicer having knowledge of such matters (each of the foregoing examinations and visits, a "Review'); provided, however, that, so long as no Amortization Event or Servicing Termination Event has occurred and is continuing, Seller Parties, collectively, shall only be responsible for the costs and expenses of one (1) Review in any one calendar year, including any audit under Section 4.1(d) of the Sale Agreement. Notwithstanding anything herein to the contrary, no Seller Party shall have any obligation to take any action in conflict with any applicable law, rule, regulation or contractual obligation prohibiting the disclosure of confidential information with respect to any Obligor; provided, however, with respect to any contractual obligation, such Seller Party shall use its commercially reasonable efforts to obtain any applicable consent to disclose such information upon the request of the Agent.

           (e)  Keeping and Marking of Records and Books.

(i)  The Servicer will (and will cause Transferor to) maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing Receivables in the event of the destruction of the originals thereof), and keep and maintain all documents, books, records and other information reasonably necessary or advisable for the collection of all Receivables (including, without limitation, records adequate to permit the immediate identification of each new Receivable and all Collections of and adjustments to each existing Receivable).

(ii)  Such Seller Party will (and will cause Transferor to) (A) on or prior to the date hereof, mark its master data processing records relating to the Purchaser Interests with a legend, acceptable to the Agent, describing the Purchaser Interests and (B) upon the request of the Agent after the occurrence of any Amortization Event and the replacement of the Servicer pursuant hereto deliver to the Agent all Records (including, without limitation, all multiple originals of any Contract) relating to the Receivables, provided, that such Seller Party shall have no obligation to take any action in conflict with any applicable law, rule, regulation or contractual obligation prohibiting the disclosure of confidential information with respect to any Obligor; provided, however, with respect to any contractual obligation, such Seller Party shall use its commercially reasonable efforts to obtain any applicable consent to disclose such information upon the request of the Agent.

(f)  Compliance with Contracts and Credit and Collection Policy. Such Seller Party will (and will cause Transferor to) timely and fully (i) perform and comply in all material respects with all provisions, covenants and other promises required to be observed by it under the Contracts related to the Receivables, and (ii) comply in all material respects with the Credit and Collection Policy in regard to each Receivable and the related Contract.

(g)  Performance and Enforcement of Receivables Sale Agreement andTransfer Agreement. Seller will, and will require Transferor to, perform each of their respective obligations and undertakings under and pursuant to the Receivables Sale Agreement and the

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Transfer Agreement relating in any material respect to the Receivables, will purchase Receivables thereunder in accordance with the terms thereof and will enforce the rights and remedies accorded to Seller or Transferor, as applicable, under the Receivables Sale Agreement and the Transfer Agreement with respect to the Receivables. Seller will, and will require Transferor to, take all actions to perfect and enforce its rights and interests (and the rights and interests of the Agent and the Purchasers as assignees of Seller) under the Receivables Sale Agreement and the Transfer Agreement with respect to the Receivables as the Agent may from time to time reasonably request, including, without limitation, making claims to which it may be entitled under any indemnity, reimbursement or similar provision contained in the Receivables Sale Agreement and the Transfer Agreement with respect to the Receivables.

(h)  Ownership. Seller will (or will cause Transferor to) take all necessary action to (i) vest legal and equitable title to the Receivables, the Related Security and the Collections purchased under the Receivables Sale Agreement irrevocably in Seller, free and clear of any Adverse Claims other than Adverse Claims in favor of the Agent and the Purchasers (including, without limitation, the filing of all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect Seller's interest in such Receivables, Related Security and Collections to the extent such interest can be perfected by filing under Article 9 of the UCC and such other action to perfect, protect or more fully evidence the interest of Seller therein as the Agent may reasonably request), and (ii) establish and maintain, in favor of the Agent, for the benefit of the Purchasers, a valid and perfected first priority undivided percentage ownership interest (and/or a valid and perfected first priority security interest) in all Receivables, Related Security and Collections to the extent such interest can be perfected by filing under Article 9 of the UCC to the full extent contemplated herein, free and clear of any Adverse Claims other than Adverse Claims in favor of the Agent for the benefit of the Purchasers (including, without limitation, the filing of all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect the Agent's (for the benefit of the Purchasers) interest in such Receivables, Related Security and Collections to the extent such interest can be perfected by filing under Article 9 of the UCC and such other action to perfect, protect or more fully evidence the interest of the Agent for the benefit of the Purchasers as the Agent may reasonably request).

(i )  Purchasers' Reliance. Seller acknowledges that the Purchasers are entering into the transactions contemplated by this Agreement in reliance upon Seller's identity as a legal entity that is separate from Transferor. Therefore, from and after the date of execution and delivery of this Agreement, Seller shall take reasonable steps, including, without limitation, all steps that the Agent or any Purchaser may from time to time reasonably request, to maintain Seller's identity as a separate legal entity and to make it manifest to third parties that Seller is an entity with assets and liabilities distinct from those of Transferor and any Affiliates thereof and not just a division of Transferor or any such Affiliate. Without limiting the generality of the foregoing and in addition to the other covenants set forth herein, Seller will:

      (A)            conduct its own business in its own name and require that all full-time employees of Seller, if any, identify themselves as such and not as employees of Transferor or any Affiliate (including, without limitation, by means of providing appropriate employees with business or identification cards identifying such employees as Seller's employees);

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(B)  compensate all employees, if any, consultants and agents directly, from Seller's own funds, for services provided to Seller by such employees, consultants and agents and, to the extent any employee, consultant or agent of Seller is also an employee, consultant or agent of Transferor or any Affiliate thereof, allocate the compensation of such employee, consultant or agent between Seller and Transferor or such Affiliate, as applicable, on a basis that reflects the services rendered to Seller and Transferor or such Affiliate, as applicable;

(C)  [Intentionally Deleted];

(D)  have a separate office subject to, if applicable, a lease with a fair market rent, a separate telephone number, which will be answered identifying its name, and separate stationery, invoices and checks in its own name;

(E)  conduct all transactions with Transferor and the Servicer (including, without limitation, any delegation of its obligations hereunder as Servicer) strictly on an arm's-length basis, allocate all overhead expenses (including, without limitation, telephone and other utility charges) for items shared between Seller and Transferor on a basis reasonably related to actual use;

(F)  at all times have a Board of Directors consisting of three members, at least one member of which is an Independent Director;

(G)  observe all corporate formalities as a distinct entity, and ensure that all corporate actions relating to (1) the selection, maintenance or replacement of the Independent Director, (2) the dissolution or liquidation of Seller or (3) the initiation of, participation in, acquiescence in or consent to any bankruptcy, insolvency, reorganization or similar proceeding involving Seller, are duly authorized in case of clause (1) and, in the case of clause (2) and (3), duly authorized by unanimous vote of its Board of Directors (including the Independent Director);

(H)  maintain Seller's books and records separate from those of Transferor and any Affiliate thereof and otherwise readily identifiable as its own assets rather than assets of Transferor and any Affiliate thereof;

(I)  prepare its financial statements separately from those of Transferor and insure that any consolidated financial statements of Transferor or any Affiliate thereof that include Seller and that are filed with the Securities and Exchange Commission or any other governmental agency have notes clearly stating that Seller is a separate corporate entity and that its assets will be available first and foremost to satisfy the claims of the creditors of Seller;

(J)     except as herein specifically otherwise provided, maintain the funds or other assets of Seller separate from, and not commingled with, those of Transferor or any Affiliate thereof and only maintain bank accounts or other depository accounts to which Seller or Servicer alone is the account party, into which Seller or Servicer alone makes deposits and from which Seller or Servicer alone (or the Agent hereunder) has the power to make withdrawals;

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(K)  pay all of Seller's operating expenses from Seller's own assets (except for certain payments by Transferor or other Persons pursuant to allocation arrangements that comply with the requirements of this Section 7.1(i));

(L)  operate its business and activities such that it does not create, incur, guarantee, assume or suffer to exist any indebtedness or other liabilities, whether direct or contingent, other than (1) as a result of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business, (2) the incurrence of obligations under this Agreement, (3) the incurrence of obligations, as expressly contemplated in the Receivables Sale Agreement, to make payment to Transferor thereunder for the purchase of Receivables from Transferor under the Receivables Sale Agreement, and (4) the incurrence of operating expenses in the ordinary course of business of the type otherwise contemplated by this Agreement;

(M)  maintain its corporate charter in conformity with this Agreement, such that it does not amend, restate, supplement or otherwise modify its Certificate of Incorporation or By-Laws in any respect that would impair its ability to comply with the terms or provisions of any of the Transaction Documents, including, without limitation, Section 7.1(i) of this Agreement;

(N)  maintain the effectiveness of, and continue to perform under the Receivables Sale Agreement, such that it does not amend, restate, supplement, cancel, terminate or otherwise modify the Receivables Sale Agreement or give any consent, waiver, directive or approval thereunder or waive any default, action, omission or breach under the Receivables Sale Agreement or otherwise grant any indulgence thereunder, without (in each case) the prior written consent of the Agent, which consent shall not be unreasonably withheld;

(0)            maintain its corporate separateness such that it does not merge or consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions, and except as otherwise contemplated herein) all or substantially all of its assets (whether now owned or hereafter acquired) to, or acquire all or substantially all of the assets of, any Person, nor at any time create, have, acquire, maintain or hold any interest in any Subsidiary; and

(P)            take such other actions as are necessary on its part to ensure that the facts and assumptions set forth in the opinion issued by Kirkland & Ellis LLP, as counsel for Seller, in connection with the closing or initial Incremental Purchase under this Agreement and relating to substantive consolidation issues, and in the certificates accompanying such opinion, remain true and correct in all material respects at all times.

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(j)  Collections. Such Seller Party will cause (1) all proceeds from all Lock-Boxes to be directly deposited by a Lock-Box Bank into a Lock-Box Account, (2) each Lock-Box and Lock-Box Account to be subject at all times to a Lock-Box Account Agreement and each Blocked Account to be subject to a Blocked Account Agreement, in each case, that is in full force and effect. Such Seller Party will cause all proceeds in any Lock-Box Account (unless Agent shall have sent any applicable Collection Notice pursuant to Section 8.3) to be deposited into the Specified NFC Allocation Account. Such Seller Party shall deposit all proceeds with respect to the Receivables in the Specified NFC Allocation Account (or cause such proceeds to be deposited) into a Blocked Account within two (2) Business Days following deposit of such proceeds into the Specified NFC Allocation Account. In the event any payments relating to Receivables are remitted directly to Seller or any Affiliate of Seller, Seller will remit (or will cause all such payments to be remitted) directly to a Blocked Account Bank and deposited into a Blocked Account within two (2) Business Days following receipt thereof, and, at all times prior to such remittance, Seller will itself hold or, if applicable, will cause such payments to be held in trust for the exclusive benefit of the Agent and the Purchasers. Seller will maintain dominion and control (subject to the terms of this Agreement) of each Lock-Box, Lock-Box Account and Blocked Account and shall not grant the right to take dominion and control of any Lock-Box, Lock-Box Account or Blocked Account at a future time or upon the occurrence of a future event to any Person, except to the Agent as contemplated by this Agreement.

(k)  Taxes. Such Seller Party will file all tax returns and reports required by law to be filed by it and will promptly pay all taxes and governmental charges at any time owing, except (a) any such taxes which are not yet delinquent or are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books or (b) to the extent the failure to do so would not reasonably be expected to result in a Material Adverse Effect. Seller will pay when due any taxes payable in connection with the Receivables, exclusive of taxes on or measured by income or gross receipts of Conduit, the Agent or any Financial Institution.

(1)            Insurance. Seller will maintain in effect, or cause to be maintained in effect, at Seller's own expense, such casualty and liability insurance as Seller shall deem appropriate in its good faith business judgment.

(m)            Payment to Transferor and Originator. With respect to any Receivable purchased by Seller from Transferor, such sale shall be effected under the Receivables Sale Agreement, including, without limitation, the terms relating to the amount and timing of payments to be made to Transferor in respect of the purchase price for such Receivable. With respect to any Receivable purchased by Transferor from Originator, such sale shall be effected in accordance with the terms of the Transfer Agreement, including, without limitation, the terms relating to the amount and timing of payments to be made to Parent in respect of the purchase price for such Receivable.

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Section 7.2 Negative Covenants of The Seller Parties. Until the date on which the Aggregate Unpaids have been indefeasibly paid in full and this Agreement terminates in accordance with its terms, each Seller Party hereby covenants, as to itself, that:

(a)  Name Change, Offices and Records. Such Seller Party will not change its name, identity or corporate structure (within the meaning of Section 9-507 of any applicable enactment of the UCC), change its state of organization or relocate any office where Records are kept unless it shall have: (i) given the Agent at least twenty (20) Business Days' prior written notice thereof and (ii) delivered to the Agent all financing statements, instruments and other documents reasonably requested by the Agent in connection with such change or relocation.

(b)  Change in Payment Instructions to Obligors. Except as may be required by the Agent pursuant to Section 8.2(b), such Seller Party will not add or terminate any bank as a Blocked Account Bank or Lock-Box Bank, or make any change in the instructions to Obligors regarding payments to be made to any Lock-Box or Blocked Account, unless the Agent shall have received, at least ten (10) days before the proposed effective date therefor, (i) written notice of such addition, termination or change and (ii) with respect to the addition of a Lock-Box Bank, or a Blocked Account Bank or a Blocked Account, Lock-Box Account or Lock-Box, an executed Lock-Box Account Agreement or Blocked Account Agreement, as applicable, with respect to the new Blocked Account, Lock-Box Account or Lock-Box; provided, however, that the Servicer may make changes in instructions to Obligors regarding payments if such new instructions require such Obligor to make payments to another existing Lock-Box, Lock-Box Account or Blocked Account.

(c)  Modifications to Contracts and Credit and Collection Policy. Such Seller Party will not, and will not permit Transferor to, make any change to the Credit and Collection Policy that would reasonably be expected to materially and adversely affect the collectibility of the Receivables or materially decrease the credit quality of any newly created Receivables unless such change shall be consented to by the Agent. Except as provided in Section 8.2(d), the Servicer will not, and will not permit Transferor to, extend, amend or otherwise modify the terms of any Receivable or any Contract related thereto other than in accordance with the Credit and Collection Policy.

(d)  Sales, Liens. Seller will not sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to, or create or suffer to exist any Adverse Claim upon (including, without limitation, the filing of any financing statement) or with respect to, any Receivable, Related Security or Collections, or upon or with respect to any Contract under which any Receivable arises, or any Lock-Box, Lock-Box Account or Blocked Account, or assign any right to receive income with respect thereto (other than, in each case, the creation of the interests therein in favor of the Agent and the Purchasers provided for herein), and Seller will defend the right, title and interest of the Agent and the Purchasers in, to and under any of the foregoing property, against all claims of third parties claiming through or under Seller or Transferor. Seller will not create or suffer to exist any mortgage, pledge, security interest, encumbrance, lien, charge or other similar arrangement on any of its inventory, the sale of which gives rise to any Receivable.

(e)  [Intentionally Omitted]

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(f)  Termination Date Determination. Seller will not designate the Termination Date (as defined in the Receivables Sale Agreement), or send any written notice to Transferor in respect thereof, without the prior written consent of the Agent, except with respect to the occurrence of such Termination Date arising pursuant to Section 5.1(d) of the Receivables Sale Agreement or in connection with clause (iv) of the definition of Amortization Date.

(g)  Restricted Junior Payments. From and after the occurrence of any Amortization Event, Seller will not make any Restricted Junior Payment if, after giving effect thereto, the Net Receivables Balance would be less than the sum of (i) the Aggregate Capital plus (ii) the Aggregate Reserves.

(h)  Accounting. Such Seller Party will not, and will not permit any Affiliate to, account for or treat (whether in financial statements or otherwise) the transactions contemplated by this Agreement and the Receivables Sale Agreement in any manner other than as is consistent with the true sale analyses set forth in the opinion issued by Kirkland & Ellis LLP, as counsel for Seller, in connection with the closing or initial Incremental Purchase under this Agreement.

ARTICLE VIII.

ADMINISTRATION AND COLLECTION

    Section 8.1        Designation of Servicer.

(a)  The servicing, administration and collection of the Receivables shall be conducted by such Person (the "Servicer") so designated from time to time in accordance with this Section 8.1. Navistar is hereby designated as, and hereby agrees to perform the duties and obligations of, the Servicer pursuant to the terms of this Agreement. The Agent may at any time after a Servicer Termination Event designate as Servicer any Person to succeed Navistar or any successor Servicer.

(b)  Without the prior written consent of the Agent and the Required Financial Institutions, Navistar shall not be permitted to delegate any of its duties or responsibilities as Servicer to any Person other than (i) an Affiliate of Navistar and (ii) with respect to certain Charged-Off Receivables, outside collection agencies in accordance with its customary practices. Such Affiliate shall not be permitted to further delegate to any other Person any of the duties or responsibilities of the Servicer delegated to it by Navistar. If at any time the Agent shall designate as Servicer any Person other than Navistar, all duties and responsibilities theretofore delegated by Navistar to Seller may, at the discretion of the Agent, be terminated forthwith on notice given by the Agent to Navistar and to Seller.

(c)  Notwithstanding the foregoing subsection (b), (i) Navistar , at all times that it or one of its Affiliates is the Servicer, shall be and remain primarily liable to the Agent and the Purchasers for the full and prompt performance of all duties and responsibilities of the Servicer hereunder and (ii) the Agent and the Purchasers shall be entitled to deal exclusively with Navistar in matters relating to the discharge by the Servicer of its duties and responsibilities hereunder. The Agent and the Purchasers shall not be required to give notice, demand or other

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communication to any Person other than Navistar at all times that it or an Affiliate of Navistar is Servicer in order for communication to the Servicer and its permitted delegate with respect thereto to be accomplished. Navistar, at all times that it is the Servicer, shall be responsible for providing any sub-servicer or other delegate of the Servicer with any notice given to the Servicer under this Agreement.

            Section 8.2        Duties of Servicer.

(a)  The Servicer shall take or cause to be taken all such actions as may be necessary or advisable to collect each Receivable from time to time, all in accordance with applicable laws, rules and regulations, with reasonable care and diligence, and in accordance with the Credit and Collection Policy.

(b)  The Servicer will instruct all Obligors to pay all Collections directly to a Lock-Box, Lock-Box Account or Blocked Account. The Servicer shall effect a Blocked Account Agreement with each bank party to a Blocked Account and a Lock-Box Account Agreement with each bank party to a Lock-Box Account at any time. In the case of any remittances received in any Lock-Box, Lock-Box Account or Blocked Account that shall have been identified, to the satisfaction of the Servicer, to not constitute Collections or other proceeds of the Receivables or the Related Security, the Servicer shall promptly remit such items to the Person identified to it as being the owner of such remittances. From and after the date the Agent delivers to any Lock-Box Bank a Collection Notice pursuant to Section 8.3, the Agent may request that the Servicer, and the Servicer thereupon promptly shall instruct all Obligors with respect to the Receivables, to remit all payments thereon to the Blocked Account and, at all times thereafter, Seller and the Servicer shall not deposit or otherwise credit, and shall not permit any other Person to deposit or otherwise credit to the Blocked Account any cash or payment item other than Collections.

(c)  The Servicer shall administer the Collections in accordance with the procedures described herein and in Article II. The Servicer shall set aside and hold in trust for the account of Seller and the Purchasers their respective shares of the Collections in accordance with Article II. The Servicer shall, upon the request of the Agent after a Servicer Termination Event shall have occurred, segregate, in a manner acceptable to the Agent, all cash, checks and other instruments received by it from time to time constituting Collections from the general funds of the Servicer or Seller prior to the remittance thereof in accordance with Article II. If the Servicer shall be required to segregate Collections pursuant to the preceding sentence, the Servicer shall segregate and deposit into the Blocked Account such allocable share of Collections of Receivables set aside for the Purchasers on the second Business Day following receipt by the Servicer of such Collections, duly endorsed or with duly executed instruments of transfer.

(d)  The Servicer may, in accordance with the Credit and Collection Policy, extend the maturity of any Receivable or adjust the Outstanding Balance of any Receivable as the Servicer determines to be appropriate to maximize Collections thereof; provided, however, that such extension or adjustment shall not alter the status of such Receivable as a Delinquent Receivable or Charged-Off Receivable or inhibit the rights of the Agent or the Purchasers under this Agreement to enforce such Receivable. Notwithstanding anything to the contrary contained

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herein, the Agent shall have the absolute and unlimited right after the occurrence and during the continuance of a Servicer Termination Event to direct the Servicer to commence or settle any legal action with respect to any Receivable or to foreclose upon or repossess any Related Security.

(e)  The Servicer shall hold in trust for Seller and the Purchasers all Records that (i) evidence or relate to the Receivables, the related Contracts and Related Security or (ii) are otherwise necessary or desirable to collect the Receivables and shall, as soon as practicable upon demand of the Agent, make available to the Agent all such Records; provided that the Servicer shall have no obligation to take any action in conflict with any applicable law, rule, regulation or contractual obligation prohibiting the disclosure of confidential information with respect to any Obligor; provided, however, with respect to any contractual obligation, such Seller Party shall use its commercially reasonable efforts to obtain any applicable consent to disclose such information upon the request of the Agent. The Servicer shall, as soon as practicable following receipt thereof turn over to Seller any cash collections or other cash proceeds not constituting proceeds of the Receivables. The Servicer shall, from time to time at the request of any Purchaser, furnish to the Purchasers (promptly after any such request) a calculation of the amounts set aside for the Purchasers pursuant to Article II.

(f)  Any payment by an Obligor in respect of any indebtedness owed by it to Parent, Transferor or Seller shall, except as otherwise specified by such Obligor or otherwise required by contract or law and unless otherwise instructed by the Agent, be applied in accordance with the Servicer's customary procedures.

Section 8.3                                Collection Notices. The Agent is authorized at any time after the occurrence and during the continuance of a Servicer Termination Event to date and to deliver to the Lock-Box Banks the Collection Notices. Seller hereby transfers to the Agent for the benefit of the Purchasers, effective when the Agent delivers such notice, the exclusive ownership and control of each Lock-Box and the Blocked Accounts. In case any authorized signatory of Navistar or Seller whose signature appears on a Blocked Account Agreement or Lock-Box Account Agreement shall cease to have such authority before the delivery of such notice, such Collection Notice shall nevertheless be valid as if such authority had remained in force. Seller hereby authorizes the Agent, and agrees that the Agent shall after the occurrence and during the continuance of a Servicer Termination Event be entitled to (i) endorse Seller's name on checks and other instruments representing Collections, (ii) enforce the Receivables, the related Contracts and the Related Security and (iii) take such action as shall be necessary or desirable to cause all cash, checks and other instruments constituting Collections of Receivables to come into the possession of the Agent rather than Seller.

Section 8.4                                Responsibilities of Seller. Anything herein to the contrary notwithstanding, the exercise by the Agent and the Purchasers of their rights hereunder shall not release the Servicer, Parent, the Transferor or Seller from any of their duties or obligations with respect to any Receivables or under the related Contracts. The Purchasers shall have no obligation or liability with respect to any Receivables or related Contracts, nor shall any of them be obligated to perform the obligations of Seller.

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Section 8.5            Reports. The Servicer shall prepare and forward to the Agent (i) on the 15th day of each month or, if such day is not a Business Day, the first Business Day thereafter and at such times as the Agent shall request, a Monthly Report, (ii) on the first Business Day of each week a Weekly Report which updates the previous month's Monthly Report for the previous week's Incremental Purchases and Collections and (iii) at such times as the Agent shall reasonably request, a listing by Obligor of all Receivables together with an aging of such Receivables.

Section 8.6                                Servicing Fees. In consideration of Navistar's agreement to act as Servicer hereunder, the Purchasers hereby agree that, so long as Navistar shall continue to perform as Servicer hereunder, Seller shall pay over to Navistar a fee (the "Servicing Fee") on the first calendar day of each month, in arrears for the immediately preceding month, equal to 1.0% per annum of the average aggregate Net Receivables during such prior monthly period, as compensation for its servicing activities.

ARTICLE IX.

AMORTIZATION EVENTS

Section 9.1           Amortization Events. The occurrence of any one or more of the following events shall constitute an Amortization Event:

(a)  Any Seller Party shall fail (i) to make any payment or deposit required hereunder when due; provided, however, that no Amortization Event shall occur under this Section 9.1(a)(i) as a result of any Iate payment or deposit (x) which was made before 5:00 p.m. on the applicable due date or (y) which is cured within one (1) Business Day after any Seller Party has knowledge of such failure if (A) with respect to clause (y) only, such late payment or deposit was due to a funds transmission failure beyond such Seller Party's control, including any failure of any Lock-Box Bank or Blocked Account Bank to follow transfer instructions, (B) such late payments or deposits do not occur more than five (5) times in any calendar year, and (C) such Seller Party pays all costs incurred by the Agent as a direct result of such failure or, (z) solely to the extent such payment or deposit represents interest or fees, such failure continues for five (5) Business Days after any Seller Party has knowledge of such failure, or (ii) to perform or observe any term, covenant or agreement hereunder (other than as referred to in clause (i) of this paragraph (a) and paragraph 9.1(e)) and such failure shall continue for ten (10) consecutive Business Days after such Seller Party has knowledge of such failure.

(b)  Any representation, warranty, certification or statement made by any Seller Party in this Agreement, any other Transaction Document or in any other document delivered pursuant hereto or thereto shall prove to have been incorrect when made or deemed made and such inaccuracy, to the extent capable of being remedied, shall remain unremedied in all material respects for five (5) Business Days after any Seller Party has knowledge of such inaccuracy; provided that the materiality qualifier in this clause shall not apply to any representation or warranty which itself contains a materiality qualifier.

(c)  The Indebtedness outstanding under the Transferor Credit Agreement shall become due in full prior to its stated maturity; or shall be declared to be due and payable in fu11or required to be prepaid in full prior to the date of maturity thereof, in each case, due to the occurrence of an event of default under the Transferor Credit Agreement.

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(d)  (i ) Any Seller Party shall generally not pay its debts as such debts become due or shall admit in writing its inability to pay its debts generally or shall make a general assignment for the benefit of creditors; or (ii) any proceeding shall be instituted by or against any Seller Party seeking to adjudicate it bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee or other similar official for it or any substantial part of its property or (iii) any Seller Party shall take any corporate action to authorize any of the actions set forth in clauses (i) or (ii) above in this subsection (d).

          (e)  Seller shall fail to comply with the terms of Section 2.6 hereof

(f)  As at the end of any calendar month, the three month rolling average Delinquency Ratio shall exceed 5.5% or the three month rolling average Default Trigger Ratio shall exceed 4.5% or the three month rolling average Dilution Ratio shall exceed 2.5%.

          (g)  A Change of Control shall occur.

(h)  (i) One or more final judgments for the payment of money in an amount in excess of $11,600 shall be entered against Seller or (ii) one or more final judgments for the payment of money in an amount in excess of $10,000,000, individually or in the aggregate, shall be entered against the Servicer on claims not covered by insurance or as to which the insurance carrier has denied its responsibility, and such judgment shall continue unsatisfied and in effect for fifteen (15) consecutive days without a stay of execution.

(i )  The "Termination Date" under and as defined in the Receivables Sale Agreement shall occur under the Receivables Sale Agreement or Transferor shall for any reason cease to transfer, or cease to have the legal capacity to transfer, or otherwise be incapable of transferring Receivables to Seller under the Receivables Sale Agreement.

(j)  This Agreement shall terminate in whole or in part (except in accordance with its terms), or shall cease to be effective or to be the legally valid, binding and enforceable obligation of Seller, or any Obligor shall successfully, directly or indirectly, contest in any manner such effectiveness, validity, binding nature or enforceability, or the Agent for the benefit of the Purchasers shall cease to have a valid and perfected first priority security interest in the Receivables, the Related Security, the Collections and the Lock-Box Accounts and Blocked Accounts to the extent a security interest can be obtained with respect to such assets and can be perfected under the UCC and, with respect to the Related Security, Collections and the Lock-Box Accounts and Blocked Accounts, such failure to maintain a valid and perfected first priority security interest would cause the occurrence of an Amortization Event pursuant to clause (k) of this Section 9.1.

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(k) The Net Receivables Balance shall, at any time, be less than an amount equal to the sum of (i) the Aggregate Capital plus (ii) the Aggregate Reserves and such failure shall continue for one Business Day after any Seller Party has knowledge of such failure.

Section 9.2         Remedies. Upon the occurrence and during the continuation of an Amortization Event, the Agent may, or upon the direction of the Required Financial Institutions shall, take any of the following actions: (i) replace the Person then acting as Servicer if such Amortization Event is a Servicer Termination Event, (ii) declare the Amortization Date to have occurred, whereupon the Amortization Date shall forthwith occur, without demand, protest or further notice of any kind, all of which are hereby expressly waived by each Seller Party; provided, however, that upon the occurrence of an Amortization Event described in Section 9.1(d)(ii), or of an actual or deemed entry of an order for relief with respect to any Seller Party under the Federal Bankruptcy Code, the Amortization Date shall automatically occur, without demand, protest or any notice of any kind, all of which are hereby expressly waived by each Seller Party, (iii) to the fullest extent permitted by applicable law, declare that the Default Fee shall accrue with respect to any of the Aggregate Unpaids outstanding at such time, (iv) deliver the Collection Notices to the Lock-Box Banks and the Blocked Account Banks, and (v) if there has been a transfer of servicing, notify Obligors of the Purchasers' interest in the Receivables. The aforementioned rights and remedies shall be without limitation, and shall be in addition to all other rights and remedies of the Agent and the Purchasers otherwise available under any other provision of this Agreement, by operation of law, at equity or otherwise, all of which are hereby expressly preserved, including, without limitation, all rights and remedies provided under the UCC, all of which rights shall be cumulative.

ARTICLE X.

INDEMNIFICATION

Section 10.1         Indemnities by the Seller Parties. Without limiting any other rights that the Agent or any Purchaser may have hereunder or under applicable law, (A) Seller hereby agrees to indemnify (and pay upon demand to) the Agent and each Purchaser and their respective assigns, officers, directors, agents and employees (each an "Indemnified Party") from and against any and all damages, losses, claims, taxes, liabilities, costs, expenses and for all other amounts payable, including reasonable attorneys' fees and disbursements (all of the foregoing being collectively referred to as "Indemnified Amounts") awarded against or incurred by any of them arising out of or as a result of this Agreement or the acquisition, either directly or indirectly, by a Purchaser of an interest in the Receivables, and (B) the Servicer hereby agrees to indemnify (and pay upon demand to) each Indemnified Party for Indemnified Amounts awarded against or incurred by any of them arising out of the Servicer's activities as Servicer hereunder excluding, however, in all of the foregoing instances under the preceding clauses (A) and (B):

            (i )            Indemnified Amounts resulted from gross negligence, willful misconduct, violation of law or breach of the Transaction Documents on the part of the Indemnified Party seeking indemnification;

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            (ii)  Indemnified Amounts to the extent the same includes losses in respect of Receivables that are uncollectible on account of the insolvency, bankruptcy or lack of creditworthiness of the related Obligor; or

            (iii)  taxes imposed by any jurisdiction other than a jurisdiction which acquired taxing authority over the Indemnified Party as a result of the Transactions, on or measured by the overall net income of such Indemnified Party to the extent that the computation of such taxes is consistent with the characterization for income tax purposes of the acquisition by the Purchasers of Purchaser Interests as a loan or loans by the Purchasers to Seller secured by the Receivables, the Related Security, the Lock-Box Accounts, the Blocked Accounts and the Collections;

provided, however, that nothing contained in this sentence shall limit the liability of any Seller Party or limit the recourse of the Purchasers to any Seller Party for amounts otherwise specifically provided to be paid by such Seller Party under the terms of this Agreement. Without limiting the generality of the foregoing indemnification, Seller shall indemnify the Agent and the Purchasers for Indemnified Amounts (including, without limitation, losses in respect of uncollectible receivables, regardless of whether reimbursement therefor would constitute recourse to Seller or the Servicer) relating to or resulting from:

(i)  any representation or warranty made by any Seller Party or Transferor (or any officers of any such Person) under or in connection with this Agreement, any other Transaction Document or any other information or report delivered by any such Person pursuant hereto or thereto, which shall have been false or incorrect when made or deemed made;

(ii)  the failure by Seller, the Servicer or Transferor to comply with any applicable law, rule or regulation with respect to any Receivable or Contract related thereto, or the nonconformity of any Receivable or Contract included therein with any such applicable law, rule or regulation or any failure of Transferor to keep or perform any of its obligations, express or implied, with respect to any Contract;

(iii)  any failure of Seller, the Servicer or Transferor to perform its duties, covenants or other obligations in accordance with the provisions of this Agreement or any other Transaction Document;

(iv)  any products liability, personal injury or damage suit, or other similar claim arising out of or in connection with merchandise, insurance or services that are the subject of any Contract or any Receivable;

(v)  any dispute, claim, offset or defense (other than discharge in bankruptcy of the Obligor) of the Obligor to the payment of any Receivable (including, without limitation, a defense based on such Receivable or the related Contract not being a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms), or any other claim resulting from the sale of the merchandise or service related to such Receivable or the furnishing or failure to furnish such merchandise or services;

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  (vi )  the commingling of Collections of Receivables at any time with other funds;

 (vii )  any investigation, litigation or proceeding related to or arising from this Agreement or any other Transaction Document,  the  transactions contemplated hereby, the use of the proceeds of an Incremental Purchase or a Reinvestment, the ownership of the Purchaser Interests or any other investigation, litigation or proceeding relating to Seller, the Servicer or Transferor in which any Indemnified Party becomes involved as a result of any of the transactions contemplated hereby;

           (viii)  [Intentionally Omitted]

            (ix)  any Amortization Event described in Section 9.1(d);

(x)  any failure of Seller to acquire and maintain legal and equitable title to, and ownership of any Receivable and the Related Security and Collections with respect thereto from Transferor, free and clear of any Adverse Claim (other than as created hereunder); or any failure of Seller to give reasonably equivalent value to Transferor under the Receivables Sale Agreement in consideration of the transfer by Transferor of any Receivable, or any attempt by any Person to void such transfer under statutory provisions or common law or equitable action;

(xi)  any failure to vest and maintain vested in the Agent for the benefit of the Purchasers, or to transfer to the Agent for the benefit of the Purchasers, legal and equitable title to, and ownership of, a first priority perfected undivided percentage ownership interest (to the extent of the Purchaser Interests contemplated hereunder) or security interest in the Receivables, the Related Security and the Collections, free and clear of any Adverse Claim (except as created by the Transaction Documents);

(xii)  the failure to have filed, or any delay in filing, financing statements or other similar instruments or documents under the UCC of any applicable jurisdiction or other applicable laws with respect to any Receivable, the Related Security and Collections with respect thereto, and the proceeds of any thereof, whether at the time of any Incremental Purchase or Reinvestment or at any subsequent time;

(xiii)  any action by any Seller Party not required by or omission by any Seller Party not prohibited by the Transaction Documents which reduces or impairs the rights of the Agent or the Purchasers with respect to any Receivable or the value of any such Receivable;

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      (xiv)  any attempt by any Person to void any Incremental Purchase or Reinvestment hereunder under statutory provisions or common law or equitable action; and

      (xv)  the failure of any Receivable included in the calculation of the Net Receivables Balance as an Eligible Receivable to be an Eligible Receivable at the time so included.

Section 10.2         Increased Cost and Reduced Return. If after the date hereof, any Funding Source shall be charged any fee, expense or increased cost on account of the adoption of any applicable law, rule or regulation (including any applicable law, rule or regulation regarding capital adequacy), any accounting principles or any change in any of the foregoing, or any change in the interpretation or administration thereof by the Financial Accounting Standards Board ("FASB'), any governmental authority, any central bank or any comparable agency charged with the interpretation or administration thereof, or compliance with any request or directive (whether or not having the force of law) of any such authority or agency (a "Regulatory Change"): (i) that subjects any Funding Source to any charge or withholding on or with respect to any Funding Agreement or a Funding Source's obligations under a Funding Agreement, or on or with respect to the Receivables, or changes the basis of taxation of payments to any Funding Source of any amounts payable under any Funding Agreement (except for changes in the rate of tax on the overall net income of a Funding Source or taxes excluded by Section 10.1) or (ii) that imposes, modifies or deems applicable any reserve, assessment, insurance charge, special deposit or similar requirement against assets of, deposits with or for the account of a Funding Source, or credit extended by a Funding Source pursuant to a Funding Agreement or (iii) that imposes any other condition the result of which is to increase the cost to a Funding Source of performing its obligations under a Funding Agreement, or to reduce the rate of return on a Funding Source's capital as a consequence of its obligations under a Funding Agreement, or to reduce the amount of any sum received or receivable by a Funding Source under a Funding Agreement or to require any payment calculated by reference to the amount of interests or loans held or interest received by it, then, upon demand by the Agent, Seller shall pay to the Agent, for the benefit of the relevant Funding Source, such amounts charged to such Funding Source or such amounts to otherwise compensate such Funding Source for such increased cost or such reduction; provided, however, in no event shall Seller be liable for the payment of any such amounts with respect to any increased cost or reduced return accruing more than ninety (90) days after the Agent obtained knowledge of such increased cost or reduced return unless the Agent shall notify Seller of the same and then only the portion accruing after the date of such notice. For the avoidance of doubt, if the issuance of FASB Interpretation No. 46, or any other change in accounting standards or the issuance of any other pronouncement, release or interpretation, causes or requires the consolidation of all or a portion of the assets and liabilities of Company or Seller with the assets and liabilities of the Agent, any Financial Institution or any other Funding Source, such event shall constitute a circumstance on which such Funding Source may base a claim for reimbursement under this Section.

Section 10.3         Other Costs and Expenses. Seller shall pay to the Agent and Conduit on demand and presentment of invoices all costs and out-of-pocket expenses in connection with the preparation, execution, delivery and administration of this Agreement, the transaction documents contemplated hereby and the other documents to be delivered hereunder, including without

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limitation, the cost of Conduit's auditors auditing the books, records and procedures of Seller once per year, reasonable fees and out-of-pocket expenses of legal counsel for Conduit and the Agent with respect thereto and with respect to advising Conduit and the Agent as to their respective rights and remedies under this Agreement. Seller shall pay to the Agent on demand any and all costs and expenses of the Agent and the Purchasers, if any, (and Agent shall demand such payment when and as such costs and expenses accrue to the knowledge of the Agent or such Purchaser) including reasonable counsel fees and expenses in connection with the enforcement of this Agreement and the other documents delivered hereunder and in connection with any restructuring or workout of this Agreement or such documents, or the administration of this Agreement following an Amortization Event.

ARTICLE XI.

THE AGENT

Section 11.1       Authorization and Action. Each Purchaser hereby designates and appoints Bank One to act as its agent hereunder and under each other Transaction Document, and authorizes the Agent to take such actions as agent on its behalf and to exercise such powers as are delegated to the Agent by the terms of this Agreement and the other Transaction Documents together with such powers as are reasonably incidental thereto. The Agent shall not have any duties or responsibilities, except those expressly set forth herein or in any other Transaction Document, or any fiduciary relationship with any Purchaser, and no implied covenants, functions, responsibilities, duties, obligations or liabilities on the part of the Agent shall be read into this Agreement or any other Transaction Document or otherwise exist for the Agent. In performing its functions and duties hereunder and under the other Transaction Documents, the Agent shall act solely as agent for the Purchasers and does not assume nor shall be deemed to have assumed any obligation or relationship of trust or agency with or for any Seller Party or any of such Seller Party's successors or assigns. The Agent shall not be required to take any action that exposes the Agent to personal liability or that is contrary to this Agreement, any other Transaction Document or applicable law. The appointment and authority of the Agent hereunder shall terminate upon the indefeasible payment in full of all Aggregate Unpaids. Each Purchaser hereby authorizes the Agent to execute each of the Uniform Commercial Code financing statements on behalf of such Purchaser (the terms of which shall be binding on such Purchaser).

Section 11.2       Delegation of Duties. The Agent may execute any of its duties under this Agreement and each other Transaction Document by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care.

Section 11.3       Exculpatory Provisions. Neither the Agent nor any of its directors, officers, agents or employees shall be (i) liable for any action lawfully taken or omitted to be taken by it or them under or in connection with this Agreement or any other Transaction Document (except for its, their or such Person's own gross negligence or willful misconduct), or (ii) responsible in any manner to any of the Purchasers for any recitals, statements,

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representations or warranties made by any Seller Party contained in this Agreement, any other Transaction Document or any certificate, report, statement or other document referred to or provided for in, or received under or in connection with, this Agreement, or any other Transaction Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement, or any other Transaction Document or any other document furnished in connection herewith or therewith, or for any failure of any Seller Party to perform its obligations hereunder or thereunder, or for the satisfaction of any condition specified in Article VI, or for the perfection, priority, condition, value or sufficiency of any collateral pledged in connection herewith. The Agent shall not be under any obligation to any Purchaser to ascertain or to inquire as to the observance or performance of any of the agreements or covenants contained in, or conditions of, this Agreement or any other Transaction Document, or to inspect the properties, books or records of the Seller Parties. The Agent shall not be deemed to have knowledge of any Amortization Event or Potential Amortization Event unless the Agent has received notice from Seller or a Purchaser.

Section 11.4        Reliance by Agent. The Agent shall in all cases be entitled to rely, and shall be fully protected in relying, upon any document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to Seller), independent accountants and other experts selected by the Agent. The Agent shall in all cases be fully justified in failing or refusing to take any action under this Agreement or any other Transaction Document unless it shall first receive such advice or concurrence of Conduit or the Required Financial Institutions or all of the Purchasers, as applicable, as it deems appropriate and it shall first be indemnified to its satisfaction by the Purchasers, provided that unless and until the Agent shall have received such advice, the Agent may take or refrain from taking any action, as the Agent shall deem advisable and in the best interests of the Purchasers. The Agent shall in all cases be fully protected in acting, or in refraining from acting, in accordance with a request of Conduit or the Required Financial Institutions or all of the Purchasers, as applicable, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Purchasers.

Section 11.5         Non-Reliance on Agent and Other Purchasers. Each Purchaser expressly acknowledges that neither the Agent, nor any of its officers, directors, employees, agents, attorneys-in-fact or affiliates has made any representations or warranties to it and that no act by the Agent hereafter taken, including, without limitation, any review of the affairs of any Seller Party, shall be deemed to constitute any representation or warranty by the Agent. Each Purchaser represents and warrants to the Agent that it has and will, independently and without reliance upon the Agent or any other Purchaser and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, prospects, financial and other conditions and creditworthiness of Seller and made its own decision to enter into this Agreement, the other Transaction Documents and all other documents related hereto or thereto.

Section 11.6         Reimbursement and Indemnification. The Financial Institutions agree to reimburse and indemnify the Agent and its officers, directors, employees, representatives and agents ratably according to their Pro Rata Shares, to the extent not paid or reimbursed by the Seller Parties (i) for any amounts for which the Agent, acting in its capacity as Agent, is entitled

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to reimbursement by the Seller Parties hereunder and (ii) for any other expenses incurred by the Agent, in its capacity as Agent and acting on behalf of the Purchasers, in connection with the administration and enforcement of this Agreement and the other Transaction Documents.

Section 11.7         Agent in its Individual Capacity. The Agent and its Affiliates may make loans to, accept deposits from and generally engage in any kind of business with Seller or any Affiliate of Seller as though the Agent were not the Agent hereunder. With respect to the acquisition of Purchaser Interests pursuant to this Agreement, the Agent shall have the same rights and powers under this Agreement in its individual capacity as any Purchaser and may exercise the same as though it were not the Agent, and the terms "Financial Institution," "Purchaser," "Financial Institutions" and "Purchasers" shall include the Agent in its individual capacity.

Section 11.8         Successor Agent. The Agent may, upon ten days' notice to Seller and the Purchasers, and the Agent will, upon the direction of all of the Purchasers (other than the Agent, in its individual capacity) resign as Agent. If the Agent shall resign, then the Required Financial Institutions during such ten-day period shall appoint from among the Purchasers a successor agent. If for any reason no successor Agent is appointed by the Required Financial Institutions during such ten-day period, then effective upon the termination of such ten-day period, the Purchasers shall perform all of the duties of the Agent hereunder and under the other Transaction Documents and Seller and the Servicer (as applicable) shall make all payments in respect of the Aggregate Unpaids directly to the applicable Purchasers and for all purposes shall deal directly with the Purchasers. After the effectiveness of any retiring Agent's resignation hereunder as Agent, the retiring Agent shall be discharged from its duties and obligations hereunder and under the other Transaction Documents and the provisions of this Article XI and Article X shall continue in effect for its benefit with respect to any actions taken or omitted to be taken by it while it was Agent under this Agreement and under the other Transaction Documents.

ARTICLE XII.

ASSIGNMENTS; PARTICIPATIONS

    Section 12.1           Assignments.

(a)  Seller and each Financial Institution hereby agree and consent to the complete or partial assignment by Conduit of all or any portion of its rights under, interest in, title to and obligations under this Agreement to the Financial Institutions pursuant to Section 13.1 or to any other Person, and upon such assignment, Conduit shall be released from its obligations so assigned. Further, Seller and each Financial Institution hereby agree that any assignee of Conduit of this Agreement or all or any of the Purchaser Interests of Conduit shall have all of the rights and benefits under this Agreement as if the term "Conduit" explicitly referred to such party, and no such assignment shall in any way impair the rights and benefits of Conduit hereunder. Except as specifically provided in this Agreement, neither Seller nor the Servicer shall have the right to assign its rights or obligations under this Agreement.

(b)  Any Financial Institution may at any time and from time to time assign to one or more Persons ("Purchasing Financial Institutions") all or any part of its rights and

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obligations under this Agreement pursuant to an assignment agreement, substantially in the form set forth in Exhibit VII hereto (the "Assignment Agreement") executed by such Purchasing Financial Institution and such selling Financial Institution. The consent of Conduit shall be required prior to the effectiveness of any such assignment. Each assignee of a Financial Institution must (i) have a short-term debt rating of A-1 or better by Standard & Poor's Ratings Group and P-1 by Moody's Investor Service, Inc. and (ii) agree to deliver to the Agent, promptly following any request therefor by the Agent or Conduit, an enforceability opinion in form and substance satisfactory to the Agent and Conduit. Upon delivery of the executed Assignment Agreement to the Agent, such selling Financial Institution shall be released from its obligations hereunder to the extent of such assignment. Thereafter the Purchasing Financial Institution shall for all purposes be a Financial Institution party to this Agreement and shall have all the rights and obligations of a Financial Institution under this Agreement to the same extent as if it were an original party hereto and no further consent or action by Seller, the Purchasers or the Agent shall be required.

(c)            Each of the Financial Institutions agrees that in the event that it shall cease to have a short-term debt rating of A-1 or better by Standard & Poor's Ratings Group and P-1 by Moody's Investor Service, Inc. (an "Affected Financial Institution"), such Affected Financial Institution shall be obligated, at the request of Conduit or the Agent, to assign all of its rights and obligations hereunder to (x) another Financial Institution or (y) another funding entity nominated by the Agent and acceptable to Conduit, and willing to participate in this Agreement through the Liquidity Termination Date in the place of such Affected Financial Institution; provided that the Affected Financial Institution receives payment in full, pursuant to an Assignment Agreement, of an amount equal to such Financial Institution's Pro Rata Share of the Aggregate Capital and Yield owing to the Financial Institutions and all accrued but unpaid fees and other costs and expenses payable in respect of its Pro Rata Share of the Purchaser Interests of the Financial Institutions.

Section 12.2         Participations. Any Financial Institution may, in the ordinary course of its business at any time sell to one or more Persons (each a "Participant") participating interests in its Pro Rata Share of the Purchaser Interests of the Financial Institutions, its obligation to pay Conduit its Acquisition Amounts or any other interest of such Financial Institution hereunder. Notwithstanding any such sale by a Financial Institution of a participating interest to a Participant, such Financial Institution's rights and obligations under this Agreement shall remain unchanged, such Financial Institution shall remain solely responsible for the performance of its obligations hereunder, and Seller, Conduit and the Agent shall continue to deal solely and directly with such Financial Institution in connection with such Financial Institution's rights and obligations under this Agreement. Each Financial Institution agrees that any agreement between such Financial Institution and any such Participant in respect of such participating interest shall not restrict such Financial Institution's right to agree to any amendment, supplement, waiver or modification to this Agreement, except for any amendment, supplement, waiver or modification described in Section 14.1(b)(i).

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ARTICLE XIII.

LIQUIDITY FACILITY

Section 13.1         Transfer to Financial Institutions. Each Financial Institution hereby agrees, subject to Section 13.4, that immediately upon written notice from Conduit delivered on or prior to the Liquidity Termination Date, it shall acquire by assignment from Conduit, without recourse or warranty, its Pro Rata Share of one or more of the Purchaser Interests of Conduit as specified by Conduit. Each such assignment by Conduit shall be made pro rata among all of the Financial Institutions, except for pro rata assignments to one or more Terminating Financial Institutions pursuant to Section 13.6. Each such Financial Institution shall, no later than 1:00 p.m. (Chicago time) on the date of such assignment, pay in immediately available funds (unless another form of payment is otherwise agreed between Conduit and any Financial Institution) to the Agent at an account designated by the Agent, for the benefit of Conduit, its Acquisition Amount. Unless a Financial Institution has notified the Agent that it does not intend to pay its Acquisition Amount, the Agent may assume that such payment has been made and may, but shall not be obligated to, make the amount of such payment available to Conduit in reliance upon such assumption. Conduit hereby sells and assigns to the Agent for the ratable benefit of the Financial Institutions, and the Agent hereby purchases and assumes from Conduit, effective upon the receipt by Conduit of the Conduit Transfer Price, the Purchaser Interests of Conduit which are the subject of any transfer pursuant to this Article XIII.

Section 13.2         Transfer Price Reduction Yield. If the Adjusted Funded Amount is included in the calculation of the Conduit Transfer Price for any Purchaser Interest, each Financial Institution agrees that the Agent shall pay to Conduit the Reduction Percentage of any Yield received by the Agent with respect to such Purchaser Interest.

Section 13.3         Payments to Conduit. In consideration for the reduction of the Conduit Transfer Prices by the Conduit Transfer Price Reductions, effective only at such time as the aggregate amount of the Capital of the Purchaser Interests of the Financial Institutions equals the Conduit Residual, each Financial Institution hereby agrees that the Agent shall not distribute to the Financial Institutions and shall immediately remit to Conduit any Yield, Collections or other payments received by it to be applied pursuant to the terms hereof or otherwise to reduce the Capital of the Purchaser Interests of the Financial Institutions.

Section 13.4         Limitation on Commitment to Purchase from Conduit. Notwithstanding anything to the contrary in this Agreement, no Financial Institution shall have any obligation to purchase any Purchaser Interest from Conduit, pursuant to Section 13.1 or otherwise, if:

(i)  Conduit shall have voluntarily commenced any proceeding or filed any petition under any bankruptcy, insolvency or similar law seeking the dissolution, liquidation or reorganization of Conduit or taken any corporate action for the purpose of effectuating any of the foregoing; or

(ii)  involuntary proceedings or an involuntary petition shall have been commenced or filed against Conduit by any Person under any bankruptcy,  insolvency or similar law seeking the dissolution, liquidation or reorganization of Conduit and such proceeding or petition shall have not been dismissed.

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Section 13.5          Defaulting Financial Institutions. If one or more Financial Institutions defaults in its obligation to pay its Acquisition Amount pursuant to Section 13.1 (each such Financial Institution shall be called a "Defaulting Financial Institution" and the aggregate amount of such defaulted obligations being herein called the "Conduit Transfer Price Deficit"), then upon notice from the Agent, each Financial Institution other than the Defaulting Financial Institutions (a "Non-Defaulting Financial Institution ") shall promptly pay to the Agent, in immediately available funds, an amount equal to the lesser of (x) such Non-Defaulting Financial Institution's proportionate share (based upon the relative Commitments of the Non-Defaulting Financial Institutions of the Conduit Transfer Price Deficit and (y) the unused portion of such Non-Defaulting Financial Institution's Commitment. A Defaulting Financial Institution shall forthwith upon demand pay to the Agent for the account of the Non-Defaulting Financial Institutions all amounts paid by each Non-Defaulting Financial Institution on behalf of such Defaulting Financial Institution, together with interest thereon, for each day from the date a payment was made by a Non-Defaulting Financial Institution until the date such Non-Defaulting Financial Institution has been paid such amounts in full, at a rate per annum equal to the Federal Funds Effective Rate plus two percent (2%). In addition, without prejudice to any other rights that Conduit may have under applicable law, each Defaulting Financial Institution shall pay to Conduit forthwith upon demand, the difference between such Defaulting Financial Institution's unpaid Acquisition Amount and the amount paid with respect thereto by the Non-Defaulting Financial Institutions, together with interest thereon, for each day from the date of the Agent's request for such Defaulting Financial Institution's Acquisition Amount pursuant to Section 13.1 until the date the requisite amount is paid to Conduit in full, at a rate per annum equal to the Federal Funds Effective Rate plus two percent (2%).

Section 13.6         Terminating Financial Institutions.

        (a)            Each Financial Institution hereby agrees to deliver written notice to the Agent not more than 30 Business Days and not less than 5 Business Days prior to the Liquidity Termination Date indicating whether such Financial Institution intends to renew its Commitment hereunder. If any Financial Institution fails to deliver such notice on or prior to the date that is 5 Business Days prior to the Liquidity Termination Date, such Financial Institution will be deemed to have declined to renew its Commitment (each Financial Institution which has declined or has been deemed to have declined to renew its Commitment hereunder, a "Non-Renewing Financial Institution'). The Agent shall promptly notify Conduit of each Non-Renewing Financial Institution and Conduit, in its sole discretion, may (A) to the extent of Commitment Availability, declare that such Non-Renewing Financial Institution's Commitment shall, to such extent, automatically terminate on a date specified by Conduit on or before the Liquidity Termination Date or (B) upon one (1) Business Days' notice to such Non-Renewing Financial Institution assign to such Non-Renewing Financial Institution on a date specified by Conduit its Pro Rata Share of the aggregate Purchaser Interests then held by Conduit, subject to, and in accordance with, Section 13.1. In addition, Conduit may, in its sole discretion, at any time (x) to the extent of Commitment Availability, declare that any Affected Financial Institution's Commitment shall automatically terminate on a date specified by Conduit or (y) assign to any Affected Financial Institution on a date specified by Conduit its Pro Rata Share of the aggregate Purchaser Interests

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then held by Conduit, subject to, and in accordance with, Section 13.1 (each Affected Financial Institution or each Non-Renewing Financial Institution is hereinafter referred to as a "Terminating Financial Institution "). The parties hereto expressly acknowledge that any declaration of the termination of any Commitment, any assignment pursuant to this Section 13.6 and the order of priority of any such termination or assignment among Terminating Financial Institutions shall be made by Conduit in its sole and absolute discretion.

(b)            Upon any assignment to a Terminating Financial Institution as provided in this Section 13.6, any remaining Commitment of such Terminating Financial Institution shall automatically terminate. Upon reduction to zero of the Capital of all of the Purchaser Interests of a Terminating Financial Institution (after application of Collections thereto pursuant to Sections 2.2 and 2.3) all rights and obligations of such Terminating Financial Institution hereunder shall be terminated and such Terminating Financial Institution shall no longer be a "Financial Institution" hereunder; provided, however, that the provisions of Article X shall continue in effect for its benefit with respect to Purchaser Interests held by such Terminating Financial Institution prior to its termination as a Financial Institution.

ARTICLE XIV.

MISCELLANEOUS

    Section 14.1        Waivers and Amendments.

 (a)  No failure or delay on the part of the Agent or any Purchaser in exercising any power, right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or remedy preclude any other further exercise thereof or the exercise of any other power, right or remedy. The rights and remedies herein provided shall be cumulative and nonexclusive of any rights or remedies provided by law. Any waiver of this Agreement shall be effective only in the specific instance and for the specific purpose for which given.

(b)  No provision of this Agreement may be amended, supplemented, modified or waived except in writing in accordance with the provisions of this Section 14.1(b). Conduit, Seller and the Agent, at the direction of the Required Financial Institutions, may enter into written modifications or waivers of any provisions of this Agreement, provided, however, that no such modification or waiver shall:

(i)            without the consent of each affected Purchaser, (A) extend the Liquidity Termination Date or the date of any payment or deposit of Collections by Seller or the Servicer, (B) reduce the rate or extend the time of payment of Yield or any CP Costs (or any component of Yield or CP Costs), (C) reduce any fee payable to the Agent for the benefit of the Purchasers, (D) except pursuant to Article XII hereof, change the amount of the Capital of any Purchaser, any Financial Institution's Pro Rata Share (except pursuant to Sections 13.1 or 13.5) or any Financial Institution's Commitment, (E) amend, modify or waive any provision of the definition of Required Financial Institutions or this Section 14.1(b), (F) consent to or permit the assignment or transfer by Seller of any of its

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rights and obligations under this Agreement, (G) change the definition of "Eligible Receivable," "Loss Reserve," or "Loss Percentage," or (H) amend or modify any defined term (or any defined term used directly or indirectly in such defined term) used in clauses (A) through (G) above in a manner that would circumvent the intention of the restrictions set forth in such clauses; or

(ii)            without the written consent of the then Agent, amend, modify or waive any provision of this Agreement if the effect thereof is to affect in any material respect the rights or duties of such Agent.

Notwithstanding the foregoing, (i) without the consent of the Financial Institutions, but with the consent of Seller, the Agent may amend this Agreement solely to add additional Persons as Financial Institutions hereunder and (ii) the Agent, the Required Financial Institutions and Conduit may enter into amendments to modify any of the terms or provisions of Article XI, Article XII, Article XIII, Section 14.13 or any other provision of this Agreement without the consent of Seller, provided that such amendment has no negative impact upon Seller. Any modification or waiver made in accordance with this Section 14.1 shall apply to each of the Purchasers equally and shall be binding upon Seller, the Purchasers and the Agent.

Section 14.2         Notices. Except as provided in this Section 14.2, all communications and notices provided for hereunder shall be in writing (including bank wire, telecopy or electronic facsimile transmission or similar writing) and shall be given to the other parties hereto at their respective addresses or telecopy numbers set forth on the signature pages hereof or at such other address or telecopy number as such Person may hereafter specify for the purpose of notice to each of the other parties hereto. Each such notice or other communication shall be effective (i) if given by telecopy, upon the receipt thereof, (ii) if given by mail, three (3) Business Days after the time such communication is deposited in the mail with first class postage prepaid or (iii) if given by any other means, when received at the address specified in this Section 14.2. Seller hereby authorizes the Agent to effect purchases and Tranche Period and Discount Rate selections based on telephonic notices made by any Person whom the Agent in good faith believes to be acting on behalf of Seller. Seller agrees to deliver promptly to the Agent a written confirmation of each telephonic notice signed by an authorized officer of Seller; provided, however, the absence of such confirmation shall not affect the validity of such notice. If the written confirmation differs from the action taken by the Agent prior to receipt by the Agent of such written confirmation, the records of the Agent shall govern absent manifest error.

Section 14.3         Ratable Payments. If any Purchaser, whether by setoff or otherwise, has payment made to it with respect to any portion of the Aggregate Unpaids owing to such Purchaser (other than payments received pursuant to Section 10.2 or 10.3) in a greater proportion than that received by any other Purchaser entitled to receive a ratable share of such Aggregate Unpaids, such Purchaser agrees, promptly upon demand, to purchase for cash without recourse or warranty a portion of such Aggregate Unpaids held by the other Purchasers so that after such purchase each Purchaser will hold its ratable proportion of such Aggregate Unpaids; provided that if all or any portion of such excess amount is thereafter recovered from such Purchaser, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest.

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Section 14.4         Protection of Ownership Interests of the Purchasers.

(a)  Seller agrees that from time to time, at its expense, it will promptly execute and deliver all instruments and documents, and take all actions, that may be necessary, or that the Agent may reasonably request, to perfect, protect or more fully evidence the Purchaser Interests, or to enable the Agent or the Purchasers to exercise and enforce their rights and remedies hereunder. At any time after a Servicer Termination Event and the transfer of servicing , the Agent may, or the Agent may direct Seller or the Servicer to, notify the Obligors of Receivables, at Seller's expense, of the ownership or security interests of the Purchasers under this Agreement and may also direct that payments of all amounts due or that become due under any or all Receivables be made directly to the Agent or its designee. Seller or the Servicer (as applicable) shall, at any Purchaser's request, withhold the identity of such Purchaser in any such notification.

(b)  If any Seller Party fails to perform any of its obligations hereunder, the Agent or any Purchaser may (but shall not be required to) perform, or cause performance of, such obligations, and the Agent's or such Purchaser's costs and expenses incurred in connection therewith shall be payable by Seller as provided in Section 10.3. Each Seller Party irrevocably authorizes the Agent at any time and from time to time in the sole discretion of the Agent, and appoints the Agent as its attorney-in-fact, to act on behalf of such Seller Party (i) to execute on behalf of Seller as debtor and to file financing statements necessary or desirable in the Agent's sole discretion to perfect and to maintain the perfection and priority of the interest of the Purchasers in the Receivables and (ii) to file a carbon, photographic or other reproduction of this Agreement or any financing statement with respect to the Receivables as a financing statement in such offices as the Agent in its sole discretion deems necessary to perfect and to maintain the perfection and priority of the interests of the Purchasers in the Receivables. This appointment is coupled with an interest and is irrevocable.

Section 14.5         Confidentiality.

(a)  Each Seller Party and each Purchaser shall maintain and shall cause each of its employees and officers to maintain the confidentiality of this Agreement and the other confidential or proprietary information with respect to the Agent and Conduit and their respective businesses obtained by it or them in connection with the structuring, negotiating and execution of the transactions contemplated herein, except that such Seller Party and such Purchaser and its officers and employees may disclose such information to such Seller Party's and such Purchaser's external accountants and attorneys and as required by any applicable law or order of any judicial or administrative proceeding.

(b)  Anything herein to the contrary notwithstanding, each Seller Party hereby consents to the disclosure of any nonpublic information with respect to it (i) to the Agent, the Financial Institutions or Conduit by each other, (ii) by the Agent or the Purchasers to any prospective or actual assignee or participant of any of them, provided such assignee or participant agrees to be bound by the confidentiality provisions contained herein and (iii) by the Agent to any rating agency, Commercial Paper dealer or provider of a surety, guaranty or credit or liquidity enhancement to Conduit or any entity organized for the purpose of purchasing, or making loans secured by, financial assets for which Bank One acts as the administrative agent

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and to any officers, directors, employees, outside accountants and attorneys of any of the foregoing, provided each such Person referred to in clause (iii) is informed of the confidential nature of such information. In addition, the Purchasers and the Agent may disclose any such nonpublic information pursuant to any law, rule, regulation, direction, request or order of any judicial, administrative or regulatory authority or proceedings (whether or not having the force or effect of law). The Agent and each Purchaser shall use its best efforts to notify the Seller Parties of any order or request for any nonpublic information.

(c)            Notwithstanding any other express or implied agreement to the contrary, the parties hereto agree that each of them and each of their employees, representatives, and other agents may disclose to any and all Persons, without limitation of any kind, the tax treatment and tax structure of the transaction and all materials of any kind (including opinions or other tax analyses) that are provided to any of them relating to such tax treatment and tax structure, except where confidentiality is reasonably necessary to comply with U.S. federal or state securities laws. For purposes of this paragraph, the terms "tax treatment" and "tax structure" have the meanings specified in Treasury Regulation section 1.6011-4(c).

Section 14.6         Bankruptcy Petition. Each of Seller, the Servicer, the Agent and each Financial Institution hereby covenants and agrees that, prior to the date that is one year and one day after the payment in full of all outstanding senior indebtedness of Conduit, it will not institute against, or join any other Person in instituting against, Conduit or any such entity any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding under the laws of the United States or any state of the United States.

Section 14.7         Limitation of Liability. Except with respect to any claim arising out of the willful misconduct or gross negligence of Conduit, the Agent or any Financial Institution, no claim may be made by any Seller Party or any other Person against Conduit, the Agent or any Financial Institution or their respective Affiliates, directors, officers, employees, attorneys or agents for any special, indirect, consequential or punitive damages in respect of any claim for breach of contract or any other theory of liability arising out of or related to the transactions contemplated by this Agreement, or any act, omission or event occurring in connection therewith; and each Seller Party hereby waives, releases, and agrees not to sue upon any claim for any such damages, whether or not accrued and whether or not known or suspected to exist in its favor.

Section 14.8         CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS.

Section 14.9         CONSENT TO JURISDICTION. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH PARTY PURSUANT TO THIS AGREEMENT AND EACH PARTY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION

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IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY PURCHASER TO BRING PROCEEDINGS AGAINST ANY SELLER PARTY IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY SELLER PARTY AGAINST THE AGENT OR ANY PURCHASER OR ANY AFFILIATE OF THE AGENT OR ANY PURCHASER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH SELLER PARTY PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS OR NEW YORK, NEW YORK.

Section 14.10         WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ANY SELLER PARTY PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.

Section 14.11         Integration; Binding Effect; Survival of Terms.

(a)  This Agreement and each other Transaction Document contain the final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire agreement among the parties hereto with respect to the subject matter hereof superseding all prior oral or written understandings.

(b)  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns (including any trustee in bankruptcy). This Agreement shall create and constitute the continuing obligations of the parties hereto in accordance with its terms and shall remain in full force and effect until terminated in accordance with its terms; provided, however, that the rights and remedies with respect to (i) any breach of any representation and warranty made by any Seller Party pursuant to Article V, (ii) the indemnification and payment provisions of Article X, and Sections 14.5 and 14.6 shall be continuing and shall survive any termination of this Agreement.

Section 14.12         Counterparts; Severability; Section References. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same Agreement. Any provisions of this Agreement which are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Unless otherwise expressly indicated, all references herein to "Article," "Section," "Schedule" or "Exhibit" shall mean articles and sections of, and schedules and exhibits to, this Agreement.

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Section 14.13         Bank One Roles. Each of the Financial Institutions acknowledges that Bank One acts, or may in the future act, (i) as administrative agent for Conduit or any Financial Institution, (ii) as issuing and paying agent for the Commercial Paper, (iii) to provide credit or liquidity enhancement for the timely payment for the Commercial Paper and (iv) to provide other services from time to time for Conduit or any Financial Institution (collectively, the "Bank One Roles"). Without limiting the generality of this Section 14.13, each Financial Institution hereby acknowledges and consents to any and all Bank One Roles and agrees that in connection with any Bank One Role, Bank One may take, or refrain from taking, any action that it, in its discretion, deems appropriate, including, without limitation, in its role as administrative agent for Conduit, and the giving of notice to the Agent of a mandatory purchase pursuant to Section 13.1.

Section 14.14         Characterization.

(a)  It is the intention of the parties hereto that each purchase hereunder shall constitute and be treated as an absolute and irrevocable sale, which purchase shall provide the applicable Purchaser with the full benefits of ownership of the applicable Purchaser Interest. Except as specifically provided in this Agreement, each sale of a Purchaser Interest hereunder is made without recourse to Seller; provided, however, that (i) Seller shall be liable to each Purchaser and the Agent for all representations, warranties, covenants and indemnities made by Seller pursuant to the terms of this Agreement, and (ii) such sale does not constitute and is not intended to result in an assumption by any Purchaser or the Agent or any assignee thereof of any obligation of Seller or Transferor or any other person arising in connection with the Receivables, the Related Security, or the related Contracts, or any other obligations of Seller or Transferor.

(b)  In addition to any ownership interest which the Agent may from time to time acquire pursuant hereto, Seller hereby grants to the Agent for the ratable benefit of the Purchasers a valid and perfected security interest in all of Seller's right, title and interest in, to and under all Receivables now existing or hereafter arising, the Collections, each Lock-Box, each Lock-Box Account, each Blocked Account, all Related Security, all other rights and payments relating to such Receivables, and all proceeds of any thereof prior to all other liens on and security interests therein to secure the prompt and complete payment of the Aggregate Unpaids. The Agent and the Purchasers shall have, in addition to the rights and remedies that they may have under this Agreement, all other rights and remedies provided to a secured creditor under the UCC and other applicable law, which rights and remedies shall be cumulative.

[SIGNATURE PAGES FOLLOW]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their duly authorized officers as of the date hereof

TRUCK RETAIL ACCOUNTS CORPORATION

By:      /s/  Andrew J. Cederoth

Name:       Andrew J. Cederoth

Title:         Vice President and Treasurer

Address:           2850 W. Golf Road

Rolling Meadows, Illinois 60008

Attention: President and Treasurer

Fax: (847) 734-4090

NAVISTAR FINANCIAL CORPORATION

By:      /s/  Andrew J. Cederoth

Name:       Andrew J. Cederoth

Title:         Vice President and Treasurer

Address:           2850 W. Golf Road

Rolling Meadows, Illinois 60008

Attention: Vice President and Treasurer

Fax: (847) 734-4090

[Signature Page to the Receivables Purchase Agreement]

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JUPITER SECURITIZATION CORPORATION

By:         /s/  RONALD J. ATKINS

                    Ronald J. Atkins

                    Authorized Signatory

Address:         c/o Bank One, NA (Main Office Chicago), as Agent

                            Asset Backed Finance

                      Suite IL1-0079, 1-19

                      1 Bank One Plaza

                      Chicago, Illinois 60670-0079

                      Fax: (312) 732-1844

BANK ONE, NA (MAIN OFFICE CHICAGO), as a Financial Institution and as Agent

 

By:         /s/    RONALD J. ATKINS

Name:            Ronald J. Atkins

Title:               Director, Capital Markets

 Address:        Bank One, NA (Main Office Chicago) Asset Backed Finance

                      Suite IL1-0596, 1-21

                      1 Bank One Plaza

                      Chicago, Illinois 60670-0596

                      Fax: (312) 732-4487

[Signature Page to the Receivables Purchase Agreement]

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EXHIBIT I

DEFINITIONS

As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

"A Receivable"means a Receivable owing from an Obligor that is a non-direct customer of the Originator evidenced by a Contract with payment terms based on the date of delivery of the subject matter of such Contract.

"Accrual Period"means each calendar month, provided that the initial Accrual Period hereunder means the period from (and including) the date of the initial purchase hereunder to (and including) the last day of the calendar month thereafter.

"Acquisition Amount"means, on the date of any purchase from Conduit of one or more Purchaser Interests pursuant to Section 13.1, (a) with respect to each Financial Institution, the lesser of (i) such Financial Institution's Pro Rata Share of the sum of (A) the lesser of (1) the Adjusted Liquidity Price of each such Purchaser Interest and (2) the Capital of each such Purchaser Interest and (B) all accrued and unpaid CP Costs for each such Purchaser Interest and (ii) such Financial Institution's unused Commitment.

"Adjusted Funded Amount" means, in determining the Conduit Transfer Price for any Purchaser Interest, an amount equal to the sum of the Adjusted Liquidity Price of each such Purchaser Interest.

                                                                                                                                     NDR                                              

        "Adjusted Liquidity Price" means an amount equal to:  RI [(i) DC + (ii) [1+ (.50 x LPF)]]

          where:

RI    = the undivided percentage interest evidenced by such Purchaser Interest.

DC  = the Deemed Colledtions. 

LPF = Loss Percentage Floor

NDR = the Outstanding Balance of all Receivables as to which any payment, or part thereof, has not remained unpaid for 91 days or more from the original due date for such payment.

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Each of the foregoing shall be determined from the most recent Monthly Report received from the Servicer.

"Adverse Claim"means a lien, security interest, charge or encumbrance, or other right or claim in, of or on any Person's assets or properties in favor of any other Person.

"Affected Financial Institution" has the meaning specified in Section 12.1(c).

"Affiliate"means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person or any Subsidiary of such Person. A Person shall be deemed to control another Person if the controlling Person possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of stock, by contract or otherwise.

"Agent"has the meaning set forth in the preamble to this Agreement.

"Aggregate Capital"means, on any date of determination, the aggregate amount of Capital of all Purchaser Interests outstanding on such date.

          "Aggregate Reduction" has the meaning specified in Section 1.3.

"Aggregate Reserves"means, on any date of determination, (a) the sum of the Loss Reserve, the Yield Reserve, the Dilution Reserve and the Servicer Reserve and (b) at any time after a Credit Enhancement Trigger, the greater of (A) 35% and (B) the amount determined in clause (a) of this definition.

"Aggregate Unpaids"means, at any time, an amount equal to the sum of all accrued and unpaid fees under the Fee Letter, CP Costs, Yield, Aggregate Capital and all other unpaid Obligations (whether due or accrued) at such time.

"Agreement" means this Receivables Purchase Agreement, as it may be amended or modified and in effect from time to time.

"Amortization Date" means the earliest to occur of (i) the day on which any of the conditions precedent set forth in Section 6.2 are not satisfied, (ii) the Business Day immediately prior to the occurrence of an Amortization Event set forth in Section 9.1(d)(ii), (iii) the Business Day specified in a written notice from the Agent following the occurrence of any other Amortization Event, and (iv) the date which is 15 Business Days after the Agent's receipt of written notice from Seller that it wishes to terminate the facility evidenced by this Agreement.

"Amortization Event" has the meaning specified in Article IX.

"Assignment Agreement" has the meaning set forth in Section 12.1(b).

"Authorized Officer"means, with respect to any Person, its chief executive officer, president, corporate controller, treasurer, chief financial officer, controller, cash manager, financing manager or treasury reporting manager.

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"BReceivable" means a Receivable owing from an Obligor that is a direct customer of the Originator evidenced by a Contract with payment terms based on the date of delivery of the subject matter of such Contract.

"Bank One" means Bank One, NA (Main Office Chicago) in its individual capacity and its successors.

"Blocked Account" means each depositary account or similar account in which any proceeds of the Specified NFC Proceeds Account relating to the Receivables or, after the delivery of the Collection Notice or segregation notice pursuant to Section 8.3, any Lock-Box Account are deposited and which is listed on Exhibit W.

"Blocked Account Agreement" means an agreement in form and substance satisfactory to Agent, by and among Transferor, Seller, the Agent and a Blocked Account Bank.

"Blocked Account Bank" means, at any time, any of the banks holding one or more Blocked Accounts.

"Broken Funding Costs" means for any Purchaser Interest which: (i) has its Capital reduced without compliance by Seller with the notice requirements hereunder or (ii) does not become subject to an Aggregate Reduction following the delivery of any Reduction Notice or (iii) is assigned under Article XIII or terminated prior to the date on which it was originally scheduled to end; an amount equal to the excess, if any, of (A) the CP Costs or Yield (as applicable) that would have accrued during the remainder of the Tranche Periods or the tanche periods for Commercial Paper determined by the Agent to relate to such Purchaser Interest (as applicable) subsequent to the date of such reduction, assignment or termination (or in respect of clause (ii) above, the date such Aggregate Reduction was designated to occur pursuant to the Reduction Notice) of the Capital of such Purchaser Interest if such reduction, assignment or termination had not occurred or such Reduction Notice had not been delivered, over (B) the sum of (x) to the extent all or a portion of such Capital is allocated to another Purchaser Interest, the amount of CP Costs or Yield actually accrued during the remainder of such period on such Capital for the new Purchaser Interest, and (y) to the extent such Capital is not allocated to another Purchaser Interest, the income, if any, actually received during the remainder of such period by the holder of such Purchaser Interest from investing the portion of such Capital not so allocated. In the event that the amount referred to in clause (B) exceeds the amount referred to in clause (A), the relevant Purchaser or Purchasers agree to pay to Seller the amount of such excess. All Broken Funding Costs shall be due and payable hereunder upon demand.

"Business Day" means any day on which banks are not authorized or required to close in New York, New York or Chicago, Illinois and The Depository Trust Company of New York is open for business, and, if the applicable Business Day relates to any computation or payment to be made with respect to the LIBO Rate, any day on which dealings in dollar deposits are carried on in the London interbank market.

"CReceivable" means a Receivable owing from an Obligor that is a direct customer of the Originator evidenced by a Contract with payment terms based on the factory invoice date with respect to the subject matter of such Contract.

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            "Capital"of any Purchaser Interest means, at any time, (A) the Purchase Price of such Purchaser Interest, minus (B) the sum of the aggregate amount of Collections and other payments received by the Agent which in each case are applied to reduce such Capital in accordance with the terms and conditions of this Agreement; provided that such Capital shall be restored (in accordance with Section 2.5) in the amount of any Collections or other payments so received and applied if at any time the distribution of such Collections or payments are rescinded, returned or refunded for any reason.

"Change of Control" means the occurrence of one or more of the following events: (i) any person or group (within the meaning of the Securities Exchange Act of 1934 (the "Exchange Act") and the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof), other than employee or retiree benefit plans or trusts sponsored or established by Transferor or Originator, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of (A) securities of the Parent representing 35% or more of the combined voting power of the Parent's then outstanding voting stock, or (B) securities of the Transferor representing 50% or more of the combined voting power of Transferor's then outstanding voting stock; (ii) the following individuals cease for any reason to constitute more than three-fourths of the number of directors then serving on the Board of Directors of the Parent; individuals who, on the date hereof, constitute the Board of Directors

and any new director (other than a director whose initial assumption of the office is in connection with an actual or threatened election by the Parent's stockholders was approved by the vote of a majority of the directors then still in office or whose appointment, election or nomination was previously so approved or recommended; (iii) the stockholders of the Parent shall approve any Plan of Liquidation; (iv) Transferor consolidates with or merges with or into another Person, or Transferor or any Subsidiary of Transferor, directly or indirectly, sells, assigns, conveys, transfers, leases or otherwise disposes of, in one transaction or series of related transactions, all or substantially all of the property or assets of the Transferor and the Subsidiaries of Transferor (determined on a consolidated basis) to any Person, or Person consolidates with, or merges with or into, Transferor, in any such event pursuant to a transaction in which the outstanding voting stock of Transferor is converted into or exchanges for cash, securities or other property, and, as a result of which, neither the Parent nor Originator has "beneficial ownership" (as set forth above), directly or indirectly, of at least 50% of the combined voting power of the then outstanding voting stock of the surviving or transferee corporation; (v) so long as any Indebtedness under the Senior Subordinated Note Indenture (as defined in the Transferor Credit Agreement) is outstanding, a "Change of Control" as defined in the Senior Subordinated Note Indenture shall occur; or (vi) the Transfer shall cease to own directly or indirectly 100% of the outstanding voting stock of the Seller.

"Charged-Off Receivable" means a Receivable: (i) as to which the Obligor thereof has taken any action, or suffered any event to occur, of the type described in Section 9.1(d) (as if references to Seller Party therein refer to such Obligor); (ii) as to which the Obligor thereof, if a natural person, is deceased, (iii) which, consistent with the Credit and Collection Policy, would be written off Seller's books as uncollectible, or (iv) which has been identified by Seller as uncollectible.

"Collection Notice" means a notice, in substantially the form of Annex A to Exhibit VI, from the Agent to a Lock-Box Bank.

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"Collections" means, with respect to any Receivable, all cash collections and other cash proceeds in respect of such Receivable, including, without limitation, all yield, Finance Charges or other related amounts accruing in respect thereof and all cash proceeds of Related Security with respect to such Receivable.

"Commercial Paper" means promissory notes of Conduit issued by Conduit in the commercial paper market.

"Commitment" means, for each Financial Institution, the commitment of such Financial Institution to purchase Purchaser Interests from (i) Seller and (ii) Conduit, in an amount not to exceed (i) in the aggregate, the amount set forth opposite such Financial Institution's name on Schedule A to this Agreement, as such amount may be modified in accordance with the terms hereof (including, without limitation, any termination of Commitments pursuant to Section 13.6 hereof) and (ii) with respect to any individual purchase hereunder, its Pro Rata Share of the Purchase Price therefor.

"Commitment Availability" means at any time the positive difference (if any) between (a) an amount equal to the aggregate amount of the Commitments at such time minus (b) the Aggregate Capital at such time.

"Concentration Limit" means, at any time, for any Obligor, 33.33% of the Loss Reserve, or such other amount (a "Special Concentration Limit") for such Obligor designated by the Agent; provided, that in the case of an Obligor and any Affiliate of such Obligor, the Concentration Limit shall be calculated as if such Obligor and such Affiliate are one Obligor; and provided, further, that Conduit or the Required Financial Institutions may, upon notice to Seller, cancel any Special Concentration Limit; provided, however, that such Special Concentration Limit shall remain in place until the first Weekly Settlement Date following the fifteenth (15th) Business Day following the delivery of such notice. As of the date hereto, until notice from the Agent to the contrary in accordance with the proceeding sentence, the following Special Concentration Limits, as amended with the Agent's consent in the Weekly Report, shall be in effect: (i) Walmart Leasing, and Affiliates 90.0%; (ii) Anheuser Bush, Inc., and Affiliates 90.0%; (iii) Safeway Stores, 50.0%; (iv) Sara Lee, and Affiliates 50.0%; (v) PHH/Ameri Gas and Affiliates (Supported by Cendant), 50.0%; (vi) Budget Truck and Affiliates, 50.0%, (vii) Ryder Truck Rental and Affiliates, 50.0%, and (viii) ) Laidlaw, Inc. and Affiliates, 25.0%; provided, however, at no time shall the aggregate Outstanding Balance of Eligible Receivables owing from the Obligors listed in clause (v) and (vi) above exceed 90% of the Loss Reserve.

"Conduit" has the meaning set forth in the preamble to this Agreement. "Conduit Residual" means the sum of the Conduit Transfer Price Reductions.

"Conduit Transfer Price" means, with respect to the assignment by Conduit of one or more Purchaser Interests to the Agent for the benefit of one or more of the Financial Institutions pursuant to Section 13.1, the sum of (i) the lesser of (a) the Capital of each such Purchaser Interest and (b) the Adjusted Funded Amount of each such Purchaser Interest and (ii) all accrued and unpaid CP Costs for each such Purchaser Interest.

"Conduit Transfer Price Deficit" has the meaning set forth in Section 13.5. 50

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"Conduit Transfer Price Reduction" means in connection with the assignment of a Purchaser Interest by Conduit to the Agent for the benefit of the Financial Institutions, the positive difference (if any) between (i) the Capital of such Purchaser Interest and (ii) the Adjusted Funded Amount for such Purchaser Interest.

"Contingent Obligation" of a Person means any agreement, undertaking or arrangement by which such Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes or is contingently liable upon, the obligation or liability of any other Person, or agrees to maintain the net worth or working capital or other financial condition of any other Person, or otherwise assures any creditor of such other Person against loss, including, without limitation, any comfort letter, operating agreement, take-or-pay contract or application for a letter of credit.

"Contract" means, with respect to any Receivable, any and all instruments, agreements, invoices or other writings pursuant to which such Receivable arises or which evidences such Receivable in each case, only to the extent such writing relates to such Receivable (it being understood that any portion of such writing not relating to a Receivable or relating to a receivable that has not been transferred pursuant to the terms of this Agreement shall not be included in the term Contract, and if any writing shall have portions that are both included in and excluded from the term Contract, both parties having rights in such writing shall be granted reasonable access to such writing as shall be necessary or reasonably desirable to enforce its rights with respect thereto).

"CP Costs"means, for each day, the sum of (i) discount or yield accrued on Pooled Commercial Paper on such day, plus (ii) any and all accrued commissions in respect of placement agents and Commercial Paper dealers, and issuing and paying agent fees incurred, in respect of such Pooled Commercial Paper for such day, plus (iii) other costs associated with funding small or odd-lot amounts with respect to all receivable purchase facilities which are funded by Pooled Commercial Paper for such day, minus (iv) any accrual of income net of expenses received on such day from investment of collections received under all receivable purchase facilities funded substantially with Pooled Commercial Paper, minus (v) any payment received on such day net of expenses in respect of Broken Funding Costs related to the prepayment of any purchaser interest of Conduit pursuant to the terms of any receivable purchase facilities funded substantially with Pooled Commercial Paper. In addition to the foregoing costs, if Seller shall request any Incremental Purchase during any period of time determined by the Agent in its sole discretion to result in incrementally higher CP Costs applicable to such Incremental Purchase, the Capital associated with any such Incremental Purchase shall, during such period, be deemed to be funded by Conduit in a special pool (which may include capital associated with other receivable purchase facilities) for purposes of determining such additional CP Costs applicable only to such special pool and charged each day during such period against such Capital.

"Credit and Collection Policy"means Seller's credit and collection policies and practices relating to Contracts and Receivables existing on the date hereof and attached as Exhibit VIII hereto, as modified from time to time in accordance with this Agreement.

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"Credit Enhancement Trigger" means a downgrade of the Parent below (i) Ba3 by Moody's Investors Service, Inc. ("Moody's) and BB- by Standard & Poor's Ratings Service ("Standard & Poor's") or (ii) B1 by Moody's or (iii) B+ by Standard & Poor's .

"DeemedCollections" means the aggregate of all amounts Seller shall have been deemed to have received as a Collection of a Receivable. Seller shall be deemed to have received a Collection of a Receivable to the extent of such reduction or cancellation if at any time (i) the Outstanding Balance of any such Receivable is either (x) reduced as a result of any defective or rejected goods or services, any discount or any adjustment or otherwise by Seller (other than cash Collections on account of the Receivables) or (y) reduced or canceled as a result of a setoff in respect of any claim by any Person (whether such claim arises out of the same or a related transaction or an unrelated transaction) or (ii) any of the representations or warranties in Article V are no longer true with respect to any Receivable.

"Default Fee"means with respect to any amount due and payable by Seller in respect of any Aggregate Unpaids, an amount equal to the interest on any such unpaid Aggregate Unpaids at a rate per annum equal to 2% above the Prime Rate.

"Default Ratio"means, for any calendar month, an amount (expressed as a percentage) equal to (i) the sum of (A) the aggregate Outstanding Balance of all Receivables that were unpaid for more than 90 days after the due date of such invoice, but less than 121 days after the due date of such invoice as of the last day of such calendar month and (B) the aggregate Outstanding Balance of all Receivables that became Charged-Off Receivables prior to becoming 91 days past due during such calendar month divided by (ii) the aggregate gross sales with respect to the Receivables of the Originator during the calendar month four calendar months prior to such calendar month.

"Default Trigger Ratio" means, for any calendar month, an amount (expressed as a percentage) equal to (i) the sum of (A) the aggregate Outstanding Balance of all Receivables that were unpaid for more than 90 days after the due date of such invoice, but less than 121 days after the due date of such invoice as of the last day of such calendar month and (B) the aggregate Outstanding Balance of all Receivables that became Charged-Off Receivables prior to becoming 61 days past due during such calendar month divided by (ii) the Outstanding Balance of all Receivables as of the end of such calendar month, in the case of clause (i)(A), as reflected on the DFO Master Aging Report at such time.

"Defaulting Financial Institution" has the meaning set forth in Section 13.5.

"Delinquency Ratio" means, at any time, a percentage equal to (i) the aggregate Outstanding Balance of all Receivables that were more than 60 days but less than 91 days past due, as reflected on the DFO Master Aging Report at such time divided by (ii) the aggregate Outstanding Balance of all Receivables as reflected on the DFO Master Aging Report at such time.

"Delinquent Receivable" means a Receivable as to which any payment, or part thereof, remains unpaid for (i) with respect to A Receivables and B Receivables, 61 days or more

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from the original due date for such payment and (ii) respect to C Receivables, 91 days or more from the original factory invoice date for such payment.

"Designated Obligor" means an Obligor indicated by the Agent, using its reasonable credit judgment to Seller in writing; provided, however, such designations shall not be effective until the first Weekly Settlement Date occurring the fifteenth (15t) Business Day following the delivery of such notice.

"Dilution Horizon Ratio" means, as of the last day of any calendar month, a percentage equal to (i) the aggregate gross sales of the Originator with respect to the Receivables for such calendar month divided by (ii) Outstanding Balance of all Eligible Receivables as of the last day of such calendar month.

"Dilution Ratio" means, a percentage equal to (i) the aggregate amount of Dilutions which occurred during the calendar month then most recently ended, divided by (ii) the aggregate gross sales of the Originator with respect to the Receivables during the calendar month one calendar month prior to such calendar month, calculated on a monthly basis.

"Dilution Reserve" means, on any date, an amount equal to (i) the greater of (a) the Dilution Reserve Percentage or (b) 5%, multiplied by (ii) the Outstanding Balance of all Net Receivables Balance as of the close of business of the Servicer on such date.

"Dilution Reserve Percentage"

        (ii)     [[2.0 x ED] + [(DS - ED) x DS ] x DHR 

                                                            ED

 where:

        ED     =    the Expected Dilution Ratio at such time

        DS     =    the Dilution Spike Ratio at such time

        DHR  =   the Dilution Horizon Ratio at such time

"Dilution Spike Ratio" means, as of the last day of any calendar month, the highest 3-month rolling average Dilution Ratio, calculated as of the last day of each of the twelve calendar months then most recently ended.

"Dilutions" means, at any time, the aggregate amount of reductions or cancellations described in clause (i) of the definition of "Deemed Collections".

"Discount Rate" means, the LIBO Rate or the Prime Rate, as applicable, with respect to each Purchaser Interest of the Financial Institutions.

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"Eligible Receivable" means, at any time, a Receivable:

(i)  the Obligor of which (a) if a natural person, is a resident of the United States or, if a corporation or other business organization, is organized under the laws of the United States or any political subdivision thereof and has its chief executive office in the United States; (b) is not an Affiliate of any of the parties hereto; and (c) is not a Designated Obligor;

(ii)  the Obligor of which (A) is not the Obligor of any Charged-Off Receivable or (B) not an Obligor of Receivables of which more than 30% of the aggregate unpaid balance of all Receivables owing from such Obligor are Delinquent Receivables;

(iii)  which is not a Charged-Off Receivable or a Delinquent Receivable;

(iv)  which by its terms is due and payable within 90 days of the original billing date therefor and has not had its payment terms extended;

(v)  which is an "account" or "chattel paper" or "payment intangible" within the meaning of Article 9 of the UCC of all applicable jurisdictions;

(vi)  which is denominated and payable only in United States dollars in the United States;

(vii)  which arises under a Contract in substantially the form of one of the form contracts set forth on Exhibit IX hereto or otherwise approved by the Agent in writing, which, together with such Receivable, is in full force and effect and constitutes the legal, valid and binding obligation of the related Obligor enforceable against such Obligor in accordance with its terms subject to no offset, counterclaim or other defense;

(viii)  which arises under a Contract which does not contain a confidentiality provision that purports to restrict the ability of any Purchaser to exercise its rights under this Agreement, including, without limitation, its right to review the Contract;

(ix)  which arises under a Contract that contains an obligation to pay a specified sum of money, contingent only upon the sale of goods or the provision of services by Parent;

(x)  which, together with the Contract related thereto, does not contravene any law, rule or regulation applicable thereto (including, without limitation, any law, rule and regulation relating to truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy) and with respect to which no part of the Contract related thereto is in violation of any such law, rule or regulation;

                (xi)  which satisfies all applicable requirements of the Credit and Collection Policy;                

                (xii) which was generated in the ordinary course of Parent's business;

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(xiii)  which arises solely from the sale of goods or the provision of services to the related Obligor by Parent, and not by any other Person (in whole or in part);

(xiv)  as to which the Agent has not notified Seller that the Agent has determined that the class of Receivables for which such Receivable is a part is not acceptable as an Eligible Receivable; provided, however, that such Receivable shall not be deemed ineligible due to this clause (xiv) until the first Weekly Settlement Date following the fifteenth (15th) Business Day following the delivery of such notice;

(xv)  which is not subject to any right of rescission, set-off, counterclaim, any other defense (including defenses arising out of violations of usury laws) (any such right referred to herein as a "Setoff Right")of the applicable Obligor against Parent or any other Adverse Claim, and the Obligor thereon holds no right as against Parent to cause Parent to repurchase the goods or merchandise the sale of which shall have given rise to such Receivable (except with respect to sale discounts effected pursuant to the Contract, or defective goods returned in accordance with the terms of the Contract); provided, however, any Receivable subject to a Setoff Right will be included as an Eligible Receivable provided, that the aggregate of the Net Obligor Setoff Amounts for all Obligors does not exceed $500,000, and if the aggregate of the Net Obligor Setoff Amounts exceeds $500,000, the Receivables of each Obligor that are subject to a Setoff Right shall be included as Eligible Receivables but the aggregate amount of such Receivables shall be reduced by the Net Obligor Setoff Amount for such Obligor;

(xvi)  as to which Originator has satisfied and fully performed all obligations on its part with respect to such Receivable required to be fulfilled by it, and no further action is required to be performed by any Person with respect thereto other than payment thereon by the applicable Obligor;

(xvii)  all right, title and interest to and in which has been validly transferred by Parent directly to Seller under and in accordance with the Receivables Sale Agreement, and Seller has good and marketable title thereto free and clear of any Adverse Claim;

(xviii)  which is a Government Receivable to the extent the total amount of all Government Receivables for which the U.S. federal government is the Obligor included in the calculation of Net Receivables Balance, at any time, is no greater than 5% of all Receivables;

(xix)  with respect to any A Receivable, delivery has been made to the applicable Obligor and payment, or part thereof, remains unpaid for not more than 60 days after the original due date for such payment;

(xx)  with respect to any B Receivable, whether or not delivery has been made to the applicable Obligor, payment, or part thereof, remains unpaid for not more than 60 days after the original due date for such payment; provided, however, (A) if delivery has been made to the applicable Obligor, no more than 90% of the aggregate Outstanding Balance of such Receivables shall be included as Eligible Receivables and (B) if delivery has not been made to

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the applicable Obligor, no more than 65% of the Outstanding Balance of such Receivables shall be included as Eligible Receivables; and

(xxi) with respect to any C Receivable, whether or not delivery has been made to the applicable Obligor, payment, or part thereof, remains unpaid for not more than 90 days after the original factory invoice date for such payment; provided, however, with respect to such Receivables to the extent payment, or part thereof, remains unpaid for no more than 30 days after the original factory invoice date, no more than 75% of the aggregate Outstanding Balance of such Receivables shall be included as Eligible Receivables.

"ERISA"means the Employee Retirement Income Security Act of 1974, as amended from time to time.

"Expected Dilution Ratio" means, as of the last day of any calendar month, the average Dilution Ratio in respect of the twelve calendar months then most recently ended.

"Facility Account"means Account No. 323-2-37053 at JPMorgan Chase Bank.

"Facility Termination Date" means the earliest of (i) April 7, 2005, or such later date as mutually agreed to by the parties hereto, (ii) the Liquidity Termination Date and (iii) the Amortization Date.

"Federal Bankruptcy Code" means Title 11 of the United States Code entitled "Bankruptcy," as amended and any successor statute thereto.

"Federal Funds Effective Rate" means, for any period, a fluctuating interest rate per annum for each day during such period equal to (a) the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the preceding Business Day) by the Federal Reserve Bank of New York in the Composite Closing Quotations for U.S. Government Securities; or (b) if such rate is not so published for any day which is a Business Day, the average of the quotations at approximately 10:30 a.m. (Chicago time) for such day on such transactions received by the Agent from three federal funds brokers of recognized standing selected by it.

"Fee Letter"means that certain letter agreement dated as of the date hereof among Seller, Transferor and the Agent, as it may be amended or modified and in effect from time to time.

"Finance Charges"means, with respect to a Contract, any finance, interest, late payment charges or similar charges owing by an Obligor pursuant to such Contract.

"Financial Institutions" has the meaning set forth in the preamble in this Agreement.

"Funding Agreement" means this Agreement and any agreement or instrument executed by any Funding Source with or for the benefit of Conduit.

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"Funding Source" means (i) any Financial Institution or (ii) any insurance company, bank or other funding entity providing liquidity, credit enhancement or back-up purchase support or facilities to Conduit.

"GAAP"means generally accepted accounting principles in effect in the United States of America as of the date of this Agreement.

"Government Receivables" means any Receivable as to which the Obligor is a government or a governmental subdivision or agency.

"Governmental Authority" means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

"Incremental Purchase" means a purchase of one or more Purchaser Interests which increases the total outstanding Aggregate Capital hereunder.

"Indebtedness" of a Person means such Person's (i) obligations for borrowed money, (ii) obligations representing the deferred purchase price of property or services (other than accounts payable arising in the ordinary course of such Person's business payable on terms customary in the trade), (iii) obligations, whether or not assumed, secured by liens or payable out of the proceeds or production from property now or hereafter owned or acquired by such Person, (iv) obligations which are evidenced by notes, acceptances, or other instruments, (v) capitalized lease obligations, (vi) net liabilities under interest rate swap, exchange or cap agreements, (vii) Contingent Obligations and (viii) liabilities in respect of unfunded vested benefits under plans covered by Title IV of ERISA.

"Independent Director" shall mean a member of the Board of Directors of Seller who is not at such time, and has not been at any time during the preceding five (5) years, (A) a director, officer, employee or affiliate of Seller, Parent, Transferor, or any of their respective Subsidiaries or Affiliates, or (B) the beneficial owner (at the time of such individual's appointment as an Independent Director or at any time thereafter while serving as an Independent Director) of more than 0.5% of the outstanding common shares of Seller, Parent, Transferor, or any of their respective Subsidiaries or Affiliates, having general voting rights;

"LIBO Rate" means the rate per annum equal to the sum of (i) (a) the applicable British Bankers' Association Interest Settlement Rate for deposits in U.S. dollars appearing on Reuters Screen FRBD as of 11:00 a.m. (London time) two Business Days prior to the first day of the relevant Tranche Period, and having a maturity equal to such Tranche Period, provided that,

(i )  if Reuters Screen FRBD is not available to the Agent for any reason, the applicable LIBO Rate for the relevant Tranche Period shall instead be the applicable British Bankers' Association Interest Settlement Rate for deposits in U.S. dollars as reported by any other generally recognized financial information service as of 11:00 a.m. (London time) two Business Days prior to the first day of such Tranche Period, and having a maturity equal to such Tranche Period, and

(ii)  if no such British Bankers' Association Interest Settlement Rate is available to the Agent, the

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applicable LIBO Rate for the relevant Tranche Period shall instead be the rate determined by the Agent to be the rate at which Bank One offers to place deposits in U.S. dollars with first-class banks in the London interbank market at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Tranche Period, in the approximate amount to be funded at the LIBO Rate and having a maturity equal to such Tranche Period, divided by (b) one minus the maximum aggregate reserve requirement (including all basic, supplemental, marginal or other reserves) which is imposed against the Agent in respect of Eurocurrency liabilities, as defined in Regulation D of the Board of Governors of the Federal Reserve System as in effect from time to time (expressed as a decimal), applicable to such Tranche Period plus (ii) the sum of (A) 0.25% per annum plus (B) the "Applicable Rate" from time to time in effect for the "Eurodollar Revolving Loans" under the Transferor's Credit Agreement. The LIBO Rate shall be rounded, if necessary, to the next higher 1/16 of 1%.

"Liquidity Termination Date" means 364 days after the closing date.

"Lock-Box" means each locked postal box with respect to which a bank who has executed a Lock-Box Account Agreement has been granted exclusive access for the purpose of retrieving and processing payments made on the Receivables and which is listed on Exhibit W.

"Lock-Box Bank" mean, at any time, any of the banks holding one or more Lock-Box Accounts.

"Lock-Box Account" means each deposit account, lock-box account or similar account into which proceeds of a Lock-Box are collected or deposited and which is listed on Exhibit W.

"Lock-Box Account Agreement" means an agreement substantially in the form of Exhibit VI among Transferor, the Agent and a Lock-Box Bank.

"Loss Horizon Ratio" means as of any date, an amount (expressed as a percentage) equal to (i) the aggregate gross sales of the Parent with respect to the Receivables during the three most recently ended calendar months divided by (ii) Outstanding Balance of all Eligible Receivables as of the last day of the most recently ended calendar month.

"Loss Percentage" means, at any time, a percentage equal to the greater of (i) 2.00 multiplied by the Loss Ratio multiplied by the Loss Horizon Ratio or (ii) the Loss Percentage Floor.

"Loss Percentage Floor" means a percentage equal to 20%.

"Loss Ratio" means, on any date, the greatest three-calendar month rolling average Default Ratio as calculated for each of the twelve most recently ended calendar months.

"Loss Reserve"means, on any date, an amount equal to the Loss Percentage multiplied by the Net Receivables Balance as of the close of business of the Servicer on such date.

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"Material Adverse Effect" means a material adverse effect on (i) the financial condition or operations of any Seller Party and its Subsidiaries, taken as a whole, (ii) the ability of any Seller Party to perform its obligations under this Agreement, (iii) the legality, validity or enforceability of this Agreement or any other Transaction Document, (iv) any Purchaser's interest in the Receivables generally or in any significant portion of the Receivables, the Related Security or the Collections with respect thereto, or (v) the collectibility of the Receivables generally or of any material portion of the Receivables.

"Material Indebtedness" means Indebtedness or obligations in an aggregate principal amount exceeding $10,000,000.

"Monthly Report"means a report, in substantially the form of Exhibit X hereto (appropriately completed), furnished by the Servicer to the Agent pursuant to Section 8.5.

"Monthly Settlement Date" means (A) the 15`h day of each month or, if such day is not a Business Day, the first Business Day thereafter (beginning May 17, 2004), and (B) the last day of the relevant Tranche Period in respect of each Purchaser Interest of the Financial Institutions.

"Navistar"has the meaning set forth in the preamble to this Agreement.

"Net Obligor Setoff Amount" means, for any Obligor and for any Accrual Period, the lesser of (a) the aggregate Outstanding Balance of all Eligible Receivables of such Obligor and (b) an amount, not less than zero, equal to (i) the dollar amount of the Setoff Right (as defined in clause (xv) of the definition of "Eligible Receivable") the applicable Obligor may have against Parent minus (ii) the amount, if any, by which the Outstanding Balance of all Eligible Receivables owing from the applicable Obligor exceeds the Concentration Limit or Special Concentration Limit, as applicable, with respect to such Obligor.

"Net Receivables Balance" means, at any time, the aggregate Outstanding Balance of all Eligible Receivables at such time reduced by the aggregate amount by which the Outstanding Balance of all Eligible Receivables of each Obligor and its Affiliates exceeds the Concentration Limit for such Obligor.

"Non-Defaulting Financial Institution" has the meaning set forth in Section 13.5.           

 "Non-Renewing Financial Institution" has the meaning set forth in Section 13.6(a).      

"Obligations" shall have the meaning set forth in Section 2.1.

"Obligor" means a Person obligated to make payments pursuant to a Contract. "Originator" means International Truck and Engine Corporation, a Delaware corporation and its successors.59

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"Outstanding Balance" of any Receivable at any time means the then outstanding principal balance thereof.

"Parent" means Navistar International Corporation, a Delaware corporation, and its successors.

"Participant" has the meaning set forth in Section 12.2.

"Person" means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.

"Pooled Commercial Paper" means Commercial Paper notes of Conduit subject to any particular pooling arrangement by Conduit, but excluding Commercial Paper issued by Conduit for a tenor and in an amount specifically requested by any Person in connection with any agreement effected by Conduit.

"Potential Amortization Event" means an event which, with the passage of time or the giving of notice, or both, would constitute an Amortization Event.

"Prime Rate" means a rate per annum equal to the prime rate of interest announced from time to time by Bank One or its parent (which is not necessarily the lowest rate charged to any customer), changing when and as said prime rate changes

"Pro Rata Share" means, for each Financial Institution, a percentage equal to (i) the Commitment of such Financial Institution, divided by (ii) the aggregate amount of all Commitments of all Financial Institutions hereunder, adjusted as necessary to give effect to the application of the terms of Sections 13.5 or 13.6.

"Proposed Reduction Date" has the meaning set forth in Section 1.3.

"Purchase Limit" means $100,000,000.

"Purchase Notice" has the meaning set forth in Section 1.2.

"Purchase Price" means, with respect to any Incremental Purchase of a Purchaser Interest, the amount paid to Seller for such Purchaser Interest which shall not exceed the least of (i) the amount requested by Seller in the applicable Purchase Notice, (ii) the unused portion of the Purchase Limit on the applicable purchase date and (iii) the excess, if any, of the Net Receivables Balance (less the Aggregate Reserves) on the applicable purchase date over the aggregate outstanding amount of Aggregate Capital determined as of the date of the most recent Monthly Report, without taking into account such proposed Incremental Purchase.

"Purchasers" means Conduit and each Financial Institution.

"Purchaser Interest" means, at any time, an undivided percentage ownership interest (computed as set forth below) associated with a designated amount of Capital, selected pursuant to the terms and conditions hereof in (i) each Receivable arising prior to the time of the

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most recent computation or recomputation of such undivided interest, (ii) all Related Security with respect to each such Receivable, and (iii) all Collections with respect to, and other proceeds of, each such Receivable. Each such undivided percentage interest shall equal:

                                   C     

                            NRB - AR

where:

C        = the Capital of such Purchaser Interest.

AR     = the Aggregate Reserves.

NRB   = the Net Receivables Balance.

Such undivided percentage ownership interest shall be initially computed on its date of purchase. Thereafter, until the Amortization Date, each Purchaser Interest shall be automatically recomputed (or deemed to be recomputed) on each day prior to the Amortization Date. The variable percentage represented by any Purchaser Interest as computed (or deemed recomputed) as of the close of the business day immediately preceding the Amortization Date shall remain constant at all times thereafter.

"Purchasing Financial Institution" has the meaning set forth in Section 12.1(b).

"Receivable"means all indebtedness and other obligations owed to Originator or Transferor (at the time it arises, and before giving effect to any transfer or conveyance under the Receivables Sale Agreement or hereunder but only to the extent it is transferred under the Receivables Sale Agreement) or in which Seller or Transferor has a security interest or other interest, including, without limitation, any indebtedness, obligation or interest constituting an account, chattel paper, instrument or general intangible, arising in connection with the sale of goods or the rendering of services by Originator, and further includes, without limitation, the obligation to pay any Finance Charges with respect thereto. Indebtedness and other rights and obligations arising from any one transaction, including, without limitation, indebtedness and other rights and obligations represented by an individual invoice, shall constitute a Receivable separate from a Receivable consisting of the indebtedness and other rights and obligations arising from any other transaction; provided further, that any indebtedness, rights or obligations referred to in the immediately preceding sentence shall be a Receivable regardless of whether the account debtor or Seller treats such indebtedness, rights or obligations as a separate payment obligation.

"Receivables Sale Agreement" means that certain Receivables Sale Agreement, dated as of April 8, 2004, between Transferor and Seller, as the same may be amended, restated or otherwise modified from time to time.

"Records"means, with respect to any Receivable, all Contracts and other documents, books, records and other information (including, without limitation, computer

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programs, tapes, disks, punch cards, data processing software and related property and rights) relating to such Receivable, any Related Security therefor and the related Obligor.

"Reduction Notice" has the meaning set forth in Section 1.3.

"Reduction Percentage" means, for any Purchaser Interest acquired by the Financial Institutions from Conduit for less than the Capital of such Purchaser Interest, a percentage equal to a fraction the numerator of which is the Conduit Transfer Price Reduction for such Purchaser Interest and the denominator of which is the Capital of such Purchaser Interest.

"Regulatory Change" has the meaning set forth in Section 10.2(a).

"Reinvestment" has the meaning set forth in Section 2.2.

"Related Security" means, with respect to any Receivable, if any:

(i)  all of Seller's interest in the inventory and goods (including returned or repossessed inventory or goods), if any, the sale, financing or lease of which by Transferor or Originator, as applicable, gave rise to such Receivable, and all insurance contracts with respect thereto,

(ii)  all other security interests or liens and property subject thereto from time to time, if any, purporting to secure payment of such Receivable, whether pursuant to the Contract related to such Receivable or otherwise, together with all financing statements and security agreements describing any collateral securing such Receivable,

(iii)  all guaranties, letters of credit, insurance and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Receivable whether pursuant to the Contract related to such Receivable or otherwise,

(iv)  all service contracts and other contracts and agreements associated with such Receivable,

(v)  all Records related to such Receivable,

(vi )    all of Seller's right, title and interest in, to and under the Receivables Sale Agreement in respect of such Receivable, and

          (vii)  all proceeds of any of the foregoing.

"Required Financial Institutions" means, at any time, Financial Institutions with Commitments in excess of 66-2/3% of the Purchase Limit.

"Required Notice Period" means two Business Days.

"Responsible Agent Party" means any asset backed senior credit officer of the Agent.

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"Restricted Junior Payment" means (i ) any dividend or other distribution, direct or indirect, on account of any shares of any class of capital stock of Seller now or hereafter outstanding, except a dividend payable solely in shares of that class of stock or in any junior class of stock of Seller, (ii) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of capital stock of Seller now or hereafter outstanding, (iii) any payment or prepayment of principal of, premium, if any, or interest, fees or other charges on or with respect to, and any redemption, purchase, retirement, defeasance, sinking fund or similar payment and any claim for rescission with respect to the Subordinated Loans (as defined in the Receivables Sale Agreement), (iv) any payment made to redeem, purchase, repurchase or retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of capital stock of Seller now or hereafter outstanding, and (v) any payment of management fees by Seller (except for reasonable management fees to the Transferor or its Affiliates in reimbursement of actual management services performed).

"Seller"has the meaning set forth in the preamble to this Agreement.

"Seller Parties" has the meaning set forth in the preamble to this Agreement.

"Servicer" means at any time the Person (which may be the Agent) then authorized pursuant to Article VIII to service, administer and collect Receivables.

"Servicer Reserve"means, on any date, an amount equal to 1% multiplied by the Outstanding Balance of all Eligible Receivables as of the close of business of the Servicer on such date.

"Servicing Fee"has the meaning set forth in Section 8.6.

"Servicer Termination Event" means an Amortization Event described in Section 9.1(a),(b),(c) or (d) with respect to the Servicer.

"Settlement Period" means (A) in respect of each Purchaser Interest of Conduit, the immediately preceding Accrual Period, and (B) in respect of each Purchaser Interest of the Financial Institutions, the entire Tranche Period of such Purchaser Interest.

"Specified NFC Allocation Account" means account No. 144-0-48257 at JPMorgan Chase Bank, 4 New York Plaza, 6th Floor, New York, New York 10004 (ABA No: 021000021) or such other account specified by the Seller Parties in a notice to the Agent.

"Subsidiary"of a Person means (i) any corporation more than 50% of the outstanding securities having ordinary voting power of which shall at the time be owned or controlled, directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, or (ii) any partnership, association, limited liability company, joint venture or similar business organization more than 50% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled. Unless otherwise expressly provided, all references herein to a "Subsidiary" shall mean a Subsidiary of Seller.

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"Termination Date" has the meaning set forth in Section 2.2.

"Termination Percentage" has the meaning set forth in Section 2.2.

"Terminating Financial Institution" has the meaning set forth in Section 13.6(a).

"Terminating Tranche" has the meaning set forth in Section 4.3(b).

"Tranche Period" means, with respect to any Purchaser Interest held by a Financial Institution:

(a)  if Yield for such Purchaser Interest is calculated on the basis of the LIBO Rate, a period of one, two, three or six months, or such other period as may be mutually agreeable to the Agent and Seller, commencing on a Business Day selected by Seller or the Agent pursuant to this Agreement. Such Tranche Period shall end on the day in the applicable succeeding calendar month which corresponds numerically to the beginning day of such Tranche Period, provided, however, that if there is no such numerically corresponding day in such succeeding month, such Tranche Period shall end on the last Business Day of such succeeding month; or

(b)  if Yield for such Purchaser Interest is calculated on the basis of the Prime Rate, a period commencing on a Business Day selected by Seller and agreed to by the Agent, provided no such period shall exceed one month.

If any Tranche Period would end on a day which is not a Business Day, such Tranche Period shall end on the next succeeding Business Day, provided, however, that in the case of Tranche Periods corresponding to the LIBO Rate, if such next succeeding Business Day falls in a new month, such Tranche Period shall end on the immediately preceding Business Day. In the case of any Tranche Period for any Purchaser Interest which commences before the Amortization Date and would otherwise end on a date occurring after the Amortization Date, such Tranche Period shall end on the Amortization Date. The duration of each Tranche Period which commences after the Amortization Date shall be of such duration as selected by the Agent.

"Transaction Documents" means, collectively, this Agreement, each Purchase Notice, the Receivables Sale Agreement, the Transfer Agreement (but only those portions that relate to the Receivables), each Lock-Box Account Agreement, each Blocked Account Agreement, the Fee Letter, the Subordinated Note (as defined in the Receivables Sale Agreement) and all other instruments, documents and agreements executed and delivered in connection herewith.

"Transactions"means, collectively, (a) the execution and delivery by each Seller Party of the Transaction Documents to which it is a party, (b) the sale by the Seller of the Receivables, Related Security and Collections pursuant to this Agreement and use of the proceeds thereof, and (c) the performance of each Seller Party's other obligations under the Transaction Documents to which it is a party.

"Transfer Agreement"means that certain Master Intercompany Agreement dated April 26, 1993, as amended through the date hereof, by and between Parent and Transferor.

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"Transferor Credit Agreement" means that certain Credit Agreement, dated as of December 8, 2000, originally among Transferor, Arrendadora Financiera Navistar, S.A. de C.V., Servicios Financieros Navistar, S.A. de C.V. and Navistar Comercial, S.A. de C.V., as Borrowers, various lenders, JP Morgan Chase Bank (as successor to The Chase Manhattan Bank), as Administrative Agent, Bank of America, N.A., as Syndication Agent, and The Bank of Nova Scotia, as Documentation Agent, as the same may be amended, restated or otherwise modified from time to time.

"Transferor"means Navistar Financial Corporation, in its capacity as seller under the Receivables Sale Agreement.

"UCC"means the Uniform Commercial Code as from time to time in effect in the specified jurisdiction.

"Weekly Report"means a report, in substantially the form of Exhibit XI hereto (appropriately complete), furnished by the Servicer to the Agent pursuant to Section 8.5.

"Weekly Settlement Date" means the third Business Day of each week.

"Yield"means for each respective Tranche Period relating to Purchaser Interests of the Financial Institutions, an amount equal to the product of the applicable Discount Rate for each Purchaser Interest multiplied by the Capital of such Purchaser Interest for each day elapsed during such Tranche Period including the first day but excluding the last day, annualized on a 360 day basis.

"YieldReserve" means, on any date, an amount equal to 1% multiplied by the Net Receivables Balance as of the close of business of the Servicer on such date.

All accounting terms not specifically defined herein shall be construed in accordance with GAAP. All terms used in Article 9 of the UCC in the State of Illinois, and not specifically defined herein, are used herein as defined in such Article 9.

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EXHIBIT II

FORM OF PURCHASE NOTICE

[DATE]

Bank One, NA (Main Office Chicago), as Agent

1 Bank One Plaza, IL1-0079

Asset-Backed Finance

Chicago, Illinois 60670-0596

Attention: Jupiter Administrator

Re: PURCHASE NOTICE

Ladies and Gentlemen:

Reference is hereby made to the Receivables Purchase Agreement, dated as of April 8, 2004, by and among Truck Retail Accounts Corporation, a Delaware corporation (the "Seller"), Navistar Financial Corporation, as Servicer, the Financial Institutions, Jupiter Securitization Corporation ("Conduit"), and Bank One, NA (Main Office Chicago), as Agent (the "Receivables Purchase Agreement").   Capitalized terms used herein shall have the meanings assigned to such terms in the Receivables Purchase Agreement.

The Agent is hereby notified of the following Incremental Purchase:

Purchase Price:                                   $__________________________

Date of Purchase:                                 __________________________

Requested Discount Rate:                  [LIBO Rate] [Prime Rate] [Pooled Commercial Paper rate]

            Please credit the Purchase Price in immediately available funds to our Facility Account [and then wire-transfer the Purchase Price in immediately available funds on the above-specified date of purchase to:

[Account Name]

[Account No.]

[Bank Name & Address]

[ABA #]

Reference:

Telephone advice to: [Name] @ tel. No. ( )

Please advise [Name] at telephone no ()                          if Conduit will not be making this purchase.

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            In connection with the Incremental Purchase to be made on the above listed "Date of Purchase" (the "Purchase Date"), the Seller hereby certifies that the following statements are true on the date hereof, and will be true on the Purchase Date (before and after giving effect to the proposed Incremental Purchase):

(i)  the representations and warranties of the Seller set forth in Section 5.1 of the Receivables Purchase Agreement are true and correct on and as of the Purchase Date as though made on and as of such date;

(ii)  no event has occurred and is continuing, or would result from the proposed Incremental Purchase, that will constitute an Amortization Event or a Potential Amortization Event;

(iii)  the Facility Termination Date has not occurred, the Aggregate Capital does not exceed the Purchase Limit and the aggregate Purchaser Interests do not exceed 100%; and

(iv)  the amount of Aggregate Capital is $                                 after giving effect to the Incremental Purchase to be made on the Purchase Date.

Very truly yours,

TRUCK RETAIL ACCOUNTS CORPORATION

By:      ______________________________

Name:  ______________________________

Title:   ______________________________

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EXHIBIT III

STATE OF ORGANIZATION; PLACES OF BUSINESS; LOCATIONS OF RECORDS;

FEDERAL EMPLOYER IDENTIFICATION NUMBER AND ORGANIZATIONAL

IDENTIFICATION NUMBER

NAVISTAR:

Places of Business:

Illinois

Locations of Records:

2850 W. Golf Road

Rolling Meadows, Illinois 60008

Federal Employer Identification Number:

36-XXXXXXX

Organizational Identification Number:

04290010

Trade and Assumed Names, Prior Names:

 International Harvester Credit Corporation

International Finance Group

SELLER

Places of Business:

Illinois

Locations of Records:

2850 W. Golf Road

Rolling Meadows, Illinois 60008

Federal Employer Identification Number:

36-XXXXXXX

Organizational Identification Number:

3270162

Trade and Assumed Names, Prior Names:

None.

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EXHIBIT IV

NAMES OF LOCK-BOX BANKS; BLOCKED ACCOUNT BANKS; LOCK-BOX

ACCOUNTS; BLOCKED ACCOUNTS

               Lock Box :                                                                                           Related Lock-Box Account:

Lock-Box No. 198381, P.O.                                                              Account No.: XXXXXXXXXX maintained with

Box 198381, Atlanta Georgia                                                               Bank of America, 231 South La Salle

39384-8381                                                                                         Street, Chicago, IL 60604

Proceeds Allocation Account: No. XXX-X-XXXXX located at JPMorgan Chase Bank, 4 New York Plaza, 6th Floor, New York, New York 10004 (ABA No. 021000021)

Blocked Account: a trust account number XXXXXXXX.X in the name "Blocked Account for Bank One, NA (Main Office Chicago), as Agent" maintained with JPMorgan Chase Bank, 4 New York Plaza, 6th Floor, New York, New York 10004.

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EXHIBIT V

FORM OF COMPLIANCE CERTIFICATE

To:  Bank One, NA (Main Office Chicago), as Agent

This Compliance Certificate is furnished pursuant to that certain Receivables Purchase Agreement dated as of April 8, 2004 among Truck Retail Accounts Corporation (the "Seller"), Navistar Financial Corporation (the "Servicer"), the Purchasers party thereto and Bank One, NA (Main Office Chicago), as agent for such Purchasers (the "Agreement").

THE UNDERSIGNED HEREBY CERTIFIES THAT:

    1.  I am the duly elected _______________of Seller.

2.  I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of Seller and its Subsidiaries, if any, with respect to the accounting period covered by the attached financial statements.

3.  The examinations described in paragraph 2 did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes an Amortization Event or Potential Amortization Event, as each such term is defined under the Agreement, as of the date of this Certificate, except as set forth in paragraph 5 below.

4.  Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which Seller has taken, is taking, or proposes to take with respect to each such condition or event:

TRUCK RETAIL ACCOUNTS CORPORATION

By:      _________________________________                                                      

Name: _________________________________                                                        

Title:   _________________________________                                                      

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EXHIBIT VI

FORM OF LOCK-BOX ACCOUNT AGREEMENT

[To BE ATTACHED]

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Date: April 8, 2004

Bank of America

231 South La Salle Street

Chicago, IL 60604

Attention:  Carmen L. Conway

                    Donald S. Irvine

                    Marion J. Alongi

Ladies and Gentlemen:

This letter is delivered to you pursuant to the Receivables Purchase Agreement, dated as of April 8, 2004 (as the same may be amended, supplemented or otherwise modified from time to time, the "Agreement") among Navistar Financial Corporation (with its successors, "Navistar Financial", "we" or "us"), Truck Retail Accounts Corporation, Jupiter Securitization Corporation and Bank One, NA (Main Office Chicago), as agent (with its successors in such capacity, the "Agent"), and in connection with the Account No. XXXXXXXXXX (the "Lockbox Account"), our Lock-box No. XXXXXX (the "Lock-box" or the "Lock-box Service") P.O. Box 198381, Atlanta, GA 30384-8381 maintained with you.

We hereby instruct you, and by your signature below you hereby agree,

(i)  to transfer, not later than on the third business day after the execution of this letter and on each business day thereafter, by wire transfer, all collected and available funds deposited into the Lockbox Account maintained by you into the Navistar Financial Proceeds Allocation Account No. XXX-X-XXXXX maintained at JPMorgan Chase Bank, 4 New York Plaza, 6th Floor, New York, New York 10004 (ABA No. 021000021) (the "Proceeds Allocation Account") until instructed in writing by the Agent to do otherwise pursuant to paragraph (f) below, and

(ii)  (x) to deposit all cash, checks, drafts and other instruments or items for the payment of money (collectively, "Checks") paid into any Lock-box maintained by you in the related Lockbox Account maintained by you (except that you may deal with items which are postdated, improperly endorsed or otherwise irregular in accordance with your Standard Terms and Conditions, which are attached hereto as Exhibit A, as modified by our existing operating instructions) and (y) to transfer, on each Business Day, all collected and available funds deposited into any such Lockbox Account to the Proceeds Allocation Account. A "Business Day" is each day except Saturdays, Sundays and your holidays. Funds are not available, if in your reasonable determination, they are subject to a hold, dispute or legal process preventing their withdrawal.

By executing a copy of this letter, you

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(a)  confirm that you have established on behalf of Navistar Financial the Lockbox Account and Lock-box Service indicated in the first paragraph of this letter,

(b)  agree that such Lockbox Account and Lock-box shall clearly indicate that certain of the items and funds delivered to the Lock-box or deposited into the Lockbox Account are the property of Navistar Financial subject to the security interest of the Agent pursuant to the Agreement,

(c)  agree that you will comply with the instructions originated by the Agent directing disposition of the funds in each such Lockbox Account without further consent by Navistar Financial,

(d)  confirm that (i) you have not received notice of any other currently effective lien or claim on the Lockbox Account and (ii) you do not yourself have any lien or other claim on the Lockbox Account (other than any interest you may have as a Secured Party under the Agreement),

(e)  agree to take such other action as may be reasonably necessary or appropriate from time to time under the UCC to perfect the Agent's Security Interest in the Lockbox Account,

(f)  agree that within a reasonable period of time, not to exceed two Business Days (as defined below), after your receipt of a notice from the Agent, substantially in the form of Annex 1 attached hereto, you will, each Business Day therafter transfer by wire transfer the collected and available balance in the Lockbox Account to the account of the Agent specified in the Notice, and

(g)  agree that all Checks delivered to the Lock-box or deposited into the Lockbox Account will not be subject to deduction, set-off, banker's lien or any other right in your favor except that (i) if you, at any time, determine that there is an inaccuracy in such Lockbox Account or that an entry previously posted to such Lockbox Account was revoked or did not become final (including but not limited to) the return of deposited items unpaid) then you may debit such amount against such Lockbox Account, and (ii) you may debit against such account any fees directly related to the operation of such account, if Navistar Financial has not paid such fees within thirty days of your making a demand for their payment.

If you (because of insufficient funds or for any other reason) cannot obtain payment pursuant to paragraph (d) above of such amount by debiting such account, we agree to pay such amount to you immediately upon demand.

We agree to indemnify and, at your option, defend you against all liabilities, claims, losses and expenses (excluding routine operating expenses), including reasonable attorneys' fees and court fees and costs incurred by you as a result of your agreeing to this letter or your relying upon or complying with this letter or any information or instruction received by you from us, the Agent. Notwithstanding the above, we shall have no obligation to indemnify you for or defend you against such liabilities, claims, losses and expenses to the

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extent such liabilities, claims, losses or expenses are the result of your gross negligence, willful misconduct or bad faith.

You will be liable to us or the Agent under or in connection with this letter or such Lockbox Account or Lock-box, to make an adjustment to such account or to pay an amount beyond the final balance actually posted to such account by you, only to the extent of our direct losses or the Agent's direct losses and only to the extent such losses are caused by your willful misconduct or failure to exercise ordinary care. The amount of your liability under or in connection with this letter or such account, to make an adjustment to such account or otherwise, will be limited to (a) the refund of any amount wrongly debited or misdirected by you from such account which we were not obliged to pay, back-dated for account analysis purposes as of the date of the debit or misdirection (or at your election, without back-dating but with interest added, computed at your effective Federal Funds rate in effect from time to time), and (b) the refund of fees paid by us for services performed by you in connection with these accounts and any services provided by you in connection therewith to the extent that such services were not properly performed by you, and (c) after such accounts are closed, payment of the balance posted to such accounts. In no event will you be liable for any special, indirect, exemplary or consequential damages. In no event will you be liable as a result of an act or omission if it is due to compliance with this letter or with applicable laws, regulations, operating circulars, clearing house rules or funds-transfer system rules, any act or omission by us or the Agent, any act or omission by any other bank, clearing house, funds-transfer system, agent or other person, mechanical failure of your equipment, power failure, strike or lock-out, fire or other casualty, riot or civil commotion, windstorm, earthquake, flood or other Act of God, delay in transportation, governmental regulation or interference, or any event beyond your control. The Agent and we acknowledge that you are not a party to the Agreement.

Neither the Agent nor any other Secured Party shall be required to pay you any compensation or indemnity whatsoever for providing the services contemplated herein.

All notices and other communications in connection with this letter shall be addressed to the respective party at its address or telefax number set forth below the respective party's name on the signature page of this letter or any other address or telefax number which a party shall specify for the purpose of communications in connection herewith, by notice in writing to the other parties. You may rely, and shall be fully protected in acting, upon any resolution, statement, certificate, instrument, opinion, report, notice, request, consent or other paper or document which it believes to be genuine and to have been signed or presented by the proper party or, in the case of telefax transmissions, to have been sent by the proper party or parties.

You may terminate this letter upon thirty days' prior written notice to the Agent and us. You may also terminate this letter at any time by written notice to the Agent and us if either the Agent or we breach any terms of this letter.

This letter shall be binding upon and inure to the benefit of each party hereto and shall inure to the benefit of the Agent and each of the other secured parties under the Agreement and their respective successors and assigns. This letter shall not be altered in

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any material manner except by a writing signed by each party hereto, provided, however, that your fees and charges are subject to change on thirty days' prior written notice to us.

We agree to pay to you, upon receipt of your invoice, all out-of-pocket costs, expenses and attorneys' fees incurred by you in connection with the enforcement of this letter and any instrument or agreement required hereunder, including but not limited to any such costs, expenses and fees arising out of the resolution of any conflict, dispute, motion regarding entitlement to rights or rights of action, or other action to enforce your rights in a case arising under Title 11, United States Code. We agree to pay you, upon receipt of your invoice, all costs, expenses and attorneys' fees incurred by you in the preparation of this letter (including any amendments hereto or instruments or agreements required hereunder).

Notwithstanding any of the other provisions in this letter, in the event of the commencement of a case pursuant to Title 11, United States Code, filed by or against us, or in the event of the commencement of any similar case under then applicable federal or state law providing for the relief of debtors or the protection of creditors by or against us, you may act as you deem necessary to comply with all applicable provisions of governing statutes and shall be held harmless from any claim of any of the parties for so doing.

This letter may be signed in any number of counterparts with the same effect as if the signatures thereto and hereto were upon the same instrument.

Nothing contained in this letter shall create any agency, fiduciary, joint venture or partnership relationship between you and us or the Agent.

This letter shall be governed by and construed in accordance with the substantive laws of the State of Illinois without regard to the choice of law principles of such jurisdiction.

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Please acknowledge receipt of this letter and your acceptance of the terms hereof by signing a copy of this letter in the space provided below.

     Very truly yours,

     NAVISTAR FINANCIAL CORPORATION

     By:    /s/  ANDREW J. CEDEROTH

     Name:      Andrew J. Cederoth

     Title:        Vice President and Treasurer

     2850 West Golf Road

     Rolling Meadows, IL 60008

     Telefax number: (847) 734-4090

     Attention: Vice President & Treasurer

Acknowledged and agreed to as of this

__ day of April, 2004.

BANK OF AMERICA, N.A.

By:     /s/  THERESA HERNANDEZ

Name:       Theresa Hernandez

Title:         Vice President

Bank of America

231 South La Salle Street

Chicago, IL 60604

Attention:  Carmen L. Conway

                    Donald S. Irvine

                    Marion J. Alongi

BANK ONE, NA (MAIN OFFICE CHICAGO), as Agent    

By:    /s/  RONALD J. ATKINS          

 Name:    Ronald J. Atkins

Title:       Director, Capital Markets

Suite IL 1-0596, 1-21

1 Bank  One Plaza

Chicago, IL 60670-0596

Telefax Number (312)732-1844

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EXHIBIT A

STANDARD TERMS AND CONDITIONS

The Lockbox Service involves processing Checks that arc received at a Lockbox Address. With this Service, Company instructs its customers to mail checks it wants to have processed under the Service to Navistar Financial Corporation (the "Company") Lockbox Address. Bank picks up mail at the Lockbox Address according to its mail pick-up schedule. Bank of America, N.A. (the "Bank") will have unrestricted and exclusive access to the mail directed to the Lockbox Address. Bank will provide Company with the Lockbox Service for a Lockbox Address when Company has completed and Bank has received Bank's then current set-up documents for the Lockbox Address.

If Bank receives any mail containing Company's lockbox number at Bank's lockbox operations location (instead of the Lockbox Address), Bank may handle the mail as if it had been received at the Lockbox Address.

PROCESSING

Bank will handle Checks received at the Lockbox Address according to the applicable deposit account agreement, as if the Checks were delivered by Company to Bank for deposit to the Account, except as modified by this Agreement.

Bank will open the envelopes picked up from the Lockbox Address and remove the contents. For the Lockbox Address, Checks and other documents contained in the envelopes will be inspected and handled in the manner specified in the Company's set-up documents. Bank captures and reports information related to the lockbox processing, where available, if Company has specified this option in the set-up documents. Bank will endorse all Checks Bank processes on Company's behalf.

If Bank processes an unsigned check as instructed in the set-up documents, and the check is paid, but the account owner does not authorize payment, Company agrees to indemnify Bank, the drawee bank (which may include Bank) and any intervening collecting bank for any liability or expense incurred by such indemnitee due to the payment and collection of the check.

If Company instructs Bank not to process a check bearing a handwritten or typed notation "Payment in Full" or words of similar import on the face of the check, Company understands that Bank has adopted procedures designed to detect Checks bearing such notations; however, Bank will not be liable to Company or any other party for losses suffered if Bank fails to detect Checks bearing such notations.

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RETURNED CHECK

Unless Company and Bank agree to another processing procedure, Bank will reclear a Check once which has been returned and marked "Refer to Maker," "Not Sufficient Funds" or "Uncollected Funds." If the Check is returned for any other reason or if the Check is returned a second time, Bank will debit the applicable Account and return the Check to Company. Company agrees that Bank will not send a returned item notice to Company for a returned Check unless Company and Bank have agreed otherwise.

ACCEPTABLE PAYEES

For the Lockbox Address, Company will provide to Bank the names of Acceptable Payees ("Acceptable Payee" means Company's name and any other payee name provided to Bank by Company as an acceptable payee for Checks to be processed under the Lockbox Service). Bank will process a check only if it is made payable to an Acceptable Payee and if the check is otherwise processable. Company warrants that each Acceptable Payee has authorized Checks payable to it to be credited to the Account Company designates for the Lockbox Service. Bank may treat as an Acceptable Payee any variation of any Acceptable Payee's name that Bank deems to be reasonable.

CHANGES TO PROCESSING INSTRUCTIONS

Company may request Bank orally or in writing to make changes to the processing instructions (including changes to Acceptable Payees) for any Lockbox Address by contacting its Bank representative. Bank will not be obligated to implement any requested changes until Bank has actually received the requests and had a reasonable opportunity to act upon them. In making changes, Bank is entitled to rely on instructions purporting to be from Company.

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ANNEX 1

[BANK ONE, N.A.]

Bank of America

231 South La Salle Street

Chicago, IL 60604

Attention:  Carmen L. Conway

                    Donald S. Irvine

                    Marion J. Alongi

RE:   Navistar Financial Corporation

    Account No. ______________________

Ladies and Gentlemen:

Reference is made to the letter agreement dated April 8, 2004 (the "Agreement") between Navistar Financial Corporation and you regarding the above-described account (the "Lockbox Account"). In accordance with Section (f) on page 2 of the Agreement, we hereby give you notice of our exercise of control of the Lockbox Account and we hereby instruct you to transfer funds to our account as follows:

Bank Name:   _____________________                                                              

ABA No.:      _____________________                                                           

Account Name: ___________________                                                             

Account No.: _____________________                                                         

Very truly yours,

BANK ONE, N.A.

By___________________________

Name:________________________

         Title:________________________

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EXHIBIT VII

FORM OF ASSIGNMENT AGREEMENT

THIS ASSIGNMENT AGREEMENT (this "Assignment Agreement") is entered into as of the ____day of ___________, ___, by and between __________________ ("Assignor") and ___________________ ("Assignee").

PRELIMINARY STATEMENTS

A.  This Assignment Agreement is being executed and delivered in accordance with Section 12.1(b) of that certain Receivables Purchase Agreement dated as of April 8, 2004 by and among Truck Retail Accounts Corporation, Navistar Financial Corporation, as Servicer, Jupiter Securitization Corporation, Bank One, NA (Main Office Chicago), as Agent, and the Financial Institutions party thereto (as amended, modified or restated from time to time, the "Purchase Agreement"). Capitalized terms used and not otherwise defined herein are used with the meanings set forth or incorporated by reference in the Purchase Agreement.

B.  Assignor is a Financial Institution party to the Purchase Agreement, and Assignee wishes to become a Financial Institution thereunder; and

  C.  Assignor is selling and assigning to Assignee an undivided ________% (the "Transferred Percentage") interest in all of Assignor's rights and obligations under the Purchase Agreement and the Transaction Documents, including, without limitation, Assignor's Commitment and (if applicable) the Capital of Assignor's Purchaser Interests as set forth herein.

AGREEMENT

  The parties hereto hereby agree as follows:

1.  The sale, transfer and assignment effected by this Assignment Agreement shall become effective (the "EffectiveDate") two (2) Business Days (or such other date selected by the Agent in its sole discretion) following the date on which a notice substantially in the form of Schedule II to this Assignment Agreement ("Effective Notice") is delivered by the Agent to Conduit, Assignor and Assignee. From and after the Effective Date, Assignee shall be a Financial Institution party to the Purchase Agreement for all purposes thereof as if Assignee were an original party thereto and Assignee agrees to be bound by all of the terms and provisions contained therein.

2.  If Assignor has no outstanding Capital under the Purchase Agreement, on the Effective Date, Assignor shall be deemed to have hereby transferred and assigned to Assignee, without recourse, representation or warranty (except as provided in paragraph 6 below), and the Assignee shall be deemed to have hereby irrevocably taken, received and assumed from Assignor, the Transferred Percentage of Assignor's Commitment and all rights and obligations associated therewith under the terms of the Purchase Agreement, including,

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without limitation, the Transferred Percentage of Assignor's future funding obligations under Section 4.1 of the Purchase Agreement.

3.  If Assignor has any outstanding Capital under the Purchase Agreement, at or before 12:00 noon, local time of Assignor, on the Effective Date Assignee shall pay to Assignor, in immediately available funds, an amount equal to the sum of (i) the Transferred Percentage of the outstanding Capital of Assignor's Purchaser Interests (such amount, being hereinafter referred to as the "Assignee's Capital; (ii)all accrued but unpaid (whether or not then due) Yield attributable to Assignee's Capital; and (iii) accruing but unpaid fees and other costs and expenses payable in respect of Assignee's Capital for the period commencing upon each date such unpaid amounts commence accruing, to and including the Effective Date (the "Assignee's Acquisition Cost"); whereupon, Assignor shall be deemed to have sold, transferred and assigned to Assignee, without recourse, representation or warranty (except as provided in paragraph 6 below), and Assignee shall be deemed to have hereby irrevocably taken, received and assumed from Assignor, the Transferred Percentage of Assignor's Commitment and the Capital of Assignor's Purchaser Interests (if applicable) and all related rights and obligations under the Purchase Agreement and the Transaction Documents, including, without limitation, the Transferred Percentage of Assignor's future funding obligations under Section 4.1 of the Purchase Agreement.

4.  Concurrently with the execution and delivery hereof, Assignor will provide to Assignee copies of all documents requested by Assignee which were delivered to Assignor pursuant to the Purchase Agreement.

5.  Each of the parties to this Assignment Agreement agrees that at any time and from time to time upon the written request of any other party, it will execute and deliver such further documents and do such further acts and things as such other party may reasonably request in order to effect the purposes of this Assignment Agreement.

6.  By executing and delivering this Assignment Agreement, Assignor and Assignee confirm to and agree with each other, the Agent and the Financial Institutions as follows: (a) other than the representation and warranty that it has not created any Adverse Claim upon any interest being transferred hereunder, Assignor makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made by any other Person in or in connection with the Purchase Agreement or the Transaction Documents or the execution, legality, validity, enforceability, genuineness, sufficiency or value of Assignee, the Purchase Agreement or any other instrument or document furnished pursuant thereto or the perfection, priority, condition, value or sufficiency of any collateral; (b) Assignor makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Seller, any Obligor, any Affiliate of the Seller or the performance or observance by the Seller, any Obligor, any Affiliate of the Seller of any of their respective obligations under the Transaction Documents or any other instrument or document furnished pursuant thereto or in connection therewith; (c) Assignee confirms that it has received a copy of the Purchase Agreement and copies of such other Transaction Documents, and other documents and information as it has requested and deemed appropriate to make its own credit analysis and decision to enter into this Assignment Agreement; (d) Assignee will, independently and without reliance upon the Agent, Conduit, the Seller or any other Financial Institution or Purchaser and

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based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Purchase Agreement and the Transaction Documents; (e) Assignee appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under the Transaction Documents as are delegated to the Agent by the terms thereof, together with such powers as are reasonably incidental thereto; and (f) Assignee agrees that it will perform in accordance with their terms all of the obligations which, by the terms of the Purchase Agreement and the other Transaction Documents, are required to be performed by it as a Financial Institution or, when applicable, as a Purchaser.

7.   Each party hereto represents and warrants to and agrees with the Agent that it is aware of and will comply with the provisions of the Purchase Agreement, including, without limitation, Sections 4.1, 13.1 and 14.6 thereof.

8.  Schedule I hereto sets forth the revised Commitment of Assignor and the Commitment of Assignee, as well as administrative information with respect to Assignee.

9.  THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS.

10.  Assignee hereby covenants and agrees that, prior to the date which is one year and one day after the payment in full of all senior indebtedness for borrowed money of Conduit, it will not institute against, or join any other Person in instituting against, Conduit any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding under the laws of the United States or any state of the United States.

IN WITNESS WHEREOF, the parties hereto have caused this Assignment Agreement to be executed by their respective duly authorized officers of the date hereof.

[ASSIGNOR]

By:  ______________________         

Title:______________________

[ASSIGNEE]

By:_______________________

Title:______________________

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SCHEDULE I TO ASSIGNMENT AGREEMENT

LIST OF LENDING OFFICES, ADDRESSES

FOR NOTICES AND COMMITMENT AMOUNTS

Date:______________, _______

Transferred Percentage: _________%

	A1	A-2	B-1	B-2
Assignor	Commitment (prior to giving effect to the Assignment Agreement)	Commitment (after giving effect to the Assignment Agreement)	Outstanding Capital (if any)	Ratable Share of Outstanding Capital

	A-2	B-1	B-2
Assignee	Commitment (after giving effect to the Assignment Agreement)	Outstanding Capital (if any)	Ratable Share of Outstanding Capital

Address for Notices

Attention:

Phone:

Fax:

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SCHEDULE II TO ASSIGNMENT AGREEMENT

EFFECTIVE NOTICE

TO:  _______________________ , Assignor

        _______________________

        _______________________

        _______________________

TO: ________________________, Assignee

       ________________________

       ________________________

       ________________________

The undersigned, as Agent under the Receivables Purchase Agreement dated as of April 8, 2004 by and among Truck Retail Accounts Corporation, a Delaware corporation, Navistar Financial Corporation, as Servicer, Jupiter Securitization Corporation, Bank One, NA (Main Office Chicago), as Agent, and the Financial Institutions party thereto, hereby acknowledges receipt of executed counterparts of a completed Assignment Agreement dated as of_________, ____ between________________, as Assignor, and _______________, as Assignee.   Terms defined in such Assignment Agreement are used herein as therein defined.

1.  Pursuant to such Assignment Agreement, you are advised that the Effective Date will be ____________, _____.

2.   Conduit hereby consents to the Assignment Agreement as required by Section 12.1(b) of the Receivables Purchase Agreement.

[3. Pursuant to such Assignment Agreement, the Assignee is required to pay $_________ to Assignor at or before 12:00 noon (local time of Assignor) on the Effective Date in immediately available funds.]

Very truly yours,

BANK ONE, NA (MAIN OFFICE CHICAGO),

individually and as Agent

By:  ______________________________  

Title:______________________________                                                

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JUPITER SECURITIZATION CORPORATION

             By:  ________________________________

                                                                                   Authorized Signatory

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EXHIBIT VIII

CREDIT AND COLLECTION POLICY

SEE EXHIBIT V TO RECEIVABLES SALE AGREEMENT

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EXHIBIT IX

FORM OF CONTRACTS)

SEE ATTACHED

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TERMS AGREEMENT

____________________________________

Buyer Name

____________________________________

Address

____________________________________

City, State. Zip

Invoicing Terms

_____________________________________ (Buyer) from time to time orders various quantities of trucks from Navistar.   For any and all trucks currently on order and all future orders.   Buyer agrees to accept invoicing for Buyer's account upon completion of manufacture at Navistar's assembly plant.   Title to such trucks shall pass to Buyerupon tender of invoice.

It is understood that Buyer will take physical delivery of trucks subject to this Agreement at the first destination specified on Buyer's purchase order or on other written notification.

Navistar will maintain responsibility for the physical condition of such trucks until delivery is completed at the designated delivery location.

 Payment Terms

Account terms have been established upon acceptance of Buyer's order.

A.  Buyer agrees that payment shall be due to Navistar  ______ days from date of factory invoice (build date).

B.  Buyer agrees that payment shall be due to Navistar ______ days from date of delivery.

While a late charge may be asessed from due date to actual date of payment, it is not intended for an late charge to be accepted in lieu of prompt payment.

This Agreement governs all purchases orders from the date hereof until canceled in writing by either party.   

Acknowledged:

By: ______________________________________

       ______________________________________

       Title

Date:_____________________________________

By: ______________________________________

National Account Manager

        Navistar  International Transportation Corp

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ADDITIONAL PROVISIONS OF SALE

1.   The trucks and equipment covered by this agreement will be invoiced immediately upon completion of manufacture at assembly plant and the title shall pass to purchaser upon tender of invoice.

2.   The seller will maintain responsibility for the physical condition of the trucks and equipment covered by this agreement until physical delivery is completed to the purchaser or his agent.

3.   While a late charge may be assessed from due date to actual date of payment, it is not intended for late charges to be accepted in lieu of prompt payment.

4.   The trade allowance set forth herein is based upon our appraisal of the trade-in referred to in its present mechanical condition, free of all liens, and with the equipment and attachments set forth upon our appraisal sheet.   Such trade-in shall be subject to reappraisal at the time it is delivered to us and if it is reappraised at a different value than the trade allowance set forth herein, because of difference in mechanical condition or because of removal or substitution of equipment or parts or attachments, or because it is subject to a lien not set forth herein, the trade allowance shall be changed to such reappraised value and the difference between the trade allowance  set forth herein and the reappraised value, less any lien not set forth herein, shall be paid in cash at the time that the new vehicle or vehicles covered by this proposal are delivered to you.

5.   You agree to accept the goods covered by this proposal, as fulfillment thereof, with such changes in design and materials, or either of them, that the manufacturer may make.

6.   If any sales or excise taxes now in effect shall be increased, any new sales excise, floor or processing taxes shall be imposed by federal, state or local laws, or if the amount of such tax actually due exceeds the amount specified in this proposal, you are to reimburse us for any and all such increased, or additional new, taxes that we may be required to pay or to reimburse others by reason of the manufacturer, importation, purchase or sale of the vehicles and equipment carried by this proposal.

7.   We shall not be responsible for delays in transportation or to delay the same on time when prevented by strikes, fires or accidents, or by the demand exceeding the available supply, or by any other cause reasonable beyond our control.

8.   The limited warranties applicable to the vehicles described herein are Navistar International Corp’s standard printed warranties which are incorporated herein by reference.

NOTE:   Disclaimer.   The corporation’s standard printed warranties are in lieu of all other warranties, expressed or implied.   Navistar International Corp. specifically disclaims warranties of MERCHANTABILITY AND FITNESS FOR A PARTICULAR

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PURPOSE, all other representations to the use/purchaser, and all other obligations or liabilities.  The corporation further excludes liability incidental or consequential damages, on the part of the corporation or seller. No person is authorized to give any other warranties or to assume any liabilities on the corporation or seller’s behalf unless made or assumed in writing by the corporation or the seller.

NOTE:   Remedies under state law.  Some states do not allow the exclusion or limitation of incidental or consequential damages, so the above limitation or exclusion may not apply to you.    Navistar International Transportation Corp’s warranties give you specific legal rights and you may also have other legal rights which may vary from state to state.

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EXHIBIT X

FORM OF MONTHLY REPORT

[To Be Attached]

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Truck Retail Account Corporation

Monthly Report For:   March 2004

As of March 31, 2004

I.	Receivables Rollforward
	Beginning Receivables	271,835,046
	Gross Sales	105,089,715
	Additional Post Invoice Sales	95,403
	Total Cash Collections	(126,014,221)
	Dilution	(330,200)
	Charge-offs	0
	Recoveries	0
	Unapplied Cash	0
	Other Adjustments	0
	Total Receivables	250,675,743

II.	Master Aging Schedule	Aging
	Current	165,875,499	66.17%
	1 – 30 days past due	60,134,384	23.99%
	31 – 60 days  past due	5,881,180	2.35%
	61 – 90 days  past due	639,527	0.26%
	91 – 120 days past due	981,840	0.39%
	> 120 days past due	421,366	0.17%
	Future (unapplied cash & terms>30)	0	0.00%
	Non-Aged	36,991,108	14.76%
	Non-Aged Credits	(20,012,163)	-7.98%
	Other Credits & Unapplied Cash	(236,906)	-0.09%
	Total Receivables	250,675,834	100.00%
	UNRECONCILED DIFFERENCE	(90)

Past Due Aging Schedule of A’s and B’s
	Aging
Current	97,698,875	85.08%
1 – 30 days past due	14,078,350	12.26%
31 – 60 days  past due	1,972,648	1.72%
61 – 90 days  past due	596,145	0.52%
91 – 120 days past due	329,934	0.29%
> 120 days past due	349,415	0.30%
Credits & Unapplied Cash	(192,897)	-0.17%
Total Receivables	114,832,470	100.00%

Past Invoice Aging Schedule of C’s
Current	Aging
1 – 30 days past  invoice	63,157,101	53.38%
31 – 60 days  past invoice	48,198,057	40.74%
61 – 90 days  past invoice	5,863,897	4.96%
91 – 120 days past  invoice	137,584	0.12%
> 120 days past invoice	994,076	0.84%
Credits & Unapplied Cash	(44,009)	-0.04%
Total Receivables	118,306,705	100.00%

III.	Eligible Receivables
	Total Receivables		250,675,743
	Minus:   A & B Receivables> 60 days past due		1,275,494
	Total B Receivables	105,835,211
	Undelivered B Receivables	68,607,238
	25% Haircut on Current undelivered B’s		17,151,809
	10% Haircut on B’s		10,583,521
	25% Haircut on 1-30dpi C’s		15,789,275
	C Receivables>90 days past invoice		1,131,660
	Non-aged (N) Receivables less N Credit		16,978,944
	Contra-Accounts> $500K	0	0
	Non-Extended Terms> 120 Days		0
	Extended Terms Receivables		0
	U.S. Government Receivables> 5%	1,100,776	0
	Obligors w/ 30%of A&B Rec’s>60 dpd (Note #1)		38,996
	Obligors w/ 30%of C’s Rec’s>90 dpi (Note #1)		0
	Bankrupt Obligors		0
	Other Ineligibles		0
	Eligible Receivables Balance		187,726,043

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IV.	Capital Availability
	Eligible Receivables Balance		187,726,043
	Minus:   Excess Concentrations (see Section VI)		59,892,783
	Cendant excess concentration		0
	Net Receivable Balance		127,833,260
	Minus:   Loss Reserve Percentage X Net Receivables Bal (Note #2)	20.00%	25,566,652
	Dilution Reserve Percentage X Net Receivables Balance (Note #3)	5.00%	6,391,663
	Yield & Servicing Reserve Percentage X Net Receivables Balance (Note#4)	1.00%	1,278,333
	In the event of a Credit Enhancement Trigger, the aggregate reserves would be the greater of:    (a) 35% or (b) the sum of the Loss, Dilution and Yield and Servicing Reserve.
	Total Reserve Requirement		33,236,648
	Available for Funding		94,596,613
	Capital Outstanding (cannot  exceed $100 million)		0
	Purchaser Interest (cannot exceed 100%) (Note #5)		0.00%
	Amount Available or Paydown Required		0
	AMOUNT ADVANCED/PAID DOWN		0
	Purchaser Interest after Draw/Paydown (cannot exceed 100%)		0.00%

V.	Compliance (Note #6)			Termination Event?
	3-Month Average Dilution Ration (cannot be greater than 2.5%)			0.13%	No
		Current month dilution ratio	0.25%
		One month prior dilution ratio	0.09%
		Two month prior dilation ratio	0.04%
	3-Month Average Master Aging Delinquency Ratio (cannot be greater than 5.5%)			1.38%	No
		Current month delinquency ratio	0.81%
		One month prior delinquency ratio	1.41%
		Two month prior delinquency ratio	1.92%
	3-Month Average Master Aging Default Ratio (cannot be greater than 0.5%)			0.89%	No
		Current month default ratio	0.26%
		One month prior default  ratio	0.90%
		Two month prior default ratio	1.51%

VI.	Obligor Concentration Limits	20.00%		Loss Reserve Floor
	Obligor Name	Obligor Total	Ineligibles	Eligible Receivables	Concentration Limit %	Limit Amount	Excess Concentration
	Anheuser Bush, Inc. and Affiliates	164,160	0	164,160	18.00%	33,790,688	0
	Walmart Leasing and Affiliates	13,590,288	1,432,695	12,157,594	18.00%	33,790,688	0
	PHH/Ameri Gas And Affiliates (Cendant)	4,710,826	376,480	4,334,346	10.00%	18,722,604	0
	Safeway Stores	947,457	206,922	740,535,0	10.00%	18,722,604	0
	Sara Lee and Affiliates	0	0	0	10.00%	18,722,604	0
	Penske	63,181,606	2,845,277	60,336,329	6.67%	12,515,070	47,821,259
	Budget (Cendant)	42,165,715	11,321,587	30,844,128	10.00%	18,772,604	12,071,524
	Ryder	18,367,117	1,765,665	16,601,452	10.00%	18,772,604	0
	Obligor 1	0	0	0	6.67%	12,515,070	0
	Obligor 2	0	0	0	6.67%	12,515,070	0
	TOTAL	143,127,169	17,948,626	125,178,543			59,892,783

Notes:

1 ALL Receivables of any A & B Obligor for whom receivables greater than 60 dpd constitute, in the aggregate, more than 30% of all Receivables of such Obligor.

All Receivables of any C Obligor for whom receivables greater than 90 dpi constitute, in the aggregate, more than 30% of all Receivables of such Obligor.

2 This reserve percentage is calculated dynamically based on recent portfolio performance.

3 This reserve percentage is calculated dynamically based on recent portfolio performance.

4 This reserve percentage a static percentage.

5 Purchaser Interest is defined as follows: Capital / NRB - (Reserve Percentage X NRB).

6 Dilution Ratio is defined as current month's dilution divided by sales 1-month prior, which cannot be greater than 2.5%

Delinquency Ratio is defined as the aggregate Oustanding Balance of all Receivables that were greater than 60 days divided by the aggregate Outstanding Balance of all Receivables, which cannot be greater than 5.5% Default Ratio is defined as the sum of the aggregate Outstanding Balance of all Receivables unpaid for more than 90 but less than 121 days and the aggregate Oustanding Balance of all Receivables that

became Charged-Off prior to 90 days past due divided by the aggregate Oustanding Balance of all Receivables, which cannot be greater than 4.5%

The undersigned hereby represent and warrants that the foregoing is a true and accurate accounting with respect to the outstandings of March 31, 2004 in accordance with the Receivables Purchase Agreement date as of April 8, 2004 and that all Representations and Warranties are restated and reaffirmed.

Signed by:  /s/   ANDREW J. CEDEROTH

                            Andrew J. Cederoth

                            Vice President & Treasurer

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EXHIBIT XI

FORM OF WEEKLY REPORT

[To Be Attached]

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EXHIBIT XII

FORM OF REDUCTION NOTICE

TRUCK RETAIL ACCOUNTS CORPORATION

REDUCTION NOTICE

DATED                     , 20_

Bank One,

NA (Main Office Chicago),

as Agent One Bank One Plaza, IL1-0079

Chicago, Illinois 60670-0079

Attention: Jupiter Administrator Ladies and Gentlemen:

Reference is made to the Receivables Purchase Agreement dated as of April 8, 2004 (as amended, supplemented or otherwise modified from time to time, the "Receivables Purchase Agreement") among Truck Retail Accounts Corporation (the "Seller"), Navistar Financial Corporation., as initial Servicer, Jupiter Securitization Corporation, and Bank One, NA (Main Office Chicago), as Agent. Capitalized terms defined in the Receivables Purchase Agreement are used herein with the same meanings.

The Seller hereby notifies the Agent that it wishes to make an Aggregate Reduction of $and that the Proposed Reduction Date for such

Aggregate Reduction is, 20_, which gives effect to the Required Notice Period.

IN WITNESS WHEREOF, the Seller has caused this Reduction Notice to be executed and delivered as of the date first above written.

TRUCK RETAIL ACCOUNTS CORPORATION, as Seller

By:           

Name:

Title:

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SCHEDULE A

COMMITMENTS OF FINANCIAL INSTITUTIONS

Financial Institution                                                                                                    Commitment

Bank One, NA (Main Office Chicago)                                                                                    $102, 000,000

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SCHEDULE B

DOCUMENTS TO BE DELIVERED TO THE AGENT

ON OR PRIOR TO THE INITIAL PURCHASE

  PART I:   Documents to be Delivered in Connection with the Receivables Sale Agreement. 

 1.   Executed copies of the Receivables Sale Agreement, duly executed by the parties thereto

 2.  Copy of the Resolutions of the Board of Directors of Transferor certified by its Secretary, authorizing Transferor's execution, delivery and performance of the Receivables Sale Agreement and the other documents to be delivered by it thereunder.

3.  Articles or Certificate of Incorporation of Transferor certified by the Secretary of State of the jurisdiction of incorporation of Transferor on or within thirty (30) days prior to the initial Purchase (as defined in the Receivables Sale Agreement).

4.  Good Standing Certificate for Transferor issued by the Secretaries of State of its state of incorporation and each jurisdiction where it has material operations, each of which is listed below:

a.  

b.  

5.  A certificate of the Secretary of Transferor certifying: (i) the names and signatures of the officers authorized on its behalf to execute the Receivables Sale Agreement and any other documents to be delivered by it thereunder and (ii) a copy of Transferor's By-Laws.

6.  Pre-filing state and federal tax lien, judgment lien and UCC lien searches against Transferor from the following jurisdictions:

a.  Delaware

b.  Illinois

7.  Copies of proper financing statements, duly filed under the UCC on or before the date of the initial Purchase (as defined in the Receivables Sale Agreement) in all jurisdictions as may be necessary or, in the opinion of Seller (or its assigns), desirable, under the UCC of all appropriate jurisdictions or any comparable law in order to perfect the ownership interests contemplated by the Receivables Sale Agreement.

8.  Copies of proper UCC termination statements, if any, necessary to release all security interests and other rights of any Person in the Receivables, Contracts or Related Security previously granted by Transferor.

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9.  Executed Lock-Box Account Agreements for each Lock-Box and Blocked Account Agreements for each Blocked Account.

10.  A favorable opinion of legal counsel for Transferor reasonably acceptable to Seller (or its assigns) which addresses the following matters and such other matters as Seller (or its assigns) may reasonably request:

--Transferor is a corporation duly incorporated, validly existing, and in good standing under the laws of its state of incorporation.

--Transferor has all requisite authority to conduct its business in each jurisdiction where failure to be so qualified would have a material adverse effect on Transferor's business.

--The execution and delivery by Transferor of the Receivables Sale Agreement and each other Transaction Document to which it is a party and its performance of its obligations thereunder have been duly authorized by all necessary corporate action and proceedings on the part of Transferor and will not:

(a)  require any action by or in respect of, or filing with, any governmental body, agency or official (other than the filing of UCC financing statements);

(b)  contravene, or constitute a default under, any provision of applicable law or regulation or of its articles or certificate of incorporation or bylaws or of any agreement, judgment, injunction, order, decree or other instrument binding upon Transferor; or

(c)  result in the creation or imposition of any Adverse Claim on assets of Transferor or any of its Subsidiaries (except as contemplated by the Receivables Sale Agreement).

--The Receivables Sale Agreement and each other Transaction Document to which it is a party has been duly executed and delivered by Transferor and constitutes the legal, valid, and binding obligation of Transferor enforceable in accordance with its terms, except to the extent the enforcement thereof may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights generally and subject also to the availability of equitable remedies if equitable remedies are sought.

-  -The provisions of the Receivables Sale Agreement are effective to create a valid security interest in favor of Seller in all Receivables and upon the filing of financing statements, Seller shall acquire a first priority, perfected security interest in such Receivables.

-  -To the best of the opinion giver's knowledge, there is no action, suit or other proceeding against Transferor or any Affiliate of Transferor, which would materially adversely affect the business or financial condition of Transferor and its Affiliates taken as a whole or which would materially adversely affect the ability of Transferor to perform its obligations under the Receivables Sale Agreement.

11.  A "true sale" opinion and "substantive consolidation" opinion of counsel for Transferor with respect to the transactions contemplated by the Receivables Sale Agreement.

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  12.  A Compliance Certificate.

13.  Executed copies of (i) all consents from and authorizations by any Persons and (ii) all waivers and amendments to existing credit facilities, that are necessary in connection with the Receivables Sale Agreement.

14.  Executed copies of the Subordinated Note (as defined in the Receivables Sale Agreement) by Seller in favor of Transferor.

PART II: Documents to Be Delivered in Connection with the Agreement

1.  Executed copies of the Agreement, duly executed by the parties thereto.

    2.  Copy of the Resolutions of the Board of Directors of each Seller Party certified by its Secretary authorizing such Person's execution, delivery and performance of this Agreement and the other documents to be delivered by it hereunder.

3.  Articles or Certificate of Incorporation of each Seller Party certified by the Secretary of State of its jurisdiction of incorporation on or within thirty (30) days prior to the initial Incremental Purchase.

  4.  Good Standing Certificate for each Seller Party issued by the Secretaries of State of its state of incorporation and each jurisdiction where it has material operations, each of which is listed below:

a.  Seller:

b.  Servicer:

5.  A certificate of the Secretary of each Seller Party certifying (i) the names and signatures of the officers authorized on its behalf to execute this Agreement and any other documents to be delivered by it hereunder and (ii) a copy of such Person's By-Laws.

6.  Pre-filing state and federal tax lien, judgment lien and UCC lien searches against each Seller Party from the following jurisdictions:

a.  Seller: Delaware and Illinois

b.  Servicer: Delaware and Illinois

7.  Copies of proper financing statements, duly filed under the UCC on or before the date of the initial Incremental Purchase in all jurisdictions as may be necessary or, in the opinion of the Agent, desirable, under the UCC of all appropriate jurisdictions or any comparable law in order to perfect the ownership interests contemplated by this Agreement.

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8.  Copies of proper UCC termination statements, if any, necessary to release all security interests and other rights of any Person in the Receivables, Contracts or Related Security previously granted by Seller.

9.  Executed copies of Lock-Box Account Agreements for each Lock-Box and Blocked Account Agreements for each Blocked Account.

 10.  A favorable opinion of legal counsel for the Seller Parties reasonably acceptable to the Agent which addresses the following matters and such other matters as the Agent may reasonably request:

--Each Seller Party is a corporation duly incorporated, validly existing, and in good standing under the laws of its state of incorporation.

--Each Seller Party has all requisite authority to conduct its business in each jurisdiction where failure to be so qualified would have a material adverse effect on such Person's business.

--The execution and delivery by each Seller Party of this Agreement and each other Transaction Document to which it is a party and its performance of its obligations thereunder have been duly authorized by all necessary corporate action and proceedings on the part of such Person and will not:

(a)  require any action by or in respect of, or filing with, any governmental body, agency or official (other than the filing of UCC financing statements);

(b)  contravene, or constitute a default under, any provision of applicable law or regulation or of its articles or certificate of incorporation or bylaws or of any agreement, judgment, injunction, order, decree or other instrument binding upon such Person; or

(c)  result in the creation or imposition of any Adverse Claim on assets of such Person or any of its Subsidiaries (except as contemplated by this Agreement).

--This Agreement and each other Transaction Document to which such Person is a party has been duly executed and delivered by such Person and constitutes the legal, valid, and binding obligation of such Person, enforceable in accordance with its terms, except to the extent the enforcement thereof may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights generally and subject also to the availability of equitable remedies if equitable remedies are sought.

--The provisions of the Agreement are effective to create a valid security interest in favor of the Agent for the benefit of the Purchasers in all Receivables, and upon the filing of financing statements, the Agent for the benefit of the Purchasers shall acquire a first priority, perfected security interest in such Receivables.

--To the best of the opinion giver's knowledge, there is no action, suit or other proceeding against any Seller Party or any of their respective Affiliates, which would materially adversely affect the business or financial condition of such Person and its Affiliates taken as a

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whole or which would materially adversely affect the ability of such Person to perform its obligations under any Transaction Document to which it is a party.

 11. If requested by Conduit or the Agent, a favorable opinion of legal counsel for each Financial Institution, reasonably acceptable to the Agent which addresses the following matters:

-  -This Agreement has been duly authorized by all necessary corporate action of such Financial Institution.

-  -This Agreement has been duly executed and delivered by such Financial Institution and, assuming due authorization, execution and delivery by each of the other parties thereto, constitutes a legal, valid and binding obligation of such Financial Institution, enforceable against such Financial Institution in accordance with its terms.

12.  A Compliance Certificate.

13.  The Fee Letter.

14.  A Monthly Report as of March 31, 2004.

15.   Executed copies of (i) all consents from and authorizations by any Persons and (ii) all waivers and amendments to existing credit facilities, that are necessary in connection with this Agreement.

16.  Officer's Certificate Re: Recycled SPVs.

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EX-10.113

EXECUTION COPY

RECEIVABLES SALE AGREEMENT

dated as of April 8, 2004

between

NAVISTAR FINANCIAL CORPORATION,

as Transferor

and

TRUCK RETAIL ACCOUNTS CORPORATION,

as Transferee

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Exhibits and Schedules

Exhibit I                                                Definitions

Exhibit II - Principal Place of Business; Location(s) of Records; Organizational and Federal Employer Identification Numbers; Other Names

Exhibit III Lock-Boxes; Lock-Box Accounts; Lock-Box Banks; Blocked Accounts; Blocked Account Banks

Exhibit IV                                              Form of Compliance Certificate

Exhibit V                                               Credit and Collection Policy

Exhibit VI                                              Form of Subordinated Note

Schedule 2.1(e)                                    Disclosed Matters

Schedule A List of Documents to Be Delivered to Transferee Prior to the Initial  Purchase

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RECEIVABLES SALE AGREEMENT

THIS RECEIVABLES SALE AGREEMENT, dated as of April 8, 2004, is by and between NAVISTAR FINANCIAL CORPORATION, a Delaware corporation (“Transferor”), and TRUCK RETAIL ACCOUNTS CORPORATION, a Delaware corporation (“Transferee”).  Unless defined elsewhere herein, capitalized terms used in this Agreement shall have the meanings assigned to such terms in Exhibit I hereto (or, if not defined in Exhibit I hereto, the meanings assigned to such terms in Exhibit I to the Purchase Agreement referenced below).

PRELIMINARY STATEMENTS

Transferor now owns, and from time to time hereafter will own, Receivables.  Transferor wishes to sell and assign to Transferee, and Transferee wishes to purchase from Transferor, all of Transferor’s right, title and interest in and to such Receivables, together with the Related Security and Collections with respect thereto.

Transferor and Transferee intend the transactions contemplated hereby to be true sales of the Receivables, Related Security and Collections from Transferor to Transferee, providing Transferee with the full benefits of ownership thereof, and Transferor and Transferee do not intend these transactions to be, or for any purpose to be characterized as, loans from Transferee to Transferor.

Following each acquisition by Transferee of Receivables, Related Security and Collections from Transferor, Transferee will convey undivided interests therein to Bank One, NA (Main Office Chicago), as agent (together with its successors in such capacity, the “Agent”), for the benefit of Jupiter Securitization Corporation, a Delaware corporation (“Conduit”), and/or certain financial institutions (together with Conduit, the “Purchasers”), pursuant to that certain Receivables Purchase Agreement dated as of April 8, 2004 by and among Transferee, as Seller, Transferor, as initial Servicer, the Purchasers and the Agent (as the same may from time to time hereafter be amended, restated or otherwise modified from time to time, the “Purchase Agreement”).

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

AMOUNTS AND TERMS OF THE PURCHASES

Section 1.1                                Purchases of Receivables.

(a)           In consideration for the Purchase Price and upon the terms and subject to the conditions set forth herein, Transferor does hereby sell, assign, transfer, set-over and otherwise convey to Transferee, without recourse (except to the extent

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expressly provided herein), and Transferee does hereby purchase from Transferor, all of Transferor’s right, title and interest in and to all Receivables existing as of the close of business on the last Business Day of the week then most recently ended (each such last Business Day, a “Cutoff Date”), together with all Related Security relating thereto and all Collections thereof.  Each Purchase shall be made on the related Transfer Date, and Transferee shall be obligated to pay the Purchase Price for the Receivables purchased hereunder on each Transfer Date in accordance with Section 1.2.  In connection with payment of the Purchase Price for any Receivables purchased hereunder, Transferee may request that Transferor deliver, and Transferor shall deliver, such approvals, opinions, information, reports or documents as Transferee may reasonably request as are customary in similar transactions in order to protect the interests of Transferee (and its assigns) under or as contemplated in this Agreement or the other Transaction Documents.

(b)           It is the intention of the parties hereto that each sale of Receivables made hereunder shall constitute a true sale which is absolute and irrevocable and provides Transferee with the full benefits of ownership of the Receivables and the associated Related Security and Collections.  Except for the Purchase Price Credits owed pursuant to Section 1.3, each Purchase hereunder is made without recourse to Transferor; provided, however, that (i) Transferor shall be liable to Transferee for all representations, warranties, covenants and indemnities made by Transferor pursuant to the terms of the Transaction Documents to which Transferor is a party, and (ii) no Purchase shall constitute or is intended to result in an assumption by Transferee or any assignee thereof of any obligation of Transferor or any other Person arising in connection with the Receivables, the related Contracts and/or other Related Security or any other obligations of Transferor.  In view of the intention of the parties hereto that each sale of Receivables made hereunder on a Transfer Date shall constitute a sale of such Receivables rather than a loan secured thereby, Transferor agrees that it will, on or prior to the date hereof and in accordance with Section 4.1(e)(ii), note in its financial statements that its Receivables have been sold to Transferee (and its assigns).  Upon the request of Transferee or the Agent (as Transferee’s assignee), Transferor will file and/or authorize the filing of such financing or continuation statements, or amendments thereto or assignments thereof, and such other instruments or notices as may be necessary or appropriate to perfect and maintain the perfection of Transferee’s ownership interest in the Receivables and the Related Security and Collections with respect thereto, or as Transferee or the Agent (as Transferee’s assignee) may reasonably request.

Section 1.2                                Payment for the Purchases.

(a)           The Purchase Price for each Purchase of Receivables shall be payable in full by Transferee to Transferor on the applicable Transfer Date, and shall be paid to Transferor in the following manner:

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(i)           in immediately available funds; and/or

(ii)           from the proceeds of a subordinated loan made by Transferor to Transferee (each, a “Subordinated Loan”) in an amount not to exceed the lesser of (A) the remaining unpaid portion of such Purchase Price, or (B) an amount not to exceed an amount that would result in the shareholder’s equity of the Transferee being less than the sum of (1) the Loss Reserve (calculated using a Loss Percentage equal to 1.5 multiplied by the Loss Ratio multiplied by the Loss Horizon), (2) the Yield Reserve and (3) the Servicing Reserve.

Transferor is hereby authorized by Transferee to endorse on the schedule attached to the Subordinated Note (or otherwise in accordance with its customary practices for advances to its Affiliates) an appropriate notation evidencing the date and amount of each advance thereunder, as well as the date of each payment with respect thereto, provided that the failure to make such notation shall not affect any obligation of Transferee thereunder.  Subject to the limitations set forth in Section 1.2(a)(ii), Transferor irrevocably agrees to advance each Subordinated Loan requested by Transferee on or prior to the Termination Date.  The Subordinated Loans shall be evidenced by, and shall be payable in accordance with the terms and provisions of, the Subordinated Note.

(b)           From and after the Termination Date, Transferor shall not be obligated to (but may, at its option) sell Receivables to Transferee.

Section 1.3                                Purchase Price Credit Adjustments.

  If on any day:

(a)           the Outstanding Balance of a Receivable is:

(i)           reduced, in whole or in part, as a result of any defective or rejected or returned goods or services, any discount or any adjustment or otherwise by Transferor (other than cash Collections received on account of such Receivables or a write-off of all or any portion of its Outstanding Balance as uncollectible),

(ii)           reduced or canceled as a result of a setoff in respect of any claim by any Person (whether such claim arises out of the same or a related transaction or an unrelated transaction), or

(b)           any of the representations and warranties set forth in Section 2.2 are not true when made or deemed made with respect to any Receivable,

then, in such event, Transferee shall be entitled to a credit (each, a “Purchase Price Credit”) against the Purchase Price otherwise payable hereunder on the next succeeding Transfer Date equal to:

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(i)           in the case of a partial reduction under clause (a)(i) or (a)(ii) above, in the amount of such reduction, and

(ii)           in all other cases, in the amount of the Outstanding Balance of such Receivable (calculated before giving effect to the applicable total reduction or cancellation).

If such Purchase Price Credit exceeds the Purchase Price of the Receivables being purchased on the next succeeding Transfer Date, then Transferor shall pay the remaining amount of such Purchase Price Credit in cash on such Transfer Date, provided that if the Termination Date has not occurred, Transferee shall be allowed to deduct the remaining amount of such Purchase Price Credit from any indebtedness it owes to Transferor under the Subordinated Note.  Upon payment of the Purchase Price Credit either as an offset to the Purchase Price of Receivables or in cash with respect to any Receivable for which such Purchase Price Credit equals the Outstanding Balance of such Receivable, such Receivable shall be deemed to be transferred from the Transferee to the Transferor and shall become the property of the Transferor for all purposes.  With respect to any Receivable for which such Purchase Price Credit paid either as an offset to the Purchase Price of Receivables or in cash is less than the Outstanding Balance of such Receivable, the Transferor shall be entitled to any Collections received with respect to such Receivable in excess of the Outstanding Balance of such Receivable not offset by a Purchase Price Credit.

Section 1.4                                Payments and Computations, Etc

.  All amounts to be paid or deposited by Transferee hereunder shall be paid or deposited in accordance with the terms hereof on the day when due in immediately available funds to the account designated from time to time by Transferor.  In the event that any payment owed by any Person hereunder becomes due on a day that is not a Business Day, then such payment shall be made on the next succeeding Business Day.  If any Person fails to pay any amount hereunder when due, such Person agrees to pay, on demand, interest thereon at the Default Rate until paid in full; provided, however, that the Default Rate shall not at any time exceed the maximum rate permitted by applicable law.  All computations of interest payable hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first but excluding the last day) elapsed.

Section 1.5                                Transfer of Records.

(a)           In connection with each Purchase of Receivables hereunder, Transferor hereby sells, transfers, assigns and otherwise conveys to Transferee all of Transferor’s right and title to and interest in the Records relating to all Receivables sold hereunder, without the need for any further documentation in connection with such Purchase.  In connection with such transfer, Transferor hereby grants to each of Transferee, the Agent and the Servicer an irrevocable, non-exclusive license to use, without royalty or payment of any kind, all software used by Transferor to account for the Receivables, to the extent necessary to

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administer the Receivables, whether such software is owned by Transferor or is owned by others and used by Transferor under license agreements with respect thereto, provided that should the consent of any licensor of such software be required for the grant of the license described herein, to be effective, Transferor hereby agrees that, upon the request of Transferee (or the Agent, as Transferee’s assignee), Transferor will use its commercially reasonable efforts to obtain the consent of such third-party licensor.  The license granted hereby shall be irrevocable until the indefeasible payment in full of the Aggregate Unpaids and shall terminate on the date this Agreement terminates in accordance with its terms.

(b)           Transferor (i) shall take such action requested by Transferee and/or the Agent (as Transferee’s assignee), from time to time hereafter, that may be necessary or appropriate to ensure that Transferee and its assigns under the Purchase Agreement have an enforceable ownership interest in the Records relating to the Receivables purchased from Transferor hereunder, and (ii) shall use its commercially reasonable efforts to ensure that Transferee, the Agent and the Servicer each has an enforceable right (whether by license or sublicense or otherwise) to use all of the computer software used to account for the Receivables and/or to recreate such Records to the extent necessary or reasonably desirable to service the Receivables or exercise any right of the Transferee (or its assigns) hereunder with respect to such Receivables.

Section 1.6                                Characterization.

  If, notwithstanding the intention of the parties expressed in Section 1.1(b), any sale by Transferor to Transferee of Receivables hereunder shall be characterized as a secured loan and not a sale or such sale shall for any reason be ineffective or unenforceable, then this Agreement shall be deemed to constitute a security agreement under the UCC and other applicable law.  For this purpose and without being in derogation of the parties’ intention that each sale of Receivables hereunder shall constitute a true sale thereof, Transferor hereby grants to Transferee a duly perfected security interest in all of Transferor’s right, title and interest in, to and under all Receivables now existing and hereafter arising, all Related Security and Collections, all other rights and payments relating to the Receivables and all proceeds of the foregoing (other than the Purchase Price) to secure the prompt and complete payment of a loan deemed to have been made in an amount equal to the aggregate Purchase Price of all outstanding Receivables together with all other obligations of Transferor hereunder, which security interest shall be prior to all other Adverse Claims thereto.  Transferee and its assigns shall have, in addition to the rights and remedies which they may have under this Agreement, all other rights and remedies provided to a secured creditor under the UCC and other applicable law, which rights and remedies shall be cumulative.

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ARTICLE II

REPRESENTATIONS AND WARRANTIES

Section 2.1                                General Representations and Warranties of Transferor.

  Transferor hereby represents and warrants to Transferee on the date hereof and on each Transfer Date that:

(a)           Organization; Powers

.  Transferor is duly organized, validly existing and in good standing (to the extent such requirement shall be applicable) under the laws of the jurisdiction of its organization, has all requisite corporate power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required.

(b)           Authorization and Enforceability

.  The Transactions are within Transferor’s corporate powers and have been duly authorized by all necessary corporate and, if required, stockholder action.  This Agreement has been duly executed and delivered by Transferor and constitutes a legal, valid and binding obligation of Transferor, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law

(c)           Governmental Approvals; No Conflicts

.  Other than the filing of the financing statements required hereunder, the Transactions (i) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except (A) such as have been obtained or made and are in full force and effect, (B) routine renewals of existing licenses and permits of Transferor in the ordinary course of business and (C) such filings as may be required under federal and state securities laws for purposes of disclosure, (ii) will not violate any applicable law or regulation or any order of any Governmental Authority, (iii) will not violate or result in a default under any indenture, agreement or other instrument binding upon Transferor or its assets, or give rise to a right thereunder to require any payment to be made by Transferor, (iv) will not violate the charter, by-laws or other organizational documents of Transferor, and (v) will not result in the creation or imposition of any Adverse Claim on any asset of Transferor except for the ownership interest in the Receivables, Related Security and Collections conveyed hereunder and, with respect to clauses (i), (ii), (iii) and (v), except as would not reasonably be expected to result in a Material Adverse Effect.  No transaction contemplated hereby requires compliance with any bulk sales act or similar law

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.(d)           Compliance with Laws and Agreements

.  Each of Transferor and its Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.  No Termination Event has occurred and is continuing.

(e)          Litigation

.  There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of Transferor, threatened against or affecting Transferor or any of its Subsidiaries (a)  which would reasonably be expected to result in an adverse determination and that, if adversely determined, would reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect (other than the Disclosed Matters) or (b) that involve this Agreement or the Transactions.

 (f)         Disclosure

.  Transferor has disclosed to Transferee, the Agent and the Purchasers all matters known to it that, individually or in the aggregate, would reasonably be expected to result in a Material Adverse Effect.  None of the reports, financial statements, certificates or other information furnished by or on behalf of Transferor to Transferee (or the Agent or any Purchaser) in connection with the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, Transferor represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.

(g)           Places of Business and Locations of Records

.  Transferor is incorporated under the laws of Delaware.  The chief executive office of Transferor and the offices where it keeps all of its Records are located at the addresses listed on Exhibit II or such other locations of which Transferee has been notified in accordance with Section 4.2(a) (other than Records in transit to any such location) in jurisdictions where all action required by Section 4.2(a) has been taken and completed.  Transferor’s Organizational and Federal Employer Identification Numbers are correctly set forth on Exhibit II.

(h)           Collections

.  The conditions and requirements set forth in Section 4.1(l) have at all times been satisfied and duly performed in all material respects.  The names and addresses of all Lock-Box Banks and Blocked Account Banks, together with the account numbers of the Blocked Accounts and Lock-Box Accounts at each Blocked Account Bank and Lock-Box Bank, respectively, and the post office box number of each Lock-Box, are listed on Exhibit III.  Transferor has not granted any Person, other than the Transferee (and its assigns) dominion and control of any Lock-Box, Lock-Box Account or Blocked Account, or the right to take dominion

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and control of any such Lock-Box, Lock-Box Account or Blocked Account at a future time or upon the occurrence of a future event.

(i)           Material Adverse Effect

.  Since the last day of the most recent fiscal year for which it has filed a Form 10-K, no event has occurred that would have a Material Adverse Effect.

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(j)           Taxes

.  Transferor and its Subsidiaries have timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which Transferor or such Subsidiary, as applicable, has set aside on its books adequate reserves with respect thereto in accordance with GAAP or (b) to the extent that the failure to do so would not reasonably be expected to result in a Material Adverse Effect.

(k)           Names

.  In the past five (5) years, Transferor has not used any corporate names, trade names or assumed names other than the name in which it has executed this Agreement and as listed on Exhibit II.

(l)           Ownership of  Transferee

.  Transferor owns, directly or indirectly, 100% of the issued and outstanding capital stock of Transferee, free and clear of any Adverse Claim other than the Adverse Claim on such stock granted in connection with the Transferor Credit Agreement.  Such capital stock is validly issued, fully paid and nonassessable, and there are no options, warrants or other rights to acquire securities of Transferee.

(m)           Investment and Holding Company Status

.Transferor is not (a) an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940, as amended or (b) a “holding company” as defined in, or subject to regulation under, the Public Utility Holding Company Act of 1935, as amended.

Section 2.2                                Representations and Warranties of Transferor with Respect to the Receivables.

Transferor hereby represents and warrants to Transferee on each Transfer Date that:

(a)           Enforceability of Contracts

.  Each Contract with respect to each  Receivable being sold on such Transfer Date is effective to create, and has created, a legal, valid and binding obligation of the related Obligor to pay the Outstanding Balance of the Receivable created thereunder and any accrued interest thereon, enforceable against the Obligor in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

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(b)           Eligible Receivables

Each Receivable included in the Net Receivables Balance as an Eligible Receivable was an Eligible Receivable on its applicable Transfer Date.

(c)           Compliance with Credit and Collection Policy

.  Transferor has complied in all material respects with the Credit and Collection Policy with regard to each Receivable being sold on such Transfer Date and the related Contract, and has not made any change to such Credit and Collection Policy, except such material change as to which Transferee (and the Agent, as its assignee) has been notified in accordance with Section 4.1(a)(vii) and as otherwise permitted pursuant to Section 4.2(c).

(d)           Payments to Transferor

.  With respect to each Receivable transferred to Transferee on such Transfer Date, the Purchase Price received by Transferor constitutes reasonably equivalent value in consideration therefor and such transfer was not made for or on account of an antecedent debt.  The sale of each such Receivable to Transferee on such Transfer Date is not voidable under any section of the Bankruptcy Reform Act of 1978 (11 U.S.C. §§ 101 et seq.), as amended.

(e)           Good Title

.  With respect to each Receivable transferred to Transferee on such Transfer Date, immediately prior to such Transfer, Transferor (i) is the legal and beneficial owner of the Receivables to be sold on such Transfer Date and (ii) is the legal and beneficial owner of the Related Security with respect thereto or possesses a valid and perfected security interest therein, in each case, free and clear of any Adverse Claim except as created by the Transaction Documents and except for any Adverse Claims released pursuant to release terms acceptable to the Agent set forth in the Transferor Credit Agreement upon transfer of such assets.

(f)           Perfection

.  This Agreement, together with the filing of the financing statements contemplated hereby, is effective to transfer to Transferee (and Transferee shall acquire from Transferor) (i) legal and equitable title to, with the right to sell and encumber each Receivable transferred to Transferee on such Transfer Date, together with the Collections with respect thereto, and (ii) all of Transferor’s right, title and interest in the Related Security associated with each Receivable, in each case, free and clear of any Adverse Claim, except as created by the Transaction Documents.  There have been duly filed all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect Transferee’s ownership interest in the Receivables, the Related Security and the Collections to the extent such interest can be perfected by filing under Article 9 of the UCC.

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(g)           Use of Proceeds

.  No portion of the Purchase Price payable on account of the Purchase occurring on such Transfer Date will be used (i) for a purpose that violates any law, rule or regulation

applicable to Transferor or (ii) to acquire any security in any transaction which is subject to Section 13 or 14 of the Securities Exchange Act of 1934, as amended.

(h)           Obligor Litigation

.  No Obligor is immune from civil and commercial law and suit on the grounds of sovereignty or otherwise from any legal action, suit or proceeding such that Transferee (or its assigns) would be unable to litigate any claim against such Obligor in respect of any Receivable.

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ARTICLE III

CONDITIONS OF PURCHASES

Section 3.1                                Conditions Precedent to Initial Purchase

.  The initial Purchase under this Agreement is subject to the conditions precedent that (a) Transferee shall have received on or before the date of such Purchase those documents referenced on Schedule A to be received by or on behalf of Transferee and (b) all of the conditions to the initial purchase under the Purchase Agreement shall have been satisfied or waived in accordance with the terms thereof.

Section 3.2                                Conditions Precedent to All Purchases

.  Transferee’s obligation to pay for Receivables to be transferred on any Transfer Date (including the initial Transfer Date) shall be subject to the further conditions precedent that:  (a) the Facility Termination Date shall not have occurred; (b) Transferee (or its assigns) shall have received such other approvals, opinions or documents as it may reasonably request as are customary in similar transactions in order to protect the interests of Transferee (and its assigns) under or as contemplated in the Transaction Documents and (c) on the applicable Transfer Date, the following statements shall be true (and acceptance of the proceeds of any payment for such Receivable shall be deemed a representation and warranty by Transferor that such statements are then true):

(i)           the representations and warranties set forth in Article II are true and correct on and as of the date such Receivable came into existence as though made on and as of such Transfer Date; and

(ii)           no event has occurred and is continuing that will constitute a Termination Event or a Potential Termination Event.

Notwithstanding the foregoing conditions precedent, upon payment of the Purchase Price for any Receivable (whether by payment of cash, through an increase in the amounts outstanding under the Subordinated Note, or by offset of amounts owed to Transferee), title to such Receivable and the Related Security and Collections with respect thereto shall vest in Transferee, whether or not the conditions precedent to Transferee’s obligation to pay for such Receivable were in fact satisfied; provided, however, that Transferee shall retain its claim for indemnity under Article VI in respect of such failure of condition.

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ARTICLE IV

COVENANTS

Section 4.1                                Affirmative Covenants of Transferor.

  Until the date on which this Agreement terminates in accordance with its terms, Transferor hereby covenants as set forth below:

(a)           Financial Reporting.  Transferor will maintain a system of accounting established and administered in accordance with GAAP, and furnish to Transferee (or its assigns):

(i)           Annual Reporting.  Within 90 days after the close of each fiscal year of the Parent and Transferor, the Parent’s and Transferor’s Form 10-K for such fiscal year, which shall include its respective audited consolidated statement of financial condition and related statements of consolidated income and retained earnings and consolidated cash flow as of the end of and for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by Deloitte & Touche, LLP or other independent public accountants of recognized national standing (without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations and cash flow of the Parent and Transferor and its respective consolidated Subsidiaries on a consolidated basis in accordance with GAAP, consistently applied.

(ii)           Quarterly Reporting.  Within 45 days after the end of each of the first three fiscal quarters of each fiscal year of Parent and Transferor, the Parent’s and Transferor’s Form 10-Q for such fiscal quarter, which shall include its consolidated statement of financial condition and related statements of consolidated income and retained earnings and respective consolidated cash flow as of the end of and for the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the statement of financial condition, as of the end of) the previous fiscal year, all certified by one of its respective Authorized Officers as presenting fairly in all material respects the financial condition and results of operations and cash flow of the Parent and Transferor and its respective consolidated Subsidiaries on a consolidated basis in

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accordance with GAAP, consistently applied, subject to normal year-end audit adjustments and the absence of footnotes.

(iii)           Compliance Certificate.  Together with the financial statements required hereunder, a compliance certificate in substantially the form of Exhibit IV signed by one of Transferor’s Financial Officers.

(iv)           [Intentionally Omitted]

(v)           [Intentionally Omitted]

(vi)           Copies of Notices.  Promptly upon its receipt of any notice of amendment or default under or in connection with any Lock-Box Account Agreement from any Person other than Transferee, the Agent or any Purchaser, copies of the same.

(vii)           Change in Credit and Collection Policy.  At least ten (10) Business Days prior to the effectiveness of any material change in or material amendment to the Credit and Collection Policy, a copy of the Credit and Collection Policy then in effect and a notice indicating such change or amendment, provided that if such proposed change or amendment would be reasonably likely to materially and adversely affect the collectibility of the Receivables or materially decrease the credit quality of any newly created Receivables, such change shall not be effective without Transferee’s and the Agent’s (as Transferee’s assignee) consent thereto, which consent shall not be unreasonably withheld and, in the case of the Agent, such consent or refusal to consent shall be given within fifteen (15) Business Days of the acknowledgment of receipt of such request, as acknowledged in writing, electronically or otherwise, by a Responsible Agent Party.

(viii)                      Other Information.  Promptly, from time to time, such other information, documents, records or reports relating to the Receivables or the condition or operations, financial or otherwise, of the Transferor as Transferee (or its assigns) may from time to time reasonably request as such information, documents, records or reports are necessary or reasonably desirable to determine the capability of the Transferee to perform its obligations under any Transaction Document to which it is a party in order to protect the interests of Transferee (and its assigns) under or as contemplated by this Agreement.

(b)           Notices.  Transferor will notify the Transferee (or its assigns) in writing of any of the following promptly upon learning of the occurrence thereof, describing the same and, if applicable, the steps being taken with respect thereto:

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(i)           Termination Events or Potential Termination Events.  The occurrence of each Termination Event and each Potential Termination Event, by a statement of an Authorized Officer of Transferor.

(ii)           Judgment and Proceedings.  The entry of any judgment or decree or the filing or commencement of any litigation or any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting the Transferor, any Subsidiary or any Affiliate thereof that would reasonably be expected to result in a Material Adverse Effect.

(iii)           Defaults.  The occurrence of a default or an event of default under any other financing arrangement with obligations with an aggregate principal amount equal to or in excess of $50,000,000 pursuant to which Transferor is a debtor or an obligor.

(iv)           Downgrade of the Transferor.  Any downgrade in the rating of any Indebtedness of Transferor by Standard and Poor’s Ratings Group or by Moody’s Investors Service, Inc., setting forth the Indebtedness affected and the nature of such change.

(v)           Material Adverse Effect.  The occurrence of any other event or condition that has had, or would reasonably be expected to have, a Material Adverse Effect.

(c)           Compliance with Laws and Preservation of Corporate Existence.  Transferor will comply in all respects with all applicable laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject, except where the failure to so comply would not reasonably be expected to have a Material Adverse Effect.  Transferor will preserve and maintain its corporate existence, rights, franchises and privileges in the jurisdiction of its incorporation, and qualify and remain qualified in good standing as a foreign corporation in each jurisdiction where its business is conducted, except where the failure to so qualify or remain in good standing would not reasonably be expected to have a Material Adverse Effect.

(d)           Audits.  Transferor will furnish to Transferee (and the Agent, as its assignee) from time to time such information with respect to it and the Receivables and its compliance with this Agreement as Transferee (or its assigns) may reasonably request as such information, documents, records or reports are necessary or reasonably desirable to determine the capability of the Transferor to perform its obligations under any Transaction Document to which it is a party in order to protect the interests of Transferee (and its assigns) under or as contemplated by this Agreement.  Transferor will, from time to time during regular business hours as requested by Transferee (or its assigns) upon reasonable notice and at the sole cost of Transferor, permit Transferee, or its assigns) or their

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respective agents or representatives and shall cause Originator to permit Transferee (or its assigns) or their respective agents or representatives), (i) to examine and make copies of and abstracts from all Records in the possession or under the control of such Person relating to the Receivables and the Related Security, including, without limitation, the related Contracts, and (ii) to visit the offices and properties of such Person for the purpose of examining such materials described in clause (i) above, and to discuss matters relating to the Receivables and the Related Security or any Person’s performance under any of the Transaction Documents or any Person’s performance under the Contracts and, in each case, with any of the Authorized Officer’s of Seller or the Servicer having knowledge of such matters (each of the foregoing examinations and visits, a “Review”); provided, however, that, so long as no Termination Event or Servicing Termination Event (as defined in the Purchase Agreement) has occurred and is continuing, Transferor shall only be responsible for the costs and expenses of one (1) Review in any one calendar year.  Notwithstanding anything herein to the contrary, Transferor shall have no obligation to take any action in conflict with any applicable law, rule, regulation or contractual obligation prohibiting the disclosure of confidential information with respect to any Obligor; provided, however, with respect to any contractual obligation, Transferor shall use its commercially reasonable efforts to obtain any applicable consent to disclose such information upon the request of the Agent.

(e)           Keeping and Marking of Records and Books.

(i)           Transferor will (and shall cause Originator to) maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing Receivables in the event of the destruction of the originals thereof), and keep and maintain all documents, books, records and other information reasonably necessary or advisable for the collection of all Receivables (including, without limitation, records adequate to permit the immediate identification of each new Receivable and all Collections of and adjustments to each existing Receivable).

(ii)           Transferor will (and will cause Originator to) (A) on or prior to the date hereof, mark its master data processing records relating to the Receivable with a legend, reasonably acceptable to Transferee (and the Agent as its assignee), describing Transferee’s ownership interests in the Receivables and further describing the Purchaser Interests of the Agent (on behalf of the Purchasers) under the Purchase Agreement and (B) upon the request of Transferee (or its assigns) following a Termination Event and the transfer of servicing under the Purchase Agreement deliver to Transferee (or its assigns) all Records (including, without

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limitation, all multiple originals of any Contract) relating to the Receivables.  Notwithstanding anything herein to the contrary, Transferor shall have no obligation to take any actions in conflict with any applicable law, rule, regulation or contractual obligation prohibiting the disclosure of confidential information with respect to any Obligor; provided, however, with respect to any contractual obligation, Transferor shall use its commercially reasonable efforts to obtain any applicable consent to disclose such information upon the request of the Agent.

(f)           Compliance with Contracts and Credit and Collection Policy.  Transferor will (and shall cause Originator to) timely and fully (i) perform and comply with all material provisions, covenants and other promises required to be observed by it under the Contracts related to the Receivables, and (ii) comply in all material respects with the Credit and Collection Policy in regard to each Receivable and the related Contract.

(g)           Performance and Enforcement of Master Intercompany Agreement.  Transferor will and will cause Originator to, perform each of their respective obligations and undertakings under and pursuant to the Master Intercompany Agreement relating to or affecting in any material respect the Receivables, will purchase Receivables thereunder in accordance with the terms thereof and will enforce the rights and remedies accorded to Transferor under the Master Intercompany Agreement with respect to the Receivables.  Transferor will take all actions to perfect and enforce its rights and interests (and the rights and interests of Transferee as assignee of Transferor) under the Master Intercompany Agreement with respect to the Receivables as Transferee (or its assigns) may from time to time reasonably request, including, without limitation, making claims to which it may be entitled under any indemnity, reimbursement or similar provision contained in the Master Intercompany Agreement with respect to the Receivables.

(h)           Ownership.  Transferor will take all necessary action to establish and maintain, irrevocably in Transferee (i) legal and equitable title to the Receivables and the Collections and (ii) all of Transferor’s right, title and interest in the Related Security associated with the Receivables, in each case, free and clear of any Adverse Claims other than Adverse Claims in favor of Transferee (and its assigns) (including, without limitation, the filing of all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect Transferee’s interest in such Receivables, Related Security and Collections to the extent such interest can be perfected by filing under Article 9 of the UCC and such other action to perfect, protect or more fully evidence the interest of Transferee as Transferee (or its assigns) may reasonably request).

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(i)           Purchasers’ Reliance

(j)           .Transferor acknowledges that the Agent and the Purchasers are entering into the transactions contemplated by the Purchase Agreement in reliance upon Transferee’s identity as a legal entity that is separate from Transferor and any Affiliates thereof.  Therefore, from and after the date of execution and delivery of this Agreement, Transferor will take reasonable steps to maintain Transferee’s identity as a separate legal entity and to make it manifest to third parties that Transferee is an entity with assets and liabilities distinct from those of Transferor and any Affiliates thereof and not just a division of Transferor or any such Affiliate.  Without limiting the generality of the foregoing and in addition to the other covenants set forth herein, Transferor (i) will not hold itself out to third parties as liable for the debts of Transferee nor purport to own the Receivables and other assets acquired by Transferee, (ii) will take all other actions necessary on its part to ensure that Transferee is at all times in compliance with the covenants set forth in Section 7.1(i) of the Purchase Agreement and (iii) will cause all tax liabilities arising in connection with the transactions contemplated herein or otherwise to be allocated between Transferor and Transferee on an arm’s-length basis and in a manner consistent with the procedures set forth in U.S. Treasury Regulations §§1.1502-33(d) and 1.1552-1.

(k)           [Intentionally Deleted]

(l)           Collections.  Transferor will cause (1) all proceeds from all Lock-Boxes to be directly deposited by a Lock-Box Bank into a Lock-Box Account and (2) each Lock-Box, Lock-Box Account and Blocked Account to be subject at all times to a Lock-Box Account Agreement or Blocked Account Agreement, as applicable, that is in full force and effect.  Transferor will cause all proceeds from each Lock-Box Account to be deposited directly into the Specified NFC Allocation Account unless a Collection Notice with respect to any Lock-Box Account has been delivered pursuant to Section 8.3 of the Purchase Agreement.  Transferor will cause all proceeds relating to Receivables in the Specified NFC Allocation Account to be deposited into a Blocked Account within two (2) Business Days following deposit into the Specified NFC Allocation Account.  In the event any payments relating to Receivables are remitted directly to Transferor or any Affiliate of Transferor, Transferor will remit (or will cause all such payments to be remitted) directly to a Blocked Account Bank and deposited into a Blocked Account within two (2) Business Days following receipt thereof and, at all times prior to such remittance, Transferor will itself hold or, if applicable, will cause such payments to be held in trust for the exclusive benefit of Transferee and its assigns.  Transferor hereby confirms that it has hereby transferred control of each Lock-Box, Lock-Box Account and Blocked Account to Transferee and agrees that it will not grant the right to take dominion and control of any Lock-Box, Lock-Box Account or Blocked Account at a future time or upon the

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occurrence of a future event to any Person, except to Transferee, Transferee and the Agent (as their assignee) as contemplated by this Agreement and the Purchase Agreement.

(m)           Taxes.  Transferor will file all tax returns and reports required by law to be filed by it and promptly pay all taxes and governmental charges at any time owing, except (a) any such taxes which are not yet delinquent or are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books or (b) to the extent that the failure to do so would not reasonably be expected to result in a Material Adverse Effect.  Transferor will pay when due any taxes payable in connection with the Receivables, exclusive of taxes on or measured by income or gross receipts of Transferee and its assigns.

(n)           Insurance.  Transferor will maintain in effect, or cause to be maintained in effect, at Transferor’s own expense, such casualty and liability insurance as Transferor deems appropriate in its good faith business judgment.

(o)           Payment to Originator

(p)           .  With respect to each Receivable, its purchase from Originator shall be effected under and pursuant to the terms of the Master Intercompany Agreement, including without limitation, the terms relating to the amount and timing of payments to be made to Originator in respect of the purchase price for such Receivable.

Section 4.2                                Negative Covenants of Transferor.

  Until the date on which this Agreement terminates in accordance with its terms, Transferor hereby covenants that:

(a)           Name Change, Offices and Records.  Transferor will not change its legal name or legal structure or relocate any office where Records are kept unless it shall have: (i) given Transferee (and the Agent, as its assignee) at least ten (10) Business Days’ prior written notice thereof and (ii) delivered to the Agent, as Transferee’s assignee, all financing statements, instruments and other documents reasonably requested by the Agent in connection with such change or relocation.

(b)           Change in Payment Instructions to Obligors.  Except as may be required by Agent pursuant to Section 8.2(b) of the Purchase Agreement, Transferor will not add or terminate any bank as a Lock-Box Bank or Blocked Account Bank, or make any change in the instructions to Obligors regarding payments to be made to any Lock-Box, or Lock-Box Account, unless Transferee (and the Agent, as its assignee) shall have received, at least ten (10) Business Days before the proposed effective date therefor, (i) written notice of such addition, termination or change and (ii) with respect to the addition of a Lock-Box

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Bank or Blocked Account Bank or a Blocked Account, Lock-Box Account or Lock-Box, an executed Lock-Box Account Agreement or Blocked Account Agreement, as applicable, with respect to the new Blocked Account, Lock-Box Account or Lock-Box; provided, however, that Transferor may make changes in instructions to Obligors regarding payments if such new instructions require such Obligor to make payments to another existing Blocked Account, Lock Box Account or Lock-Box.

(c)           Modifications to Contracts and Credit and Collection Policy.  Transferor will not (and will not permit Originator to) make any change to the Credit and Collection Policy that would reasonably be expected to materially andadversely affect the collectibility of the Receivables or any significant portion thereof, or materially decrease the credit quality of newly created Receivables unless such change shall be consented to by the Agent.  Except as otherwise permitted in its capacity as Servicer pursuant to Article VIII of the Purchase Agreement, Transferor will not extend, amend or otherwise modify the terms of any Receivable or any Contract related thereto other than in accordance with the Credit and Collection Policy.

(d)           Sales, Liens.  Transferor will not sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to, or create or suffer to exist any Adverse Claim upon (including, without limitation, the filing of any financing statement) or with respect to, any Receivable, Related Security or Collections, or upon or with respect to any Contract under which any Receivable arises, or any Lock-Box, Lock-Box Account or Blocked Account, or assign any right to receive income with respect thereto (other than, in each case, the creation of the interests therein in favor of Transferee and its assigns provided for in the Transaction Documents and Adverse Claims which are released pursuant to release language acceptable to the Agent set forth in the Transferor Credit Agreement upon transfer of the related assets), and Transferor will defend the right, title and interest of Transferee and its assigns in, to and under any of the foregoing property, against all claims of third parties claiming through or under Transferor.  Without the prior written consent of the Agent, as Transferee’s assign, Transferor shall not create or suffer to exist any mortgage, pledge, security interest, encumbrance, lien, charge or other similar arrangement on any of its inventory, the sale of which gives rise to any Receivable other than liens created pursuant to the Transaction Documents.

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(e)           Accounting for Purchase.  Transferor will not, and will not permit any Affiliate to, account for or treat (whether in financial statements or otherwise) the transactions contemplated hereby in any manner other than the sale of the Receivables and the Related Security by Transferor to Transferee or in any other respect account for or treat the transactions contemplated hereby in any manner other than as a sale of the Receivables and the Related Security by Transferor to Transferee except to the extent that such transactions are not recognized on account of consolidated financial reporting in accordance with GAAP.

(f)           No Adverse Selection.  To the extent that Originator or Transferor has retained Receivables that would be Eligible Receivables but which have not been ultimately transferred to Transferee hereunder, Originator and Transferor will not select those Receivables to be transferred hereunder in any manner that materially adversely affects Transferee.

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ARTICLE V

TERMINATION EVENTS

Section 5.1                                Termination Events.

The occurrence of any one or more of the following events shall constitute a Termination Event:

(a)           Transferor shall fail to make any payment or deposit required hereunder when due; provided, however, that no Termination Event shall occur under this Section 5.1(a) as a result of any late payment or deposit (i) made before 5:00 p.m. on the applicable due date or (ii) which is cured within one (1) Business Day after Transferor has knowledge of such failure if (A) with respect to clause (ii) only, such late payment or deposit was due to funds transmission failure beyond Transferor’s control, including the failure of any Lock-Box Bank or Blocked Account Bank to follow wire transfer instructions, (B) such late payment or deposits do not occur more than five (5) times in any calendar year, and (C) Transferor pays all costs incurred by Transferee (or its assigns) as a direct result of such failure or, (iii) solely to the extent such payment or deposit represents interest or fees, such failure continues for five (5) Business Days after Transferor has knowledge of such failure.

(b)           Transferor shall fail to perform or observe any term, covenant or agreement hereunder (other than as referred to in another subsection of this Section 5.1) or any other Transaction Document to which it is a party and, such failure shall continue for ten (10) consecutive Business Days after the Transferor has knowledge of such failure.

(c)           Any representation, warranty, certification or statement made by Transferor in this Agreement, any other Transaction Document or in any other document delivered pursuant hereto or thereto shall prove to have been incorrect when made or deemed made and such inaccuracy, to the extent capable of being remedied, shall remain unremedied in all material respects for five (5) Business Days after any Seller Party has knowledge of such inaccuracy; provided that the materiality qualifier in this clause shall not apply to any representation or warranty which itself has a materiality qualifier.

(d)           The Indebtedness outstanding under the Transferor Credit Agreement becomes due in full prior to its scheduled maturity or shall be declared to be due and payable in full or required to be prepaid in full prior to the date of maturity thereof, in each case, as a result of an event of default under the Transferor Credit Agreement.

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(e)           (i)  An involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (A) liquidation, reorganization, or other relief in respect of Transferor or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (B) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for Transferor or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;

      (ii)                 Transferor shall (A) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization, or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (B) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (i) of this Section 5.1(e), (C) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Parent, Originator, Transferor or Transferee or for a substantial part of its assets, (D) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (E) make a general assignment for the benefit of creditors or (F) take any action for the purpose of effecting any of the foregoing; or

           (iii)           Transferor shall become unable, admit in writing or fail generally to pay its debts as they become due.

(f)           A Change of Control shall occur.

(g)           One or more judgments for the payment of money in an aggregate amount in excess of $10,000,000 shall be rendered against Transferor, any of its Subsidiaries or any combination thereof and the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of Transferor or any of its Subsidiaries to enforce any such judgment.

Section 5.2                                Remedies.

  Upon the occurrence and during the continuation of a Termination Event, Transferee may take any of the following actions:  (i) declare the Termination Date to have occurred, whereupon the Termination Date shall forthwith occur, without demand, protest or further notice of any kind, all of which are hereby expressly waived by Transferor; provided, however, that upon the occurrence of a Termination Event described in Section 5.1(e), or of an actual or deemed entry of an order for relief with respect to Transferor under the Federal Bankruptcy Code, the Termination Date shall automatically occur, without demand, protest or any notice of any kind, all of which are hereby expressly waived by Transferor or (ii) to the

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fullest extent permitted by applicable law, declare that the Default Fee shall accrue with respect to any amounts then due and owing by Transferor to Transferee.  The aforementioned rights and remedies shall be without limitation and shall be in addition to all other rights and remedies of Transferee and its assigns otherwise available under any other provision of this Agreement, by operation of law, at equity or otherwise, all of which are hereby expressly preserved, including, without limitation, all rights and remedies provided under the UCC, all of which rights shall be cumulative.

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ARTICLE VI

INDEMNIFICATION

Section 6.1                                Indemnities by Transferor.

  Without limiting any other rights that Transferee may have hereunder or under applicable law, Transferor hereby agrees to indemnify (and pay upon demand to) Transferee and its assigns and their respective officers, directors, agents and employees (each an “Indemnified Party”) from and against any and all damages, losses, claims, Taxes, liabilities, costs, expenses and for all other amounts payable, including reasonable attorneys’ fees and disbursements (all of the foregoing being collectively referred to as “Indemnified Amounts”) awarded against or incurred by any of them arising out of or as a result of this Agreement or the acquisition, either directly or indirectly, by Transferee of an interest in the Receivables, excluding, however:

(a)                 Indemnified Amounts to the extent that such Indemnified Amounts resulted from gross negligence, willful misconduct, violation of law or breach of any of the Transaction Documents on the part of the Indemnified Party seeking indemnification;

(b)                 Indemnified Amounts to the extent the same includes losses in respect of Receivables that are uncollectible on account of the insolvency, bankruptcy or lack of creditworthiness of the related Obligor; or

(c)                 taxes imposed by any jurisdiction other than a jurisdiction which acquired taxing authority over the Indemnified Party as a result of the Transaction, on or measured by the overall net income of such Indemnified Party to the extent that the computation of such taxes is consistent with the characterization for income tax purposes of the acquisition by the Purchasers under the Purchase Agreement of Purchaser Interests as a loan or loans by the Purchasers to Transferee secured by the Receivables, the Related Security, the Lock-Box Accounts, the Blocked Accounts and the Collections;

provided,however, that nothing contained in this sentence shall limit the liability of Transferor or limit the recourse of Transferee to Transferor for amounts otherwise specifically provided to be paid by Transferor under the terms of this Agreement.  Without limiting the generality of the foregoing indemnification, Transferor shall indemnify the Indemnified Parties for Indemnified Amounts (including, without limitation, losses in respect of uncollectible receivables, regardless of whether reimbursement therefor would constitute recourse to Transferor) relating to or resulting from:

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(i)           any representation or warranty made by Transferor (or any officers of Transferor) under or in connection with this Agreement, any other Transaction Document or any other information or report delivered by Transferor pursuant hereto or thereto that shall have been false or incorrect when made or deemed made;

(ii)           the failure by Transferor to comply with any applicable law, rule or regulation with respect to any Receivable or Contract related thereto, or the nonconformity of any Receivable or Contract included therein with any such applicable law, rule or regulation or any failure of Transferor to keep or perform any of its obligations, express or implied, with respect to any Contract;

(iii)           any failure of Transferor to perform its duties, covenants or other obligations in accordance with the provisions of this Agreement or any other Transaction Document to which it is a party, or any failure of Transferor to satisfy any condition precedent to any Purchase;

(iv)           any products liability, personal injury or damage suit or other similar claim arising out of or in connection with merchandise, insurance or services that are the subject of any Contract or any Receivable;

(v)           any dispute, claim, offset or defense (other than discharge in bankruptcy of the Obligor) of the Obligor to the payment of any Receivable (including, without limitation, a defense based on such Receivable or the related Contract not being a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms), or any other claim resulting from the sale of the merchandise or service related to such Receivable or the furnishing or failure to furnish such merchandise or services;

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(vi)           the commingling of Collections of Receivables at any time with other funds;

(vii)           any investigation, litigation or proceeding related to or arising from this Agreement or any other Transaction Document, the transactions contemplated hereby, the use of the proceeds of any Purchase Price payment, the ownership of the Receivables or any other investigation, litigation or proceeding relating to Transferor in which any Indemnified Party becomes involved as a result of any of the transactions contemplated hereby;

(viii)                      [Intentionally Omitted];

(ix)           any Termination Event described in Section 5.1(e);

(x)           any failure of Transferor to acquire and maintain legal and equitable title to, and ownership of any Receivable and the Related Security and Collections with respect thereto from Originator, free and clear of any Adverse Claim (other than as created hereunder); or any failure of Transferor to give reasonably equivalent value to Originator under the Master Intercompany Agreement in consideration of the transfer by Originator of any Receivable, or any attempt by any Person to void such transfer under statutory provisions or common law or equitable action;

(xi)           any failure to vest and maintain vested in Transferee, or to transfer to Transferee, legal and equitable title to, and ownership of, the Receivables and the Collections, and all of Transferor’s right, title and interest in the Related Security associated with the Receivables, in each case, free and clear of any Adverse Claim;

(xii)           the failure to have filed, or any delay in filing, financing statements or other similar instruments or documents under the UCC of any applicable jurisdiction or other applicable laws with respect to any Receivable, the Related Security and Collections with respect thereto, and the proceeds of any thereof, whether at the time of  Purchase or at any subsequent time;

(xiii)                      any action by Transferor not required by, or omission by Transferor not prohibited by, the Transaction Documents which reduces or impairs the rights of Transferee with respect to any Receivable or the value of any such Receivable;

(xiv)                      any attempt by any Person to void any Purchase hereunder under statutory provisions or common law or equitable action; and

(xv)           the failure of any Receivable included in the calculation of the Net Receivables Balance as an Eligible Receivable to be an Eligible Receivable at the time so included.

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ARTICLE VII

MISCELLANEOUS

Section 7.1                                Waivers and Amendments.

(a)           No failure or delay on the part of Transferee (or its assigns) in exercising any power, right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or remedy preclude any other further exercise thereof or the exercise of any other power, right or remedy.  The rights and remedies herein provided shall be cumulative and nonexclusive of any rights or remedies provided by law.  Any waiver of this Agreement shall be effective only in the specific instance and for the specific purpose for which given.

(b)           No provision of this Agreement may be amended, supplemented, modified or waived except in writing signed by Transferor and Transferee and, to the extent required under the Purchase Agreement, the Agent and the Financial Institutions or the Required Financial Institutions.

Section 7.2                                Notices.

  All communications and notices provided for hereunder shall be in writing (including bank wire, telecopy or electronic facsimile transmission or similar writing) and shall be given to the other parties hereto at their respective addresses or telecopy numbers set forth on the signature pages hereof or at such other address or telecopy number as such Person may hereafter specify for the purpose of notice to the other party hereto.  Each such notice or other communication shall be effective (a) if given by telecopy, upon the receipt thereof, (b) if given by mail, five (5) Business Days after the time such communication is deposited in the mail with first class postage prepaid or (c) if given by any other means, when received at the address specified in this Section 7.2.

Section 7.3                                Protection of Ownership Interests of Transferee

(a)           Transferor agrees that from time to time, at its expense, it will promptly execute and deliver all instruments and documents, and take all actions, that may be necessary, or that Transferee (or its assigns) may reasonably request, to perfect, protect or more fully evidence the interest of Transferee hereunder and the Purchaser Interests, or to enable Transferee (or its assigns) to exercise and enforce their rights and remedies hereunder.  At any time after a Servicer Termination Event and the transfer of servicing, the Transferee (or its assigns) may, at Transferor’s sole cost and expense, direct Transferor to notify the Obligors of Receivables, at Transferor’s expense, of the ownership or security interests of Transferee under this Agreement and may also direct that payments of all amounts due or that become due under any or all Receivables be made directly to Transferee or its designee.

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(b)           If Transferor fails, after any applicable grace period, to perform any of its obligations hereunder, Transferee (or its assigns) may (but shall not be required to) perform, or cause performance of, such obligations, and Transferee’s (or such assigns’) costs and expenses incurred in connection therewith shall be payable by Transferor as provided in Section 6.2.  Transferor irrevocably authorizes Transferee (and its assigns) at any time and from time to time in the sole discretion of Transferee (or its assigns), and appoints Transferee (and its assigns) as its attorney(ies)-in-fact, to act on behalf of Transferor (i) to execute on behalf of Transferor as debtor and to file financing statements necessary in Transferee’s (or its assigns’) sole discretion to perfect and to maintain the perfection and priority of the interest of Transferee in the Receivables and (ii) to file a carbon, photographic or other reproduction of this Agreement or any financing statement with respect to the Receivables as a financing statement in such offices as Transferee (or its assigns) in their sole discretion deem necessary to perfect and to maintain the perfection and priority of Transferee’s interests in the Receivables.  This appointment is coupled with an interest and is irrevocable.

Section 7.4                                Confidentiality

(a)           Transferor shall maintain and shall cause each of its employees and officers to maintain the confidentiality of this Agreement and the other confidential or proprietary information with respect to the Agent and Conduit and their respective businesses obtained by it or them in connection with the structuring, negotiating and execution of the transactions contemplated herein, except that Transferor and its officers and employees may disclose such information to Transferor’s external accountants and attorneys and as required by any applicable law, rule, regulation, direction, request or order of any judicial, administrative or regulatory authority or proceeding (whether or not having the force or effect of law).

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(b)           Anything herein to the contrary notwithstanding, Transferor hereby consents to the disclosure of any nonpublic information with respect to it (i) to Transferee, the Agent, the Financial Institutions or Conduit by each other, (ii) by Transferee, the Agent or the Purchasers to any prospective or actual assignee or participant of any of them, provided such assignee or participant agrees to be bound by the confidentiality provisions specified herein and (iii) by the Agent to any rating agency, Commercial Paper dealer or provider of a surety, guaranty or credit or liquidity enhancement to Conduit or any entity organized for the purpose of purchasing, or making loans secured by, financial assets for which Bank One acts as the administrative agent and to any officers, directors, employees, outside accountants and attorneys of any of the foregoing, provided each such Person is informed of the confidential nature of such information.  In addition, the Purchasers and the Agent may disclose any such nonpublic information pursuant to any law, rule, regulation, direction, request or order of any judicial, administrative or regulatory authority or proceedings (whether or not having the force or effect of law).  Transferee and its assigns shall use its commercially reasonable efforts to notify Transferor of any order or request for any nonpublic information.

(c)           Transferee shall maintain and shall cause each of its employees and officers to maintain the confidentiality of this Agreement and the other confidential or proprietary information with respect to Transferor, the Obligors and their respective businesses obtained by it in connection with the due diligence evaluations, structuring, negotiating and execution of the Transaction Documents, and the consummation of the transactions contemplated herein and any other activities of Transferee arising from or related to the transactions contemplated herein, provided, however, that except as prohibited by law, rule or regulation each of Transferee and its employees and officers shall be permitted to disclose such confidential or proprietary information: (i) to the Agent and the other Purchasers, (ii) to any prospective or actual assignee or participant of the Agent or the other Purchasers who execute a confidentiality agreement for the benefit of Transferor and Transferee on terms comparable to those required of Transferee hereunder with respect to such disclosed information, (iii) to any rating agency, provider of a surety, guaranty or credit or liquidity enhancement to Conduit, (iv) to any officers, directors, employees, outside accountants and attorneys of any of the foregoing, and (v) to the extent required pursuant to any applicable law, rule, regulation, direction, request or order of any judicial, administrative or regulatory authority or proceedings with competent jurisdiction (whether or not having the force or effect of law) so long as such required disclosure is made under seal to the extent permitted by applicable law or by rule of court or other applicable body.

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(d)           Notwithstanding any other express or implied agreement to the contrary, the parties hereto agree that each of them and each of their employees, representatives, and other agents may disclose to any and all Persons, without limitation of any kind, the tax treatment and tax structure of the transaction and all materials of any kind (including opinions or other tax analyses) that are provided to any of them relating to such tax treatment and tax structure, except where confidentiality is reasonably necessary to comply with U.S. federal or state securities laws.  For purposes of this paragraph, the terms “tax treatment” and “tax structure” have the meanings specified in Treasury Regulation section 1.6011-4(c).

Section 7.5                                Bankruptcy Petition.

  Each of Transferor and Transferee hereby covenants and agrees that, prior to the date that is one year and one day after the payment in full of all outstanding senior indebtedness of Conduit, it will not institute against, or join any other Person in instituting against, Conduit any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding under the laws of the United States or any state of the United States.

Section 7.6                                Limitation of Liability.

  Except with respect to any claim arising out of the willful misconduct or gross negligence of the Agent or any Purchaser, no claim may be made by Transferor or any other Person against the Agent or any Purchaser or their respective Affiliates, directors, officers, employees, attorneys or agents for any special, indirect, consequential or punitive damages in respect of any claim for breach of contract or any other theory of liability arising out of or related to the transactions contemplated by this Agreement, or any act, omission or event occurring in connection therewith; and Transferor hereby waives, releases, and agrees not to sue upon any claim for any such damages, whether or not accrued and whether or not known or suspected to exist in its favor.

Section 7.7                                CHOICE OF LAW.

  THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS.

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Section 7.8                                CONSENT TO JURISDICTION.

  EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY ANY PARTY PURSUANT TO THIS AGREEMENT AND EACH PARTY  HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.  NOTHING HEREIN SHALL LIMIT THE RIGHT OF TRANSFEREE (OR ITS ASSIGNS) TO BRING PROCEEDINGS AGAINST TRANSFEROR IN THE COURTS OF ANY OTHER JURISDICTION.  ANY JUDICIAL PROCEEDING BY TRANSFEROR AGAINST TRANSFEREE (OR ITS ASSIGNS) OR ANY AFFILIATE THEREOF INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY ORIGINAL SELLER PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS OR NEW YORK, NEW YORK.

Section 7.9                                WAIVER OF JURY TRIAL.

  EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY TRANSFEROR PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.

Section 7.10                                Integration; Binding Effect; Survival of Terms.

(a)           This Agreement and each other Transaction Document contain the final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire agreement among the parties hereto with respect to the subject matter hereof superseding all prior oral or written understandings.

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(b)           This Agreement shall be binding upon and inure to the benefit of Transferor, Transferee and their respective successors and permitted assigns (including any trustee in bankruptcy).  Transferor may not assign any of its rights and obligations hereunder or any interest herein without the prior written consent of Transferee, the Agent and the Purchasers.  Transferee may assign at any time its rights and obligations hereunder and interests herein to any other Person without the consent of Transferor.  Without limiting the foregoing, Transferor acknowledges that Transferee will assign to the Agent, for the benefit of the Purchasers, its rights, remedies, powers and privileges hereunder and that the Agent may further assign such rights, remedies, powers and privileges to the extent permitted in the Purchase Agreement.  Transferor agrees that the Agent, as the assignee of Transferee, shall, subject to the terms of the Purchase Agreement, have the right to enforce this Agreement and to exercise directly all of Transferee’s rights and remedies under this Agreement (including, without limitation, the right to give or withhold any consents or approvals of Transferee to be given or withheld hereunder) and Transferor agrees to cooperate fully with the Agent in the exercise of such rights and remedies.  This Agreement shall create and constitute the continuing obligations of the parties hereto in accordance with its terms and shall remain in full force and effect until terminated in accordance with its terms; provided, however, that the rights and remedies with respect to (i) any breach of any representation and warranty made by Transferor pursuant to Article II; (ii) the indemnification and payment provisions of Article VI; and (iii) Section 7.4 and Section 7.5 shall be continuing and shall survive any termination of this Agreement.

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Section 7.11                                Counterparts; Severability; Section References.

This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same Agreement.  Any provisions of this Agreement which are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  Unless otherwise expressly indicated, all references herein to “Article,” “Section,” “Schedule” or “Exhibit” shall mean articles and sections of, and schedules and exhibits to, this Agreement.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their duly authorized officers as of the date hereof.

NAVISTAR FINANCIAL CORPORATION

By:           

Name:

Title:

Address:                2850 W. Golf Road

Rolling Meadows, Illinois 60008

Attention: President and Treasurer

Fax: (847) 734-4090

TRUCK RETAIL ACCOUNTS CORPORATION

By:           

Name:

Title:

Address:                2850 W. Golf Road

Rolling Meadows, Illinois 60008

Attention: Vice President

and Treasurer

Fax: (847) 734-4090

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Exhibit I

Definitions

This is Exhibit I to the Agreement (as hereinafter defined).   As used in the Agreement and the Exhibits, Schedules and Annexes thereto, capitalized terms have the meanings set forth in this Exhibit I (such meanings to be equally applicable to the singular and plural forms thereof).  If a capitalized term is used in the Agreement, or any Exhibit, Schedule or Annex thereto, and not otherwise defined therein or in this Exhibit I, such term shall have the meaning assigned thereto in Exhibit I to the Purchase Agreement.

“Adverse Claim” means any Lien.

“Agent” has the meaning set forth in the Preliminary Statements to the Agreement.

“Agreement” means the Receivables Sale Agreement, dated as of April 8, 2004, between Transferor and Transferee, as the same may be amended, restated or otherwise modified.

“Calculation Period” means each calendar month or portion thereof which elapses during the term of the Agreement.  The first Calculation Period shall commence on the initial Transfer Date and the final Calculation Period shall terminate on the Termination Date.

“Change of  Control” means the occurrence of one or more of the following events:  (i) any person or group (within the meaning of the Securities Exchange Act of 1934 (the “Exchange Act”) and the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof), other than employee or retiree benefit plans or trusts sponsored or established by Transferor or Originator, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of (A) securities of the Parent representing 35% or more of the combined voting power of the Parent’s then outstanding voting stock, or (B) securities of the Transferor representing 50% or more of the combined voting power of Transferor’s then outstanding voting stock; (ii) the following individuals cease for any reason to constitute more than three-fourths of the number of directors then serving on the Board of Directors of the Parent; individuals who, on the date hereof, constitute the Board of Directors and any new director (other than a director whose initial assumption of the office is in connection with an actual or threatened election by the Parent’s stockholders was approved by the vote of a majority of the directors then still in office or whose appointment, election or nomination was previously so approved or recommended; (iii) the stockholders of the Parent shall approve any Plan of Liquidation; (iv) Transferor consolidates with or merges with or into another Person, or Transferor or any Subsidiary of Transferor, directly or indirectly, sells, assigns, conveys, transfers, leases or otherwise disposes of, in one transaction or series of related transactions, all or substantially all of the property or assets of the Transferor and the Subsidiaries of Transferor (determined on a consolidated basis) to any Person, or Person consolidates with, or merges with or into, Transferor, in any such event pursuant to a transaction in which the outstanding voting stock of Transferor is converted into or exchanges for cash, securities or other property, and, as a

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result of which, neither the Parent nor Originator has “beneficial ownership” (as set forth above), directly or indirectly, of at least 50% of the combined voting power of the then outstanding voting stock of the surviving or transferee corporation; (v) so long as any Indebtedness under the Senior Subordinated Note Indenture (as defined in the Transferor’s Credit Agreement) is outstanding, a “Change of Control” as defined in the Senior Subordinated Note Indenture shall occur; or (vi) Transferor shall cease to own, directly or indirectly, 100% of the voting stock of the Transferee.

“Conduit” has the meaning set forth in the Preliminary Statements to the Agreement.

“Credit and Collection Policy” means Transferor credit and collection policies and practices relating to Contracts and Receivables existing on the date hereof and as attached as Exhibit V, as modified from time to time in accordance with the Agreement.

“Cutoff  Date” has the meaning set forth in Section 1.1(a).

“Default Rate” means a rate equal to the sum of (i) the Prime Rate, plus (ii) 2% per annum.

“Disclosed Matters” means the actions, suits and proceedings disclosed in Schedule 2.1(e).

“Discount Factor” means a percentage calculated as follows:

Days Sales Outstanding	x	(Prime Rate + Servicing Fee)	+ Profit Discount
360

where,

“Days Sales Outstanding” means, for any weekly period, an amount equal to the product of (i) a fraction, the numerator of which is the sum of the Outstanding Balance of all Receivables at the end of each of the 12 immediately preceding weekly periods, and the denominator of which is the aggregate amount of Receivables acquired by the Transferor during the 12 immediately preceding weekly periods and (ii) 7.

Profit Discount = .25%

“Financial Officer” means, with respect to Transferor, the chief financial officer, principal accounting officer, treasurer, controller, cash manager, financing manager or treasury reporting manager of Transferor.

“GAAP” means generally accepted accounting principles in the United States of America.

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“Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

“Indebtedness” has the meaning provided in Transferor Credit Agreement.

“Hedging Agreement” means any interest rate protection agreement, foreign currency exchange agreement, currency swap agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset and (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such asset.

“Material Adverse Effect” means a material adverse effect on (i) the financial condition or operations of Transferor and its Subsidiaries, taken as a whole, (ii) the ability of Transferor to perform its obligations under the Agreement or any other Transaction Document, (iii) the legality, validity or enforceability of the Agreement or any other Transaction Document, (iv) Transferor’s, Transferee’s, the Agent’s or any Purchaser’s interest in the Receivables generally or in any significant portion of the Receivables, the Related Security or Collections with respect thereto, or (v) the collectibility of the Receivables generally or of any material portion of the Receivables.

“Master Intercompany Agreement” means that certain Master Intercompany Agreement dated April 26, 1993, as amended as of September 20, 1996 and as may be amended, supplemented or modified from time to time with respect to any provision not related to the Receivables except as otherwise agreed to by the Agent, by and between Originator and Transferor.

“Material Indebtedness” means Indebtedness, or obligations in respect of one or more Hedging Agreements in an aggregate principal amount exceeding $10,000,000.  For purposes of determining Material Indebtedness, the “principal amount” of the obligations in respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that Transferor would be required to pay if such Hedging Agreement were terminated at such time.

“Original Balance” means, with respect to any Receivable, the Outstanding Balance of such Receivable on the date it was created.

“Originator” means International Truck and Engine Corporation, a Delaware corporation.

“Parent” means Navistar International Corporation, a Delaware corporation, and its successors.

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“Potential Termination Event” means an event which, with the passage of time or the giving of notice, or both, would constitute a Termination Event.

“Prime Rate” means a rate per annum equal to the prime rate of interest announced from time to time by Bank One or its parent (which is not necessarily the lowest rate charged to any customer), changing when and as said prime rate changes.

“Purchase” means each purchase pursuant to Section 1.1(a) of the Agreement by Transferee from Transferor of Receivables and the Related Security and Collections related thereto, together with all related rights in connection therewith.

“Purchase Agreement” has the meaning set forth in the Preliminary Statements to the Agreement.

“Purchase Price” means, with respect to any Purchase, the aggregate price to be paid by Transferee to Transferor for such Purchase in accordance with Section 1.2 of the Agreement for the Receivables, Collections and Related Security being sold to Transferee, which price shall equal on any date (i) the product of (x) the Outstanding Balance of such Receivables on such date, multiplied by (y) one minus the Discount Factor in effect on such date, minus (ii) any Purchase Price Credits to be credited against such Purchase Price otherwise payable in accordance with Section 1.3 of the Agreement.

“Purchase Price Credit” has the meaning set forth in Section 1.3 of the Agreement.

“Receivable” means each domestic open account trade receivable arising from the sale of one or more trucks by Originator, including, without limitation, all rights to receive payments of Finance Charges with respect thereto, which receivable has been sold by the Originator to the Transferor pursuant to the Master Intercompany Agreement (but excluding any receivable that has been or is to be resold by the Transferor to the Originator unless that receivable has already been sold by the Transferee pursuant to the Purchase Agreement and included in the Net Receivables Balance reported to the Agent), but excluding any Retail Account Service Charges (as defined in the Master Intercompany Agreement) paid to Transferor.  Open account trade receivables arising from any one transaction, including, without limitation, those represented by an individual invoice, shall constitute a Receivable separate from a Receivable consisting of the rights and obligations arising from any other transaction; provided, further, that any open account trade receivable referred to in this sentence shall be a Receivable regardless or whether the Obligor, the Originator or Transferor treats such trade receivable as a separate payment obligation.

“Related Security” means, with respect to any Receivable, if any:

(i)           all of Transferor’s interest in the inventory and goods (including returned or repossessed inventory or goods, if any), the sale of which by Transferor gave rise to such Receivable, and all insurance proceeds with respect  to such inventory and goods,

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(ii)           all other security interests or liens and property subject thereto from time to time, if any, purporting to secure payment of such Receivable, whether pursuant to the Contract related to such Receivable or otherwise, together with all financing statements and security agreements describing any collateral securing such Receivable,

(iii)           all guaranties, letters of credit, credit insurance and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Receivable whether pursuant to the Contract related to such Receivable or otherwise,

(iv)           all service contracts and other contracts and agreements associated with such Receivable,

(v)           all Records related to such Receivable,

(vi)           all of Transferor’s rights and remedies under the Master Intercompany Agreement associated with such Receivable,

(vii)           all of Transferor’s right, title and interest in each Lock-Box, each Lock-Box Account and each Blocked Account, and

(viii)                      all proceeds of any of the foregoing (other than the Purchase Price).

“Subordinated Loan” has the meaning set forth in Section 1.2(a) of the Agreement.

“Subordinated Note” means a promissory note in substantially the form of Exhibit VI hereto as more fully described in Section 1.2 of the Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority.

“Termination Date” means the earliest to occur of (i) the Facility Termination Date, (ii) the Business Day immediately prior to the occurrence of a Termination Event set forth in Section 5.1(e), (iii) the Business Day specified in a written notice from Transferee to Transferor following the occurrence of any other Termination Event, and (iv) the date which is 10 Business Days after Transferee’s receipt of written notice from Transferor that it wishes to terminate the facility evidenced by this Agreement.

“Termination Event” has the meaning set forth in Section 5.1 of the Agreement.

“Transaction Documents” means, collectively, the Agreement, the Master Intercompany Agreement (but only those portions that relate to the Receivables), the Purchase Agreement, each Lock-Box Account Agreement, each Blocked Account Agreement, the

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Subordinated Note and all other instruments, documents and agreements executed and delivered in connection herewith or therewith.

“Transactions” means, collectively, (a) the execution and delivery by Transferor of the Transaction Documents to which it is a party, (b) the sale by the Transferor of the Receivables, Related Security and Collections pursuant to the Agreement and use of the proceeds thereof, and (c) the performance of Transferor’s other obligations under the Transaction Documents to which it is a party.

“Transfer Date” means the first Business Day of each week after the date of the Agreement.

“Transferee” has the meaning set forth in the preamble to the Agreement.

“Transferor” has the meaning set forth in the preamble to the Agreement.

“Transferor Credit Agreement” means that certain Credit Agreement, dated as of December 8, 2000, originally among Transferor, Arrendadora Financiera Navistar, S.A. de C.V., Servicios Financieros Navistar, S.A. de C.V. and Navistar Comercial, S.A. de C.V., as Borrowers, various lenders, JPMorgan Chase Bank (as successor to The Chase Manhattan Bank), as Administrative Agent, Bank of America, N.A., as Syndication Agent, and The Bank of Nova Scotia, as Documentation Agent, as the same may be amended, restated or otherwise modified from time to time.

“UCC” means the Uniform Commercial Code as from time to time in effect in the specified jurisdiction.

All accounting terms not specifically defined herein shall be construed in accordance with GAAP.  All terms used in Article 9 of the UCC in the State of Illinois, and not specifically defined herein, are used herein as defined in such Article 9.

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Exhibit II

Places of Business; Locations of Records;

Organizational and Federal Employer Identification Numbers; Other Names

TRANSFEROR

Places of Business:

Illinois

Locations of Records:

2850 W. Golf Road

Rolling Meadows, Illinois 60008

Federal Employer Identification Number:

36-XXXXXXXXX

Organizational Identification Number:

04290010

Trade and Assumed Names, Prior Names:

International Harvester Credit Corporation

International Finance Group

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Exhibit III

Lock-Boxes; Lock-Box Accounts, Lock-Box Banks,

Blocked Accounts; Blocked Account Banks

Lock Box	Related Lock-Box Account
Lock-Box No. XXXXXX, P.O. Box198381, Atlanta Georgia 39384-8381	Account No.: XXXXXXXXXX maintained with Bank of America, 231 South La Salle Street, Chicago, IL 60604

Proceeds Allocation Account:  No. XXX-XXXXXX located at JPMorgan Chase Bank, 4 New York Plaza, 6th Floor, New York, New York 10004 (ABA No. 021000021)

Blocked Account: a trust account number XXXXXXXXX in the name “Blocked Account for Bank One, NA (Main Office Chicago), as Agent” maintained with JPMorgan Chase Bank, 4 New York Plaza, 6th Floor, New York, New York 10004.

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Exhibit IV

Form of Compliance Certificate

This Compliance Certificate is furnished pursuant to that certain Receivables Sale Agreement dated as of April 8, 2004 (the “Agreement”), between TRUCK RETAIL ACCOUNTS CORPORATION, a Delaware corporation, and NAVISTAR FINANCIAL CORPORATION, a Delaware corporation (“Transferor”).  Capitalized terms used and not otherwise defined herein are used with the meanings attributed thereto in the Agreement.

THE UNDERSIGNED HEREBY CERTIFIES THAT:

1.           I am the duly elected ______________ of Transferor.

2.           I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of Transferor with respect to the accounting period covered by the attached financial statements.

3.           The examinations described in paragraph 2 did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes a Termination Event or a Potential Termination Event, as each such term is defined under the Agreement, as of the date of this Certificate, except as set forth below.

4.           Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which Transferor has taken, is taking, or proposes to take with respect to each such condition or event:_______________________________________.

The foregoing certifications, together with the financial statements delivered with this Certificate in support hereof, are made and delivered this ___ day of ________________, 20__.

______________________________

[Name]

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Exhibit V

Credit and Collection Policy

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Exhibit VI

Form of Subordinated Note

SUBORDINATED NOTE

April 8, 2004

1.           Note.  FOR VALUE RECEIVED, the undersigned, TRUCK RETAIL ACCOUNTS CORPORATION, a Delaware corporation (“SPV”), hereby unconditionally promises to pay to NAVISTAR FINANCIAL CORPORATION, a Delaware corporation (“NFC”), in lawful money of the United States of America and in immediately available funds, on the date following the Termination Date, which is one year and one day after the date on which (i) the Outstanding Balance of all Receivables sold under the Sale Agreement referred to below has been reduced to zero and (ii) NFC has paid to the SPV all indemnities, adjustments and other amounts which may be owed thereunder in connection with the Purchases (the “Collection Date”), the aggregate unpaid principal sum outstanding of all “Subordinated Loans” made from time to time by NFC to SPV pursuant to and in accordance with the terms of that certain Receivables Sale Agreement dated as of April 8, 2004 between NFC and SPV (as amended, restated, supplemented or otherwise modified from time to time, the “Sale Agreement”).  Reference to Section 1.2 of the Sale Agreement is hereby made for a statement of the terms and conditions under which the loans evidenced hereby have been and will be made.  All terms which are capitalized and used herein and which are not otherwise specifically defined herein shall have the meanings ascribed to such terms in the Sale Agreement.

2.           Interest.  SPV further promises to pay interest on the outstanding unpaid principal amount hereof from the date hereof until payment in full hereof at a rate equal to the Prime Rate; provided, however, that if SPV shall default in the payment of any principal hereof, SPV promises to pay, on demand, interest at the rate of the Prime Rate plus 2.00% per annum on any such unpaid amounts, from the date such payment is due to the date of actual payment.  Interest shall be payable on the first Business Day of each month in arrears; provided, however, that SPV may elect on the date any interest payment is due hereunder to defer such payment and upon such election the amount of interest due but unpaid on such date shall constitute principal under this Subordinated Note.  The outstanding principal of any loan made under this Subordinated Note shall be due and payable on the Collection Date and may be repaid or prepaid at any time without premium or penalty.

3.           Principal Payments.  NFC is authorized and directed by SPV to enter on the grid attached hereto, or, at its option, in its books and records, the date and amount of each loan made by it which is evidenced by this Subordinated Note and the amount of each payment of principal made by SPV, and absent manifest error, such entries shall constitute prima facie evidence of the accuracy of the information so entered; provided that neither the failure of NFC to make any such entry or any error therein shall expand, limit or affect the obligations of SPV hereunder.

4.           Subordination.  NFC shall have the right to receive, and SPV shall make, any and all payments relating to the loans made under this Subordinated Note provided that, after

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giving effect to any such payment, the aggregate Outstanding Balance of Receivables (as each such term is defined in the Purchase Agreement hereinafter referred to) owned by SPV at such time exceeds the sum of (a) the Aggregate Unpaids (as defined in the Purchase Agreement) outstanding at such time under the Purchase Agreement, plus (b) the aggregate outstanding principal balance of all loans made under this Subordinated Note.  NFC hereby agrees that at any time during which the conditions set forth in the proviso of the immediately preceding sentence shall not be satisfied, NFC shall be subordinate in right of payment to the prior payment of any indebtedness or obligation of SPV owing to the Agent or any Purchaser under that certain Receivables Purchase Agreement dated as of April 8, 2004 by and among SPV, NFC, as Servicer, various “Purchasers” from time to time party thereto, and Bank One, NA (Main Office Chicago), as the “Agent” (as amended, restated, supplemented or otherwise modified from time to time, the “Purchase Agreement”).  The subordination provisions contained herein are for the direct benefit of, and may be enforced by, the Agent and the Purchasers and/or any of their respective assignees (collectively, the “Senior Claimants”) under the Purchase Agreement.  Until the date on which all “Capital” outstanding under the Purchase Agreement has been repaid in full and all other obligations of SPV and/or the Servicer thereunder and under the “Fee Letter” referenced therein (all such obligations, collectively, the “Senior Claim”) have been indefeasibly paid and satisfied in full,  NFC shall not institute against SPV any proceeding of the type described in Section 5.1(e) of the Sale Agreement unless and until the Collection Date has occurred.  Should any payment, distribution or security or proceeds thereof be received by NFC in violation of this Section 4, NFC agrees that such payment shall be segregated, received and held in trust for the benefit of, and deemed to be the property of, and shall be immediately paid over and delivered to the Agent for the benefit of the Senior Claimants.

5.           Bankruptcy; Insolvency.  Upon the occurrence of any proceeding of the type described in Section 5.1(e) of the Sale Agreement involving SPV as debtor, then and in any such event the Senior Claimants shall receive payment in full of all amounts due or to become due on or in respect of the Aggregate Capital (as defined in the Purchase Agreement) and the Senior Claim (including “CP Costs” and “Yield” as defined and as accruing under the Purchase Agreement after the commencement of any such proceeding, whether or not any or all of such CP Costs or Yield is an allowable claim in any such proceeding) before NFC is entitled to receive payment on account of this Subordinated Note, and to that end, any payment or distribution of assets of SPV of any kind or character, whether in cash, securities or other property, in any applicable insolvency proceeding, which would otherwise be payable to or deliverable upon or with respect to any or all indebtedness under this Subordinated Note, is hereby assigned to and shall be paid or delivered by the Person making such payment or delivery (whether a trustee in bankruptcy, a receiver, custodian or liquidating trustee or otherwise) directly to the Agent for application to, or as collateral for the payment of, the Senior Claim until such Senior Claim shall have been paid in full and satisfied.

6.           Amendments.  This Subordinated Note shall not be amended or modified except in accordance with Section 7.1 of the Sale Agreement.  The terms of this Subordinated Note may not be amended or otherwise modified without the prior written consent of the Agent for the benefit of the Purchasers, which shall not be unreasonably withheld.

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7.           GOVERNING LAW.  THIS SUBORDINATED NOTE HAS BEEN MADE AND DELIVERED AT CHICAGO, ILLINOIS, AND SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LAWS AND DECISIONS OF THE STATE OF ILLINOIS.  WHEREVER POSSIBLE EACH PROVISION OF THIS SUBORDINATED NOTE SHALL BE INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER APPLICABLE LAW, BUT IF ANY PROVISION OF THIS SUBORDINATED NOTE SHALL BE PROHIBITED BY OR INVALID UNDER APPLICABLE LAW, SUCH PROVISION SHALL BE INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR INVALIDITY, WITHOUT INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS OF THIS SUBORDINATED NOTE.

8.           Waivers.  All parties hereto, whether as makers, endorsers, or otherwise, severally waive presentment for payment, demand, protest and notice of dishonor.  NFC additionally expressly waives all notice of the acceptance by any Senior Claimant of the subordination and other provisions of this Subordinated Note and expressly waives reliance by any Senior Claimant upon the subordination and other provisions herein provided.

9.           Assignment.  This Subordinated Note may not be assigned, pledged or otherwise transferred to any party other than its delivery to NFC without the prior written consent of the Agent (which shall not be unreasonably withheld), and any such attempted transfer shall be void.

TRUCK RETAIL ACCOUNTS CORPORATION

By:_____________________________

   Title:

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Schedule

to

SUBORDINATED NOTE

SUBORDINATED LOANS AND PAYMENTS OF PRINCIPAL

  Date   Amount of Subordinated Loan   Amount of Principal Paid   Unpaid Principal Balance   Notation made by

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Schedule 2.1(e)

Disclosed Matters

None

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Schedule A

DOCUMENTS TO BE DELIVERED TO TRANSFEREE

ON OR PRIOR TO THE INITIAL PURCHASE

SEE PART I OF SCHEDULE B TO THE PURCHASE AGREEMENT.

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EX-10.114

WAIVER NO. 1

TO RECEIVABLES PURCHASE AGREEMENT

THIS WAIVER NO. 1 (this "Waiver"), dated as of January 28, 2005, is among Truck Retail Accounts Corporation, a Delaware corporation ("Seller"), Navistar Financial Corporation, a Delaware corporation ("Navistar"), as initial Servicer (Navistar, together with Seller, the "Seller Parties"and each a "Seller Party"), the entities listed on Schedule A to this Agreement (together with any of their respective successors and assigns hereunder, the "Financial Institutions"), Jupiter Securitization Corporation ("Conduit") and Bank One, NA (Main Office Chicago), as agent for the Purchasers hereunder or any successor agent hereunder (together with its successors and assigns hereunder, the "Agent"), and pertains to that certain RECEIVABLES PURCHASE AGREEMENT dated as of April 8, 2004 by and among the parties hereto (the "Agreement"). Unless defined elsewhere herein, capitalized terms used in this Waiver have the meanings assigned to such terms in the Agreement.

PRELIMINARY STATEMENTS

The Seller Parties have requested that the Agent and the Purchasers agree to waive a certain provision of the Agreement; and

The Agent and the Purchasers are willing to agree to the requested waiver on the terms hereinafter set forth.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiencyof which are hereby acknowledged, the parties hereto agree as follows:

Section 1.                      Waiver. The requirement in Section 7.1(a)(i ) of the Agreement for delivery of annual financial statements of Parent, Transferor and the Seller for fiscal year 2004 is hereby waived through and including February 28, 2005.

Section 2.                      Representations and Warranties. In order to induce the parties to enter into this Waiver, each of the Seller Parties hereby represents and warrants to the Agent and the Purchasers that (a) after giving affect to this Waiver, each of such Seller Party's representations and warranties contained in Article V of the Agreement is true and correct as of the date hereof, (b) the execution and delivery by such Seller Party of this Waiver, and the performance of its obligations hereunder, are within its corporate or limited partnership, as applicable, powers and authority and have been duly authorized by all necessary corporate or limited partnership, as applicable, action on its part, and (c) this Waiver has been duly executed and delivered by such Seller Party and constitutes the legal, valid and binding obligation of such Seller Party enforceable against such Seller Party in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

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Section 3.                      Condition Precedent. This Waiver shall become effective as of the date first above written upon receipt by the Agent of counterparts hereof duly executed by each of the parties hereto.

Section 4.                       Miscellaneous.

(a)           THIS WAIVER SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS,

(c)           Except as expressly modified hereby, the Agreement remains unaltered and in full force and effect and is hereby ratified and confirmed. This Waiver shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns (including any trustee in bankruptcy).

(c)            This Waiver may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.

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IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be executed and delivered by their duly authorized officers as of the date hereof.

TRUCK RETAIL ACCOUNTS CORPORATION

By:  /s/ ANDREW J. CEDEROTH

Name:  Andrew J. Cederoth

Title:    V.P., Treasurer

NAVISTR FINANCIAL CORPORATION

By:  /s/ ANDREW J. CEDEROTH

Name:  Andrew J. Cederoth

Title:    V.P., Treasurer

JUPITER SECURIZATION CORPORATION

By:  /s/ BETH M. PROVAIZANA

Its:      Authorized Signatory

JPMORGAN CHASE BANK, N.A, (successor by merger to

Bank One, N.A. (Main Office Chicago), individually

as a Financial Institution and as Agent

By:  /s/ BETH M. PROVAIZANA

Its:       Vice President

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EX-10.115

WAIVER NO.2

TO RECEIVABLES PURCHASE AGREEMENT

THIS WAIVER NO. 2(this "Waiver"), dated as of March 14, 2005, is among Truck Retail Accounts Corporation, a Delaware corporation ("Seller"), Navistar Financial Corporation, a Delaware corporation ("Navistar"), as initial Servicer (Navistar, together with Seller, the "Seller Parties" andeach a "Seller Party"), the entities listed on Schedule A to this Agreement (together with any of their respective successors and assigns hereunder, the "Financial Institutions"), JupiterSecuritization Corporation ("Conduit") and Bank One, NA (Main Office Chicago), as agent for the Purchasers hereunder or any successor agent hereunder (together with its successors and assigns hereunder, the  “Agent”), and pertains to that certain RECEIVABLES PURCHASE AGREEMENT dated as of April 8, 2004 by and among theparties hereto (the "Agreement”). Unless defined elsewhere herein, capitalized terms used in this Waiver have the meanings assigned to such terms in the Agreement.

PRELIMINARY STATEMENTS

The Seller Parties have requested that the Agent and the Purchasers agree to waive a certain provision of the Agreement; and

The Agent and the Purchasers are willing to agree to the requested waiver on the terms hereinafter set forth.

NOW, THEREFORE,in consideration of the premises and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1.        Waiver. The requirement in Section 7.1(a)(ii) of the Agreement for delivery of annual financial statements of Parent, Transferor and the Seller for fiscal year 2004 is hereby waived through and including April 15, 2005.

Section 2.         Representation and Warranties. In order to induce the parties to enter into this Waiver, each of the Seller Parties hereby represents and warrants to the Agent and the purchaser that (a) after giving affect to this Waiver, each of such Seller Party's representations and warranties contained in Article V of the Agreement is true and correct as of the date hereof, (b) the execution and delivery by such Seller Party of this Waiver, and the performance of its obligations hereunder, are within its corporate or limited partnership, as applicable, powers and authority have been duly authorized by all necessary corporate or limited partnership, as applicable, action on its part, and (c) this Waiver has been duly executed and delivered by such Seller Party and constitutes the legal, valid and binding obligation of such Seller Party enforceable against such Seller Party in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

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Section 3.          Condition Precedent. This Waiver shall become effective as of the date first above written upon receipt by the Agent of counterparts hereof dulyexecuted by each of the parties hereto.

Section 4.           Miscellaneous.

(a)           THIS WAIVER SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OFCONFLICTS) OF THE STATE OF ILLINOIS.

           (c)           Except as expressly modified hereby, the Agreement remains unaltered and in full forceand effect and is hereby ratified and confirmed. This Waiver shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns (including any trustee in bankruptcy).

          (c)            This Waiver may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which whentaken together shall constitute one and the same agreement.

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JUPITER SECURITIZATION CORPORATION

By:  /s/  BETH PROVARZARA

Its:         Authorized Signatory

JPMORGAN CHASE BANK, N.A. (successor by

merger to Bank One, NA (Main Office Chicago),

Individually as a Financial Institution and as Agent

By:  /s/  BETH PROVARZARA

Its:         Authorized Signatory

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IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be executed and delivered by their duly authorize officers as of the date hereof.

TRUCK RETAIL ACCOUNTS CORPORATION

By:      /s/ ANDREW J CEDEROTH

Name:      Andrew J. Cederoth

Title:        V.P. & Treasurer

NAVISTAR FINANCIAL CORPORATION

By:      /s/ ANDREW J CEDEROTH

Name:      Andrew J. Cederoth

Title:        V.P. & Treasurer

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EX-10.116

WAIVER NO.3

TO RECEIVABLES PURCHASE AGREEMENT

THIS WAIVER NO. 3 (this "Waiver"), dated as of April 14, 2005, is among Truck Retail Accounts Corporation, a Delaware corporation("Seller"), Navistar Financial Corporation, a Delawarecorporation ("Navistar”),as initial Servicer (Navistar, together with Seller, the "Seller Parties" and each a"Seller Party”), theentities listed on Schedule A to this Agreement (together with any of their respective successors and assigns hereunder, the "Financial Institutions”),JupiterSecuritization Corporation("Conduit") and JPMorgan Chase Bank, N.A., successor by merger to Bank One, NA (Main Office Chicago), as agent for the Purchasers hereunder or any successor agent hereunder(together with its successors and assigns hereunder, the "Agent"), and pertains to that certain RECEIVABLES PURCHASE AGREEMENT dated as of April 8, 2004 by and among the parties hereto (the "Agreement"). Unless defined elsewhere herein, capitalized terms used in this Waiver have the meanings assigned to such terms in the Agreement.

PRELIMINARY STATEMENTS

The Seller Parties have requested that the Agent and the Purchasers agree to waive a certain provision of the Agreement; and

The Agent and the Purchasers are willing to agree to the requested waiver on the terms hereinafter set forth.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree asfollows:

Section 1.                       Waiver. The requirement in Section 7.1(a)(ii) of the Agreement for delivery of annual financial statements of Parent, Transferor and the Seller for fiscal year 2004 is hereby waived throughand including April 30, 2005.

Section 2.                       Representations and Warranties. In order to induce the parties to enter into this Waiver, each of theSeller Parties herebyrepresents and warrants to the Agent and the Purchasers that (a) after giving affect to this Waiver, each of such SellerParty's representations and warranties contained in Article V of the Agreement is true and correct as of the date hereof, (b) the execution and delivery by such Seller Party of this Waiver, and the performance of its obligations hereunder, are within its corporate or limited partnership, as applicable, powers and authority and have been duly authorized by all necessary corporate or limited partnership, as applicable, action on its part, and (c) this Waiver has been duly executed and deliveredby such Seller Party andconstitutes the legal, valid and binding obligation of such Seller Party enforceable against such Seller Party in accordancewith its terms, except as such enforcement may be limited by applicablebankruptcy, insolvency, reorganizationor othersimilar laws relating to or limiting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

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Section 3.                      Condition Precedent. This Waiver shall become effective as of the date first above written upon receipt by the Agent of counterparts hereofduly executed by each of the parties hereto.

   Section4.                       Miscellaneous.

(a)       THIS WAIVER SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITHTHE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS.

(c)       Except as expressly modified hereby, the Agreement remains unaltered and in full force and effect and is hereby ratified and confirmed. This Waiver shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns (including any trustee in bankruptcy).

(c)       This Waiver may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when soexecuted shall bedeemed to be an original and all of which when taken together shall constitute one and the same agreement.

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IN WITNESS WHEREOF, theparties hereto have caused this Waiver to be executed and delivered by their duly authorized officers as of the date hereof.

TRUCK RETAIL ACCOUNTS CORPORATION

By:      /s/  ANDREW J CEDEROTH

Name:       Andrew J. Cederoth

Title:         V.P. & Treasurer

NAVISTAR FINANCIAL CORPORATION

By:      /s/  ANDREW J CEDEROTH

Name:       Andrew J. Cederoth

Title:         V.P. & Treasurer

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JUPITER SECURITIZATION CORPORATION

By:  /s/  JILL T LANE

Its:        Authorized Signatory

JPMORGAN CHASE BANK, N.A., Individually as a Financial Institution and as Agent

By:  /s/  JILL T LANE

Its:         Vice President

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EX-10.117

WAIVER NO. 4

TO RECEIVABLES PURCHASE AGREEMENT

THIS WAIVER NO. 4 (this "Waiver"), dated as of July 20, 2005, is among Truck Retail Accounts Corporation, a Delaware corporation ("Seller" ), Navistar Financial Corporation, a Delaware corporation ("Navistar"), as initial Servicer (Navistar, together with Seller, the "Seller Parties" and each a "Seller Party" ), the entities listed on Schedule A to this Agreement (together with any of their respective successors and assigns hereunder, the "Financial Institutions”), Jupiter Securitization Corporation ("Conduit”) and JPMorgan Chase Bank, N.A. (successor by merger to Bank One, NA (Main Office Chicago)), as agent for the Purchasers hereunder or any successor agent hereunder (together with its successors and assigns hereunder, the "Agent”), and pertains to that certain RECEIVABLES PURCHASE AGREEMENT dated as of April 8, 2004 by and among the parties hereto (the "Agreement"). Unless defined elsewhere herein, capitalized terms used in this Waiver have the meanings assigned to such terms in the Agreement.

PRELIMINARY STATEMENTS

The Seller Parties have requested that the Agent and the Purchasers agree to waive a certain provision of the Agreement; and

The Agent and the Purchasers are willing to agree to the requested waiver on the terms hereinafter set forth.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1.                       Waiver. Compliance with Section 9.1(f) of the Agreement is hereby waived for the three Settlement Periods ended June 30, 2005, the three Settlement Periods ending July 31, 2005, and the three Settlement Periods ending August 31, 2005.

Section 2.                       Representations and Warranties. In order to induce the parties to enter into this Waiver, each of the Seller Parties hereby represents and warrants to the Agent and the Purchasers that (a) after giving affect to this Waiver, each of such Seller Party's representations and warranties contained in Article V of the Agreement is true and correct as of the date hereof, (b) the execution and delivery by such Seller Party of this Waiver, and the performance of its obligations hereunder, are within its corporate or limited partnership, as applicable, powers and authority and have been duly authorized by all necessary corporate or limited partnership, as applicable, action on its part, and (c) this Waiver has been duly executed and delivered by such Seller Party and constitutes the legal, valid and binding obligation of such Seller Party enforceable against such Seller Party in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

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Section 3.                       Condition Precedent. This Waiver shall become effective as of the date first above written upon receipt by the Agent of counterparts hereof duly executed by each of the parties hereto.

Section 4.                       Miscellaneous.

(a)                 THIS WAIVER SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS.

(c)                 Except as expressly modified hereby, the Agreement remains unaltered and in full force and effect and is hereby ratified and confirmed. This Waiver shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns (including any trustee in bankruptcy).

(c)            This Waiver may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.

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IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be executed and delivered by their duly authorized officers as of the date hereof.

TRUCK RETAIL ACCOUNTS CORPORATION

By:      /s/  ANDREW J CEDEROTH

Name:       Andrew J. Cederoth

Title:         V.P. & Treasurer

NAVISTAR FINANCIAL CORPORATION

By:      /s/ ANDREW J CEDEROTH

Name:      Andrew J. Cederoth

Title:        V.P. & Treasurer

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JUPITER SECURITIZATION CORPORATION

By:   /s/  JILL T LANE

Its:         Authorized Signatory

JPMORGAN CHASE BANK, N.A., (Sucussor

by merger to Bank One, NA (Main Office Chicago),

Individually as a Financial Institution and as Agent

By:  /s/ JILL T LANE

Its:        Vice President

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EX-10.118

WAIVER NO. 5

TO RECEIVABLES PURCHASE AGREEMENT

THIS WAIVER NO. 5 (this "Waiver”), dated as of January 17, 2006, is among Truck Retail Accounts Corporation, a Delaware corporation ("Seller”), Navistar Financial Corporation, a Delaware corporation ("Navistar”), as initial Servicer (Navistar, together with Seller, the "Seller Parties" and each a "Seller Party”), the entities listed on Schedule A to this Agreement (together with any of their respective successors and assigns hereunder, the "Financial Institutions”), Jupiter Securitization Corporation ("Conduit”) and JPMorgan Chase Bank, N.A. (successor by merger to Bank One, NA (Main Office Chicago)), as agent for the Purchasers hereunder or any successor agent hereunder (together with its successors and assigns hereunder, the "Agent”), and pertains to that certain RECEIVABLES PURCHASE AGREEMENT dated as of April 8, 2004 by and among the parties hereto (as heretofore amended or modified from time to time, the "Agreement”). . Unless defined elsewhere herein, capitalized terms used in this Waiver have the meanings assigned to such terms in the Agreement.

PRELIMINARY STATEMENTS

The Seller Parties have requested that the Agent and the Purchasers agree to waive a certain provision of the Agreement; and

The Agent and the Purchasers are willing to agree to the requested waiver on the terms hereinafter set forth.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1.                       Waiver. The requirement in Section 7.1(a)(i) of the Agreement for delivery of annual financial statements of Parent, Transferor and the Seller for fiscal year 2005, and the requirement in Section 7.1(a)(ii) of the Agreement for delivery of quarterly financial statements of Parent and Transferor for the first quarter of fiscal year 2006, are each hereby waived through and including May 31, 2006.

Section 2.                       Representations and Warranties. In order to induce the parties to enter into this Waiver, each of the Seller Parties hereby represents and warrants to the Agent and the Purchasers that (a) after giving affect to this Waiver, each of such Seller Party's representations and warranties contained in Article V of the Agreement is true and correct as of the date hereof, (b) the execution and delivery by such Seller Party of this Waiver, and the performance of its obligations hereunder, are within its corporate or limited partnership, as applicable, powers and authority and have been duly authorized by all necessary corporate or limited partnership, as applicable, action on its part, and (c) this Waiver has been duly executed and delivered by such Seller Party and constitutes the legal, valid and binding obligation of such Seller Party enforceable against such Seller Party in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other

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similar laws relating to or limiting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

Section 3.                       Condition Precedent. This Waiver shall become effective as of the date first above written upon receipt by the Agent of counterparts hereof duly executed by each of the parties hereto.

Section 4.                       Miscellaneous.

(a)              THIS WAIVER SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS.

(c)              Except as expressly modified hereby, the Agreement remains unaltered and in full force and effect and is hereby ratified and confirmed. This Waiver shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns (including any trustee in bankruptcy).

(c)            This Waiver may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.

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IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be executed and delivered by their duly authorized officers as of the date hereof.

TRUCK RETAIL ACCOUNTS CORPORATION

By:      /s/ PAUL E MARTIN

Name:      Paul E Martin

Title:       V.P. & Treasurer

NAVISTAR FINANCIAL CORPORATION

By:      /s/ PAUL E MARTIN

Name:      Paul E. Martin

Title:        V.P. & Treasurer

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JUPITER SECURITIZATION CORPORATION

By:   JPMorgan Chase Bank, N.A., ITS Attorney-in-Fact

By:       _____________________________

Title:     Vice President

JPMORGAN CHASE BANK, N.A., (Sucessor by merger to

Bank One, N.A. (Main Office Chicago),

Individually as a Financial Institution and as Agent

By:       _____________________________

Title:       Vice President

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EX-10.119

EXECUTION COPY

WAIVER NO. 6

TO RECEIVABLES PURCHASE AGREEMENT

THIS WAIVER NO. 6 (this "Waiver"), dated as of March 21, 2006, is among Truck Retail Accounts Corporation, a Delaware corporation ("Seller"), Navistar Financial Corporation, a Delaware corporation ("Navistar"), as initial Servicer (Navistar, together with Seller, the "Seller Parties" and each a "Seller Party"), the entities set forth on the signature pages to this Agreement (together with any of their respective successors and assigns hereunder, the "Financial Institutions"), Jupiter Securitization Corporation ("Conduit") and JPMorgan Chase Bank, N.A. (successor by merger to Bank One, NA (Main Office Chicago)), as agent for the Purchasers hereunder or any successor agent hereunder (together with its successors and assigns hereunder, the "Agent"), and pertains to that certain RECEIVABLES PURCHASE AGREEMENT dated as of April 8, 2004 by and among the parties hereto (as heretofore amended or modified from time to time, the "Agreement"). Unless defined elsewhere herein, capitalized terms used in this Waiver have the meanings assigned to such terms in the Agreement.

PRELIMINARY STATEMENTS

The Seller Parties have requested that the Agent and the Purchasers agree to waive certain provisions of the Agreement and to consent to a certain action of the Seller Parties; and

The Agent and the Purchasers are willing to agree to the requested waivers and consent on the terms hereinafter set forth.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1.                      Waiver.

(a)The requirement in Section 7.1(a)(i) of the Agreement for delivery of annual financial statements of Parent and Transferor for fiscal year 2005, the requirement in Section 7.1(a)(ii) of the Agreement for delivery of quarterly financial statements of Parent and Transferor for the first, second and third quarters of fiscal year 2006, and the requirements in Sections 7.1(a)(iii) for the delivery of certain compliance certificates related to the aforementioned financial statements, are each hereby waived until the earlier of (i) January 31, 2007 and (ii) the date on which Parent and Transferor shall have timely filed reports on Form 10-K or 10-Q after the date hereof with the Securities and Exchange Commission pursuant to Sections 13 and 15 of the Securities Exchange Act of 1934, as amended (the "Exchange Act").

(b)Any condition or required representation or warranty that has not been satisfied or made or deemed made, and any Amortization Event or Potential Amortization Event, in each case, as a result of the breach of any representation or warranty in Section 5.1(g) of the Agreement as a result of or arising out of any restatement, in connection with the audit conducted for the fiscal year ended October 31, 2005, of any financial statements of Transferor or any of its affiliates for any period ending on or before July 31, 2005, or any reports, financial statements, certificates or other information containing similar information with respect to such periods, are each hereby waived.

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(c)The failure of Transferor to timely notify Agent pursuant to Section 7.1(b)(vi) of the Agreement that Transferor was downgraded by Moody's Investors Service, Inc., and setting forth the Indebtedness affected and the nature of such change, is hereby waived.

Section 2.                       Consent. The Waiver No. 1, dated as of the date hereof, attached hereto as Exhibit A, is hereby consented to pursuant to Section 7.1(b) of the Agreement.

Section 3.                       Agreement by Transferor. Notwithstanding anything to the contrary in the Agreement, to induce the parties to enter into this Waiver, until the expiration of the waiver provided in Section 1(a), Transferor agrees to deliver to the Agent:

(a)As soon as available after the end of the fiscal year of Transferor ended October 31, 2005 a copy of the annual report for such year for the Parent and its Subsidiaries, including therein (i) a consolidated balance sheet of the Parent and its Subsidiaries as of the end of such fiscal year and (ii) a consolidated statement of income and a consolidated statement of cash flows of the Parent and its Subsidiaries for such fiscal year, in each case prepared in accordance with Rule 3-10 of Regulation S-X, consistent with the Parent's past practice, on the basis of management's good faith calculations and fairly presenting in all material respects the consolidated financial condition of the Parent and its Subsidiaries as at such date and the consolidated results of operations of the Parent and its Subsidiaries for the period ended on such date; provided that, in the event of any change in generally accepted accounting principles used in the preparation of such financial statements, the Parent shall also provide a reconciliation of its financial statements to GAAP.

(b)As soon as available after the annual report in respect of the fiscal year of the Parent ended October 31, 2005 is delivered, and thereafter within 45 days after the end of each fiscal quarter ended January 31, 2006, April 30, 2006 and July 31, 2006, (i) a consolidated balance sheet of the Parent and its Subsidiaries as of the end of such quarter, (ii) a consolidated statement of income and a consolidated statement of cash flows of the Parent and its Subsidiaries for the period commencing at the end of the previous fiscal quarter and ending with the end of such fiscal quarter, and (iii) a consolidated statement of income and a consolidated statement of cash flows of the Parent and its Subsidiaries for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, all prepared in accordance with Rule 3-10 of Regulation S-X, consistent with the Parent's past practice, on the basis of management's good faith calculations and fairly presenting in all material respects, subject to year end audit adjustments and the absence of footnotes, the consolidated financial condition of the Parent and its Subsidiaries as at such dates and the consolidated results of operations of the Parent and its Subsidiaries for the periods ended on such dates, setting forth in each case in comparative form the corresponding figures for the corresponding date or period of the preceding fiscal year, all in reasonable detail and duly certified (subject to normal year-end audit adjustments and the absence of footnotes) by a financial officer of the Parent as having been

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prepared in accordance with GAAP; provided that, in the event of any change in generally accepted accounting principles used in the preparation of such financial statements, the Parent shall also provide a reconciliation of such financial statements to GAAP.

(c)As soon as available, and in any event within 60 days after the end of each fiscal quarter of the Transferor, except the fiscal quarter ended January 31, 2006 for which the requirement is 90 days, management financial reports of the US Borrower setting forth (i) a preliminary consolidated balance sheet and consolidated statements of income in a management format , (ii) serviced portfolio information (iii) funding availability under its contractual arrangements with Truck Retail Installment Paper Corp. and under the Transferor Credit Agreement and (iv) calculations demonstrating compliance with Section 8.01 of the Transferor Credit Agreement, in each case prepared in a manner materially consistent with the Transferor's past practices (unless otherwise required to conform with the results of the audit or changes in GAAP) and, to the extent relevant, on the basis of management's good faith efforts, in such form and detail reasonably satisfactory to the Agent; provided, however, that such reporting shall not be required so long as the Transferor has filed all reports with the Securities and Exchange Commission required pursuant to Section 13 of the Exchange Act. The parties hereto acknowledge that such management financial reports are not final and are subject to change in connection with either the preparation, for the corresponding fiscal quarter, of a report on Form 10-Q or 10-K, as a result of or arising out of any restatement, in connection with the audit conducted for the fiscal year ended October 31, 2005, as the case may be.

(d)As soon as available, and in any event within 30 days after the end of each month, commencing with the month of March 2006, monthly management financial reports of the Parent in respect of the sales and income by segment and cash balances, Indebtedness, capital expenditures and depreciation and amortization of the Parent and its consolidated Subsidiaries prepared in a manner consistent with the Parent's past practices and on the basis of management's good faith calculations, in such form and detail reasonably satisfactory to the Agent; provided,however, that such reporting shall not be required so long as the Parent has filed all reports with the Securities and Exchange Commission required pursuant to Section 13 of the Exchange Act.

Section 4.                       Representations and Warranties. In order to induce the parties to enter into this Waiver, each of the Seller Parties hereby represents and warrants to the Agent and the Purchasers that (a) after giving affect to this Waiver, each of such Seller Party's representations and warranties contained in Article V of the Agreement is true and correct as of the date hereof, (b) the execution and delivery by such Seller Party of this Waiver, and the performance of its obligations hereunder, are within its corporate or limited partnership, as applicable, powers and authority and have been duly authorized by all necessary corporate or limited partnership, as applicable, action on its part, and (c) this Waiver has been duly executed and delivered by such Seller Party and constitutes the legal, valid and binding obligation of such Seller Party enforceable against such Seller Party in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

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Section 5.                      Condition Precedent. This Waiver shall become effective as of the date first above written upon receipt by the Agent of counterparts hereof duly executed by each of the parties hereto.

Section 6.                       Miscellaneous.

(a)           THIS WAIVER SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS.

(c)           Except as expressly modified hereby, the Agreement remains unaltered and in full force and effect and is hereby ratified and confirmed. This Waiver shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns (including any trustee in bankruptcy).

(c)            This Waiver may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.

[signatures on next pages]

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IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be executed and delivered by their duly authorized officers as of the date hereof.

TRUCK RETAIL ACCOUNTS CORPORATION

By: _____________________________

Title:____________________________

NAVISTAR FINANCIAL CORPORATION

By:______________________________

Title:_____________________________

JUPITER SECURITIZATION CORPORATION

By: JPMORGAN CHASE BANK, N.A., Its attorney-in-fact

By:__________________________________

Title:_________________________________

JPMPRGAN CHASE BANK, N.A. (successor by

 merger to Bank One, NA (Main Office Chicago),

Individually as a Financial institution and as Agent

By:___________________________________

Title:__________________________________

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Exhibit A

[Attached]

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EX-10.120

WAIVER NO. 7

TO RECEIVABLES PURCHASE AGREEMENT

THIS WAIVER NO. 7 (this "Waiver"), dated as of January 31, 2007, is among Truck Retail Accounts Corporation, a Delaware corporation ("Seller"), Navistar Financial Corporation, a Delaware corporation ("Navistar”), as initial Servicer (Navistar, together with Seller, the "Seller Parties" and each a"Seller Party”), the entities set forth on the signature pages to this Agreement (together with any of their respective successors and assigns hereunder, the "Financial Institutions”), Jupiter Securitization Company LLC, a Delaware limited liability company formerly known as Jupiter Securitization Corporation ("Conduit”), and JPMorgan Chase Bank, N.A. (successor by merger to Bank One, NA (Main Office Chicago)), as agent for the Purchasers hereunder or any successor agent hereunder (together with its successors and assigns hereunder, the "Agent”), and pertains to that certain RECEIVABLES PURCHASE AGREEMENT dated as of April 8, 2004 by and among the parties hereto (as heretofore amended or modified from time to time, the "Agreement”.  Unless defined elsewhere herein, capitalized terms used in this Waiver have the meanings assigned to such terms in the Agreement.

PRELIMINARY STATEMENTS

The Seller Parties have requested that the Agent and the Purchasers agree to waive certain provisions of the Agreement and to consent to a certain action of the Seller Parties; and

The Agent and the Purchasers are willing to agree to the requested waivers and consent on the terms hereinafter set forth.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1.                       Waiver.

(a)            The requirement in Section 7.1(a)(i) of the Agreement for delivery of annual financial statements of Parent and Transferor for fiscal years 2005 and 2006, the requirement in Section 7.1(a)(ii) of the Agreement for delivery of quarterly financial statements of Parent and Transferor for the first, second and third quarters of fiscal years 2006 and 2007, and the requirements in Sections 7.1(a)(iii) for the delivery of certain compliance certificates related to the aforementioned financial statements, are each hereby waived until the earlier of (i) October 31, 2007 and (ii) the date on which Parent and Transferor shall have timely filed reports on Form 10-K or 10-Q after the date hereof with the Securities and Exchange Commission pursuant to Sections 13 and 15 of the Securities Exchange Act of 1934, as amended (the "Exchange Act").

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(b)            Any condition or required representation or warranty that has not been satisfied or made or deemed made, and any Amortization Event or Potential Amortization Event, in each case, as a result of the breach of any representation or warranty in Section 5.1(g) of the Agreement as a result of or arising out of any restatement, in connection with the audit conducted for the fiscal year ended October 31, 2005 or October 31, 2006, of any financial statements of Transferor or any of its affiliates for any period ending on or before October 31, 2007, or any reports, financial statements, certificates or other information containing similar information with respect to such periods, are each hereby waived.

Section 2.                      Consent. The Waiver No. 2, dated as of the date hereof, attached hereto as Exhibit A, is hereby consented to pursuant to Section 7.1 of the Agreement.

Section 3.                      Agreement by Transferor. Notwithstanding anything to the contrary in the Agreement, to induce the parties to enter into this Waiver, until the expiration of the waiver provided in Section 1(a), Transferor agrees to deliver to the Agent:

(a)As soon as available after the end of each of the fiscal years of Transferor ended October 31, 2005 and October 31, 2006, a copy of the annual report for such year for the Parent and its Subsidiaries, including therein (i) a consolidated balance sheet of the Parent and its Subsidiaries as of the end of such fiscal year and (ii) a consolidated statement of income and a consolidated statement of cash flows of the Parent and its Subsidiaries for such fiscal year, in each case prepared in accordance with Rule 3-10 of Regulation S-X, consistent with the Parent's past practice, on the basis of management's good faith calculations and fairly presenting in all material respects the consolidated financial condition of the Parent and its Subsidiaries as at such date and the consolidated results of operations of the Parent and its Subsidiaries for the period ended on such date; provided that, in the event of any change in generally accepted accounting principles used in the preparation of such financial statements, the Parent shall also provide a reconciliation of its financial statements to GAAP.

(b)As soon as available after the end of the fiscal quarters ended January 31, 2006, April 30, 2006, July 31, 2006, January 31, 2007, April 30, 2007 and July 31, 2007 (i) a consolidated balance sheet of the Parent and its Subsidiaries as of the end of such quarter, (ii) a consolidated statement of income and a consolidated statement of cash flows of the Parent and its Subsidiaries for the period commencing at the end of the previous fiscal quarter and ending with the end of such fiscal quarter, and (iii) a consolidated statement of income and a consolidated statement of cash flows of the Parent and its Subsidiaries for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, all prepared in accordance with Rule 3-10 of Regulation S-X, consistent with the Parent's past practice, on the basis of management's good faith calculations and fairly presenting in all material respects, subject to year end audit adjustments and the absence of footnotes, the consolidated financial condition of the Parent and its Subsidiaries as at such dates and the consolidated results of operations of the Parent and its Subsidiaries for the periods ended on such dates, setting forth in each case in comparative form the corresponding figures for the corresponding date or period of the preceding fiscal year, all in reasonable detail and duly certified (subject to normal year-end audit adjustments and the absence of footnotes) by a financial officer of the Parent as having been prepared in accordance with GAAP; provided that, in the event of any change in generally accepted accounting principles used in the preparation of such financial statements, the Parent shall also provide a reconciliation of such financial statements to GAAP.

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(c)As soon as available, and in any event within 60 days after the end of each fiscal quarter (other than the last fiscal quarter of a fiscal year) or 90 days after the end of the last fiscal quarter of a fiscal year of Navistar, ended on or after October 31, 2006, management financial reports of Navistar setting forth (i) a preliminary consolidated balance sheet and consolidated statements of income in a management format, (ii) serviced portfolio information (iii) funding availability under its contractual arrangements with Truck Retail Installment Paper Corp. and under the Transferor Credit Agreement and (iv) calculations demonstrating compliance with Section 8.01 of the Transferor Credit Agreement, in each case prepared in a manner materially consistent with the Transferor's past practices (unless otherwise required to conform with the results of the audit or changes in GAAP) and, to the extent relevant, on the basis of management's good faith efforts, in such form and detail reasonably satisfactory to the Agent; provided, however, that such reporting shall not be required so long as the Transferor has filed all reports with the Securities and Exchange Commission required pursuant to Section 13 of the Exchange Act. The parties hereto acknowledge that such management financial reports are not final and are subject to change in connection with either the preparation, for the corresponding fiscal quarter, of a report on Form 10-Q or 10-K, as a result of or arising out of any restatement, in connection with the audit conducted for the fiscal year ended October 31, 2005 or October 31, 2006, as the case may be.

(d)As soon as available, and in any event within 30 days after the end of each month, commencing with the month of October 2006, monthly management financial reports of the Parent in respect of the sales and income by segment and cash balances, Indebtedness, capital expenditures and depreciation and amortization of the Parent and its consolidated Subsidiaries prepared in a manner consistent with the Parent's past practices and on the basis of management's good faith calculations, in such form and detail reasonably satisfactory to the Agent; provided,however, that such reporting shall not be required so long as the Parent has filed all reports with the Securities and Exchange Commission required pursuant to Section 13 of the Exchange Act.

Section 4.                      Representations and Warranties. In order to induce the parties to enter into this Waiver, each of the Seller Parties hereby represents and warrants to the Agent and the Purchasers that (a) after giving affect to this Waiver, each of such Seller Party's representations and warranties contained in Article V of the Agreement is true and correct as of the date hereof, (b) the execution and delivery by such Seller Party of this Waiver, and the performance of its obligations hereunder, are within its corporate or limited partnership, as applicable, powers and authority and have been duly authorized by all necessary corporate or limited partnership, as applicable, action on its part, and (c) this Waiver has been duly executed and delivered by such Seller Party and constitutes the legal, valid and binding obligation of such Seller Party enforceable against such Seller Party in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

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Section 5.                       Condition Precedent. This Waiver shall become effective as of the date first above written upon receipt by the Agent of counterparts hereof duly executed by each of the parties hereto.

Section 6.                       Miscellaneous.

(a)      THIS WAIVER SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS.

(c)      Except as expressly modified hereby, the Agreement remains unaltered and in full force and effect and is hereby ratified and confirmed. This Waiver shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns (including any trustee in bankruptcy).

(c)       This Waiver may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.

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IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be executed and delivered by their duly authorized officers as of the date hereof.

TRUCK RETAIL ACCOUNTS CORPORATION

By:        /s/ JOHN V. MULVANEY, SR.

Name:         John V. Mulvaney, Sr.

Title:           V.P., CFO & Treasurer

NAVISTAR FINANCIAL CORPORATION

By:       /s/   JOHN V. MULVANEY, SR.

Name:          John V. Mulvaney, Sr.

Title:            V.P., CFO & Treasurer

JUPITER SECURITIZATION COMPANY LLC

By: JP Morgan Chase Bank, N.A., ITS Attorney-in-Fact

By:      /s/   JOHN K. SVOLOS

Name:         John K. Svolos

Title:          Vice President

JP MORGAN CHASE BANK, N.A. (successor by

Merger to Bank One, NA (Main Office Chicago)

INDIVIDUALLY AS A FINANCIAL INSTITUTION AND

AS AGENT

By:      /s/   JOHN K. SVOLOS

Name:         John K. Svolos

Title:          Vice President

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Exhibit A

[Attached]

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EX-10.121

EXECUTION COPY

WAIVER NO. 1

TO RECEIVABLES SALE AGREEMENT

THIS WAIVER NO. 1 (this "Waiver"), dated as of March 21, 2006, is among Navistar Financial Corporation, a Delaware corporation ("Navistar"), as Transferor, and Truck Retail Accounts Corporation, a Delaware corporation, as Transferee and pertains to that certain RECEIVABLES SALE AGREEMENT dated as of April 8, 2004 by and among the parties hereto (as heretofore amended or modified from time to time, the "Agreement"). Unless defined elsewhere herein, capitalized terms used in this Waiver have the meanings assigned to such terms in the Agreement.

PRELIMINARY STATEMENTS

The Transferor has requested that the Transferee agree to waive certain provisions of the Agreement; and

The Transferee is willing to agree to the requested waivers on the terms hereinafter set forth.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1.                       Waiver.

(a)The requirement in Section 4.1(a)(i ) of the Agreement for delivery of annual financial statements of Parent and Transferor for fiscal year 2005, the requirement in Section 4.1(a)(ii) of the Agreement for delivery of quarterly financial statements of Parent and Transferor for the first, second and third quarters of fiscal year 2006, and the requirements in Sections 4.1(a)(iii) for the delivery of certain compliance certificates related to the aforementioned financial statements, are each hereby waived until the earlier of (i) January 31, 2007 and (ii) the date on which Parent and Transferor shall have timely filed reports on Form 10-K or 10-Q after the date hereof with the Securities and Exchange Commission pursuant to Sections 13 and 15 of the Securities Exchange Act of 1934, as amended (the "Exchange Act").

(b)Any condition or required representation or warranty that has not been satisfied or made or deemed made, as a result of the breach of any representation or warranty in Section 2.1(f) of the Agreement as a result of or arising out of any restatement, in connection with the audit conducted for the fiscal year ended October 31, 2005, of any financial statements of Transferor or any of its affiliates for any period ending on or before July 31, 2005, or any reports, financial statements, certificates or other information containing similar information with respect to such periods, is hereby waived.

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(c)            The failure of Transferor to timely notify Transferee pursuant to Section 4.1(b)(iv) of the Agreement that Transferor was downgraded by Moody's Investors Service, Inc., and setting forth the Indebtedness affected and the nature of such change, is hereby waived.

Section 2.                      Agreement by Transferor. Notwithstanding anything to the contrary in the Agreement, to induce the parties to enter into this Waiver, until the expiration of the waiver provided in Section 1(a), Transferor agrees to deliver to the Transferee:

(a)As soon as available after the end of the fiscal year of Transferor ended October 31, 2005 a copy of the annual report for such year for the Parent and its Subsidiaries, including therein (i) a consolidated balance sheet of the Parent and its Subsidiaries as of the end of such fiscal year and (ii) a consolidated statement of income and a consolidated statement of cash flows of the Parent and its Subsidiaries for such fiscal year, in each case prepared in accordance with Rule 3-10 of Regulation S-X, consistent with the Parent's past practice, on the basis of management's good faith calculations and fairly presenting in all material respects the consolidated financial condition of the Parent and its Subsidiaries as at such date and the consolidated results of operations of the Parent and its Subsidiaries for the period ended on such date; provided that, in the event of any change in generally accepted accounting principles used in the preparation of such financial statements, the Parent shall also provide a reconciliation of its financial statements to GAAP.

(b)As soon as available after the annual report in respect of the fiscal year of the Parent ended October 31, 2005 is delivered, and thereafter within 45 days after the end of each fiscal quarter ended January 31, 2006, April 30, 2006 and July 31, 2006, (i) a consolidated balance sheet of the Parent and its Subsidiaries as of the end of such quarter, (ii) a consolidated statement of income and a consolidated statement of cash flows of the Parent and its Subsidiaries for the period commencing at the end of the previous fiscal quarter and ending with the end of such fiscal quarter, and (iii) a consolidated statement of income and a consolidated statement of cash flows of the Parent and its Subsidiaries for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, all prepared in accordance with Rule 3-10 of Regulation S-X, consistent with the Parent's past practice, on the basis of management's good faith calculations and fairly presenting in all material respects, subject to year end audit adjustments and the absence of footnotes, the consolidated financial condition of the Parent and its Subsidiaries as at such dates and the consolidated results of operations of the Parent and its Subsidiaries for the periods ended on such dates, setting forth in each case in comparative form the corresponding figures for the corresponding date or period of the preceding fiscal year, all in reasonable detail and duly certified (subject to normal year-end audit adjustments and the absence of footnotes) by a Financial Officer of the Parent as having been prepared in accordance with GAAP; provided that, in the event of any change in generally accepted accounting principles used in the preparation of such financial statements, the Parent shall also provide a reconciliation of such financial statements to GAAP.

(c)As soon as available, and in any event within 60 days after the end of each fiscal quarter of the Transferor, except the fiscal quarter ended January 31, 2006 for which the requirement is 90 days, management financial reports of the US Borrower setting forth (i) a preliminary consolidated balance sheet and consolidated statements of income in a management format , (ii) serviced portfolio information (iii) funding availability under its contractual

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arrangements with Truck Retail Installment Paper Corp. and under the Transferor Credit Agreement and (iv) calculations demonstrating compliance with Section 8.01 of the Transferor Credit Agreement, in each case prepared in a manner materially consistent with the Transferor's past practices (unless otherwise required to conform with the results of the audit or changes in GAAP) and, to the extent relevant, on the basis of management's good faith efforts, in such form and detail reasonably satisfactory to the Agent; provided, however, that such reporting shall not be required so long as the Transferor has filed all reports with the Securities and Exchange Commission required pursuant to Section 13 of the Exchange Act. The parties hereto acknowledge that such management financial reports are not final and are subject to change in connection with either the preparation, for the corresponding fiscal quarter, of a report on Form 10-Q or 10-K, as a result of or arising out of any restatement, in connection with the audit conducted for the fiscal year ended October 31, 2005, as the case may be.

(d)            As soon as available, and in any event within 30 days after the end of each month, commencing with the month of March 2006, monthly management financial reports of the Parent in respect of the sales and income by segment and cash balances, Indebtedness, capital expenditures and depreciation and amortization of the Parent and its consolidated Subsidiaries prepared in a manner consistent with the Parent's past practices and on the basis of management's good faith calculations, in such form and detail reasonably satisfactory to the Agent; provided,however, that such reporting shall not be required so long as the Parent has filed all reports with the Securities and Exchange Commission required pursuant to Section 13 of the Exchange Act.

Section 3.                       Representations and Warranties. In order to induce the parties to enter into this Waiver, the Transferor represents and warrants to the Transferee that (a) after giving affect to this Waiver, each of Transferor's representations and warranties contained in Article II of the Agreement is true and correct as of the date hereof, (b) the execution and delivery by the Transferor of this Waiver, and the performance of its obligations hereunder, are within its corporate or limited partnership, as applicable, powers and authority and have been duly authorized by all necessary corporate or limited partnership, as applicable, action on its part, and (c) this Waiver has been duly executed and delivered by the Transferor and constitutes the legal, valid and binding obligation of such Seller Party enforceable against the Transferor in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

Section 4.                       Condition Precedent. This Waiver shall become effective as of the date first above written upon receipt by the Agent of counterparts hereof duly executed by each of the parties hereto.

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Section 5.                       Miscellaneous.

(a) THIS WAIVER SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS.

(c) Except as expressly modified hereby, the Agreement remains unaltered and in full force and effect and is hereby ratified and confirmed. This Waiver shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns (including any trustee in bankruptcy).

(c)            This Waiver may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.

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IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be executed and delivered by their duly authorized officers as of the date hereof.

NAVISTAR FINANCIAL CORPORATION

By:      /s/    JOHN V. MULVANEY, SR.

Name:          John V. Mulvaney, Sr.

Title:            V.P. Controller

TRUCK RETAIL ACCOUNTS CORPORATION

By:     /s/      JOHN V. MULVANEY, SR.

Name:           John V. Mulvaney, Sr.

Title:             V.P. Controller

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EX-10.122

WAIVER NO.2

TO RECEIVABLES SALE AGREEMENT

THIS WAIVER NO. 2 (this "Waiver”), dated as of January 31, 2007, is among Navistar Financial Corporation, a Delaware corporation ("Navistar"), as Transferor, and Truck Retail Accounts Corporation, a Delaware corporation, as Transferee and pertains to that certain RECEIVABLES SALE AGREEMENT dated as of April 8, 2004 by and among the parties hereto (as heretofore amended or modified from time to time, the "Agreement”). Unless defined elsewhere herein, capitalized terms used in this Waiver have the meanings assigned to such terms in the Agreement.

PRELIMINARY STATEMENTS

The Transferor has requested that the Transferee agree to waive certain provisions of the Agreement; and

The Transferee is willing to agree to the requested waivers on the terms hereinafter set forth.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1.                       Waiver.

(a)The requirement in Section 4.1(a)(i) of the Agreement for delivery of annual financial statements of Parent and Transferor for fiscal years 2005 and 2006, the requirement in Section 4.1(a)(ii) of the Agreement for delivery of quarterly financial statements of Parent and Transferor for the first, second and third quarters of fiscal years 2006 and 2007, and the requirements in Sections 4.1(a)(iii) for the delivery of certain compliance certificates related to the aforementioned financial statements, are each hereby waived until the earlier of (i) October 31, 2007 and (ii) the date on which Parent and Transferor shall have timely filed reports on Form 10-K or 10-Q after the date hereof with the Securities and Exchange Commission pursuant to Sections 13 and 15 of the Securities Exchange Act of 1934, as amended (the "Exchange Act").

(b)Any condition or required representation or warranty that has not been satisfied or made or deemed made, as a result of the breach of any representation or warranty in Section 2.1(f) of the Agreement as a result of or arising out of any restatement, in connection with the audit conducted for the fiscal year ended October 31, 2005 or October 31, 2006, of any financial statements of Transferor or any of its affiliates for any period ending on or before October 31, 2007, or any reports, financial statements, certificates or other information containing similar information with respect to such periods, is hereby waived.

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Section 2.                       Agreement by Transferor. Notwithstanding anything to the contrary in the Agreement, to induce the parties to enter into this Waiver, until the expiration of the waiver provided in Section 1(a), Transferor agrees to deliver to the Transferee:

(a)As soon as available after the end of each of the fiscal years of Transferor ended October 31, 2005 and October 31, 2006, a copy of the annual report for such year for the Parent and its Subsidiaries, including therein (i) a consolidated balance sheet of the Parent and its Subsidiaries as of the end of such fiscal year and (ii) a consolidated statement of income and a consolidated statement of cash flows of the Parent and its Subsidiaries for such fiscal year, in each case prepared in accordance with Rule 3-10 of Regulation S-X, consistent with the Parent's past practice, on the basis of management's good faith calculations and fairly presenting in all material respects the consolidated financial condition of the Parent and its Subsidiaries as at such date and the consolidated results of operations of the Parent and its Subsidiaries for the period ended on such date; provided that, in the event of any change in generally accepted accounting principles used in the preparation of such financial statements, the Parent shall also provide a reconciliation of its financial statements to GAAP.

(b)As soon as available after the end of the fiscal quarters ended January 31, 2006, April 30, 2006, July 31, 2006, January 31, 2007, April 30, 2007 and July 31, 2007 (i) a consolidated balance sheet of the Parent and its Subsidiaries as of the end of such quarter, (ii) a consolidated statement of income and a consolidated statement of cash flows of the Parent and its Subsidiaries for the period commencing at the end of the previous fiscal quarter and ending with the end of such fiscal quarter, and (iii) a consolidated statement of income and a consolidated statement of cash flows of the Parent and its Subsidiaries for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, all prepared in accordance with Rule 3-10 of Regulation S-X, consistent with the Parent's past practice, on the basis of management's good faith calculations and fairly presenting in all material respects, subject to year end audit adjustments and the absence of footnotes, the consolidated financial condition of the Parent and its Subsidiaries as at such dates and the consolidated results of operations of the Parent and its Subsidiaries for the periods ended on such dates, setting forth in each case in comparative form the corresponding figures for the corresponding date or period of the preceding fiscal year, all in reasonable detail and duly certified (subject to normal year-end audit adjustments and the absence of footnotes) by a Financial Officer of the Parent as having been prepared in accordance with GAAP; provided that, in the event of any change in generally accepted accounting principles used in the preparation of such financial statements, the Parent shall also provide a reconciliation of such financial statements to GAAP.

(c)As soon as available, and in any event within 60 days after the end of each fiscal quarter (other than the last fiscal quarter of a fiscal year) or 90 days after the end of the last fiscal quarter of a fiscal year of Navistar, ended on or after October 31, 2006, management financial reports of Navistar setting forth (i) a preliminary consolidated balance sheet and consolidated statements of income in a management format , (ii) serviced portfolio information (iii) funding availability under its contractual arrangements with Truck Retail Installment Paper Corp. and under the Transferor Credit Agreement and (iv) calculations demonstrating compliance with Section 8.01 of the Transferor Credit Agreement, in each case prepared in a manner materially consistent with the Transferor's past practices (unless otherwise required to

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conform with the results of the audit or changes in GAAP) and, to the extent relevant, on the basis of management's good faith efforts, in such form and detail reasonably satisfactory to the Agent; provided, however, that such reporting shall not be required so long as the Transferor has filed all reports with the Securities and Exchange Commission required pursuant to Section 13 of the Exchange Act. The parties hereto acknowledge that such management financial reports are not final and are subject to change in connection with either the preparation, for the corresponding fiscal quarter, of a report on Form 10-Q or 10-K, as a result of or arising out of any restatement, in connection with the audit conducted for the fiscal year ended October 31, 2005 or October 31, 2006, as the case may be.

(d)            As soon as available, and in any event within 30 days after the end of each month, commencing with the month of October 2006, monthly management financial reports of the Parent in respect of the sales and income by segment and cash balances, Indebtedness, capital expenditures and depreciation and amortization of the Parent and its consolidated Subsidiaries prepared in a manner consistent with the Parent's past practices and on the basis of management's good faith calculations, in such form and detail reasonably satisfactory to the Agent; provided,however, that such reporting shall not be required so long as the Parent has filed all reports with the Securities and Exchange Commission required pursuant to Section 13 of the Exchange Act.

Section 3.                       Representations and Warranties. In order to induce the parties to enter into this Waiver, the Transferor represents and warrants to the Transferee that (a) after giving affect to this Waiver, each of Transferor's representations and warranties contained in Article II of the Agreement is true and correct as of the date hereof, (b) the execution and delivery by the Transferor of this Waiver, and the performance of its obligations hereunder, are within its corporate or limited partnership, as applicable, powers and authority and have been duly authorized by all necessary corporate or limited partnership, as applicable, action on its part, and (c) this Waiver has been duly executed and delivered by the Transferor and constitutes the legal, valid and binding obligation of such Seller Party enforceable against the Transferor in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

Section 4.                      Condition Precedent. This Waiver shall become effective as of the date first above written upon receipt by the Agent of counterparts hereof duly executed by each of the parties hereto.

Section 5.                       Miscellaneous.

(a)             THIS WAIVER SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS.

     (c)            Except as expressly modified hereby, the Agreement remains unaltered and in full force and effect and is hereby ratified and confirmed. This Waiver shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns (including any trustee in bankruptcy).

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(c)           This Waiver may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.

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IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be executed and delivered by their duly authorized officers as of the date hereof.

NAVISTAR FINANCIAL CORPORATION

By:    /s/ JOHN V. MULVANEY, SR.

Name:    John V. Mulvaney, Sr.

Title:      V.P. CFO & Treasurer

TRUCK RETAIL ACCOUNTS CORPORATION

By:    /s/ JOHN V. MULVANEY, SR.

Name:    John V. Mulvaney, Sr.

Title:     V.P. CFO & Treasurer

[Signature Page to Waiver No.  to the Receivables Sale Agreement]

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EX-10.123

AMENDMENT NO. 1

TO RECEIVABLES PURCHASE AGREEMENT

THIS AMENDMENT NO. 1 (this "Amendment"), dated as of March 31, 2005, is among Truck Retail Accounts Corporation, a Delaware corporation ("Seller"), Navistar Financial Corporation, a Delaware corporation ("Navistar”), as initial Servicer (Navistar, together with Seller, the "Seller Parties"and each a "Seller Party"), the entities listed on Schedule A tothis Agreement (together with any of their respective successors and assigns hereunder, the "Financial Institutions"), Jupiter Securitization Corporation ("Conduit") and Bank One, NA (Main Office Chicago), as agent for the Purchasershereunder or any successor agent hereunder (together with its successors and assigns hereunder, the ”Agent”), and pertains to that certainRECEIVABLES PURCHASE AGREEMENT dated as of April 8, 2004 by and among the parties hereto (the "Agreemens”). Unless defined elsewhere herein, capitalized terms used in this, Amendment shall have the meanings assignedto such terms inthe Agreement.

PRELIMINARY STATEMENTS

The Seller Parties have requested that the Agent and the Purchasers agree to amend certain provisions of the Agreement; and

The Agent and the Purchasers are willing to agree to the requested amendments on the terms hereinafter set forth.

NOW, THEREFORE, in consideration of the premises and themutual covenants herein contained, and for other good andvaluable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1.                       Amendments.

(a)All references in the Agreement to "Bank One, NA (Main Office Chicago)" and "Bank One" are hereby replaced with "JPMorgan Chase Bank, N.A." and "JPMorgan Chase," respectively.

(b)The definitions in Exhibit I to the Agreement of the following defined terms are hereby amended and restated in their entirety to read, respectively, as follows:

"Delinquency Ratio" means, at any time, a percentage equal to (i) theaggregate Outstanding Balance of all Receivables that were more than 60 days days past due, as reflected on the DFO MasterAging Report at such time divided

by (ii) the aggregate Outstanding Balance of all Receivables as reflected on the DFO Master Aging Report at such time.

"Dilution Horizons Ratio" means, as of the last dayof any calendar month, a percentage equal to (i) the aggregate gross sales of the Originator giving rise to Receivables for the three calendar months ended on such day, divided by

(ii) the Outstanding Balance of all Eligible Receivables as of the last day of such calendar month.

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"Dilution Ratio" means, a percentage equal to (i) the aggregate amount of Dilutions which occurred during the calendar month then mostrecently ended, divided by (ii) the aggregate gross sales of the Originator giving rise to

Receivables during the second calendar month prior to the calendar month referenced in clause (i), calculated on a monthly basis.

"Facility Termination Date" means the earlier of (i) the Liquidity Termination Date and (ii) the Amortization Date.

"Liquidity Termination Date" means August 14, 2005.

Section 2.                       Representations and Warranties, In order to induce the parties to enter into this Amendment, each of the Seller Parties hereby represents and warrants to the Agent and thePurchasersthat (a) after giving affect to this Amendment, each of such Seller Party's representations and warranties contained in Article V of the Agreement is true and correct as of the date hereof, (b) the execution and delivery by such Seller Party of this Amendment, and the performance of its obligations hereunder, are within its corporate or limited partnership, as applicable, powers and authority and have been duly authorized byall necessary corporate or limited partnership, as applicable, action on its part, and (c) this Amendmenthas been duly executed and delivered by such Seller Party and constitutes the legal, valid and binding obligation of such Seller Party enforceable against such Seller Party in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

Section 3.                        Condition Precedent. This Amendment shall become effective as of the date first above written upon receipt by the Agent of counterparts hereof duly executed by each of the parties hereto.

Section 4.                        Miscellaneous

(a)           THIS AMENDMENT SHALL BE GOVERNED AND CONSTRUED 1N ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS.

(c)            Except as expressly modified hereby, the Agreement remains unaltered and in full force and effect and is hereby ratified and confirmed. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns (including any trustee in bankruptcy).

(c)            This Amendment may be executed in any number of counterparts and by different parties hereto inseparate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.

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IN WITNESS WHEREOF,the parties hereto have caused this Amendment to be executed and delivered by their duly authorized officers as of the date hereof.

TRUCK RETAIL ACCOUNTS CORPORATION

By:  /s/ ANDREW J. CEDEROTH

Name:  Andrew J. Cederoth

Title:    V.P., & Treasurer

NAVISTAR FINANCIAL CORPORATION

By:  /s/ ANDREW J. CEDEROTH

Name:  Andrew J. Cederoth

Title:    V.P., & Treasurer

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JUPITER SECURIZATION CORPORATION

By:  /s/ JILL T. LANE

Its:      Authorized Signatory

JPMORGAN CHASE BANK, N.A, individually

as a Financial Institution and as Agent

By:  /s/ JILL T. LANE

Its:       Vice President

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EX-10.124

AMENDMENT NO. 2

TO RECEIVABLES PURCHASE AGREEMENT

THIS AMENDMENT NO. 2 (this "Amendment'), dated as of August 14, 2005, is among Truck Retail Accounts Corporation, a Delaware corporation ("Seller"), Navistar Financial Corporation, a Delaware corporation (“Navistar”), as initial Servicer (Navistar, together with Seller, the "Seller Parties" and each a "Seller Party"), the entities listed on Schedule A to the Agreement (together with any of their respective successors and assigns hereunder, the “Financial Institutions”), Jupiter Securitization Corporation (“Conduit”) and JPMorgan Chase Bank, N.A., successor by merger to Bank One, NA, as agent for the Purchasers (together with its successors and assigns, the “Agent”), and pertains to that certain Receivables Purchase Agreement dated as of April 8, 2004 by and among the parties hereto, as heretofore amended (the “Agreement”). Unless defined elsewhere herein, capitalized terms used in this, Amendment shall have the meanings assigned to such terms in the Agreement.

PRELIMINARY STATEMENTS

The Seller Parties have requested that the Agent and the Purchasers agree to amend certain provisions of the Agreement; and

The Agent and the Purchasers are willing to agree to the requested amendments on the terms hereinafter set forth.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1.                       Amendments.

(a)The following new Section 4.6 is hereby added to the Agreement:

4.6. Funding Agreement Fundings. The parties hereto acknowledge that Conduit may assign all or any portion of the Purchaser Interests to one or more Funding Sources at any time pursuant to a Funding Agreement to finance or refinance the necessary portion of the Purchaser Interests through a funding thereunder. The fundings under each Funding Agreement will accrue Yield in accordance with this Article IV. Regardless of whether a funding of a Purchaser Interests by a Funding Source constitutes a direct purchase of a Purchaser Interest hereunder, an assignment of a Purchaser Interest originally funded by a Conduit or the sale of one or more participations or other interests in such a Purchaser Interest, each Funding Source participating in a funding of a Purchaser Interest pursuant to a Funding Agreement shall have the rights and obligations of a "Purchaser" hereunder with the same force and effect as if it had directly purchased such Purchaser Interest directly from Seller hereunder.

(b)Each of the following definitions set forth in Exhibit I to the Agreement is hereby amended and restated in its entirety to read, respectively, as follows:

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"Funding Agreement" means any agreement or instrument executed by any Funding Source with or for the benefit of Conduit, as the same may be amended, restated or otherwise modified from time to time.

"Liquidity Termination Date" means August 13, 2006.

(c)The first sentence of Section 12.2 of the Agreement is hereby amended and restated in its entirety to read as follows:

Any Financial Institution may, in the ordinary course of its business at any time sell to one or more Persons (each, a "Participant") participating interests in its Pro Rata Share of the Purchaser Interests of the Financial Institutions or any other interest of such Financial Institution under any Funding Agreement.

(d)Each of Sections 13.1 through and including 13.5 of the Agreement is hereby deleted in its entirety and replaced with "[Intentionally deleted]" and each reference in the Agreement to any of such Sections or to "Article XIII" is hereby replaced with "a Funding Agreement."

(e)           Each of the following definitions in the Agreement is hereby deleted in its entirety:

            "Acquisition Amount"

"Adjusted Funded Amount"

"Adjusted Liquidity Price"

"Conduit Residual"

"Conduit Transfer Price"

"Conduit Transfer Price Deficit"

"Conduit Transfer Price Reduction"

"Defaulting Financial Institution"

"Non-Defaulting Financial Institution"

"Non-Renewing Financial Institution"

"Reduction Percentage"

(f)Exhibit VII to the Agreement is hereby amended to delete the reference to Section 13.1 in numbered paragraph 7.

Section 2.                      Representations and Warranties. In order to induce the parties to enter into this Amendment, each of the Seller Parties hereby represents and warrants to the Agent and the Purchasers that (a) after giving affect to this Amendment, each of such Seller Party's representations and warranties contained in Article V of the Agreement is true and correct as of the date hereof, (b) the execution and delivery by such Seller Party of this Amendment, and the performance of its obligations hereunder, are within its corporate or limited partnership, as applicable, powers and authority and have been duly authorized by all necessary corporate or limited partnership, as applicable, action on its part, and (c) this Amendment has been duly executed and delivered by such Seller Party and constitutes the legal, valid and binding

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obligation of such Seller Party enforceable against such Seller Party in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

Section 3.                       Condition Precedent. This Amendment shall become effective as of the date first above written upon receipt by the Agent of counterparts hereof duly executed by each of the parties hereto.

Section 4.                       Miscellaneous.

(a) THIS AMENDMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS.

(c)            Except as expressly modified hereby, the Agreement remains unaltered and in full force and effect and is hereby ratified and confirmed. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns (including any trustee in bankruptcy).

(c)            This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.

[signature page follows]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered by their duly authorized officers as of the date hereof.

TRUCK RETAIL ACCOUNTS CORPORATION

By:  /s/ PAUL MARTIN

Name:  Paul Martin

Title:    V.P. Controller

NAVISTR FINANCIAL CORPORATION

By:  /s/ PAUL MARTIN

Name:  Paul Martin

Title:    V.P. Controller

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JUPITER SECURIZATION CORPORATION

By:  /s/ JILL T LANE

Its:      Authorized Signatory

JPMORGAN CHASE BANK, N.A, individually

as a Financial Institution and as Agent

By:  /s/ JILL T. LANE

Its:       Vice President

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EX-10.125

AMENDMENT NO.3

TO RECEIVABLES PURCHASE AGREEMENT

THIS AMENDMENT NO. 3 (this"Amendment"), dated as of August 11, 2006, is among Truck Retail Accounts Corporation, a Delaware corporation ("Seller"),Navistar Financial Corporation, a Delaware corporation ("Navistar"), as initial Servicer (Navistar, together with Seller, the "Seller Parties" and each a "Seller Party"), the entities listed on Schedule A to the Agreement (together with any of their respective successors and assigns hereunder, the "Financial Institutions"), Jupiter Securitization Company LLC (f/k/a Jupiter Securitization Corporation) ("Conduit") and JPMorgan Chase Bank, N.A., successor by merger to Bank One, NA, as agent for the Purchasers (together with its successors and assigns, the "Agent"), and pertains to that certain Receivables Purchase Agreement dated as of April 8, 2004 by and among the parties hereto, as heretofore amended (the "Agreement"). Unless defined elsewhere herein, capitalized terms used in this, Amendment shall have the meanings assigned to such termsin the Agreement.

PRELIMINARY STATEMENTS

The Seller Parties have requested that the Agent and the Purchasers agree to amend certain provisions of the Agreement; and

The Agent and the Purchasers are willing to agree to the requested amendments on the terms hereinafter set forth.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1.                      Amendments.

(a)All references in the Agreement to "Jupiter Securitization Corporation" are hereby replaced with "Jupiter Securitization Company LLC".

(b)Each of the following definitions set forth in Exhibit I to the Agreement is hereby amended and restated in its entirety to read, respectively, as follows:

"Concentration Limit" means, at any time, for any Obligor, 33.33% of the Loss Reserve, or such other amount (a "Special Concentration Limit") for such Obligor designated by the Agent; provided, that in the case of an Obligor and any Affiliate of such Obligor, the Concentration Limit shall be calculated as if such Obligor and such Affiliate are one Obligor; and provided, further, that Conduit or the Required Financial Institutions may, upon notice to Seller, cancel any Special Concentration Limit; provided, however, that such Special Concentration Limit shall remain in place until the first Weekly Settlement Date following the fifteenth (15th) Business Day following the delivery of such notice. As of

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the date hereto, until notice from the Agent to the contrary in accordance with the proceeding sentence, the following Special Concentration Limits, as amended with the Agent's consent in the Weekly Report, shall be in effect: (i) Walmart Leasing, and Affiliates 90.0%; (ii) Anheuser Bush, Inc., and Affiliates 90.0%; (iii) Safeway Stores, 50.0%; (iv) Sara Lee, and Affiliates 50.0%; (v) PHH/Ameri Gas and Affiliates, 50.0%; (vi) [Intentionally deleted], (vii) Ryder Truck Rental and Affiliates, 50.0%, and (viii) Laidlaw, Inc. and Affiliates, 25.0%.

"Credit Enhancement Trigger" means (a) a downgrade of the Parent below (i) Ba3 by Moody's Investors Service, Inc. ("Moody's") and BB- by Standard & Poor's Ratings Service ("Standard & Poor's") or (ii) B1 by Moody's or (iii) B+ by Standard & Poor's, or (b) a withdrawal of ratings by both Moody's and Standard & Poor's.

"Liquidity Termination Date" means August 10, 2007.

"Transferor Credit Agreement" means that certain Amended and Restated Credit Agreement, dated as of July 1, 2005 among Navistar, Arrendadora Financiera Navistar, S.A. de C.V., Organization Auxiliar del Credito, Servicios Finacieros Navistar, S.A. de C.V., Sociedad Financiera de Objeto Limitado and Navistar Comercial, S.A. de C.V., as borrowers, various lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Banc of America, N.A., as Syndication Agent, and The Bank of Nova Scotia, as Documentation Agent, and J.P. Morgan Securities Inc. and Banc of America Securities LLC, as Joint Book Managers and Joint Lead Arrangers, as the same may be amended, restated or otherwise modified from time to time.

Section 2.                         Representations and Warranties. In order to induce the parties to enter into this Amendment, each of the Seller Parties hereby represents and warrants to the Agent and the Purchasers that (a) after giving affect to this Amendment, each of such Seller Party's representations and warranties contained in Article V of the Agreement is true and correct as of the date hereof, (b) the execution and delivery by such Seller Party of this Amendment, and the performance of its obligations hereunder, are within its corporate or limited partnership, as applicable, powers and authority and have been duly authorized by all necessary corporate or limited partnership, as applicable, action on its part, and (c) this Amendment has been duly executed and delivered by such Seller Party and constitutes the legal, valid and binding obligation of such Seller Party enforceable against such Seller Party in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

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    Sction 3                       Condition Precedent. This Amendment shall become effective as of the date first above written upon receipt by the Agent of counterparts hereof duly executed by each of the parties hereto.

Section 4.                      Miscellaneous.

(a) THIS AMENDMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS.

(c)            Except as expressly modified hereby, the Agreement remains unaltered and in full force and effect and is hereby ratified and confirmed. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns (including any trustee in bankruptcy).

(c)            This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.

[signature pages follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered by their duly authorized officers as of the date hereof.

TRUCK RETAIL ACCOUNTS CORPORATION

By:  /s/ JOHN V. MULVANEY, SR.

Name:  John V. Mulvaney, Sr.

Title:    V.P.,Controller

NAVISTR FINANCIAL CORPORATION

By:  /s/ JOHN V. MULVANEY, SR.

Name:  John V. Mulvaney, Sr.

Title:    V.P.,Controller

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JUPITER SECURIZATION COMPANY LLC

By:  JPMorgan Chaase bank, N.A., ITS Attorney-in-Fact

By:   /s/ JOHN K. SVOLOS

Name:    John K. Svolos

Title:     Vice President

JPMORGAN CHASE BANK, N.A, individually as a Financial Institution and as Agent

By:    /s/ JOHN K. SVOLOS

Name:     John K. Svolos

Title:      Vice President

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EX-10.126

EXECUTION COPY

AMENDMENT NO. 1 TO POOLING AGREEMENT

THIS AMENDMENT NO. 1 TO POOLING AGREEMENT (this "Amendment") dated as of January 31, 2007, is entered into among Navistar Financial Retail Receivables Corporation (the "Seller") and Navistar Financial 2006-ARC Owner Trust, as issuer (the "Issuer").

RECITALS

A.Seller and Issuer are parties to that certain Pooling Agreement, dated as of September 1, 2006 (as amended, supplemented or otherwise modified through the date hereof, the "Agreement").

B.Such parties desire to amend the Agreement as hereafter set forth in accordance with Section 5.01(b) of the Agreement.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.Amendments to Agreement. By its signature hereto, each party hereto hereby agrees to the following amendments to the Agreement:

(a) The definition of "Principal Distribution Amount" in Part I of Appendix A of the Agreement is amended by deleting the second proviso to such definition and substituting therefor the following proviso:

"and providedfurther, that notwithstanding the foregoing, on the Final Scheduled Distribution Date for the Notes (and on any Distribution Date thereafter), on and after the date the Notes have been declared due and payable following an Event of Default until such acceleration has been rescinded, and on any Distribution Date on and after the occurrence of a Trigger Event (other than a Trigger Event described in clause (c) of the definition of Enhancement Event), until such Trigger Event has been waived or cured, the Principal Distribution Amount shall not be less than the amount that is necessary to reduce the Outstanding Amount of the Notes to zero."

2.Representations and Warranties. The Seller hereby represents and warrants that, after giving effect to this Amendment, no Event of Default has occurred and is now continuing.

3.Effect of Amendment. All provisions of the Agreement, as extended by this Amendment, remain in full force and effect. After this Amendment becomes effective, all references in the Agreement to "this Agreement", "hereof”, "herein" or words of similar effect referring to the Agreement in the Agreement or in any other document relating to the

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Seller's securitization program shall be deemed to be references to the Agreement as extended by this Amendment. This Amendment shall not be deemed to expressly or impliedly waive, amend or supplement any provision of the Agreement other than as set forth herein.

4.Conditions Precedent. This Amendment shall become effective on the first date written above subject to the satisfaction of the following conditions:

(a)each of the Seller, the Issuer, the Indenture Trustee, the Funding Agent, the Alternate Investor, each Conduit Investor, each Certificateholder and the Swap Counterparty shall have executed counterparts of this Amendment;

(b)each of S&P and Moody's confirms in writing to the Conduit Investors, without regard to the financial strength of Navistar Financial Corporation for the ratings of the transaction, that such amendment shall not result in a reduction or withdrawal of its rating on the Commercial Paper issued by such Conduit Investors;

(c)delivery to each Trustee of (a) an Opinion of Counsel described in Section 5.02(i) of the Agreement and (b) an opinion of counsel stating that the execution of such amendment is authorized or provided by the Agreement and that all conditions precedent to the execution and delivery of this Amendment have been satisfied; and

    (d)delivery to the Funding Agent by the Indenture Trustee of the substance of this Amendment as provided to the Indenture Trustee.

5.Counterparts. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, and each counterpart shall be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

6.Governing Law. This Amendment shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to any otherwise applicable principles of conflict of laws.

7.Section Headings. The various headings of this Amendment are inserted for convenience only and shall not affect the meaning or interpretation of this Amendment or the Agreement or any provision hereof or thereof.

8.Limitation of Liability of the Indenture Trustee and the Owner Trustee.

      (a)       Notwithstanding anything contained herein to the contrary, this Amendment has been acknowledged and accepted by LaSalle Bank, National Association not in its individual capacity but solely as Indenture Trustee and in no event shall LaSalle Bank, National Association have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer.

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  (b)      Notwithstanding anything contained herein to the contrary, this Amendment has been executed by Chase Bank USA, National Association not in its individual capacity but solely in its capacity as Owner Trustee and in no event shall Chase Bank USA, National Association in its individual capacity or, except as expressly provided in the Trust Agreement, as Owner Trustee of the Issuer have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer. For all purposes of this Agreement, in the performance of its duties or obligations hereunder, or in the performance of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Article VI of the Trust Agreement.

[Signature Pages Follow]

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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written,

NAVISTAR FINANCIAL 2006-ARC OWNER TRUST,

By:  Chase Bank USA, National Association, not in its individual capacity, but solely as Owner Trustee on behalf of the Trust

By:  /s/ JOHN J. CASHIN

Name:  Vice President

NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION, as Seller

By:  /s/ KRISTIN L MORAN

Name:  Kristin L Moran

Title:    V.P., & General Counsel

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Consent to, Acknowledge and Accept:

LASALLE BANK NATIONAL ASSOCIATION, not in its individual capacity but solely as indenture Trustee

By:   /s/ TIMOTHY E. CUTSINGER

Title:     Assistant Vice President

ABN AMRO BANK, N.V., as Funding Agent and Alternate Investor

By:   /s/ DAVID J. DONOFRIO

Title:     Director

By:   /s/ BRANDY HAN

Title:     Vice President

AMSTERDAM FUNDING CORPORATION, as Conduit Investor

By:   /s/ BERNARD J. ANGELO

Title:     Vice President

NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION, as Certificateholder

By:  /s/ KRISTIN L MORAN

Name:  Kristin L Moran

Title:    V.P., & General Counsel

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LASALLE BANK NATIONAL ASSOCIATION, as swap Counterparty

By:   /s/ FREDRICK P. ENGLER

Title:     Senior Vice President

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EX-10.127

EXECUTION COPY

AMENDMENT NO. 1 TO POOLING AGREEMENT

THIS AMENDMENT NO. 1 TO POOLING AGREEMENT (this "Amendment") dated as of May 31, 2007, is entered into among Navistar Financial Retail Receivables Corporation (the "Seller") and Navistar Financial 2006-RBC Owner Trust, as issuer (the "Issuer").

RECITALS

A.Seller and Issuer are parties to that certain Pooling Agreement, dated as of October 20, 2006 (as amended, supplemented or otherwise modified through the date hereof, the "Agreement").

B.Such parties desire to amend the Agreement as hereafter set forth in accordance with Section 5.01 of the Agreement.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.Amendments to Agreement. By its signature hereto, each party hereto hereby agrees to the following amendments to the Agreement:

(a)     The definition of "Principal Distribution Amount" in Part I of Appendix A of the Agreement is amended by deleting the second proviso to such definition and substituting therefor the following proviso:

"and providedfurther, that notwithstanding the foregoing, on the Final Scheduled Distribution Date for the Notes (and on any Distribution Date thereafter), on and after the date the Notes have been declared due and payable following an Event of Default until such acceleration has been rescinded, and on any Distribution Date on and after the occurrence of a Trigger Event (other than a Trigger Event described in clause (c) of the definition of Enhancement Event), until such Trigger Event has been waived or cured, the Principal Distribution Amount shall not be less than the amount that is necessary to reduce the Outstanding Amount of the Notes to zero."

2.Representations and Warranties. The Seller hereby represents and warrants that, after giving effect to this Amendment, no Event of Default has occurred and is now continuing.

3.Effect of Amendment. All provisions of the Agreement, as extended by this Amendment, remain in full force and effect. After this Amendment becomes effective, all references in the Agreement to "this Agreement", “hereof” "herein" or words of similar effect referring to the Agreement in the Agreement or in any other document relating to the Seller's securitization program shall be deemed to be references to the Agreement as amended by this Amendment. This Amendment shall not be deemed to expressly or impliedly waive, amend or supplement any provision of the Agreement other than as set forth herein.

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4.             Conditions Precedent. This Amendment shall become effective on the first date written above subject to the satisfaction of the following conditions:

(a)each of the Seller, the Issuer, the Indenture Trustee, the Agent, the Conduit Investor, the Certificateholder and the Swap Counterparty shall have executed counterparts of this Amendment;

   (b)      delivery to each Trustee of (a) an Opinion of Counsel described in Section 5.02(i) of the Agreement and (b) an opinion of counsel stating that the execution of this Amendment is authorized or provided by the Agreement and that all conditions precedent to the execution and delivery of this Amendment have been satisfied; and

    (c)delivery to the Agent by the Indenture Trustee of the substance of this Amendment as provided to the Indenture Trustee.

5. Counterparts. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, and each counterpart shall be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

6.             Governing Law. This Amendment shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to any otherwise applicable principles of conflict of laws.

7.             Section Headings. The various headings of this Amendment are inserted for convenience only and shall not affect the meaning or interpretation of this Amendment or the Agreement or any provision hereof or thereof.

8.             Limitation of Liability of the Indenture Trustee and the Owner Trustee.

         (a)Notwithstanding anything contained herein to the contrary, this Amendment has been consented to, acknowledged and accepted by The Bank of New York not in its individual capacity but solely as Indenture Trustee and in no event shall The Bank of New York have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer.

         (b)Notwithstanding anything contained herein to the contrary, this Amendment has been executed by Deutsche Bank Trust Company Delaware not in its individual capacity but solely in its capacity as Owner Trustee and in no event shall Deutsche Bank Trust Company Delaware in its individual capacity or, except as expressly provided

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in the Trust Agreement, as Owner Trustee of the Issuer have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer. For all purposes of this Agreement, in the performance of its duties or obligations hereunder, or in the performance of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Article VI of the Trust Agreement.

[Signature Pages Follow]

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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.

NAVISTAR FINANCIAL 2006 RBC OWNER TRUST, as Issuer

By:  DEUTSCHE BANK TRUST COMPANY DELEWARE,

not in its individual capacity but solely as Owner Trustee on behalf of the Trust

By:  /s/ MICHELE HY VOON

Name:  Michele Hy Voon

Title:    Attorney –In-Fact

By:  /s/ PETER T. BECKER

Name:  Peter T. Becker

Title:    Attorney –In-Fact

NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION, as Seller

By:  /s/ JOHN V. MULVANEY, SR.

Name:  John V. Mulvaney, Sr.

Title:   V.P. , CFO & Treasurer

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Consented to, Acknowledged and Accepted:

BANK OF NEW YORK, Not in its individual capacity but solely as Indenture Trustee

By:  /s/ JOHN BOBKO

Name:  John Bobko

Title:    Vice President

ROYAL BANK OF CANADA, as the Agent

By:  /s/ ROGER PELLEGRINI

Name:  Roger Pellegrini

Title:    Authorized Signatory

By:  /s/ ANDREW S WHITE

Name:  Andrew S. White

Title:    Authorized Signatory

THUNDER BAY FUNDING, LLC, as Conduit Investor

By:  /s/ ROGER PELLEGRINI

Name:  Roger Pellegrini

Title:    Authorized Signatory

NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION, as Certificateholder

By:  /s/ JOHN V. MULVANEY, SR.

Name:  John V. Mulvaney, Sr.

Title:   V.P. , CFO & Treasurer

ROYAL BANK OF CANADA, as Swap Counterpart

By:  /s/ SUSAN HEARD

Name:  Susan Heard

Title:    Authorized Signatory

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EX-10.128

AMENDMENT NO. 4

TO RECEIVABLES PURCHASE AGREEMENT

THIS AMENDMENT NO. 4 (this "Amendment"), dated as of August 10, 2007, is among Truck Retail Accounts Corporation, a Delaware corporation ("Seller"), Navistar Financial Corporation, a Delaware corporation ("Navistar”), as initial Servicer (Navistar, together with Seller, the "Seller Parties" and each a "Seller Party"), the entities listed on Schedule A to the Agreement (together with any of their respective successors and assigns hereunder, the "Financial Institutions"),Jupiter Securitization Company LLC (f/k/a Jupiter Securitization Corporation) ("Conduit”) and JPMorgan Chase Bank, N.A., successor by merger to Bank One, NA, as agent for the Purchasers (together with its successors and assigns, the "Agent”), and pertains to that certain Receivables Purchase Agreement dated as of April 8, 2004 by and among the parties hereto, as heretofore amended (the "Agreement”). Unless defined elsewhere herein, capitalized terms used in this, Amendment shall have the meanings assigned to such terms in the Agreement.

PRELIMINARY STATEMENTS

The Seller Parties have requested that the Agent and the Purchasers agree to amend certain provisions of the Agreement; and

The Agent and the Purchasers are willing to agree to the requested amendments on the terms hereinafter set forth.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1.                       Amendments.

(a)            Each of the following definitions set forth in Exhibit I to the Agreement is hereby amended and restated in its entirety to read, respectively, as follows:

"Authorized Officer" means, with respect to any person, its Chief Executive Officer, Chief Financial Officer, Treasurer, Assistant Treasurer, Controller, or any Vice President

"Concentration Limit" means, at any time, for any Obligor, 33.33% of the Loss Reserve, or such other amount (a "Special Concentration Limit") for such Obligor designated by the Agent; provided, that in the case of an Obligor and any Affiliate of such Obligor, the Concentration Limit shall be calculated as if such Obligor and such Affiliate are one Obligor; and provided, further, that Conduit or the Required Financial Institutions may, upon notice to Seller, cancel any Special Concentration Limit; provided, however, that such Special Concentration Limit shall remain in

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place until the first Weekly Settlement Date following the fifteenth (15th) Business Day following the delivery of such notice. As of the date hereto, until notice from the Agent to the contrary in accordance with the proceeding sentence, the following Special Concentration Limits, as amended with the Agent's consent in the Weekly Report, shall be in effect: (i) Walmart Leasing, and Affiliates 90.0%; (ii) Anheuser Bush, Inc., and Affiliates 90.0%; (iii) Safeway Stores, 50.0%; (iv) Sara Lee, and Affiliates 50.0%; (v) Ryder Truck Rental and Affiliates, 50.0%, and (vi) Laidlaw, Inc. and Affiliates, 25.0%.

"Liquidity Termination Date" means August 8, 2008.

Section 2.                       Representations and Warranties. In order to induce the parties to enter into this Amendment, each of the Seller Parties hereby represents and warrants to the Agent and the Purchasers that (a) after giving affect to this Amendment, each of such Seller Party's representations and warranties contained in Article V of the Agreement is true and correct as of the date hereof, (b) the execution and delivery by such Seller Party of this Amendment, and the performance of its obligations hereunder, are within its corporate or limited partnership, as applicable, powers and authority and have been duly authorized by all necessary corporate or limited partnership, as applicable, action on its part, and (c) this Amendment has been duly executed and delivered by such Seller Party and constitutes the legal, valid and binding obligation of such Seller Party enforceable against such Seller Party in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

Section 3.                       Condition Precedent. This Amendment shall become effective as of the date first above written upon receipt by the Agent of counterparts hereof duly executed by each of the parties hereto.

Section 4.                       Miscellaneous.

(a)           THIS AMENDMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS.

(c)            Except as expressly modified hereby, the Agreement remains unaltered and in full force and effect and is hereby ratified and confirmed. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns (including any trustee in bankruptcy).

(c)            This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered by their duly authorized officers as of the date hereof.

TRUCK RETAIL ACCOUNTS CORPORATION

By:  /s/ JOHN V. MULVANEY, SR.

Name:  John V. Mulvaney, Sr.

Title:    V.P.,Controller

NAVISTR FINANCIAL CORPORATION

By:  /s/ JOHN V. MULVANEY, SR.

Name:  John V. Mulvaney, Sr.

Title:    V.P.,Controller

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JUPITER SECURIZATION COMPANY LLC

By: JPMorgan Chase Bank, N.A., ITS Attorney in Fact

By:  /s/ ALAN P. ENGLISH

Name:  Alan P. English

Title:   Vice President

JPMORGAN CHASE BANK, N.A, individually as a Financial Institution and as Agent

By:  /s/ ALAN P. ENGLISH

Name:  Alan P. English

Title:   Vice President

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EX-10.129

Not used

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EX-10.130

    January 31, 2007

Navistar Financial Corporation

425 N. Martingale Road

Suite 1800,

Attention:   General Counsel

Schaumburg, Illinois 60173

LaSalle Bank National Association

Suite 1625

Chicago, Illinois 60603

Attention:   Global Securities and Trust Services-Navistar 2006-ARC

 Re:            Defaults and Events of Default Ladies/Gentlemen:

Please refer to (a) the Indenture dated as of September 1, 2006 (as amended, the "Indenture") between Navistar Financial 2006-ARC Owner Trust, a Delaware statutory trust, and LaSalle Bank National Association, a national banking association, as indenture trustee (in such capacity, the "Indenture Trustee"), (b) the Note Purchase Agreement dated as of September 1, 2006 (the "Note Purchase Agreement"), among Navistar Financial Retail Receivables Corporation (the "Seller"), Navistar Financial Corporation ("NFC"), Amsterdam Funding Corporation, as a Conduit Investor, and ABN AMRO Bank, N.V., as Funding Agent and an Alternate Investor and (c) the ISDA Master Agreement dated as of September 1, 2006 between LaSalle Bank National Association (in such capacity, the "Swap Counterparty") and Navistar Financial Corporation. Capitalized terms used but not otherwise defined herein have the respective meanings assigned thereto (including by incorporation by reference) in the Indenture, or if not defined therein, in the Note Purchase Agreement.

By its signature below, effective as of the date hereof, (i ) each of the Funding Agent, the Alternate Investor and the Conduit Investor waives a breach of the covenant set forth in Section 5.02(c) of the Note Purchase Agreement arising as a result of the failure of NFC to deliver its financial statements for fiscal year 2005 and for the fiscal quarters ending January 31, April 30 and July 31 of 2006 by January 31, 2007, the financial statements for fiscal year 2006 within 120 days after the end thereof and for fiscal quarters ended January 31, April 30 and July 31, 2007 within 45 days after the end thereof (such financial statements, collectively, the "Financial Statements"), (ii) each of the Funding Agent, the Alternate Investor and the Conduit Investor waives and instructs the Indenture Trustee to waive, and the Indenture Trustee and the Swap Counterparty hereby waive, any failure of the Servicer under Section 3.02 of the Servicing Agreement to deliver the Accountant's Report (as defined in the Servicing Agreement) required to be delivered on or before February 1, 2007 and (iii) each of such parties hereto waives the occurrence of a default, Default, Event of Default or Servicer Default arising solely from the breach of the covenants described in the foregoing clauses (i) and (ii), whether such event is matured or unmatured, under the Indenture, the Servicing Agreement or the Note Purchase Agreement; provided that each of the Seller, the Servicer, the Issuer, the Swap Counterparty and the Indenture Trustee acknowledge that an immediate Event of Default under the Indenture and the Interest Rate Swap and Servicer Default will occur if, and to the extent such failures constitute an Event of Default under the Indenture or the Interest Rate Swap or a Servicer Default, as applicable, without the need for the giving

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of any notices by any party or the passage of any grace period, the Funding Agent and Swap Counterparty shall not have received the Financial Statements and the Accountant's Report (as defined in the Servicing Agreement) by the earlier of (i) October 31, 2007 and (ii) five (5) Business Days after the filing of such Financial Statements with the SEC, unless the Funding Agent, the Conduit Investors, the Majority Investors and the Swap Counterparty, shall have provided a further waiver of the covenant violation described in this sentence on or before such date.

LaSalle Bank National Association, as Swap Counterparty, hereby agrees that it will not request any financial statements or other information pursuant to Part 3(b) of the Schedule to the ISDA Master Agreement dated as of September 1, 2006, between it and NFC until the earlier of (i) October 31, 2007 and (ii) five (5) Business Days after the filing of such financial statements with the SEC.

The foregoing waiver shall become effective as of the date hereof when the Funding Agent has received: (1) counterparts of this letter executed by the Seller, the Servicer, the Conduit Investors, the Alternate Investor, the Indenture Trustee, the Issuer and the Swap Counterparty and (2) each of Standard & Poor's and Moody's confirms in writing to the Conduit Investor that such waiver shall not result in a reduction or withdrawal of its rating of the Commercial Paper issued by the Conduit Investor; it being understood that such rating confirmation does not constitute an assessment by Standard & Poor's or Moody's of the financial strength of NFC.

Except as specifically waived above, all of the terms, conditions and covenants of the Note Purchase Agreement, the Indenture and the other Transaction Documents shall remain in full force and effect and are hereby ratified and confirmed in all respects. Further, the Funding Agent, as agent for the Conduit Investor, acknowledges, represents and warrants that it holds all of the Outstanding Amount of the Controlling Class.

Notwithstanding anything contained herein to the contrary, this waiver has been signed by LaSalle Bank National Association, in its capacity as Indenture Trustee, not in its individual capacity but solely as Indenture Trustee and in no event shall LaSalle Bank National Association have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer.

No failure or delay by any party in exercising any right hereunder shall operate as a waiver thereof, nor shall any single or partial waiver thereof preclude any other or further exercise thereof or the exercise of any other right hereunder.

Notwithstanding anything contained herein to the contrary, this waiver has been executed by Chase Bank USA, National Association not in its individual capacity but solely in its capacity as Owner Trustee and in no event shall Chase Bank USA, National Association in its individual capacity or, except as expressly provided in the Trust Agreement, as Owner Trustee of the Issuer have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer.   For  all  purposes  of this  Agreement, in  the  performance  of  its duties

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 or obligations hereunder, or in the performance of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Article VI of the Trust Agreement.

[Signatures Follow]

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This letter may be executed in any number of counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original but all such counterparts shall together constitute one and the same letter. This letter shall be governed by the laws of the State of New York, without reference to its conflict of law provisions, and the obligations, rights and remedies of the parties hereto shall be determined in accordance with such laws.

Very truly yours,

ABN AMRO BANK, N.V., as Funding Agent and Alternate Investor

By:   /s/ THERESE GREMLEY

Title:     Vice President

By:   /s/ MICHAEL MCINTYRE

Title:     Vice President

AMSTERDAM FUNDING CORPORATION, as Conduit Investor

By:   /s/ BERNARD J. ANGELO

Title:     Vice President

LASALLE BANK NATIONAL ASSOCIATION, as Indenture Trustee

By:   /s/ TIMOTHY E. CUTSINGER

Title:     Assistant Vice President

LASALLE BANK NATIONAL ASSOCIATION, as Swap Counterparty

By:   /s/ FREDRICK P. ENGLER

Title:     Senior Vice President

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Acknowledged and Agreed, as of January 31, 2007

NAVISTAR FINANCIAL RETAIL RECEIVABLES

CORPORATION, as Seller and Certificateholder

By:  /s/ KRISTIN L MORAN

Name:  Kristin L Moran

Title:    V.P., & General Counsel

NAVISTAR FINANCIAL CORPORATION, as Servicer

By:  /s/ KRISTIN L MORAN

Name:  Kristin L Moran

Title:    V.P., & General Counsel

NAVISTAR FINANCIAL 2006-ARC OWNER TRUST,

By:  Chase Bank USA, National Association, not in its

individual capacity, but solely as Owner Trustee on behalf of the Trust

By:  /s/ JOHN J. CASHIN

Name:  Vice President

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EX-10.131

EXECUTION COPY

January 31, 2007

Navistar Financial Corporation

Navistar Financial Retail Receivables Corporation

425 N Martingale Road

Suite 1800

Schaumburg, Illinois 60173

Re:     Waiver

Ladies/Gentlemen:

Please refer to the Receivables Purchase Agreement, dated as of July 30, 2004 (as in effect on the date hereof, the "Receivables Purchase Agreement") among Navistar Financial Retail Receivables Corporation, as Seller, Navistar Financial Corporation, as Servicer, Thunder Bay Funding, LLC, as Company, and Royal Bank of Canada, as Agent. Capitalized terms used but not defined herein have the respective meanings ascribed to them in the Receivables Purchase Agreement.

The Receivables Purchase Agreement requires, among other things, the following:

(i )Section 5.1(a) requires that the Servicer deliver to the Agent (x) within 120 days after the close of each fiscal year, a copy of the annual report for the Servicer for such fiscal year on Form 10-K (the "10-K Delivery Requirement") and (y) within 45 days after the close of the first three quarterly periods of a fiscal year, a copy of the quarterly report for the Servicer for such fiscal year on form 10-Q (the "10-Q Delivery Requirement"); and

(ii)Section 6.10 requires that on or before February 1 of each year, beginning February 1, 2005, the Servicer shall cause a firm of independent accountants to deliver to the Agent an independent Accountant's Report for the preceding fiscal year (the "Independent Accountant's Report Delivery Requirement").

For (x) the fiscal year ended on October 31, 2005 (the "2005 Fiscal Year"), the Servicer has failed to satisfy the 10-K Delivery Requirement and has failed to satisfy the Independent Accountant's Report Delivery Requirement and (y) the fiscal year ended on October 31, 2006 (the "2006 Fiscal Year"), the Servicer expects to fail to satisfy the 10-K Delivery Requirement and expects to fail to satisfy the Independent Accountant's Report Delivery Requirement.

Additionally, the Servicer has notified the Agent that it (i) has failed to timely file its annual reports on Form 10-K for the 2005 Fiscal Year and the 2006 Fiscal Year with the Securities and Exchange Commission in accordance with the Securities and Exchange Act of 1934, (ii) has failed to timely file quarterly reports on Form 10-Q for all of its fiscal quarters in 2006 with the Securities Exchange Commission in accordance with the Securities Exchange Act of 1934, and (iii) may fail to timely file one or more of its quarterly reports on Form 10-Q for

E-286

fiscal quarters in 2007 with the Securities and Exchange Commission in accordance with the Securities and Exchange Act of 1934 (the occurrence of any such failure, a "Periodic Reporting Failure").

The Servicer has requested that the Agent waive any potential Servicer Defaults arising from the matters described above. The Agent hereby agrees to waive the occurrence of any Servicer Defaults to the extent described below.

1. The Agent hereby waives any Servicer Default arising solely from the failure to satisfy the 10-K Delivery Requirements for the 2005 Fiscal Year and the 2006 Fiscal Year; provided that this waiver shall only remain effective until October 31, 2007 unless the Servicer shall have satisfied the 10-K Delivery Requirements for the 2005 Fiscal Year and the 2006 Fiscal Year prior to such date.

2. The Agent hereby waives any Servicer Default arising solely from the failure to satisfy the 10-Q Delivery Requirements for any fiscal quarter in the 2006 fiscal year of the Servicer and any fiscal quarter in the 2007 fiscal year of the Servicer; provided that this waiver shall only remain effective until October 31, 2007 unless the Servicer shall have satisfied the 10-Q Delivery Requirements for each fiscal quarter in the 2006 and the 2007 fiscal year of the Servicer prior to such date.

3. The Agent hereby waives any Servicer Default arising under Section 5.1(c) of the Receivables Purchase Agreement from any Periodic Reporting Failure; provided that this waiver shall only remain effective until October 31, 2007 unless the Servicer shall have caused the annual reports and quarterly reports giving rise to any Periodic Reporting Failure to be filed with the Securities and Exchange Commission prior to such date.

4. The Agent hereby waives any Servicer Default arising solely from the failure of the Servicer to satisfy the Independent Accountant's Report Delivery Requirement; provided that this waiver shall only remain effective until October 31, 2007 unless the Servicer shall have satisfied the Independent Accountant's Report Delivery Requirement prior to such date.

The Agent hereby expressly reserves, and nothing herein shall be construed as a waiver of, (i) any Servicer Default specified in paragraphs 1, 2, 3 and 4 above, to the extent that the effectiveness of the waiver of such Servicer Default shall lapse as described therein and (ii) any rights with respect to any breach constituting a Servicer Default or Potential Servicer Default existing or arising for any other reason.

This waiver may be executed in any number of counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original but all such counterparts shall together constitute one and the same waiver. This waiver shall be a contract made under and governed by the internal laws of the State of New York applicable to contracts made and to be performed entirely within such State.

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IN WITNESS WHEREOF, the undersigned has caused this waiver to be duly executed and delivered by their respective duly authorized officers on the day and year first above written.

	ROYAL BANK OF CANADA, as Agent By:     /s/ KAREN STONE Name:      Karen Stone Title:        Authorized Signatory
Acknowledged and Agreed: NAVISTAR FINANCIAL CORPORATION By:      /s/   KRISTIN L MORAN Name:        Kristin L Moran Title:          V.P., & General Counsel NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION By:      /s/ KRISTIN L MORAN Name:      Kristin L Moran Title:        V.P., & General Counsel

E-288

EX-10.132

Execution Copy

AMENDMENT TO

AMENDED AND RESTATED

CERTIFICATE PURCHASE AGREEMENT

THIS AMENDMENT TO AMENDED AND RESTATED CERTIFICATE PURCHASE AGREEMENT (this "Amendment") dated as of October 31, 2006, is entered into among Navistar Financial Securities Corporation (the "Seller"), Navistar Financial Corporation ("Servicer"), Kitty Hawk Funding Corporation, ("KHFC"), as a Conduit Purchaser, Liberty Street Funding Corp. ("Liberty Street"), as a Conduit Purchaser, the Bank of Nova Scotia ("BNS"), as a Managing Agent and a Committed Purchaser, and Bank of America, National Association ("Bank of America"), as a Managing Agent, the Administrative Agent and a Committed Purchaser.

RECITALS

A.The Seller, the Servicer, KHFC, Liberty Street, BNS and Bank of America are parties to that certain Amended and Restated Certificate Purchase Agreement, dated as of December 27, 2004 (as amended, supplemented or otherwise modified through the date hereof, the "Agreement").

B.Such parties desire to amend the Agreement as hereafter set forth.

C.Such parties desire to modify the definition of Maximum Funded Amount set forth in Section 1.01 of the Agreement.

D.NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.             Amendments to Agreement. By their signatures hereto, each of the parties hereto hereby agrees to the following amendments to the Agreement:

(i )The definition of "Maximum Funded Amount" contained in Section 1.01 of the Agreement is hereby amended by replacing the amount "$600,000,000" contained therein with the amount "$800,000,000"; and

(ii)the Purchaser Percentage and Commitment for the Committed Purchasers are amended and restated to read as set forth on the signature pages to this Amendment.

2.             Representations and Warranties. The Seller hereby represents and warrants to KHFC, Liberty Street, BNS and Bank of America that, after giving effect to this Amendment, no Early Amortization Event has occurred and is now continuing, and NFC hereby represents and warrants that, after giving effect to this Amendment, no Early Amortization Event or Servicer Termination Event has occurred and is now continuing.

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3.Effect of Amendment. All provisions of the Agreement, as extended by this Amendment, remain in full force and effect. After this Amendment becomes effective, all references in the Agreement to "this Agreement", "hereof', "herein" or words of similar effect referring to the Agreement in the Agreement or in any other document relating to the Seller's securitization program shall be deemed to be references to the Agreement as extended by this Amendment. This Amendment shall not be deemed to expressly or impliedly waive, amend or supplement any provision of the Agreement other than as set forth herein.

4.Conditions Precedent. The effectiveness of this Amendment is subject to the conditions precedent that the Seller shall have furnished to the Administrative Agent and the Managing Agent such information, certificates and documents as the Administrative Agent and the Managing Agents may reasonably requests.

5.Counterparts. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, and each counterpart shall be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

6.Governing Law. This Amendment shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to any otherwise applicable principles of conflicts of law.

7.Section Headings. The various headings of this Amendment are inserted for convenience only and shall not affect the meaning or interpretation of this Amendment or the Agreement or any provision hereof or thereof.

[signatures on next page]

E-290

IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.

NAVISTAR FINANCIAL SECURITIES CORPORATION

as Seller

By:        /s/  KRISTIN L. MORAN

Name:          Kristin L. Moran

Title:            V.P. and General Counsel

NAVISTAR FINANCIAL CORPORATION

as Servicer

By:       /s/  KRISTIN L. MORAN

Name:        Kristin L. Moran

Title:          V.P. and General Counsel

KITTY HAWK FUNDING CORPORATION,

as a Conduit Purchaser for the KHFC Purchaser Group

By:       /s/  AMY S. KEITH

Name:         Amy S. Keith

Title:           Vice President

BANK OF AMERICA, NATIONAL ASSOCIATION,

as Administrative Agent

By:     /s/  WILLEM VAN BEEK

Name:       Willem Van Beek

Title:         Principal

BANK OF AMERICA, NATIONAL ASSOCIATION

as a Committed Purchaser and Managing Agent for the KHFC Purchaser Group

By:     /s/  WILLEM VAN BEEK

Name:       Willem Van Beek

Title:         Principal

Purchaser Percentage:  50.00%

Comittment :  $400,000,000

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THE BANK OF NOVA SCOTIA,

as a Committed Purchaser and Managing Agent for the Liberty Street Purchaser Group

By:     /s/  J. ALAN EDWARDS

Name:       J. Alan Edwards

Title:         Managing Director

Purchaser Percentage:  50.00%

Commitment:  $400,000,000

LIBERTY STREET FUNDING CORP.

as a Conduit Purchaser for the Liberty Street Purchaser Group

By:     /s/  BERNARD J. ANGELO

Name:       Bernard J. Angelo

Title:         Vice President

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EX-10.133

Execution Copy

AMENDMENT, WAIVER AND EXTENSION TO

AMENDED AND RESTATED

CERTIFICATE PURCHASE AGREEMENT

THIS AMENDMENT, WAIVER AND EXTENSION TO AMENDED AND RESTATED CERTIFICATE PURCHASE AGREEMENT (this "Amendment") dated as of March 24, 2006, is entered into among Navistar Financial Securities Corporation (the "Seller"), Navistar Financial Corporation ("Servicer"), Kitty Hawk Funding Corporation, ("KHFC"), as a Conduit Purchaser, Liberty Street Funding Corp. ("Liberty Street"), as a Conduit Purchaser, the Bank of Nova Scotia ("BNS") as a Managing Agent and a Committed Purchaser and Bank of America, National Association ("Bank of America"), as a Managing Agent, the Administrative Agent and a Committed Purchaser.

RECITALS

A.The Seller, the Servicer, KHFC, Liberty Street, BNS and Bank of America are parties to that certain Amended and Restated Certificate Purchase Agreement, dated as of December 27, 2004 (as amended, supplemented or otherwise modified through the date hereof, the "Agreement").

B.Such parties desire to amend the Agreement as hereafter set forth.

C.Prior to giving effect to the amendment to Section 7A.01(c) of the Agreement set forth in Section 1 below, Section 7A.01 of the Agreement required, among other things, that NFC furnish to the Administrative Agent as soon as available and in any event within 45 days after the end of each of the first three fiscal quarters of any fiscal year and 120 days after the end of the last fiscal quarter of any fiscal year, copies of the interim or annual, as applicable, financial statements of NFC, prepared in conformity with generally accepted accounting principles consistently applied. NFC has requested a waiver of any Default (defined below) arising from its failure to deliver copies of the annual and interim financial statements of the fiscal year ending October 2005 and the fiscal quarter ended January 2006 (such failure, the "Reporting Default"). The parties hereto hereby agrees to waive the occurrence of any Default to the extent described below.

D.Such parties desire to .modify the Purchase Expiration Date under (and as defined in) the Agreement in accordance with Section 2.04 of the Agreement.

E.NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.            Amendment to Agreement. By their signatures hereto, each of the parties hereto hereby agrees that the Agreement is hereby amended by amending and restating Section 7A.01(c) of the Agreement in its entirety to read as follows:

(c) as soon as available and in any event within ( i) 45 days after the end of each of the first three fiscal quarters of any fiscal year and (ii) 120 days after the end of the last fiscal

E-293

 quarter of any fiscal year, copies of the interim or annual, as applicable, financial statements of NFC, prepared in conformity with generally accepted accounting principles consistently applied; provided, however that NFC shall not be required to deliver its financial statements for fiscal year 2005 and for the first quarter of fiscal 2006 until the earlier to occur of May 31, 2006 and five (5) Business Days after the filing thereof with the SEC;

2.Waiver. By their signatures hereto, each of the parties hereto waives any condition or covenant that has not been satisfied, the breach of any representation or warranty made or deemed made, and any occurrence of an Early Amortization Event, event of default, event of termination or similar event (in each case, with respect to all of the foregoing, whether such event is matured or unmatured and collectively referred to herein as a "Default"), under the Agreement, solely to the extent such Default was caused directly by or resulted directly from (a) the Reporting Default, (b) a breach of any representation or warranty in Section 5.01(1) or 5.02(j) of the Agreement resulting from or arising out of any restatement, in connection with the audit conducted for the fiscal year ended October 2005, of any financial statements of NFC or any of its affiliates for any period ending on or before July 31, 2005, or any reports, financial statements, certificates or other information containing similar or derived information therefrom with respect to such periods or (c) the failure of NFC, as Servicer, to deliver the reports contemplated by, and due on or about April 15, 2006 pursuant to, Section 3.06(a) and (b) of the Pooling and Servicing Agreement (as defined in the Agreement) by April 15, 2006; provided that such reports shall be delivered on or before May 31, 2006. Each party (other than NFC and the Seller) hereto hereby expressly reserves, and nothing herein shall be construed as a waiver of NFC's failure to comply with Section 7A.01(c), as amended hereby or NFC's failure to deliver the reports referred to in the immediately preceding sentence on or before May 31, 2006.

3.Extension. The Purchase Expiration Date is extended to May 26, 2006, or, if earlier, the date specified in clause (ii) of the definition of Purchase Expiration Date in the Agreement as originally executed.

4.Representations and Warranties. The Seller hereby represents and warrants to KHFC, Liberty Street, BNS and Bank of America that, after giving effect to this Amendment, no Early Amortization Event has occurred and is now continuing, and NFC hereby represents and warrants that, after giving effect to this Amendment, no Early Amortization Event or Servicer Termination Event has occurred and is now continuing.

5.Effect of Amendment. All provisions of the Agreement, as extended by this Amendment, remain in full force and effect. After this Amendment becomes effective, all references in the Agreement to "this Agreement", "hereof”, "herein" or words of similar effect referring to the Agreement in the Agreement or in any other document relating to the Seller's securitization program shall be deemed to be references to the Agreement as extended by this Amendment . This Amendment shall not be deemed to expressly or impliedly waive, amend or supplement any provision of the Agreement other than as set forth herein.

6.Counterparts. This Amendment may he executed in any number of counterparts and by different parties on separate counterparts, and each counterpart shall be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

7.Governing Law. This Amendment shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to any otherwise applicable principles of conflicts of law.

8.Section Headings. The various headings of this Amendment are inserted for convenience only and shall not affect the meaning or interpretation of this Amendment or the Agreement or any provision hereof or thereof.

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E-294

IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.

NAVISTAR FINANCIAL SECURITIES CORPORATION, as Seller

By:       /s/  KRISTIN L. MORAN

Name:         Kristin L. Moran

Title:           Vice President & General Counsel

NAVISTAR FINANCIAL CORPORATION,

as Servicer

By:     /s/  JUSTIN J. SCHEUCHENZUBER

Name:       Justin J. Scheuchenzuber

Title:        V.P. Field Operations

KITTY HAWK FUNDING CORPORATION,

as a Conduit Purchaser for the KHFC Purchaser Group

By :     /s/  JILL A. GORDON

Name:        Jill A. Gordon

Title:          Vice President

BANK OF AMERICA, NATIONAL ASSOCIATION,

as Administrative Agent

By:     /s/  WILLEM VAN BEEK

Name:       Willem Van Beek

Title:         Principal

 BANK OF AMERICA, NATIONAL ASSOCIATION,

as a Committed Purchaser and Managing Agent for the KHFC Purchaser Group

By:     /s/    WILLEM VAN BEEK

Name:         Willem Van Beek

Title:           Principal

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THE BANK OF NOVA SCOTIA

as a Committed Purchaser and Managing Agent

for the Liberty Street Purchaser Group

By:      /s/    NORMAN LAST

Name:          Norman Last

Title:            Managing Director

LIBERTY STREET FUNDING CORP.

as Conduit Purchaser for the Liberty Street Purchaser Group

By:     /s/     BERNARD J. ANGELO

Name:          Bernard J. Angelo

Title:            Vice President

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EX-10.134

EXTENSION TO CERTIFICATE PURCHASE AGREEMENT

THIS EXTENSION TO CERTIFICATE PURCHASE AGREEMENT (this "Extension") dated as of February 20, 2004, is entered into among NAVISTAR FINANCIAL SECURITIES CORPORATION, as seller (the "Seller"), NAVISTAR FINANCIAL CORPORATION, as servicer (the "Servicer"), KITTY HAWK FUNDING CORPORATION, as conduit purchaser and assignee of RECEIVABLES CAPITAL CORPORATION (the "Conduit Purchaser"), BANK OF AMERICA, NATIONAL ASSOCIATION, as a committed purchaser (the "Committed Purchaser") and BANK OF AMERICA, NATIONAL ASSOCIATION, as administrative agent for the Purchasers (in such capacity, the "Adminstrative Agent").

RECITALS

A.The Seller, the Servicer, the Conduit Purchaser, the Committed Purchaser and the Administrative Agent are parties to that certain Certificate Purchase Agreement, dated as of January 28, 2000 (as amended, supplemented or otherwise modified through the date hereof, the "Agreement").

B.Such parties desire to modify the Purchase Expiration Date under (and as defined in) the Agreement in accordance with Section 2.04 of the Agreement.

C.NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.Extension. The Purchase Expiration Date is extended to February 17, 2005, or, if earlier, the date specified in clause(ii) of the definition of Purchase Expiration Date in the Agreement as originally executed. This extension of the Purchase Expiration Date shall be given effect as of January 20, 2004, so the Revolving Period (as defined in the Series Supplement referred to in the Agreement) will be deemed not to have ended as a result of the occurrence of the Purchase Expiration Date (before giving effect to this Extension); provided, that, for purposes of calculating the Non-Use Fee pursuant to the Fee Letter, the period beginning on and including January 21, 2004 and ending on but excluding February 19, 2004 shall not be deemed to fall within the Revolving Period.

2.Effect of Extension. All provisions of the Agreement, as extended by this Extension, remain in full force and effect. After this Extension becomes effective, all references in the Agreement to "this Agreement", "hereof', "herein" or words of similar effect referring to the Agreement in the Agreement or in any other document relating to the Seller's securitization program shall be deemed to be references to the Agreement as extended by this Extension. This Extension shall not be deemed to expressly or impliedly waive, amend or supplement any provision of the Agreement other than as set forth herein.

3.Counterparts. This Extension may be executed in any number of counterparts and by different parties on separate counterparts, and each counterpart shall be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

4.Governing Law. This Extension shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to any otherwise applicable principles of conflicts of law.

5.Section Headings. The various headings of this Extension are inserted for convenience only and shall not affect the meaning or interpretation of this Extension or the Agreement or any provision hereof or thereof.

[signatures on next page]

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IN WITNESS WHEREOF, the partieshave caused this Extension to be executed by their respective officers thereunto duly authorized, as of the date first above written.

NAVISTAR FINANCIAL SECURITIES CORPORATION

 as Seller

By:       /s/ ANDREW J. CEDEROTH

Name:       Andrew J. Cederoth

Title:         V.P. & Treasurer

NAVISTAR FINANCIAL CORPORATION

By:      /s/  ANDREW J. CEDEROTH

Name:       Andrew J. Cederoth

Title:         V.P. & Treasurer

KITTY HAWK FUNDING CORPORATION,

as Conduit Purchaser

By:     /s/  JILL A. GORDON

Name:      Jill A. Gordon

Title:        Vice President

BANK OF AMERICA, NATIONAL ASSOCIATION

 as Committed Purchaser

By:    /s/  WILLEM VAN BEEK

Name:     Willem Van Beek

Title:        Principal

BANK OF AMERICA, NATIONAL ASSOCIATION

as Administrative Agent

By:  /s/   WILLEM VAN BEEK

Name:     Willem Van Beek

Title         Principal:

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EX-10.135

AMENDMENT NO. 5

TO RECEIVABLES PURCHASE AGREEMENT

THIS AMENDMENT NO. 5 (this "Amendment"), dated as of August 15, 2007, is among Truck Retail Accounts Corporation, a Delaware corporation ("Seller"), Navistar Financial Corporation, a Delaware corporation ("Navistar"), as initial Servicer (Navistar, together with Seller, the "Seller Parties" and each a "Seller Party"), the entities listed on Schedule A to the Agreement (together with any of their respective successors and assigns hereunder, the "Financial Institutions"), Jupiter Securitization Company LLC (f/kla Jupiter Securitization Corporation) ("Jupiter"), JS Siloed Trust (the "Trust") and JPMorgan Chase Bank, N.A., successor by merger to Bank One, NA, as agent for the Purchasers (together with its successors and assigns, the "Agent"), and pertains to that certain Receivables Purchase Agreement dated as of April 8, 2004 by and among the parties hereto other than the Trust, as heretofore amended (the "Agreement"). Unless defined elsewhere herein, capitalized terms used in this, Amendment shall have the meanings assigned to such terms in the Agreement.

PRELIMINARY STATEMENTS

Jupiter wishes to assign all of its right, title and interest in, to and under the Agreement to the Trust, and the Trust wishes to accept such assignment; and

In connection with the foregoing assignment, certain technical amendments to the Agreement are required.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1.                       Amendments.

(a)For value received, Jupiter hereby assigns all of its right, title and interest in, to and under the Agreement and other Transaction Documents to the Trust, and the Trust hereby accepts such assignment. From and after the date hereof, all references in the Transaction Documents to "Jupiter Securitization Company LLC," "Jupiter" or "Conduit," whether alone or as part of another defined term, are hereby replaced with references to "JS Siloed Trust," "JSST" or "Trust," respectively. The address for notices to JS Siloed Trust shall be as set forth below its signature hereto.

(b)Section 10.1 is hereby amended to delete "the Agent and each Purchaser" where it appears in the third line thereof and to replace it with "the Agent, Jupiter and each Purchaser".

(c)Clause (iii) of Section 14.5(b) is hereby amended and restated in its entirety to read as follows:

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(iii) by the Agent to any rating agency, Commercial Paper dealer, Funding Sourceor any other entity organized for the purpose of purchasing, or making loans secured by, financial assets for which JPMorgan Chase acts as the administrative agent or trusteeand to any officers, directors, employees, outside accountants and attorneys of any of the foregoing, provided each such Person referred to in this clause (iii) is informed of the confidential nature of such information.

(d)Section 14.6 is hereby amended and restated in its entirety to read as follows:

Section 14.6. Bankruptcy Petition. Each of Seller, the Servicer, the Agent and each Financial Institution hereby covenants and agrees that, prior to the date that is one year and one day after the payment in full of all outstanding senior indebtedness of JSST or Jupiter, it will not institute against, or join any other Person in instituting against, JSST or Jupiter any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding under the laws of the United States or any state of the United States.

(e)Section 14.13 is hereby amended and restated in its entirety to read as follows:

Section 14.13. JPMorgan Chase Roles. Each of the Financial Institutions acknowledges that JPMorgan Chase acts, or may in the future act, (i) as administrative trustee for the Trust, (ii) as administrative agent for Jupiter and the Financial Institutions, (iii) as issuing and paying agent for the Commercial Paper, (iv) to provide credit or liquidity enhancement for the timely payment for the Commercial Paper and (v) to provide other services from time to time for the Trust, Jupiter or any Financial Institution (collectively, the "JPMorgan Chase Roles"). Without limiting the generality of this Section 14.13, each Financial Institution hereby acknowledges and consents to any and all JPMorgan Chase Roles and agrees that in connection with any JPMorgan Chase Role, JPMorgan Chase may take, or refrain from taking, any action that it, in its discretion, deems appropriate, including, without limitation, in its role as administrative trustee for the Trust, and the giving of notice to the Agent of a mandatory purchase pursuant to a Funding Agreement.

(f)            The following definitions are hereby amended and restated in their entirety as set forth below:

"Commercial Paper" means promissory notes of Jupiter SecuritizationCompany LLC (together with its successors, "Jupiter") issued in the commercial paper market.

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"Funding Agreement" means this Agreement, any agreement executed by the Trust and Jupiter under which Jupiter agrees to provide funds to the Trust, and any agreement or instrument executed by any Funding Source with or for the benefit of Jupiter or the Trust.

"Funding Source"means (i) any Financial Institution, (ii) Jupiter, or (iii) any insurance company, bank or other funding entity providing liquidity, credit enhancement or back-up purchase support or facilities to Jupiter or the Trust.

"Pooled Commercial Paper"means Commercial Paper notes of Jupitersubject to any particular pooling arrangement by Jupiter,but excluding Commercial Paper issued by Jupiter for a tenor and in an amount specifically requested by any Person in connection with any agreement effected by Jupiter orthe Trust.

Section 2.                       Representations and Warranties. In order to induce the parties to enter into this Amendment, each of the Seller Parties hereby represents and warrants to the Agent and the Purchasers that (a) after giving affect to this Amendment, each of such Seller Party's representations and warranties contained in Article V of the Agreement is true and correct as of the date hereof, (b) the execution and delivery by such Seller Party of this Amendment, and the performance of its obligations hereunder, are within its corporate or limited partnership, as applicable, powers and authority and have been duly authorized by all necessary corporate or limited partnership, as applicable, action on its part, and (c) this Amendment has been duly executed and delivered by such Seller Party and constitutes the legal, valid and binding obligation of such Seller Party enforceable against such Seller Party in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

Section 3.                       Condition Precedent. This Amendment shall become effective as of the date first above written upon receipt by the Agent of counterparts hereof duly executed by each of the parties hereto.

Section 4.                       Miscellaneous.

(a)THIS AMENDMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS.

(b)Except as expressly modified hereby, the Agreement remains unaltered and in full force and effect and is hereby ratified and confirmed. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns (including any trustee in bankruptcy).

(c)This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered by their duly authorized officers as of the date hereof.

TRUCK RETAIL ACCOUNTS CORPORATION

By:         /s/ JOHN V. MULVANEY, SR.

Name:          John V. Mulvaney, Sr.

Title:            V.P., CFO & Treasurer

NAVISTAR FINANCIAL CORPORATION

By:       /s/  JOHN V. MULVANEY, SR.

Name:         John V. Mulvaney, Sr.

Title:           V.P., CFO & Treasurer

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JUPITER SECURITIZATION COMPANY LLC

By:  JPMorgan Chase Bank, N.A., ITS Attorney in Fact

By:      /s/  ED REISINGER

Name:        Ed Reisinger

Title:          Managing Director

JS Siloed Trust

JP MORGAN CHASE BANK, N.A., as Administrative Trustee

By:      /s/  ED REISINGER

Name:        Ed Reisinger

Title:          Managing Director

Address for Notices:

Js Siloed Trust

c/o JP Morgan Chase Bank, N.A., as Administrative Trustee

Chase Tower, 10 S. Dearborn

Chicago, Illinois 60670

Attn:  Asset Backed Securities Conduit Group

Fax:  (312) 732-3600

JP MORGAN CHASE BANK, N.A., INDIVIDUALLY

AS A FINANCIAL INSTITUTION AND AS AGENT

By:     /s/   ED REISINGER

Name:        Ed Reisinger

Title:          Managing Director

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EX-10.136

EXECUTION COPY

Navistar Financial Corporation Navistar Financial Retail Receivables Corporation 425 N Martingale Road, Suite 1800 Schaumburg, Illinois 60173   Re: Waiver Ladies/Gentlemen: January 31, 2007

Please refer to the Receivables Purchase Agreement, dated as of April 29, 2005 (as in effect on the date hereof, the "Receivables Purchase Agreement") among Navistar Financial Retail Receivables Corporation, as Seller, Navistar Financial Corporation, as Servicer, Thunder Bay Funding, LLC, as Company, and Royal Bank of Canada, as Agent. Capitalized terms used but not defined herein have the respective meanings ascribed to them in the Receivables Purchase Agreement.

The Receivables Purchase Agreement requires, among other things, the following:

(i)Section 5.1(a) requires that the Servicer deliver to the Agent (x) within 120 days after the close of each fiscal year, a copy of the annual report for the Servicer for such fiscal year on Form 10-K (the "10-K Delivery Requirement") and (y) within 45 days after the close of the first three quarterly periods of a fiscal year, a copy of the quarterly report for the Servicer for such fiscal year on form 10-Q (the "10-Q Delivery Requirement"); and

(ii)Section 6.10 requires that on or before February 1 of each year, beginning February 1, 2006, the Servicer shall cause a firm of independent accountants to deliver to the Agent an independent Accountant's Report for the preceding fiscal year (the "Independent Accountant's Report Delivery Requirement").

For (x) the fiscal year ended on October 31, 2005 (the "2005 Fiscal Year"), the Servicer has failed to satisfy the 10-K Delivery Requirement and has failed to satisfy the Independent Accountant's Report Delivery Requirement and (y) the fiscal year ended on October 31, 2006 (the "2006 Fiscal Year"), the Servicer expects to fail to satisfy the 10-K Delivery Requirement and expects to fail to satisfy the Independent Accountant's Report Delivery Requirement.

Additionally, the Servicer has notified the Agent that it (i) has failed to timely file its annual reports on Form 10-K for the 2005 Fiscal Year and the 2006 Fiscal Year with the Securities and Exchange Commission in accordance with the Securities and Exchange Act of 1934, (ii) has failed to timely file quarterly reports on Form 10-Q for all of its fiscal quarters in 2006 with the Securities Exchange Commission in accordance with the Securities Exchange Act of 1934, and (iii) may fail to timely file one or more of its quarterly reports on Form 10-Q for

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fiscal quarters in 2007 with the Securities and Exchange Commission in accordance with the Securities and Exchange Act of 1934 (the occurrence of any such failure, a "Periodic Reporting Failure").

The Servicer has requested that the Agent waive any potential Servicer Defaults arising

from the matters described above. The Agent hereby agrees to waive the occurrence of any Servicer Defaults to the extent described below.

1.The Agent hereby waives any Servicer Default arising solely from the failure to satisfy the 10-K Delivery Requirements for the 2005 Fiscal Year and the 2006 Fiscal Year; provided that this waiver shall only remain effective until October 31, 2007 unless the Servicer

shall have satisfied the 10-K Delivery Requirements for the 2005 Fiscal Year and the 2006 Fiscal Year prior to such date.

2.The Agent hereby waives any Servicer Default arising solely from the failure to satisfy the 10-Q Delivery Requirements for any fiscal quarter in the 2006 fiscal year of the Servicer and any fiscal quarter in the 2007 fiscal year of the Servicer; provided that this waiver shall only remain effective until October 31, 2007 unless the Servicer shall have satisfied the 10-Q Delivery Requirements for each fiscal quarter in the 2006 and the 2007 fiscal year of the Servicer prior to such date.

3.The Agent hereby waives any Servicer Default arising under Section 5.1(c) of the Receivables Purchase Agreement from any Periodic Reporting Failure; provided that this waiver shall only remain effective until October 31, 2007 unless the Servicer shall have caused the

annual reports and quarterly reports giving rise to any Periodic Reporting Failure to be filed with the Securities and Exchange Commission prior to such date.

4.The Agent hereby waives any Servicer Default arising solely from the failure of the Servicer to satisfy the Independent Accountant's Report Delivery Requirement; provided that this waiver shall only remain effective until October 31, 2007 unless the Servicer shall have satisfied the Independent Accountant's Report Delivery Requirement prior to such date.

The Agent hereby expressly reserves, and nothing herein shall be construed as a waiver of, (i) any Servicer Default specified in paragraphs 1, 2, 3 and 4 above, to the extent that the effectiveness of the waiver of such Servicer Default shall lapse as described therein and (ii) any

rights with respect to any breach constituting a Servicer Default or Potential Servicer Default existing or arising for any other reason.

This waiver may be executed in any number of counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original but all such counterparts shall together constitute one and the same waiver. This waiver shall be a contract

made under and governed by the internal laws of the State of New York applicable to contracts made and to be performed entirely within such State.

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IN WITNESS WHEREOF, the undersigned has caused this waiver to be duly executed and delivered by their respective duly authorized officers on the day and year first above written

	ROYAL BANK OF CANADA, as Agent By:      /s/ KAREN STONE Name:       Karen Stone Title:         Authorized Signatory
Acknowledged and Agreed: NAVISTAR FINANCIAL CORPORATION By:     /s/ KRISTIN L MORAN Name:      Kristin L Moran Title:        V.P., & General Counsel NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION By:    /s/ KRISTIN L MORAN Name:     Kristin L Moran Title:       V.P., & General Counsel

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EX-10.137

Navistar Financial Corporation Navistar Financial Retail Receivables Corporation 425 N Martingale Road, Suite 1800 Schaumburg, Illinois 60173   Re: Waiver   Ladies/Gentlemen: March 31, 2007

Please refer to (i) the Note Purchase Agreement, dated as of October 20, 2006 (as in effect on the date hereof, the "Note Purchase Agreement") among Navistar Financial Retail Receivables Corporation ("NFRRC"), as Seller, Navistar Financial Corporation, individually ("NFC") and as Servicer, Thunder Bay Funding, LLC, as Conduit Investor, and Royal Bank of Canada, as Agent and (ii) the Servicing Agreement, dated as of October 20, 2006, among NFRRC, Navistar Financial 2006-RBC Owner Trust, as Issuer, NFC, as Servicer, and The Bank of New York, as Indenture Trustee. The Agent (on behalf of the Conduit Investor and the other Investors) is the holder of record of 100% of the Floating Rate Asset Backed Note, No. R-1, issued by the Issuer pursuant to the Indenture. Capitalized terms used but not defined herein have the respective meanings ascribed to them (or incorporated by reference in) the Servicing Agreement.

The Note Purchase Agreement or the Servicing Agreement, as applicable, requires, among other things, the following:

(i )Section 5.02(c) of the Note Purchase Agreement requires that the Servicer deliver to the Agent (x) on or before July 31, 2007 (or earlier under certain circumstances specified therein), (x) a copy of the annual financial statements of the Servicer for the fiscal years October 31 2005 and 2006 (each such delivery requirement, an "Annual Financial Statement DeliveryRequirement") and (y) (i) on or before July 31, 2007 (or earlier in certain circumstances specified therein), a copy of the quarterly financial statements of the Servicer for the fiscal quarters ended January 31, April 30 and July 31, 2006 and for the fiscal quarters ended January 31 and April 30, 2007 and (ii) on or before September 15, 2007 (i.e., within 45 days after the end of the July 31, 2007 fiscal quarter), a copy of the quarterly financial statements of the Servicer for the fiscal quarter ended July 31, 2007 (each such delivery requirement in this clause (y), a "Quarterly Financial Statement Delivery Requirement"); and

(ii)Section 3.02(a) of the Servicing Agreement requires that on or before July 31, 2007 (or earlier under certain circumstances specified therein), the Servicer shall cause a firm of independent accountants to deliver to the Agent an independent Accountant's Report for the fiscal year ended October 31, 2006 (the "Independent Accountant's Report DeliveryRequirement").

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The Servicer expects to fail to satisfy each Annual Financial Statement Delivery Requirement, each Quarterly Financial Statement Delivery Requirement and the Independent Accountant's Report Delivery Requirement.

Additionally, the Servicer has notified the Agent that it (i) has failed to timely file its annual reports on Form 10-K for the 2005 Fiscal Year and the 2006 Fiscal Year with the Securities and Exchange Commission in accordance with the Securities and Exchange Act of 1934, (ii) has failed to timely file quarterly reports on Form 10-Q for all of its fiscal quarters in 2006 with the Securities Exchange Commission in accordance with the Securities Exchange Act of 1934, and (iii) may fail to timely file one or more of its quarterly reports on Form 10-Q for fiscal quarters in 2007 with the Securities and Exchange Commission in accordance with the Securities and Exchange Act of 1934 (the occurrence of any such failure, a "Periodic Reporting Failure").

The Servicer has requested that the Agent waive any potential Servicer Defaults arising from the matters described above. The Agent hereby agrees to waive the occurrence of any Servicer Defaults to the extent described below.

1. The Agent (in accordance with Section 7.06 of the Servicing Agreement) hereby directs the Indenture Trustee to waive, and each of Indenture Trustee, the Conduit Investor and the Agent hereby waives, any Servicer Default arising solely from the failure to satisfy the Annual Financial Statement Delivery Requirements; provided that this waiver shall only remain effective until October 31, 2007 unless the Servicer shall have satisfied each Annual Financial Statement Delivery Requirement prior to such date.

2. The Agent (in accordance with Section 7.06 of the Servicing Agreement) hereby directs the Indenture Trustee to waive, and each of Indenture Trustee, the Conduit Investor and the Agent hereby waives, any Servicer Default arising solely from the failure to satisfy the Quarterly Financial Statement Delivery Requirements; provided that this waiver shall only remain effective until October 31, 2007 unless the Servicer shall have satisfied each Quarterly Financial Statement Delivery Requirement prior to such date.

3. The Agent (in accordance with Section 7.06 of the Servicing Agreement) hereby directs the Indenture Trustee to waive, and each of Indenture Trustee, the Conduit Investor and the Agent hereby waives, any Servicer Default or default arising under Section 5.05 of the Note Purchase Agreement from any Periodic Reporting Failure; provided that this waiver shall only remain effective until October 31, 2007 unless the Servicer shall have caused the annual reports and quarterly reports giving rise to any Periodic Reporting Failure to be filed with the Securities and Exchange Commission prior to such date.

4. The Agent (in accordance with Section 7.06 of the Servicing Agreement) hereby directs the Indenture Trustee to waive, and each of Indenture Trustee, the Conduit Investor and the Agent hereby waives, any Servicer Default arising solely from the failure of the Servicer to satisfy the Independent Accountant's Report Delivery Requirement; provided that this waiver shall only remain effective until October 31, 2007 unless the Servicer shall have satisfied the Independent Accountant's Report Delivery Requirement prior to such date.

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Each of the Indenture Trustee, the Conduit Investor and the Agent hereby expressly reserves, and nothing herein shall be construed as a waiver of, (i) any Servicer Default or default under the Note Purchase Agreement specified in paragraphs 1, 2, 3 and 4 above, to the extent that the effectiveness of the waiver of such Servicer Default or default under the Note Purchase Agreement shall lapse as described therein and (ii) any rights with respect to any breach constituting a Servicer Default, Potential Servicer Default or default under the Note Purchase Agreement existing or arising for any other reason.

This waiver may be executed in any number of counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original but all such counterparts shall together constitute one and the same waiver. This waiver shall be a contract made under and governed by the internal laws of the State of New York applicable to contracts made and to be performed entirely within such State.

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IN WITNESS WHEREOF, the undersigned has caused this waiver to be duly executed and delivered by their respective duly authorized officers on the day and year first above written

ROYAL BANK OF CANADA, as Agent

By:  /s/  KAREN STONE

Name:    Karen Stone

Title:      Authorized Signatory

THUNDER BAY FUNDING, LLC, as Conduit Investor

By:  Royal Bank of Canada, its

Attorney-in-fact

By:    /s/ ROGER PELLEGRINI

Name:     Roger Pellegrini.

Title:       Authorized Signatory

THE BANK OF NEW YORK, not in its individual capacity but solely as Indenture Trustee

By:    /s/ JOHN BOBKO

Name:      John Bobko.

Title:       Vice President

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Acknowledged and Agreed:

NAVISTAR FINANCIAL CORPORATION

By:    /s/  KRISTIN L. MORAN

Name:      Kristin L. Moran.

Title:        V.P. , & General Counsel

NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION

By:    /s/  KRISTIN L. MORAN

Name:      Kristin L. Moran.

Title:        V.P. , & General Counsel

NAVISTAR FINANCIAL, 2006-RBC OWNER TRUST

By:  Deutsche Trust Company Delaware, not in its individual capacity but solely as Owner Trustee

By:    /s/ MICHELE HY VOON

Name:     Michele Hy Voon

Title:       Attorney-in-fact

By:    /s/ SUSAN BARSTOCK

Name:     Susan Barstock

Title:       Attorney-in-fact

ROYAL BANK OF CANADA, as Swap Counterparty

By:    /s/  M. RUTH PRESTON

Name:      M. Ruth Preston

Title:        Authorized Signatory

[Signature Page to MC/Navistar Waiver Letter, dated March 2007 (for 2006 Transaction)]              

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EX-10.138

EXECUTION COPY

FIRST AMENDED CONTROL AGREEMENT

This First Amended Control Agreement, dated as of February 20, 2007 (this “Agreement”), is among Truck Retail Accounts Corporation, as seller (the “Seller”), Navistar Financial Corporation, as servicer (the “Servicer”), JPMorgan Chase Bank N.A., as successor to Bank One, NA (Main Office Chicago), as agent (the “Secured Party”), and The Bank of New York as successor to JPMorgan Chase Bank, N.A., as securities intermediary (the “Securities Intermediary”).

RECITALS

WHEREAS, pursuant to the Receivables Purchase Agreement, the Seller has granted to the Secured Party a security interest in investment property consisting of the Securities Account, related Security Entitlements and the Financial Assets and other investment property from time to time included therein; and

WHEREAS, the parties hereto desire that the security interest of the Secured Party in the Securities Account be a first priority security interest perfected by “control” pursuant to Articles Eight and Nine of the UCC.

NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

 DEFINITIONS

Section 1.01.General Definitions.  Except as otherwise specified herein or as the context may otherwise require, the following terms have the respective meanings set forth below for all purposes of this Agreement.

“Agreement” has the meaning set forth in the Preamble.

“Business Day” means any day on which banks are not authorized or required to close in New York, New York or Chicago, Illinois and The Depository Trust Company of New York is open for business.

“Blocked Account” means a trust account number 232874 in the name “Blocked Account for JPMorgan Chase Bank, N.A., as Agent” established with the Securities Intermediary together with any successor accounts established pursuant to the Receivables Purchase Agreement.

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“Entitlement Holder” means, with respect to any Financial Asset, a Person identified in the records of the Securities Intermediary as the Person having a Security Entitlement against the Securities Intermediary with respect to such financial asset.

“Entitlement Order” means a notification directing the Securities Intermediary to transfer or redeem a financial asset.

“Financial Asset” has the meaning specified in Section 8-102(a)(9) of the UCC.

“Person” means any 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.

“Rating Agencies” means Moody’s Investors Service, Inc. and Standard and Poor’s Ratings Group.

“Receivables Purchase Agreement” means the Receivables Purchase Agreement, dated as of April 8, 2004 (as amended, supplemented or otherwise modified and in effect from time to time), among the Seller, the Servicer, Jupiter Securitization Corporation, as Conduit and JPMorgan Chase Bank, N.A., as successor to Bank One, N.A., as Agent.

“Secured Party” has the meaning set forth in the Preamble.

“Securities Account” means the Blocked Account.

“Securities Intermediary” has the meaning set forth in the Preamble.

“Security Entitlement” means the rights and property interest of an Entitlement Holder with respect to a financial asset, as specified in Part 5 of Article 8 of the UCC.

“UCC” means the Uniform Commercial Code as in effect in the State of New York on the date hereof or any successor statute, or any comparable law, as the same may from time to time be amended, supplemented or otherwise modified.

“Weekly Settlement Date” means the third Business Day of each week.

Section 1.02.Incorporation of UCC by Reference.  Except as otherwise specified herein or as the context may otherwise require, all terms used in this Agreement not otherwise defined herein which are defined in the UCC shall have the meanings assigned to them in the UCC.

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ARTICLE II

 ESTABLISHMENT OF CONTROL OVER SECURITIES ACCOUNT

Section 2.01.Establishment of Securities Account.  The Securities Intermediary hereby confirms that (i) the Securities Intermediary has established the Securities Account specifically referenced in the definition thereof, (ii) the Securities Account is an account to which Financial Assets are or may be credited, (iii) the Securities Intermediary shall, subject to the terms of this Agreement, treat the Secured Party as entitled to exercise the rights that comprise any Financial Asset credited to the Securities Account, (iv) all property delivered to the Securities Intermediary by or on behalf of the Seller or the Secured Party for deposit to the Securities Account will promptly be credited to such Securities Account and (v) all securities or other property underlying any Financial Assets credited to the Securities Account shall be registered in the name of the Securities Intermediary, endorsed to the Securities Intermediary or in blank or credited to another securities account maintained in the name of the Securities Intermediary and in no case will any Financial Asset credited to the Securities Account be registered in the name of the Seller, payable to the order of the Seller or specifically endorsed to the Seller except to the extent the foregoing have been specially endorsed to the Securities Intermediary or in blank.

Section 2.02.“Financial Assets” Election.  The Securities Intermediary and the other parties hereto hereby agree that each item of property (whether investment property, financial asset, security, instrument or cash) credited to the Securities Account shall be treated as a “financial asset” within the meaning of Section 8-102(a)(9) of the UCC.

Section 2.03.Entitlement Orders.                                           Unless and until the Securities Intermediary should have received an Entitlement Order from the Secured Party, the Seller or the Servicer may give instructions to the Securities Intermediary relating to the redemption or transfer of Financial Assets in the Securities Account.  If at any time the Securities Intermediary shall receive any Entitlement Order from the Secured Party with respect to the Securities Account, the Securities Intermediary shall comply with such Entitlement Order without further consent by the Seller or any other Person.  After receipt of an Entitlement Order from the Secured Party, the Securities Intermediary shall not comply with any Entitlement Order from the Seller or the Servicer unless and until the Securities Intermediary shall have received notice from the Secured Party authorizing the Securities Intermediary to follow any subsequent Entitlement Order delivered to the Securities Intermediary by the Seller or the Servicer.

Section 2.04.Subordination of Lien; Waiver of Set-Off.  In the event that the Securities Intermediary has or subsequently obtains by agreement, operation of law or otherwise a security interest in the Securities Account or any Security Entitlement credited thereto, the Securities Intermediary hereby agrees that such security interest shall be subordinate to the security interests of the Secured Party.  The Financial Assets and other items deposited to the Securities Account will not be subject to deduction, set-off, banker’s lien or any other right in favor of any Person or entity other than the Secured Party (except that the Securities Intermediary may set off against amounts on deposit in the Securities Account (i) all amounts due to it in respect of its customary fees and expenses for the routine maintenance and operation of such Securities Account and (ii) the face amount of any checks which have been credited to such Securities Account but are subsequently returned unpaid because of uncollected or insufficient funds).

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Section 2.05.Notice of Adverse Claims.  Except for the claims and interests of the Secured Party and the Seller in the Securities Account, the Securities Intermediary does not know of any claim to, or interest in, the Securities Account or in any Financial Asset credited thereto.  If any Person asserts any lien, encumbrance or adverse claim (including any writ, garnishment, judgment, warrant of attachment, execution or similar process) against the Securities Account or in any Financial Asset carried therein, and the Securities Intermediary has actual knowledge thereof, the Securities Intermediary will promptly notify the Secured Party and the Seller thereof.

ARTICLE III

 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SECURITIES INTERMEDIARY

Section 3.01.Representations, Warranties and Covenants of the Securities Intermediary.  The Securities Intermediary hereby represents and warrants to the Secured Party and the Seller, and covenants that:

(a)The Securities Account has been established as set forth in Section 2.01 and will be maintained in the manner set forth herein until termination of this Agreement.  The Securities Intermediary shall not change the name or account number of the Securities Account without the prior written consent of the Secured Party.

(b)No Financial Asset carried in the Securities Account is or will be registered in the name of the Seller, payable to the order of the Seller, or specially endorsed to the Seller, except to the extent such Financial Asset has been endorsed to the Securities Intermediary or in blank.

(c)This Agreement is the valid and legally binding obligation of the Securities Intermediary.

(d)The Securities Intermediary has not entered into, and until the termination of this Agreement, will not enter into, any agreement pursuant to which it agrees to comply with Entitlement Orders of any Person other than the Secured Party, the Seller and the Servicer with respect to the Securities Account.

(e)The Securities Intermediary has not entered into any other agreement with the Seller or the Secured Party purporting to limit or condition the obligation of the Securities Intermediary to comply with Entitlement Orders as set forth in Section 2.03.

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ARTICLE IV

RIGHTS OF THE SECURITIES INTERMEDIARY

Section 4.01.Indemnity.  The Servicer hereby agrees to defend, indemnify and hold harmless the Securities Intermediary, its directors, officers, employees and agents from and against any and all claims, demands, causes of action, lawsuits, settlements, liabilities, losses, damages, costs and expenses, including, without limitation, court costs and reasonable attorneys’ fees and expenses, in any way related to or arising out of or in connection with this Agreement or any action taken or not taken pursuant to this Agreement, except to the extent caused by the Securities Intermediary’s gross negligence or willful misconduct.

Section 4.02.Compensation and Expenses.  The Servicer hereby agrees to pay to the Securities Intermediary such compensation as the Securities Intermediary and the Servicer shall agree in writing from time to time.  The Servicer shall reimburse the Securities Intermediary for all reasonable expenses, disbursements and other third-party costs reasonably incurred by the Securities Intermediary in connection with its administration of the Securities Account.

Section 4.03.Certain Rights of the Securities Intermediary.

(a)The duties, responsibilities and obligations of Securities Intermediary shall be limited to those expressly set forth herein and no duties, responsibilities or obligations shall be inferred or implied.

(b)Securities Intermediary shall not be subject to, charged with the knowledge of any provision of, nor required to comply with, (i) any other agreement between or among the Seller, the Servicer and the Secured Party or (ii) any agreement to which either the Seller, the Servicer or the Secured Party is a party, even though reference thereto may be made herein.

(c)Securities Intermediary shall not be required to, and shall not, expend or risk any of its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, except in connection with any liabilities arising out of Securities Intermediary’s gross negligence or willful misconduct.

(d)Securities Intermediary shall not be liable for any action taken or omitted or for any loss or injury resulting from its actions or its performance or lack of performance of its duties hereunder in the absence of gross negligence or willful misconduct on its part.

(e)The Securities Intermediary shall be entitled to rely upon any written instructions actually received by it and reasonably believed by it to be duly authorized and delivered.

ARTICLE V

MISCELLANEOUS

Section 5.01.Choice of Law.  This Agreement and the Securities Account shall be governed by the laws of the State of New York.  Regardless of any provision in any other agreement, for purposes of the UCC, New York shall be deemed to be the Securities Intermediary’s location and the Securities Account (as well as the Security Entitlements related thereto) shall be governed by the laws of the State of New York.

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Section 5.02.Conflict with other Agreements.  There are no other agreements entered into between the Securities Intermediary in such capacity and the Seller with respect to the Securities Account.  In the event of any conflict between this Agreement (or any portion thereof) and any other agreement now existing or hereafter entered into, the terms of this Agreement shall prevail.

Section 5.03.Amendments.  No amendment or modification of this Agreement or waiver of any right hereunder shall be binding on any party hereto unless it is in writing and is signed by all of the parties hereto.

Section 5.04.Successors.  The terms of this Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective corporate successors.

Section 5.05.Notices.  All demands, notices and communications hereunder shall be in writing and shall be deemed to have been duly given if personally delivered at or mailed by registered mail, return receipt requested, to, in the case of (i) the Seller, at 425 North Martingale Road, Suite 1800, Schaumburg, IL 60173, Attention: Vice President & Treasurer, telecopier no. (630) 753-4090, (ii) the Servicer, at 425 North Martingale Road, Suite 1800, Schaumburg, IL 60173, Attention: Vice President & Treasurer, telecopier no. (630) 753-4090, (iii) the Secured Party,  JPMorgan Chase Bank, N.A., Attetion:  Asset Backed Securities Group, Chase Tower, 10 South Dearborn Street, Chicago, Illinois 60603 and (iv) the Securities Intermediary, 101 Barclay Street, 4W,  New York, New York 10286, Attn: Structured Finance Services, telecopier no. (212) 815-3883, or as to any of such parties, at such other address as shall be designated by such party in a written notice to the other parties.

Section 5.06.Termination.  The rights and powers granted herein to the Secured party have been granted in order to perfect its security interest in the Securities Account, are powers coupled with an interest and will neither be affected by the bankruptcy of the Seller nor by the lapse of time.  The obligations of the Securities Intermediary hereunder shall continue in effect with respect to the Securities Account until the Secured Party has notified the Securities Intermediary in writing that its security interest in the Securities Account has been terminated.

Section 5.07.Counterparts.  This Agreement may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Agreement by signing and delivering one or more counterparts.

Section 5.08.Permitted Investments.  Until an Entitlement Order has been received by the Securities Intermediary, the Securities Intermediary may comply with written instructions (by standing instructions or otherwise) to invest funds on deposit in the Securities Account from time to time in Permitted Investments (as defined below) from either the Seller or the Servicer.  After an Entitlement Order has been received by the Securities Intermediary, the Securities Intermediary shall comply with instructions from Secured Party only.  In the absence of written investment instructions, funds on deposit in the Securities Account shall remain uninvested.  In the event of a loss on the sale of such investments, the Securities Intermediary shall have no responsibility in respect of such loss, except with respect to its gross negligence or willful misconduct.

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For purposes of this Agreement, “Permitted Investments” shall mean: book-entry securities, negotiable instruments or securities represented by instruments in bearer or registered form which evidence:

(i)   direct obligations of, and obligations fully guaranteed as to timely payment of principal and interest by, the United States of America;

(ii)   demand deposits, time deposits or certificates of deposit of any depository institution or trust company incorporated under the laws of the United States of America or any state thereof (or any domestic branch of a foreign bank) and subject to supervision and examination by Federal or State banking or depository institution authorities; provided, however, that at the time of the investment or contractual commitment to invest therein, the commercial paper or other short-term unsecured debt obligations (other than such obligations the rating of which is based on the credit of a Person other than such depository institution or trust company) thereof shall have a credit rating from each of the Rating Agencies in the highest investment category for short-term unsecured debt obligations or certificates of deposit granted thereby;

(iii)   commercial paper having, at the time of the investment or contractual commitment to invest therein, a rating from each of the Rating Agencies in the highest investment category for short-term unsecured debt obligations or certificates of deposit granted thereby;

(iv)   investments in money market or common trust funds having a rating from each of the Rating Agencies in the highest investment category for short-term unsecured debt obligations or certificates of deposit granted thereby;

(v)   bankers’ acceptances issued by any depository institution or trust company referred to in clause (ii) above;

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(vi)   repurchase obligations with respect to any security that is a direct obligation of, or fully guaranteed by, the United States of America or any agency or instrumentality thereof the obligations of which are backed by the full faith and credit of the United States of America, in either case entered into with (A) a depository institution or trust company (acting as principal) described in clause (ii) or (B) a depository institution or trust company the deposits of which are insured by the Federal Deposit Insurance Corporation or the counterparty for which has a rating from each of the Rating Agencies in the highest investment category for short-term unsecured debt obligations, is marked to market daily and is maintained in an amount that exceeds the amount of such repurchase obligation, and which requires liquidation of the collateral immediately upon the amount of such collateral being less than the amount of such repurchase obligation (unless the counterparty immediately satisfies the repurchase obligation upon being notified of such shortfall);

(vii)   commercial paper master notes having, at the time of the investment or contractual commitment to invest therein, a rating from each of the Rating Agencies in the highest investment category for short-term unsecured debt obligations; and

(viii)   any other investment permitted by the Secured Party.

in each case, other than as permitted by theSecured Party, maturing not later thanthe Business Day immediately preceding the next Weekly Settlement Date.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective officers as of the day and year first above written.

TRUCK RETAIL ACCOUNTS CORPORATION,

   as Seller

By:                                                                           

Name:

Title:

JPMORGAN CHASE BANK, N.A. as successor to BANK ONE, NA, as Agent,

   as Secured Party,

By:                                                                           

Name:

Title:

THE BANK OF NEW YORK as successor to JPMORGAN CHASE BANK, N.A.,

   as Securities Intermediary,

By:                                                                           

Name:

Title:

NAVISTAR FINANCIAL CORPORATION,

   as Servicer

By:                                                                           

Name:

Title:

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EX-10.139

AMENDMENT TO

NOTE PURCHASE AGREEMENT

THIS AMENDMENT TO NOTE PURCHASE AGREEMENT (this "Amendment") dated as of January 31, 2007, is entered into among Navistar Financial Retail Receivables Corporation (the "Seller"), Navistar Financial Corporation ("Servicer"), Kitty Hawk Funding Corporation, ("KHFC"), as a Conduit Investor, and Bank of America, National Association ("Bank of America"), as Agent, the Administrator and an Alternate Investor.

RECITALS

A.The Seller, the Servicer, KHFC and Bank of America are parties to that certain Note Purchase Agreement, dated as of February 27, 2006 (as amended, supplemented or otherwise modified through the date hereof, the "Agreement").

B.Such parties desire to amend the Agreement as hereafter set forth.

C.NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.             Amendments to Agreement. By their signatures hereto, each of the parties hereto hereby agrees to the following amendments to the Agreement:

(a)The Agreement is hereby amended by amending and restating Section 3.01(a)(v) of the Agreement in its entirety to read as follows:

"(v) except for those caused by the failure of NFC and its affiliates to deliver its financial statements and related financial information for the fiscal years ended October 31, 2005 or October 31, 2006, or for fiscal quarters ending January 31, April 30 and July 31 of 2006, or for fiscal quarters ending January 31, April 30 and July 31 of 2007, in each case, prior to October 31, 2007, the Seller (i) is not in violation of its Certificate of Incorporation or By-Laws and (ii) is not in breach or violation of any of the terms or provisions of, or with the giving of notice or lapse of time, or both, would be in default under, any contract, indenture, mortgage, deed of trust, loan agreement, note, lease, partnership agreement, or other agreement or instrument to which the Seller is a party or by which it may be bound or to which any of its properties or assets may be subject, except for such violations or defaults that would not have a Material Adverse Effect;"

(b)The Agreement is hereby amended by amending and restating Section 3.01(b)(vi) of the Agreement in its entirety to read as follows:

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"(vi) except for those caused by the failure of NFC and its affiliates to deliver its financial statements and related financial information for the fiscal years ended October 31, 2005 or October 31, 2006, or for fiscal quarters ending January 31, April 30 and July 31 of 2006, or for fiscal quarters ending January 31, April 30 and July 31 of 2007, in each case, prior to October 31, 2007, NFC (i) is not in violation of its Certificate of Incorporation or By-Laws and (ii) is not in breach or violation of any of the terms or provisions of, or with the giving of notice or lapse of time, or both, would be in default under, any contract, indenture, mortgage, deed of trust, loan agreement, note, lease, partnership agreement, or other agreement or instrument to which the Seller is a party or by which it may be bound or to which any of its properties or assets may be subject, except for such violations or defaults that would not have a Material Adverse Effect;"

(c)            The Agreement is hereby amended by amending and restating Section 5.02(c) of the Agreement in its entirety to read as follows:

"(c)(1) as soon as available and in any event within (i) 45 days after the end of each of the first three fiscal quarters of any fiscal year and (ii) 120 days after the end of the last fiscal quarter of any fiscal year, copies of the interim or annual, as applicable, financial statements of NFC, prepared in conformity with generally accepted accounting principles consistently applied; provided, however that NFC shall not be required to deliver its financial statements for the fiscal year 2005 or for the fiscal year 2006, for the fiscal quarters ending January 31, April 30 and July 31 of 2006, or for the fiscal quarters ending January 31, April 30 and July 31 of 2007 until the earlier to occur of October 31, 2007 and five (5) Business Days after the filing thereof with the SEC and (2) as soon as available and in any event within 30 days after the end of each month, the monthly management financial reports required to be delivered pursuant to the Amended and Restated Credit Agreement dated as of July 1, 2005, and the Third Waiver and Consent, dated as of November 20, 2006, among the Servicer and Bank of America, among others; provided, however, that such reporting shall not be required so long as the Servicer's parent has filed all reports with the Securities and Exchange Commission required pursuant to Section 13 of the Exchange Act; and"

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2.Waiver. By its signature hereto, each of the parties hereto waives any condition or covenant that has not been satisfied, the breach of any representation or warranty made or deemed made, and any occurrence of an Event of Default, termination event or similar event (in each case, with respect to all of the foregoing, whether such event is matured or unmatured and collectively referred to herein as a "Default"), under the Agreement, solely to the extent such Default was caused directly by or resulted directly from a breach of any representation or warranty in Section 3.01(a)(xii) or Section 3.01(b)(x) of the Agreement resulting from or arising out of any restatement, in connection with the audit conducted for the fiscal year 2005 or the fiscal year 2006, of any financial statements of NFC or any of its affiliates for any period ending on or before the expiration of the waiver contemplated herein, or any reports, financial statements, certificates or other information containing similar or derived information therefrom with respect to such periods. Each party (other than NFC and the Seller) hereto hereby expressly reserves, and nothing herein shall be construed as a waiver of NFC's failure to comply with Sections 3.01(a)(v), 3.01(b)(vi) and 5.02(c), as amended hereby, or any Servicer Default occurring as a result of NFC's failure to deliver the reports referred to in the immediately preceding sentence on or before the earlier of (i) five (5) Business Days after the filing thereof with the SEC and (ii) October 31, 2007.

3.Representations and Warranties. The Seller hereby represents and warrants to KHFC and Bank of America that, after giving effect to this Amendment, no Event of Default has occurred and is now continuing, and NFC hereby represents and warrants that, after giving effect to this Amendment, no Event of Default or Servicer Default has occurred and is now continuing.

4.Effect of Amendment. All provisions of the Agreement, as extended by this Amendment, remain in full force and effect. After this Amendment becomes effective, all references in the Agreement to "this Agreement", "hereof”, "herein" or words of similar effect referring to the Agreement in the Agreement or in any other document relating to the Seller's securitization program shall be deemed to be references to the Agreement as extended by this Amendment. This Amendment shall not be deemed to expressly or impliedly waive, amend or supplement any provision of the Agreement other than as set forth herein.

5.Counterparts. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, and each counterpart shall be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

6.Governing Law. This Amendment shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to any otherwise applicable principles of conflicts of law.

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7.             Section Headings. The various headings of this Amendment are inserted for convenience only and shall not affect the meaning or interpretation of this Amendment or the Agreement or any provision hereof or thereof.

[signatures on next page]

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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.

NAVSITAR FINANCIAL RETAIL RECEIVABLES CORPORATION,

as Seller

By:        /s/  JOHN V.  MULVANEY, SR.

Name:          John V. Mulvaney, Sr.

Title:            V.P., CFO & Treasurer

NAVISTAR FINANCIAL COPORATION,

as Servicer

By:        /s/  JOHN V.  MULVANEY, SR.

Name:          John V. Mulvaney, Sr.

Title:            V.P., CFO & Treasurer

KITTY HAWK FUNDING CORPORATION,

as a Conduit Investor

By:       /s/ AMY S. KEITH

Name:       Amy S. Keith

Title:         Vice President

BANK OF AMERICA, NATIONAL ASSOCIATION,

as Agent, Administrator and as an Alternate Investor

By:      /s/  WILLEM VAN BEEK

Name:        Willem Van Beek

                Title:          Principal

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EX-10.140

Bank of America

    Banc of America

    Leasing Global Vendor Finance

WAIVER Dated as of January 8, 2007

Navistar Financial Corporation

425 North Martingale Road, Suite 1800

Schaumburg, Illinois 60173

International Truck Leasing Corp.

425 North Martingale Road, Suite 1800

Schaumburg, Illinois 60173

Re: Waiver Dear Sirs:

Banc of America Leasing & Capital LLC ("BALCAP") and International Truck Leasing Corp ("ITLC") are parties to that certain Master Purchase Agreement dated as of June 30, 2004 (together with all amendments and modifications thereto, the "Agreement"). Unless defined elsewhere herein, capitalized terms used in this Waiver have the meanings assigned to such terms in the Agreement.

ITLC has requested that BALCAP extend its waiver (dated as of February 28, 2006) of certain provisions of the Agreement as more specifically set forth herein. BALCAP does hereby waive such provisions as herein provided, subject however, to the limitations set forth below:

A.   BALCAP waives compliance with the provisions of Exhibit D to Master Purchase Agreement, Section (b), Financial Statement for the period through and including the earlier of ( i ) October 31, 2007 and (ii) the date on which Navistar Financial Corporation shall have timely filed a report on Form 10-K or 10-Q with the Securities and Exchange Commission.

B.   BALCAP waives the condition precedent specified in clause I(b)(vi ) as it relates directly to the failure of  NFC or any of its affiliates to deliver or file any financial statement: SEC report or related information during the period of the waiver described above in Section A, ("Financial Statement Default"), so long as such other creditor has not declared an event of default with respect to Navistar Financial Corporation or accelerated the debt of Navistar Financial Corporation due to a Financial Statement Default.

BALCAP's waiver as provided herein shall be strictly limited to the matters set forth above, and shall not constitute a waiver, surrender, or modification of any other rights, remedies, privileges or benefits under the Agreement or any related documents. This letter and the waiver set forth herein shall not constitute a course of dealing, and each of the provisions of the Agreement and any related document, shall remain in full force and effect.

Very truly your,

Banc of America Leasing & Capital LLC

By:_______________________________

Its:_______________________________-

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EX-10.144

NAVISTAR FINANCIAL SECURITIES CORPORATION

Seller

NAVISTAR FINANCIAL CORPORATION

Servicer

and

THE BANK OF NEW YORK

Master Trust Trustee

on behalf of the Series 1997-1 Certificateholders

__________________________________

SERIES 1997-1 SUPPLEMENT

Dated as of August 19, 1997

to

POOLING AND SERVICING AGREEMENT

Dated as of June 8, 1995

_________________________________

Floating Rate

Dealer Note Asset Backed Certificates, Series 1997-1

DEALER NOTE MASTER TRUST

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SERIES 1997-1 SUPPLEMENT

TO POOLING AND SERVICING AGREEMENT

SERIES 1997-1 SUPPLEMENT dated as of August 19, 1997 (the "Series Supplement"), by and among NAVISTAR FINANCIAL SECURITIES CORPORATION, a Delaware corporation, as Seller (the "Seller"), NAVISTAR FINANCIAL CORPORATION, a Delaware corporation, as Servicer (the "Servicer"), and THE BANK OF NEW YORK, a New York banking corporation, as trustee (together with its successors in trust thereunder as provided in the Agreement referred to below, the "Master Trust Trustee") under the Pooling and Servicing Agreement, dated as of June 8, 1995 (as amended and supplemented, the "Agreement") among the Seller, the Servicer, the Master Trust Trustee and The Chase Manhattan Bank, as trustee under the 1990 Trust Agreement.

Section 6.09 of the Agreement provides that the Seller may from time to time direct the Master Trust Trustee to issue, on behalf of the Master Trust, one or more new Series of Investor Certificates representing fractional undivided interests in the Master Trust.  The Principal Terms of any new Series are to be set forth in a Supplement to the Agreement.

Pursuant to this Series Supplement, the Seller and the Master Trust Trustee shall create a new Series of Investor Certificates and specify the Principal Terms thereof.

ARTICLE I

CREATION OF SERIES 1997-1 AND

THE SERIES 1997-1 CERTIFICATES;

ACCEPTANCE OF CLASS A-5 CERTIFICATE

SECTION                                I.1  Designation.

(a)           There is hereby created a new Series pursuant to the Agreement and this Series Supplement to be known as the "Series 1997-1."  The interest of the Investor Certificateholders in Series 1997-1 shall be represented by the Series 1997-1 Certificates.

(b)           If any term or provision contained herein shall conflict with or be inconsistent with any term or provision contained in the Agreement, the terms and provisions of this Series Supplement shall govern with respect to Series 1997-1.

SECTION                                I.2  Acceptance of Class A-5 Investor Certificate.

(a)           By execution of this Series Supplement,  as amended in Section 2.03(a) of the Agreement, the Master Trust Trustee hereby delivers the 1990 Trust Seller Certificate to the 1990 Trustee and accepts in exchange therefor the newly issued Class A-5 Investor Certificate and the reissued 1990 Trust Seller Certificate.  If the original sale, transfer, assignment, set-over or conveyance of the 1990 Trust Seller Certificate to the Master Trust is deemed to create a security interest in such property, the Master Trust shall have a security interest in the Class A-5 Investor Certificate and the reissued 1990 Trust Seller Certificate (which shall be deemed to be a first perfected security interest) and the Seller agrees that the Agreement, including this Series Supplement, shall constitute a security agreement under applicable law.

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(b)           As provided in Section 2.03(a) of the Agreement, the Master Trust Trustee agrees to maintain physical possession thereof.

ARTICLE II

DEFINITIONS

SECTION I   I.1  Definitions.

(a)           Whenever used in this Series Supplement, the following words and phrases shall have the following meanings:

"1990 Trust Spread Account" shall mean the Spread Account established and maintained pursuant to the 1990 Trust Agreement.

"Accumulation Period" shall mean, unless an Early Amortization Event shall have occurred prior thereto, the period commencing on the Accumulation Period Commencement Date and ending upon the first to occur of (a) the commencement of an Early Amortization Period and (b) the payment of the Invested Amount in full.

"Accumulation Period Commencement Date" shall mean the first day of the nth full Due Period prior to the Expected Payment Date where n is the number of Due Periods in the Accumulation Period Length; provided, however, that the Accumulation Period Commencement Date shall be the Specified Accumulation Period Commencement Date if, on the Specified Accumulation Period Commencement Date, any other outstanding Series shall have entered into an investment period or an early amortization period; and provided further that, if the Accumulation Period Length and the Accumulation Period Commencement Date  have been determined pursuant to Section 4.11 but the Accumulation Period has not commenced and any other outstanding Series shall enter into an investment period or an early amortization period, the Accumulation Period Commencement Date shall be the date that such outstanding Series shall have entered into an investment period or an early amortization period.

"Accumulation Period Length" shall mean a period which is between one and nine Due Periods and which is determined by the Servicer pursuant to Section 4.11.

"Adjusted Invested Amount" shall mean, with respect to any Distribution Date, an amount (which shall never be less than zero) equal to the Initial Invested Amount, plus the Available Subordinated Amount as of the end of the related Transfer Date, minus the aggregate amount of Investor Charge-Offs not reimbursed on or prior to such Distribution Date.

"Amortizing Due Period" shall have the meaning specified in Section 4.12.

"Available Certificateholder Interest Collections" shall mean, with respect to any Due Period commencing after the 1990 Trust Termination Date, the sum of (a) Investor Finance Charge Collections for such Due Period and (b) Investment Income for the related Distribution Period.

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"Available Draw Funds" shall have the meaning specified in Section 4.05(b).

"Available Seller's Finance Charge Collections" shall mean, with respect to any Due Period commencing after the 1990 Trust Termination Date, an amount equal to the product of (a) the excess of (i) the Seller's Percentage for such Due Period over (ii) the result (if positive) of the Excess Seller's Percentage for such Due Period minus the Required Excess Seller Interest Percentage and (b) Series Allocable Finance Charge Collections for such Due Period; provided, however, that Available Seller's Finance Charge Collections shall be zero for any Due Period to the extent the Available Subordinated Amount equals or is reduced to zero on the Transfer Date related to such Due Period.

"Available Seller's Principal Collections" shall mean, with respect to any Business Day after the 1990 Trust Termination Date, an amount equal to the product of (a) the excess of (i) the Seller's Percentage for the Due Period in which such Business Day occurs over (ii) the Excess Seller's Percentage for such Due Period and (b) Series Allocable Principal Collections for such Business Day; provided, however, that Available Seller's Principal Collections shall be zero for any Business Day to the extent the Available Subordinated Amount equals or is reduced to zero on the Transfer Date immediately preceding such Business Day.

"Available Subordinated Amount" shall mean (a) for each Transfer Date related to a Due Period commencing prior to the 1990 Trust Termination Date, zero, (b) on the Transfer Date related to the first Due Period after the 1990 Trust Termination Date (before giving effect to all adjustments in the Available Subordinated Amount on such Transfer Date), the product of (i) the Subordinated Percentage and (ii) the Invested Amount as of the preceding Distribution Date, and (c) for each Transfer Date thereafter (before giving effect to all adjustments in the Available Subordinated Amount thereto on such Transfer Date), the lesser of (i) the Maximum Subordinated Amount as of such Transfer Date and (ii) the Available Subordinated Amount as of the end of the preceding Transfer Date.

"Average Coverage Differential" shall be determined, on any Determination Date, by reference to the Coverage Differentials for each of the related Due Period and the three immediately preceding Due Periods, and shall equal the sum of the three highest such Coverage Differentials dividedby three.  Average Coverage Differential shall be expressed as a percentage, and shall be rounded to the nearest one-hundredth of a percentage point.

"Business Day" shall mean, with respect to Series 1997-1, any day other than a Saturday, a Sunday, or a day on which banking institutions in New York, New York, Chicago, Illinois, or the city in which the Corporate Trust Office is located, or in connection with the determination of LIBOR, London, England, are authorized or obligated by law or executive order to be closed or remain closed.

"Certificate Rate" shall mean the interest rate on the Series 1997-1 Certificates, which shall be calculated on the basis of actual days elapsed and a 360-day year and for the Initial Distribution Period and for each Distribution Period thereafter will equal LIBOR as of the related LIBOR Determination Date plus 0.15%.

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"Class A-5 Investor Certificate" shall mean the Class A-5 Floating Rate Pass-through Certificate issued by the 1990 Trust to the Master Trust in connection with the issuance of the Series 1997-1 Certificates.

"Class A-5 Investor Certificate Collections" shall mean, with respect to any Due Period, the sum of Class A-5 Investor Certificate Interest Collections and Class A-5 Investor Certificate Principal Collections for such Due Period.

"Class A-5 Investor Certificate Interest Collections" shall mean, with respect to any Due Period, all interest payments received by the Master Trust on the Distribution Date related to such Due Period in respect of the Class A-5 Investor Certificate.

"Class A-5 Investor Certificate Principal Collections" shall mean, with respect to any Due Period, all principal payments received by the Master Trust on the Distribution Date related to such Due Period in respect of the Class A-5 Investor Certificate.

"Closing Date" shall mean August 19, 1997.

"Common Depository" shall mean Cede & Co.

"Controlled Amortization Amount" shall mean an amount equal to the result of (a) the Invested Amount as of the Distribution Date preceding the Specified Accumulation Period Commencement Date dividedby (b) the Accumulation Period Length.

"Controlled Deposit Amount" shall mean, with respect to any Due Period occurring during the Accumulation Period, the excess, if any, of (a) the product of (i) the Controlled Amortization Amount and (ii) the number of Due Periods, including such Due Period, that have elapsed with respect to the Accumulation Period (but not in excess of the Accumulation Period Length) over (b) the amount on deposit in the Series Principal Account at the close of business on the last Business Day of the preceding Due Period; provided, however, that, notwithstanding the foregoing, the Seller may, in its sole discretion, increase the Controlled Deposit Amount at any time and from time to time.

"Coverage Differential" shall mean, with respect to any Due Period, the result of (a) the Portfolio Yield for such Due Period minus (b) the sum of (i) the Certificate Rate for the related Distribution Period and (ii) one percent (1%).  Coverage Differential shall be expressed as a percentage, and shall be rounded to the nearest one-hundredth of a percentage point.

"Deficiency Amount" shall have the meaning specified in Section 4.05(a).

"Draw Amount" shall mean, with respect to any Transfer Date, the least of (a) the Deficiency Amount for such Transfer Date, (b) the Available Subordinated Amount as of the end of the preceding Transfer Date and (c) Available Draw Funds for such Transfer Date.

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"Early Amortization Event" shall mean, with respect to Series 1997-1, any event specified in Section 9.01(c) of the Agreement, together with any additional Early Amortization Event specified in Section 6.01 of this Series Supplement, but shall not mean any other event specified in Section 9.01 of the Agreement.

"Early Amortization Period" shall mean an Early Amortization Period with respect to Series 1997-1 that occurs as a result of any event specified in Section 9.01(c) of the Agreement or any Early Amortization Event specified in Section 6.01 of this Series Supplement.

"Early Amortization Period Shortfall Amount" shall have the meaning specified in Section 4.08(e).

“Eligible Investments” shall mean

(a)           book-entry securities, negotiable instru­ments or securities represented by instruments in bearer or regis­tered form having (except in the case of clause (iv) below) remaining maturities occurring not later than the Distribution Date next succeeding the Master Trust Trustee's acquisition thereof, except as otherwise described herein, that evidence:

(i)           direct obligations of, and obligations fully guaran­teed as to timely payment by, the United States of America;

(ii)           demand deposits, time deposits or certificates of deposit of, or bankers' acceptances issued by, any depository institution or trust company incorporated under the laws of the United States of America or any state thereof (or any domestic branch of a foreign bank) and subject to supervision and examination by federal or state banking or depository institution authorities; provided, however, that at the time of the Master Trust's investment or contractual commitment to invest therein, the commercial paper or other short-term unsecured debt obligations (other than such obligations the rating of which is based on the credit of a person or entity other than such depository institution or trust company) of such depository institution or trust company shall have a credit rating not lower than the highest investment category for short term unsecured debt obligations granted by the applicable Rating Agency from each Rating Agency then Rating the affected Series of Investor Certificates;

(iii)           com­mer­cial paper having, at the time of the Master Trust's investment or contractual commitment to investment therein, a rating not lower than the highest investment category for short term unsecured debt obligations granted by the applicable Rating Agency from each Rating Agency then Rating the affected Series of Investor Certificates;

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(iv)           investments in money market funds having a rating not lower than the highest investment category for short term unsecured debt obligations granted by the applicable Rating Agency from each Rating Agency then Rating the affected Series of Investor Certificates or otherwise approved in writing by each of such Rating Agencies;

(v)           repurchase obligations (x) with respect to any security that is a direct obligation of, or fully guaranteed by, the United States of America or any agency or instrumentality thereof the obligations of which are backed by the full faith and credit of the United States of America, in either case, entered into with (A) a depository institution or trust company (acting as principal) described in clause (ii) or (B) a depository institution or trust company the deposits of which are insured by FDIC or (y) the counterparty for which has a rating not lower than the highest investment category for short term unsecured debt obligations granted by the applicable Rating Agency from each Rating Agency then Rating the affected Series of Investor Certificates, the collateral for which is held by a custodial bank for the benefit of the Trust or the Indenture Trustee, is marked to market daily and is maintained in an amount that exceeds the amounts of such repurchase obligation, and which required liquidation of the collateral immediately upon the amount of such collateral being less than the amount of such repurchase obligation (unless the counterparty immediately satisfies the repurchase obligation upon being notified of such shortfall); or

(vi)  commercial paper master notes where the issuer has, at the time of the Master Trust’s investment or contractual commitment to invest therein, a rating not lower than the highest investment category for short term unsecured debt obligations granted by the applicable Rating Agency from each Rating Agency then Rating the Series 1997-1; and

(b)  any other investment consisting of a financial asset that by its terms converts to cash within a finite period of time, provided that the Rating Agency Condition is satisfied.

Eligible Investments of fund in the Series Principal Account and the Liquidity Reserve Acoount will be subject to the following additional restrictions:   (X) no more than 20% of the aggregate Eligible Investment in all such accounts collectively shall be obligations of or investments in any single issuer (except that such 20% limitation shall not apply to Eligible investments of the type specified in Clause (a)(i)); and (y) each Eligible Investment shall be denominated and be payable solely in U. S. dollars, shall bear interest at a specified rate that is, or is based upon, LIBOR or a commerical paper rate, shall entitle the holder to a fixed principal amount at maturity and shall have a yield that is not inadversely or disproportionately affected by changes in interest rates.  

"Excess Seller's Percentage" shall mean, with respect to any Due Period commencing after the 1990 Trust Termination Date, a percentage (which percentage shall never be less than 0% nor more than 100%) equal to the excess of (a) the Seller's Percentage for such Due Period, over (b) the percentage equivalent (which percentage shall never be less than 0% nor more than 100%) of a fraction, the numerator of which is the Available Subordinated Amount as of the end of the related Transfer Date and the denominator of which is the product of (x) the sum of the aggregate principal amount of Dealer Notes in the Master Trust and the aggregate principal amount of funds on deposit in the Excess Funding Account, both as of the end of the immediately preceding Due Period and (y) the Series 1997-1 Allocation Percentage for the Due Period for which the Excess Seller's Percentage is being calculated.

"Excess Seller's Principal Collections" shall mean, with respect to any Business Day during a Due Period commencing after the 1990 Trust Termination Date, the product of (a) Series Allocable Principal Collections for such Business Day and (b) the Excess Seller's Percentage for such Due Period.

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"Expected Payment Date" shall mean the August 2003 Distribution Date.

"Floating Allocation Percentage" shall mean, with respect to any Due Period commencing after the 1990 Trust Termination Date, the percentage equivalent (which percentage shall never exceed 100%) of a fraction, the numerator of which is the Invested Amount as of the immediately preceding Distribution Date (after giving effect to all increases and reductions thereof on such Distribution Date) and the denominator of which is the product of (a) the sum of the aggregate principal amount of Dealer Notes in the Master Trust and the aggregate principal amount of funds on deposit in the Excess Funding Account, both as of the end of the immediately preceding Due Period, and (b) the Series 1997-1 Allocation Percentage for the Due Period for which the Floating Allocation Percentage is being calculated.

"Initial Distribution Period" shall mean the period from August 19, 1997 through September 24, 1997.

"Initial Invested Amount" shall mean $200,000,000.

"Initial Spread Account Required Amount" shall mean the Projected Spread as of the 1990 Trust Termination Date.

"Invested Amount" shall mean, with respect to any Distri­bu­tion Date, an amount (which shall never be less than zero) equal to the Initial Invested Amount, minus the sum of (a) the aggregate amount of payments of principal in respect of the Series 1997-1 Certificates made to Series 1997-1 Certificateholders on or prior to such Distribution Date, (b) the aggregate amount of Investor Charge-Offs not reimbursed pursuant to Section 4.04(a)(iv) on or prior to such Distribution Date and (c) the aggregate amount of Series Principal Account Losses on or prior to such Distribution Date.

"Investment Income" shall mean, for any Distribution Period with respect to Series 1997-1, the sum of (i) income during such Distribution Period from the investment of funds on deposit in the Series Principal Account and the Spread Account and (ii) the product of (a) the Series Allocation Percentage for such Distribution Period and (b) income from the investment of funds on deposit in the Collections Account and the Excess Funding Account.

"Investor Charge-Off" shall have the meaning specified in Section 4.06.

"Investor Dealer Note Losses" shall mean, with respect to any Due Period commencing after the 1990 Trust Termination Date, the product of (a) the Floating Allocation Percentage for such Due Period and (b) Series Allocable Dealer Note Losses for such Due Period.

"Investor Finance Charge Collections" shall mean, with respect to any Due Period commencing after the 1990 Trust Termination Date, an amount equal to the product of (a) the Floating Allocation Percentage for such Due Period and (b) Series Allocable Finance Charge Collections for such Due Period.

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"Investor Principal Collections" shall mean, with respect to any Business Day after the 1990 Trust Termination Date, the sum of (a) the product of (i) with respect to the Revolving Period, the Floating Allocation Percentage and with respect to the Accumulation Period or any Early Amortization Period, the Principal Allocation Percentage, in either case for the Due Period in which such Business Day occurs and (ii) Series Allocable Principal Collections for such Business Day and (b) on any Transfer Date, the amount, if any, of Available Certificateholder Interest Collections treated as Investor Principal Collections pursuant to Sections 4.04(a)(iii) and (iv).

"Investor Servicing Fee" shall have the meaning specified in Section 3.01.

"LIBOR" shall mean (a) prior to the 1990 Trust Termination Date, the one-month London interbank offered rate as determined by the 1990 Trust Trustee in accordance with the 1990 Trust Agreement and (b) after the 1990 Trust Termination Date, the interest rate determined by the Master Trust Trustee in accordance with the following provisions:

(i)           On each LIBOR Determination Date, LIBOR will be determined on the basis of the offered rates for deposits in United States Dollars having a one month maturity, which appear on the Reuters Screen LIBO Page as of 11:00 A.M., London time, on such LIBOR Determination Date.  Such posted offered rates are for value on the second Business Day after which dealings in deposits in United States Dollars are transacted in the London interbank market.  If at least two such offered rates appear on the Reuters Screen LIBO Page, the rate in respect of such LIBOR Determination Date will be the arithmetic mean (rounded, if necessary, to the nearest one hundred-thousandth of a percent) of such offered rates as determined by the Master Trust Trustee.  If fewer than two offered rates appear, LIBOR in respect of such LIBOR Determination Date will be determined as if the parties had specified the rate described in (ii) below.

(ii)           On any LIBOR Determination Date on which fewer than two offered rates appear on the Reuters Screen LIBO Page as specified in (i) above, LIBOR will be determined on the basis of the rates at which deposits in United States Dollars are offered by the Reference Banks at approximately 11:00 A.M., London time, on such LIBOR Determination Date to prime banks in the London interbank market, having a one month maturity, such deposits commencing on the second Business Day immediately following such LIBOR Determination Date and in a principal amount of not less than U.S. $1,000,000 that is representative for a single transaction in such market at such time.  The Master Trust Trustee will request the principal London office of each of such Reference Banks to provide a quotation of its rate.  If at least two such quotations are provided,  LIBOR in respect of such LIBOR Determination Date will be the arithmetic mean (rounded, if necessary, to the nearest one hundred-thousandth of a percent) of such quotations.  If fewer than two quotations are provided, LIBOR in respect of such LIBOR Determination Date will be the arithmetic mean (rounded, if necessary, to the nearest one hundred-thousandth of a percent) of the rates quoted by three major banks in The City of New York selected by the Master Trust Trustee at approximately 11:00 A.M., New York City time, on such LIBOR Determination Date for loans in United States Dollars to leading European banks, having a one month maturity, such loans commencing on the second Business Day immediately following such LIBOR Determination Date and in a principal amount of not less than U.S. $1,000,000 that is representative for a single transaction in such market at such time, provided, however, that if the banks in The City of New York selected as aforesaid by the Master Trust Trustee are not quoting as mentioned in this sentence, LIBOR with respect to such LIBOR Determination Date will be LIBOR in effect immediately prior to such LIBOR Determination Date.

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"LIBOR Determination Date" shall mean, with respect to any Distribution Period, the date which is two Business Days prior to the start of such Distribution Period, which with respect to the Initial Distribution Period is August 15, 1997.

"Liquidity Reserve Account" shall have the meaning specified in Section 4.02(c)(i).

"Maximum Subordinated Amount" shall mean, with respect to any Transfer Date related to a Due Period commencing after the 1990 Trust Termination Date, the product of (a) the Invested Amount as of the preceding Distribution Date and (b) the Subordinated Percentage; provided, however, that with respect to a Transfer Date related to a Due Period occurring during an Early Amortization Period, the Maximum Subordinated Amount shall not decline until the Invested Amount equals the Maximum Subordinated Amount, and thereafter the Maximum Subordinated Amount shall equal the Invested Amount.

"Minimum Series 1997-1 Seller's Interest" shall mean, with respect to any Business Day after the 1990 Trust Termination Date, the sum of (a) the Available Subordinated Amount as of the end of the preceding Transfer Date and (b) the Required Excess Seller Interest as of the end of the preceding Distribution Date.

                      "Monthly Interest" shall mean, with respect to each Transfer Date related to a Distribution Period, an amount equal to the product of (a) the Certificate Rate for such Distribution Period and (b) the Invested Amount as of the preceding Distribution Date (or the Initial Invested Amount with respect to the first Transfer Date) and (c) a fraction, which (i) with respect to the first Transfer Date, shall be equal to 37 dividedby 360 and  (ii) with respect to each subsequent Transfer Date, shall be equal to the actual number of days in the related Distribution Period divided by 360.

"Monthly Servicing Fee" shall have the meaning specified in Section 3.01.

"New Vehicle Monthly Interest Rate" shall mean, with respect to any Due Period, the product of (a) the per annum rate of interest and finance charges billed by NFC during such Due Period on New Vehicle Dealer Notes and (b) the quotient of (i) the number of days during such Due Period and (ii) the actual number of days in the related calendar year.

"Portfolio Yield" shall mean, with respect to any Due Period, the product of (a) the quotient of (i) Finance Charges for such Due Period and (ii) the daily average principal amount of Dealer Notes outstanding during such Due Period and (b) a fraction, the numerator of which is 365 and the denominator of which is the actual number of days elapsed during such Due Period.  Portfolio Yield shall be expressed as a percentage, and shall be rounded to the nearest one-hundredth of a percentage point.

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"Principal Allocation Percentage" shall mean, with respect to any Due Period commencing on or after the 1990 Trust Termination Date and occurring during the Accumulation Period or any Early Amortization Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction, the numerator of which is the Invested Amount as of the end of the Revolving Period and the denominator of which is equal to the product of (a) the sum of the aggregate amount of Dealer Notes in the Master Trust and the aggregate principal amount of funds on deposit in the Excess Funding Account, both as of the end of the Revolving Period and (b) the Series 1997-1 Allocation Percentage for the Due Period for which the Principal Allocation Percentage is being calculated.

"Principal Shortfall" shall mean, with respect to Series 1997-1, the Series 1997-1 Principal Shortfall.

"Projected Dealer Note Income" shall mean, on any Transfer Date after the 1990 Trust Termination Date, an amount equal to the sum of (a) the product of (i) the principal amount of Dealer Notes financing new vehicles outstanding on such Transfer Date, (ii) the New Vehicle Monthly Interest Rate for the Due Period in which such Transfer Date occurs and (iii) the Series 1997-1 Allocation Percentage for such Due Period and (b) the product of (i) the principal amount of Dealer Notes financing used vehicles outstanding on such Transfer Date, (ii) the Used Vehicle Monthly Interest Rate for such Due Period and (iii) the Series 1997-1 Allocation Percentage for such Due Period.

"Projected Monthly Interest" shall mean, on any LIBOR Determination Date after the 1990 Trust Termination Date with respect to the related  Distribution Period, an amount equal to the product of (a) the Certificate Rate for such Distribution Period, (b) the Invested Amount as of the immediately preceding Distribution Date and (c) the result of (i) the actual number of days in such Distribution Period divided by (ii) 360.

"Projected Monthly Servicing Fee" shall mean, on any Transfer Date after the 1990 Trust Termination Date with respect to the Due Period in which such Transfer Date occurs, an amount equal to one-twelfth of the product of (a) 1%, (b) the aggregate principal amount of Dealer Notes as of such Transfer Date, (c) the Series 1997-1 Allocation Percentage for the Due Period related to such Transfer Date and (d) the Floating Allocation Percentage for the Due Period related to such Transfer Date.

"Projected Spread" shall mean, on any Transfer Date after the 1990 Trust Termination Date with respect to the Distribution Period next following the Distribution Period to which such Transfer Date relates, the sum of (a) the positive amount, if any, by which (i) the sum of (A) Projected Monthly Interest for such Distribution Period, and (B) the Projected Monthly Servicing Fee for the Due Period in which such Transfer Date occurs exceeds (ii) the Projected Dealer Note Income as of such Transfer Date and (b) 1.25% of the Invested Amount as of the preceding Distribution Date.

"Reassignment Amount" shall mean, with respect to any Distribution Date, after giving effect to any deposits and distributions otherwise to be made on such Distribution Date, the sum of (a) the Invested Amount on such Distribution Date, and (b) accrued and unpaid interest thereon.

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"Reference Banks" shall mean the principal London offices of Morgan Guaranty Trust Company of New York, Swiss Bank Corporation and Barclays Bank PLC.

"Remaining Available Seller's Principal Calculations" shall have the meaning specified in Section 4.08(d).

"Required Excess Seller Interest" shall mean, with respect to any Business Day, 3.0% of the Invested Amount as of the end of the preceding Distribution Date (and such percentage shall be the "Required Excess Seller Interest Percentage").

"Required Subordinated Amount" shall mean, with respect to any Transfer Date related to a Due Period commencing after the 1990 Trust Termination Date, an amount equal to 87.1% of the Maximum Subordinated Amount as of such Transfer Date.

"Revolving Due Period" shall have the meaning specified in Section 4.12.

"Revolving Period" shall mean, unless an Early Amortization Event shall have occurred prior thereto, the period beginning on the 1990 Trust Termination Date and ending on the earlier of (a) the close of business on the Business Day immediately preceding the Accumulation Period Commencement Date and (b) the close of business on the Business Day immediately preceding the day on which an Early Amortization Event occurs.­­

"Seller's Percentage" shall mean, with respect to any Due Period commencing after the 1990 Trust Termination Date, 100% minus (a) the Floating Allocation Percentage for such Due Period, when used with respect to Finance Charge Collections and Dealer Note Losses at all times or Principal Collections during the Revolving Period, and (b) the Principal Allocation Percentage for such Due Period, when used with respect to Principal Collections during the Accumulation Period or any Early Amortization Period.

"Seller's Principal Collections" shall mean, with respect to any Business Day after the 1990 Trust Termination Date, an amount equal to the sum of (a) Available Seller's Principal Collections for such Business Day and (b) Excess Seller's Principal Collections for such Business Day.

"Series 1997-1" shall mean the Series of Investor Certificates, the terms of which are specified in this Series Supplement.

"Series 1997-1 Accounts" shall mean, collectively, the Series Principal Account, the Distribution Account maintained for the Series 1997-1 Certificateholders, the Liquidity Reserve Account and the Spread Account.

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"Series 1997-1 Accumulation Period Principal Shortfall" shall mean, with respect to any Business Day occurring  during the Accumulation Period, the excess, if any, of the Controlled Deposit Amount for the Due Period in which such Business Day occurs over the amount of Investor Principal Collections deposited in the Series Principal Account on such Business Day when added to the amount of Investor Principal Collections previously deposited in the Series Principal Account during such Due Period.

"Series 1997-1 Allocation Percentage" shall mean the Series Allocation Percentage with respect to Series 1997-1.

"Series 1997-1 Certificateholders" shall mean the holders of Series 1997-1 Certificates.

"Series 1997-1 Certificateholders' Interest" shall mean that portion of the Certificateholders' Interest evidenced by the Series 1997-1 Certificates.

"Series 1997-1 Certificates" shall mean any one of the certificates executed by the Seller and authenticated by the Master Trust Trustee, substantially in the form of Exhibit A.

"Series 1997-1 Principal Shortfall" shall equal either (a) with respect to any Business Day occurring  during the Accumulation Period, the Series 1997-1 Accumulation Period Principal Shortfall or (b) with respect to any Business Day during any Early Amortization Period, the excess, if any, of the Invested Amount (reduced by (i) amounts on deposit in the Series Principal Account and (ii) the aggregate amount of Series Principal Account Losses for the Distribution Period in which such Business Day occurs) as of the immediately preceding Distribution Date over Investor Principal Collections for such Business Day.

"Series 1997-1 Rating Agency Condition" shall mean, with respect to any action, that each Rating Agency shall have notified the Seller, the Servicer, and the Master Trust Trustee in writing that such action will not result in a reduction or withdrawal of the rating of the Series 1997-1 Certificates with respect to which it is a Rating Agency.

"Series 1997-1 Shared Principal Collections" shall have the meaning specified in Section 4.09(b).

"Series 1997-1 Shared Seller Principal Collections" shall have the meaning specified in Section 4.08(d)(iv).

"Series Allocable Dealer Note Losses" shall mean, with respect to any Due Period commencing after the 1990 Trust Termination Date, the product of (a) the Series 1997-1 Allocation Percentage for such Due Period and (b) Dealer Note Losses for such Due Period.

"Series Allocable Finance Charge Collections" shall mean, with respect to any Due Period, the product of (a) the Series 1997-1 Allocation Percentage for such Due Period and (b) the amount of Finance Charge Collections for such Due Period.

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"Series Allocable Principal Collections" shall mean, with respect to any Business Day, the sum of (a) the product of (i) the Series 1997-1 Allocation Percentage for the related Due Period and (ii) the amount of Principal Collections deposited in the Collections Account on such Business Day and (b) if the Accumulation Period Commencement Date occurs on such Business Day, the product of (i) the Series 1997-1 Allocation Percentage for such Due Period and (ii) the amount of funds on deposit in the Excess Funding Account on such Accumulation Period Commencement Date.

"Series Invested Amount" shall mean, with respect to Series 1997-1, the Invested Amount.

"Series Principal Account" shall have the meaning specified in Section 4.02(a)(i).

"Series Principal Account Losses" shall mean losses of principal on investment of funds in the Series Principal Account.

"Series Termination Date" shall mean the August 2006 Distribution Date.

"Specified Accumulation Period Commencement Date" shall mean November 1, 2002.

"Spread Account" shall have the meaning specified in Section 4.02(b)(i).

"Spread Account Deposit Amount" shall mean, with respect to any Transfer Date, the amount, if any, by which the Projected Spread exceeds the amount of funds on deposit in the Spread Account.

"Subject Month" shall have the meaning specified in Section 4.12.

"Subordinated Percentage" shall mean 15.5%.

"Turnover" shall have the meaning specified in Section 6.01(k).

"Used Vehicle Monthly Interest Rate" shall mean, with respect to any Due Period, the product of (i) the per annum rate of interest and finance charges billed by NFC during such Due Period on Used Vehicle Dealer Notes and (ii) the quotient of (a) a number equal to the number of days during such Due Period and (b) the actual number of days in the related calendar year.

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(b)           Notwithstanding anything to the contrary in this Series Supplement or the Agreement, the term "Rating Agency" shall mean, whenever used in this Series Supplement or the Agreement with respect to Series 1997-1, Moody's and Standard & Poor's.  As used in this Series Supplement and in the Agreement with respect to Series 1997-1, "highest investment category" shall mean (i) in the case of Standard & Poor's, A-1+ or AAA, as applicable, and (ii) in the case of Moody's, P-1 or Aaa, as applicable.

(c)           All capitalized terms used herein and not otherwise defined herein have the same meanings ascribed to them in the Agreement.

(d)           The words "hereof," "herein" and "hereunder" and words of similar import when used in this Series Supplement shall refer to this Series Supplement as a whole and not to any particular provision of this Series Supplement; references to any Article, Section or Exhibit are references to Articles, Sections and Exhibits in or to this Series Supplement unless otherwise specified; and the term "including" means "including without limitation."

(e)           As used in this Series Supplement, references to the Available Subordinated Amount "as of the end" of a Transfer Date shall mean the Available Subordinated Amount as of  such Transfer Date, after giving effect to all increases and reductions thereof pursuant to Article IV hereof.

(f)           As used in this Series Supplement, accounting terms which are not defined, and accounting terms partly defined, herein shall have the respective meanings given to them under generally accepted accounting principles as in effect on the date hereof.  To the extent that the definitions of accounting terms in this Series Supplement are inconsistent with the meanings of such terms under generally accepted accounting principles, the definitions contained in this Series Supplement will control.

(g)           With respect to any Distribution Date or Transfer Date, the "related Due Period" and the "related Distribution Period" will mean the Due Period and Distribution Period, respectively, immediately preceding such Distribution Date or Transfer Date, and the relationships between Due Periods and Distribution Periods will be correlative to the foregoing relationships.  With respect to any LIBOR Determination Date, the "related Distribution Period" will mean the Distribution Period beginning on the Distribution Date immediately following such LIBOR Determination Date.

(h)           Each defined term used in this Series Supplement has a comparable meaning when used in  its plural or singular form.  Each gender-specific term used in this Series Supplement has a comparable meaning whether used in a masculine, feminine or gender-neutral form.

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ARTICLE III

SERVICING FEE

SECTION III.1   Servicing Compensation.  The monthly servicing fee (the "Monthly Servicing Fee") shall be payable to the Servicer, in arrears, on each Distribution Date in respect of a Due Period (or portion thereof) commencing after the 1990 Trust Termination Date and occurring prior to the earlier of the first Distribution Date following the Series Termination Date and the first Distribution Date on which the Invested Amount is zero, in an amount equal to one-twelfth of the result of (a) 1% multipliedby (b) the aggregate principal amount of Dealer Notes outstanding as of the last day of such Due Period and multipliedby (c) the Series 1997-1 Allocation Percentage with respect to such Due Period.  The share of the Monthly Servicing Fee allocable to the Series 1997-1 Certificateholders with respect to any Transfer Date (the "Investor Servicing Fee") shall be equal to the product of (a) the Monthly Servicing Fee and (b) the Floating Allocation Percentage with respect to such Due Period.  The remainder of the Monthly Servicing Fee shall be paid by the Seller and in no event shall the Master Trust, the Master Trust Trustee or the ­Series 1997-1 Certificateholders be liable for the share of the Monthly Servicing Fee to be paid by the Seller; and the remainder of the Servicing Fee shall be paid by the Seller and the Investor Certificateholders of other Series and the Series 1997-1 Certificateholders shall in no event be liable for the share of the Servicing Fee to be paid by the Seller or the Investor Certificateholders of other Series.  The Investor Servicing Fee shall be payable to the Servicer solely to the extent amounts are available for distribution in accordance with the terms of this Series Supplement.

The Servicer will be permitted, in its sole discretion, to waive the Monthly Servicing Fee for any Distribution Date by notice to the Master Trust Trustee on or before the related Determination Date; provided, however, that the Servicer believes that sufficient Series Allocable Finance Charge Collections will be available on any future Distribution Date to pay the Investor Servicing Fee relating to the waived Monthly Servicing Fee.  If the Servicer so waives the Monthly Servicing Fee for any Distribution Date, the Monthly Servicing Fee and the Investor Servicing Fee for such Distribution Date shall be deemed to be zero for all purposes of this Series Supplement and the Agreement; provided, however, that such Investor Servicing Fee shall be paid on a future date solely to the extent amounts are available therefor pursuant to Section 4.04(a)(vi); and providedfurther that, to the extent any such waived Investor Servicing Fee is so paid, the related portion of the Monthly Servicing Fee to be paid by the Seller shall be paid by the Seller to the Servicer.

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ARTICLE IV

RIGHTS OF SERIES 1997-1 CERTIFICATEHOLDERS

AND ALLOCATION AND APPLICATION OF COLLECTIONS

 SECTION IV.1    Rights of the ­Series 1997-1 Certificateholders.  The Series 1997-1 Certificates shall represent frac­tional undivided interests in the Master Trust, consisting of the right to receive, to the extent necessary to make the required payments with respect to the Series 1997-1 Certificates at the times and in the amounts specified in this Series Supplement, Collections allocated to Series 1997-1 pursuant to Article IV of the Agreement and this Article IV, funds on deposit in the Collections Account and the Excess Funding Account allocable to Series 1997-1 Certificateholders pursuant to Article IV of the Agreement and this Article IV, and funds on deposit in the Series 1997-1 Accounts (collectively, the "Series 1997-1 Certificateholders' Interest"), it being understood that the Series 1997-1 Certifi­cate­s shall not represent any interest in any Series Account or Enhancement for the benefit of any other Series or Class.  The Servicer shall apply, or instruct the Master Trust Trustee to apply, all funds on deposit in the Collections Account and Excess Funding Account allocable to the Series 1997-1 Certif­i­cates, and all funds on deposit in the Series Principal Account, the Spread Account and the Distri­bution Account maintained for the ­Series 1997-1 Certificateholders, as described in this Article IV.

SECTION IV.2   Establishment of Series Principal Account, Spread Account and Liquidity Reserve Account.

(a) Series Principal Account.

(i)           On or prior to the commencement of an Early Amortization Period or the Accumulation Period, the Master Trustee, for the benefit of the Series 1997-1 Certificateholders, shall establish and maintain in the name of the Master Trust an Eligible Deposit Account bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Series 1997-1 Certificateholders (the "Series Principal Account").  The Master Trust Trustee shall possess all right, title and interest in all funds on deposit from time to time in the Series Principal Account and in all proceeds thereof.  Pursuant to authority granted to it pursuant to Section 3.01(b) of the Agreement, the Servicer shall have the revocable power to instruct the Master Trust Trustee to withdraw funds from the Series Principal Account for the purpose of carrying out the duties of the Servicer under this Series Supplement and the Agreement.  The Servicer at all times shall maintain accurate records reflecting each transaction in the Series Principal Account.

(ii)                      Funds on deposit in the Series Principal Account overnight or for a longer period shall at all times be invested in Eligible Investments at the direction of the Servicer or its agent, subject to the restrictions set forth in the Agreement and subject to the requirement that each such Eligible Investment shall have a stated maturity on or prior to the following Transfer Date (or such longer maturity as shall be allowed upon satisfaction of the Series 1997-1 Rating Agency Condition).  Net interest and earnings (less investment expenses) on funds on deposit in the Series Principal Account, if any, shall be allocated and distributed as provided in Section 4.03(a) or Section 4.04, as applicable.

(b) Spread Account.  

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(i)           On or prior to the 1990 Trust Termination Date, the Master Trust Trustee, for the benefit of the Series 1997-1 Certificateholders, shall cause to be established and maintained in the name of the Master Trust, an Eligible Deposit Account bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Series 1997-1 Certificateholders (the "Spread Account").  The Master Trust Trustee shall possess all right, title and interest in all funds on deposit from time to time in the Spread Account and in all proceeds thereof.  Pursuant to authority granted to it pursuant to Section 3.01(b) of the Agreement, the Servicer shall have the revocable power to instruct the Master Trust Trustee to withdraw funds from the Spread Account for the purpose of carrying out the duties of the Servicer under this Series Supplement and the Agreement.  The Servicer at all times shall maintain accurate records reflecting each transaction in the Spread Account.  As of the 1990 Trust Termination Date, the Servicer shall cause to be deposited in the Spread Account an amount equal to the lesser of (A) the Projected Spread as of the immediately preceding Transfer Date and (B) the amount of funds on deposit in the 1990 Trust Spread Account multipliedby a fraction, the numerator of which is the Projected Spread as of the immediately preceding Transfer Date, and the denominator of which is the projected spreads as of the immediately preceding Transfer Date for all outstanding Series which have spread accounts.

(ii)                      Funds on deposit in the Spread Account overnight or for a longer period shall at all times be invested in Eligible Investments at the direction of the Servicer or its agent, subject to the restrictions set forth in the Agreement and subject to the requirement that each such Eligible Investment shall have a stated maturity on or prior to the following Transfer Date.  Net interest and earnings (less investment expenses) on funds on deposit in the Spread Account, if any, shall be allocated and distributed as provided in Section 4.04.

(iii)                      On any Transfer Date related to a Due Period commencing after the 1990 Trust Termination Date on which the amount of funds on deposit in the Spread Account is greater than the Projected Spread on such Transfer Date, the Servicer shall withdraw the amount of such excess from the Spread Account and allocate and pay such excess to the Seller.

(iv)                      Upon the commencement of and during an Early Amortization Period, the Master Trust Trustee will deposit all funds in the Spread Account into the Liquidity Reserve Account, and no additional funds shall be deposited into the Spread Account.

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(c)           Liquidity Reserve Account.

(i)           The Master Trust Trustee, for the benefit of the Seller, shall establish on or prior to the commencement of an Early Amortization Period and maintain or cause to be established and maintained in the name of the Master Trust Trustee, an Eligible Deposit Account bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Seller (the "Liquidity Reserve Account").  The Seller shall possess all right, title and interest in all funds on deposit from time to time in the Liquidity Reserve Account and in all proceeds thereof; provided, however, that no funds on deposit in the Liquidity Reserve Account shall be paid to the Seller if such payment would reduce the funds in such account below an amount equal to the Available Subordinated Amount.  Pursuant to authority granted to it pursuant to Section 3.01(b) of the Agreement, the Servicer shall have the revocable power to instruct the Master Trust Trustee to withdraw funds from the Liquidity Reserve Account for the purpose of fulfilling the obligations of the Seller under this Series Supplement and the Agreement.  The Servicer at all times shall maintain accurate records reflecting transactions in the Liquidity Reserve Account.

(ii)                      Funds on deposit in the Liquidity Reserve Account overnight or for a longer period shall at all times be invested in Eligible Investments at the direction of the Seller or its agent, subject to the restric­tions set forth in the Agreement.  Any Eligible Investment with a stated maturity shall mature on or prior to the following Transfer Date.  All net interest and earnings (less investment expenses) on funds on deposit in the Liquidity Reserve Account, if any, shall be paid to the Seller.  On any Transfer Date commencing after the 1990 Trust Termination Date on which the amount on deposit in the Liquidity Reserve Account exceeds the Available Subordinated Amount as of the end of such Transfer Date, the Servicer shall withdraw the amount of such excess from the Liquidity Reserve Account and allocate and pay such excess to the Seller.

(d)           Replacement Series 1997-1 Accounts.  If, at any time, any of the Series 1997-1 Accounts ceases to be an Eligible Deposit Account, the Master Trust Trustee (or the Servicer on its behalf) shall upon the earlier of (a) 30 calendar days, or (b) the next Determination Date, establish a new Series 1997-1 Account meeting the conditions specified in paragraphs (a), (b), (c) or (d) above, as applicable, as an Eligible Deposit Account and shall transfer any cash and/or any investments to such new Series 1997-1 Account.  Neither the Seller, the Servicer nor any person or entity claiming by, through or under the Seller, the Servicer or any such person or entity shall have any right, title or interest in, or any right to withdraw any amount from, any Series 1997-1 Account, except as expressly provided herein.

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SECTION IV.3  Application of Class A-5 Investor Certificate Collections Prior to the 1990 Trust Termination Date.

(a)           Class A-5 Investor Certificate Interest Collections.  On each Distribution Date related to a Due Period commencing prior to the 1990 Trust Termination Date, the Master Trust Trustee, acting in accordance with instructions from the Servicer, shall apply Class A-5 Investor Certificate Interest Collections for such Due Period and Investment Income for the related Distribution Period in the following amounts and in the following order of priority:

(i)           Monthly Interest.  An amount equal to Monthly Interest for the related Distribution Period plus any Monthly Interest due with respect to any prior Distribution Period not previously distributed to the Series 1997-1 Certificateholders on a prior Distribution Date, plus to the extent permitted by law, interest at the Certificate Rate that has accrued on Monthly Interest that was due pursuant to this clause (i) but was not previously distributed to the Series 1997-1 Certificateholders on a prior Distribution Date shall be deposited in the Distribution Account.

(ii)  Allocation to Seller.  Any remaining Class A-5 Investor Certificate Interest Collections for the related Due Period and Investment Income for the related Distribution  Period shall be allocated and paid to the Seller.

(b)           Class A-5 Investor Certificate Principal Collections.  On each Transfer Date related to a Due Period commencing prior to the 1990 Trust Termination Date and occurring during an Early Amortization Period, the Master Trust Trustee, acting in accordance with instructions from the Servicer, shall withdraw from the Collections Account and apply Class A-5 Investor Certificate Principal Collections, if any, for the related Due Period in the following amounts and in the following order of priority:

(i)           Invested Amount.  An amount equal to the excess of the Invested Amount over the amount of all previous deposits to the Series Principal Account pursuant to this Section 4.03(b)(i) shall be deposited in the Series Principal Account.

(ii)                      Allocation to Seller.  Any remaining Class A-5 Investor Certificate Principal Collections for such Due Period shall be allocated and paid to the Seller.

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SECTION IV.4  Application of Available Certificateholder Interest Collections After the 1990 Trust Termination Date.

(a)           Application of Available Certificateholder Interest Collections.  On each Transfer Date related to a Due Period commencing after the 1990 Trust Termination Date, the Master Trust Trustee, acting in accordance with instructions from the Servicer, shall apply Available Certificateholder Interest Collections for such Due Period in the following amounts and in the following order of priority:

(i)           Investor Servicing Fee.  An amount equal to the Investor Servicing Fee for such Due Period (unless such amount has been netted against deposits to the Collections Account or waived) shall be allocated and paid to the Servicer.

(ii)                      Monthly Interest.  An amount equal to Monthly Interest for the Distribution Period, plus any Monthly Interest due with respect to any prior Distribution Period but not previously distributed to the Series 1997-1 Certificateholders on a prior Distribution Date, plus to the extent permitted by law, additional interest at the Certificate Rate for such Distribution Period that has accrued on Monthly Interest that was due pursuant to this clause (ii) but was not previously distributed to the Series 1997-1 Certificateholders on a prior Distribution Date shall be deposited in the Distribution Account.

(iii)                      Investor Dealer Note Losses.  An amount equal to the Investor Dealer Note Losses, if any, for such Due Period shall be reimbursed by being treated as Investor Principal Collections for such Transfer Date.

(iv)                      Reimbursement of Investor Charge-Offs.  An amount equal to the aggregate amount of unreimbursed Investor Charge-Offs, if any, for any prior Due Period shall be reimbursed by being treated as Investor Principal Collections for such Transfer Date.

(v)           Spread Account Deposit Amount.  An amount equal to the Spread Account Deposit Amount, if any, for such Transfer Date shall be deposited into the Spread Account.

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(vi)                      Deferred Investor Servicing Fee.  An amount equal to the aggregate outstanding amounts of the Investor Servicing Fee which have been previously waived pursuant to Section 3.01 (unless such amounts have been waived again) shall be allocated and paid to the Servicer.

(vii)                      Reinstatement of Available Subordinated Amount.  An amount equal to the excess, if any, of the Maximum Subordinated Amount as of the end of the preceding Transfer Date over the Available Subordinated Amount as of the end of the preceding Transfer Date shall be (A) during the Revolving Period or the Accumulation Period, allocated and paid to the Seller or (B) during an Early Amortization Period, deposited in the Liquidity Reserve Account, and in either case (A) or (B) the Available Subordinated Amount shall be reinstated by the amount of such payment or deposit.

(viii)                      Excess Interest Collections.  Any remaining  Available Certificateholder Interest Collections shall be treated as Excess Interest Collections, and applied pursuant to Section 4.03(f) of the Agreement.

If Available Certificateholder Interest Collections are not sufficient to satisfy each of the applications described in clauses (i) through (vii) above on any Transfer Date, then Excess Interest Collections from other Series allocable to Series 1997-1 will be applied as Available Certificateholder Interest Collections in the priority and the manner described in clauses (i) through (vii) above.  If Excess Interest Collections are less than the shortfalls for all Series that provide for allocations of Excess Interest Collections, such Excess Interest Collections shall be allocable to shortfalls for Series 1997-1 and any other Series that so provides pro rata based on the relative amounts of each Series' shortfall.

SECTION IV.5  Application of Available Seller's Finance Charge Collections, Spread Account and Liquidity Reserve Account to Deficiency Amount.

(a)           On each Transfer Date commencing after the 1990 Trust Termination Date, the Servicer shall determine the amount (the "Deficiency Amount"), if any, by which the amount of the entire allocations required on such Transfer Date by Sections 4.04(a)(i) through (iv) exceeds the amount of Available Certificateholder Interest Collections for such Due Period and Excess Interest Collections allocated to Series 1997-1 on such Transfer Date, if any, for the related Due Period.

(b)           If the Deficiency Amount for any Transfer Date is greater than zero, the Master Trust Trustee, acting in accordance with instructions from the Servicer, shall apply available funds from the following sources in the following order of priority in the same manner as Available Certificateholder Interest Collections, each of which applications shall reduce such Deficiency Amount (all such available funds being the "Available Draw Funds" for such Transfer Date):

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(i)           Available Seller's Finance Charge Collections;

(ii)          funds on deposit in the Spread Account;

(iii)        for any Transfer Date occurring during any Early Amortization Period, funds on deposit in the Liquidity Reserve Account;

provided, however, that the amount applied pursuant to this Section 4.05(b) shall not exceed the Draw Amount.  The Available Subordinated Amount shall be reduced by the aggregate amount of Available Draw Funds applied pursuant to this Section 4.05(b).

(c)           If all of the amounts applied pursuant to Section 4.05(a) and (b) are insufficient to make the entire application described in Section 4.04(a)(iii), the Available Subordinated Amount shall be reduced (but not below zero) by the amount of such deficiency and any remaining Investor Dealer Note Losses shall be deemed to be reimbursed to the extent of such reduction.

SECTION IV.6  Investor Charge-Offs.  If, for any Transfer Date on which the Available Subordinated Amount equals or is reduced to zero (after giving effect to the allocations, distributions, withdrawals and deposits to be made on such Transfer Date) and the Deficiency Amount for such Transfer Date (as reduced by the applications required by Section 4.05 of this Series Supplement) is greater than zero, the Invested Amount shall be reduced by the lesser of (i) such remaining Deficiency Amount for such Transfer Date and (ii) the amount of Investor Dealer Note Losses for the related Due Period remaining unreimbursed after all applications of funds or reductions of the Available Subordinated Amount pursuant to Sections 4.04 and 4.05 (such lesser amount being an "Investor Charge-Off").

SECTION IV.7  Application of Seller's Finance Charge Collections After the 1990 Trust Termination Date.

(a)           Application of Available Seller's Finance Charge Collections.  On each Transfer Date related to a Due Period commencing after the 1990 Trust Termination Date, the Master Trust Trustee, acting in accordance with instructions from the Servicer, shall withdraw and apply from the Collections Account to the extent of Available Seller's Finance Charge Collections for such Due Period, the following amounts in the following order of priority:

(i)           On each Transfer Date related to a Due Period for which a Deficiency Amount exists, the amount required by Section 4.05(b)(i) shall be applied as specified in Section 4.05(b).

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(ii)                      On each Transfer Date related to a Due Period occurring during an Early Amortization Period, the amount, if any, by which the Available Subordinated Amount as of the end of such Transfer Date exceeds the amount of funds on deposit in the Liquidity Reserve Account shall be deposited in the Liquidity Reserve Account.

(iii)                      On each Transfer Date on which the full Spread Account Deposit Amount was not deposited in the Spread Account pursuant to Section 4.04(a)(v), an amount equal to the shortfall in such Spread Account Deposit Amount shall be deposited in the Spread Account.

(iv)                      Any remaining Available Seller's Finance Charge Collections for the related Due Period shall be allocated and paid to the Seller.

(b)           Application of Series Allocable Finance Charge Collections to the Seller.  On each Transfer Date related to a Due Period commencing after the 1990 Trust Termination Date, the Master Trust Trustee, acting in accordance with instructions from the Servicer, shall withdraw from the Collections Account and allocate and pay to the Seller an amount equal to the product of (i) the result of the Excess Seller's Percentage for such Due Period minus the Required Excess Seller Interest Percentage and (ii) Series Allocable Finance Charge Collections for such Due Period.

SECTION IV.8  Application of Series Allocable Principal Collections After the 1990 Trust Termination Date.  On each Business Day after the 1990 Trust Termination Date, the Master Trust Trustee, acting in accordance with instructions from the Servicer, shall withdraw Series Allocable Principal Collections for such Business Day from the Collections Account and apply such funds in the following amounts:

(a)           Investor Principal Collections During Revolving Period.  During the Revolving Period, an amount equal to Investor Principal Collections for such Business Day shall be treated as Shared Principal Collections, and applied, pursuant to the written direction of the Servicer, pursuant to Section 4.03(e) of the Agreement.

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(b)           Investor Principal Collections during Accumulation Period or Early Amortization Period.  During the Accumulation Period or any Early Amortization Period,  Investor Principal Collections for such Business Day shall be allocated to the Series 1997-1 Certificateholders and deposited into the Series Principal Account to the extent the Invested Amount as of the preceding Distribution Date exceeds the amount of funds on deposit in the Series Principal Account on such Business Day; provided, however, that for each Business Day of a Due Period occurring during the Accumulation Period, the amount of Investor Principal Collections deposited in the Series Principal Account on such Business Day,  when added to the amount of Investor Principal Collections previously deposited in the Series Principal Account during such Due Period, shall not exceed the Controlled Deposit Amount for such Due Period.  Any Investor Principal Collections remaining after the applications described in the preceding sentence shall be treated as Shared Principal Collections, and applied, pursuant to the written direction of the Servicer, pursuant to Section 4.03(e) of the Agreement.

(c)           Seller's Principal Collections During the Revolving Period.  During the Revolving Period, all Seller's Principal Collections for such Business Day shall be deemed to be Series 1997-1 Shared Seller Principal Collections and shall be allocated as provided in Section 4.08(d)(iii).

(d)           Seller's Principal Collections During Accumulation Period or Early Amortization Period; Shared Seller Principal Collections.

(i)           During the Accumulation Period, Available Seller's Principal Collections for such Business Day shall be deemed to be "Remaining Available Seller's Principal Collections," which shall be included in Series 1997-1 Shared Seller Principal Collections and allocated as provided in clause (iii) below.  During the Accumulation Period, Excess Seller's Principal Collections shall be included in Series 1997-1 Shared Seller Principal Collections and allocated as provided in clause (iii) below.

(ii)                      During any Early Amortization Period Available Seller's Principal Collections for such Business Day shall be deposited in the Liquidity Reserve Account to the extent the Available Subordinated Amount as of the end of the immediately preceding Transfer Date exceeds the amount of funds on deposit in the Liquidity Reserve Account (including amounts deposited pursuant to Section 4.07(a)(ii)).  The amount required to be deposited pursuant to the preceding sentence shall be reduced by the amount of Available Seller's Finance Charge Collections deposited in the Liquidity Reserve Account on such Business Day.  Any remaining Available Seller's Principal Collections for such Business Day shall be deemed to be "Remaining Available Seller's Principal Collections."  During any Early Amortization Period, all Excess Seller’s Principal Collections, all Remaining Available Seller’s Principal Collections and all shared seller principal collections of any other Series that provides for shared seller principal collections not allocated in respect of principal shortfalls shall be allocated and paid to the Seller or deposited in the Excess Funding Account to the extent necessary to maintain the Master Trust Seller’s Interest at an amount equal to (or, in the Seller’s discretion, greater than) the Minimum Master Trust Seller’s Interest.

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(iii)                      During the Revolving Period or the Accumulation Period, Series 1997-1 Shared Seller Principal Collections, if any, and shared seller principal collections for any other Series that provides for shared seller principal collections shall be determined on each business day and allocated in the following priority:  (i) to the 1997-1 Series to the extent of any Series 1997-1 Accumulation Period Principal Shortfall and to any other Series to the extent such Series provides for the use of shared seller principal collections in respect of principal shortfalls, (ii) to the Excess Funding Account to the extent necessary to maintain the Master Trust Seller’s Interest at an amount equal to (or, in the discretion of the Seller, greater than) the Minimum Master Trust Seller’s Interest and (iii) to the Seller.  If shared seller principal collections for all Series, including Series 1997-1 Shared Seller Principal Collections, are less than the shortfalls for which shared seller principal collections may be used, including any Series 1997-1 Accumulation Period Principal Shortfall, then such shared seller principal collections will be allocated to all such shortfalls, including any Series 1997-1 Accumulation Period Principal Shortfall, pro rata based on the relative amounts of each such shortfall.

(iv)                      “Series 1997-1 Shared Seller Principal Collections” means on each business day (i) during a Revolving Period, all Available Seller’s Principal Collections and all Excess Seller’s Principal Collections and (ii) during an Accumulation Period, all Remaining Available Seller’s Principal Collections and all Excess Seller’s Principal Collections.  There shall be no Series 1997-1 Shared Seller Principal Collections during any Early Amortization Period.

(e)           If on any Distribution Date during an Early Amortization Period after the application of all funds to be allocated or distributed on such date the excess, if any, of (x) the Invested Amount over (y) the amount in the Series Principal Account (the “Early Amortization Period Shortfall Amount”) is less than or equal to the aggregate amount of funds contained in the Liquidity Reserve Account then funds shall be withdrawn in an amount equal to the Early Amortization Period Shortfall Amount and shall be deposited in the Series Principal Account.

SECTION IV.9  Shared Principal Collections.

(a)           That portion of Shared Principal Collections for any Business Day equal to the amount of Series 1997-1 Shared Principal Collections for such Business Day will be allocated to Series 1997-1 and will be applied in the same manner as Investor Principal Collections pursuant to Section 4.08(b) and otherwise will be deposited in the Excess Funding Account to the extent necessary to maintain the Master Trust Seller's Interest at an amount equal to (or, in the discretion of the Seller, greater than) the Minimum Master Trust Seller's Interest or allocated to the Seller..

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(b)           "Series 1997-1 Shared Principal Collections," with respect to any Business Day commencing after the 1990 Trust Termination Date, shall mean an amount equal to the Series 1997-1 Principal Shortfall for such Business Day; provided, however, that, if the aggregate amount of Shared Principal Collections for all Series for such Business Day is less than the aggregate amount of Principal Shortfalls for all Series for such Business Day, then Series 1997-1 Shared Principal Collections for such Business Day shall equal the product of (x) Shared Principal Collections for all Series for such Business Day and (y) a fraction, the numerator of which is the Series 1997-1 Principal Shortfall for such Business Day and denominator of which is the aggregate amount of Principal Shortfalls for all Series for such Business Day.

SECTION IV.10  Distributions to ­Series 1997-1 Certificateholders.  On each Transfer Date, after all allocations to the Distribution Account and the Series Principal Account for the related Transfer Date have been made, the Master Trust Trustee, acting in accordance with instructions from the Servicer, shall transfer to the Distribution Account the funds on deposit in the Series Principal Account and shall make, without duplication, the following distributions from the Distribution Account:

(a)           Interest Distributions.  On each Distribution Date (including the Expected Payment Date), Monthly Interest will be distributed to the Series 1997-1 Certificateholders as accrued interest on the 1997-1 Certificates.  To the extent any interest is due but not distributed on any such Distribution Date, such amount will be distributed on the following Distribution Date, along with, to the extent permitted by law, interest at the Certificate Rate on such amount.

(b)           Expected Payment Date.  On the Expected Payment Date, in addition to the amount described in (a) above, amounts on deposit in the Series Principal Account will be distributed as principal (up to a maximum of the Invested Amount on such Distribution Date) on the Series 1997-1 Certificates.

(c)           Early Amortization Period.  On each Distribution Date related to a Due Period occurring during an Early Amortization Period, in addition to the amount described in (a) above, amounts on deposit in the Series Principal Account will be distributed as principal (up to a maximum of the Invested Amount on such Distribution Date) on the Series 1997-1 Certificates.

SECTION IV.11  Accumulation Period Length; Accumulation Period Commencement Date.  On or prior to the first Due Period which is nine months prior to the Due Period related to the Distribution Date which is the Expected Payment Date, the Servicer shall determine in its sole discretion the Accumulation Period Length and the Accumulation Period Commencement Date and, promptly following such determination, the Servicer shall notify the Master Trust Trustee and the Rating Agencies in writing of such determination.

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SECTION IV.12   Partial Month Due Period.  The allocation and distribution provisions in this Series Supplement are based upon the assumptions that each Due Period will be a calendar month and that each Due Period will have a unique related Transfer Date and Distribution Date.  However, under certain circumstances (such as the occurrence of an Early Amortization Event, the Revolving Period could end on a date other than the last day of a calendar month (the period from the first day of such month (the "Subject Month") to and including the date of such occurrence being referred to herein as the "Revolving Due Period"), and an Early Amortization Period could commence on a date other than the first day of a calendar month (the period from such other date until the last day of the Subject Month being the "Amortizing Due Period").  If such a circumstance occurs, then the Servicer, the Seller and the Master Trust Trustee shall observe the following rules:

(i)           the Transfer Date for both the Revolving Due Period and the Amortizing Due Period shall be the date on which the Transfer Date would have occurred if the Subject Month had been an ordinary Due Period;

(ii)           the allocations and distributions of Finance Charge Collections (and all items derived from Finance Charge Collections, such as Available Certificateholder Interest Collections and Available Seller's Finance Charge Collections) and Dealer Note Losses occurring during the Subject Month shall be made as if the Subject Month were one Due Period, without any distinction between the Revolving Due Period and the Amortizing Due Period; and

(iii)           two separate sets of allocations and distributions of Principal Collections (and all items derived from Principal Collections, such as Investor Principal Collections and Seller's Principal Collections) shall be made on such Transfer Date, according to whether such Principal Collections were received during the Revolving Due Period (in which case allocations and distributions shall be made as provided in Sections 4.08(a) and (c)) or the Amortizing Due Period (in which case allocations and distributions shall be made as provided in Sections 4.08(b) and (d)).

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SECTION IV.13  Additional Rights upon the Occurrence of Certain Events.  Notwithstanding the provisions of Section 9.02(a) of the Agreement, if any insolvency event occurs with respect to the Seller, Navistar International Corporation, Navistar International Transportation Corporation or Navistar Financial Corporation on the day of such insolvency event, the Seller will (subject to the actions of the Certificateholders) immediately cease to transfer Dealer Notes to the 1990 Trust or the Master Trust, as applicable, and promptly give notice to the Master Trust Trustee of such insolvency event.  Under the terms of the Pooling and Servicing Agreement, if an insolvency event occurs with respect to the Seller after the 1990 Trust Termination Date but prior to the date on which the Series 1995-1 investor certificates issued by the Master Trust have been paid in full, then within 15 days the Master Trust Trustee will publish a notice of such insolvency event stating that the Master Trust Trustee intends to sell, liquidate or otherwise dispose of the Dealer Notes in a commercially reasonable manner and on commercially reasonable terms, unless within a specified period of time Certificate holders representing more than 50% of the aggregate series invested amount of the certificates of each such Series and each person holding a Supplemental Certificate, instruct the Master Trust Trustee not to sell, dispose of or otherwise liquidate the Dealer Notes and to continue transferring Dealer Notes as before such insolvency event.

SECTION IV.14  Voting of the Master Trust’s Interests in the 1990 Trust.  The Master Trust Trustee will have the right, without the consent of the Certificateholders, to vote, or to consent or withhold consent with respect to, the Class A-5 Investor Certificate and any other Investor Certificate on any matter for which votes or consents are solicited under the 1990 Trust Agreement, provided that such action will not, as evidenced by an officer’s certificate of the Servicer, have a material adverse effect on the Certificateholders of any Series.  The Master Trust Trustee will also have the right, with the consent of the Applicable Voting Percentage of the Certificateholders, to vote, or to consent or withhold consent, with respect to the Class A-5 Investor Certificate and any other Investor Certificate on any matter for which votes or consents are solicited under the 1990 Trust Agreement.

“Applicable Voting Percentage” means, with respect to any matter for which votes or consents are solicited under the 1990 Trust Agreement, the percentage of votes or consents of the Investor Certificates needed to pass the proposed matter.

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ARTICLE V

DISTRIBUTIONS AND REPORTS

TO SERIES 1997-1 CERTIFICATEHOLDERS

SECTION V.1  Distributions.

(a)           The Paying Agent shall distribute (in accordance with the Monthly Servicer Certificate and Settlement Statement delivered by the Servicer to the Master Trust Trustee and the Paying Agent pursuant to Section 3.04(d) of the Agreement) to each Series 1997-1 Certificateholder of record on the preceding Record Date (other than as provided in Section 12.02 of the Agreement respecting a final distribution) on each Distribution Date such Certificateholder's pro rata share (based on the aggregate fractional undivided interests represented by the Series 1997-1 Certificates held by such Certificateholder) of the amounts on deposit in the Series 1997-1 Accounts as is payable to the Series 1997-1 Certificateholders on such Distribution Date pursuant to Sections 4.10  (a), (b) and (c).

(b)           Except as provided in Section 12.03 of the Agreement with respect to a final distribution, distributions to Series 1997-1 Certificateholders hereunder shall be made by check mailed to each Series 1997-1 Certificateholder at such Certificateholder's address appearing in the Certificate Register without presentation or surrender of any Series 1997-1 Certificate or the making of any notation thereon; provided, however, that, with respect to Series 1997-1 Certificates registered in the name of a Common Depository, such distributions shall be made to such Common Depository in immediately available funds.

SECTION V.2  Monthly and Annual Certificateholders' Statement.

(a)           Monthly Series 1997-1 Certificateholders' Statement.  At least two Business Days prior to each Distribution Date, the Servicer will provide to the Master Trust Trustee and the Paying Agent, and on each Distribution Date, the Paying Agent shall forward to each Series 1997-1 Certificateholder a Monthly Servicer Certificate and Settlement Statement substantially in the form of Exhibit B-1 prior to the 1990 Trust Termination Date or substantially in the form of Exhibit B-2 after the 1990 Trust Termination Date, in each case with such changes as the Servicer shall deem necessary or appropriate, prepared by the Servicer and delivered to the Master Trust Trustee setting forth, among other things, the following information which, prior to the 1990 Trust Termination Date, will include only the amounts specified in (iii), (iv), (v), (xi), (xiv), (xv) and (xvi) below, and which, in the case of (i), (ii), (iii), (viii), and (ix) below, shall be stated on the basis of an original principal amount of $1,000 per Series 1997-1 Certificate:

(i)           the aggregate amount of Collections, including the aggregate amount of Finance Charge Collections and the aggregate amount of Principal Collections for the related Due Period;

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(ii)                      the Series 1997-1 Allocation Percentage, the Floating Allocation Percentage and the Principal Allocation Percentage (if applicable) for the related Due Period;

(iii)                      the total amount to be distributed on the Series 1997-1 Certificates on such Distribution Date;

(iv)                      the amount, if any, of such distribution allocable to the Invested Amount;

(v)           the amount, if any, of such distribution allocable to interest on the Series 1997-1 Certificates;

(vi)                      Dealer Note Losses for the related Due Period;

(vii)                      the Draw Amount as of the related Transfer Date, if any;

(viii)                      the amount of the Investor Charge-Offs and the amount of reimbursement thereof as of the related Transfer Date;

(ix)                      the amount of the Investor Servicing Fee to be paid on such Distribution Date;

(x)           the Controlled Deposit Amount for the related Due Period (if applicable);

(xi)                      the Invested Amount (after giving effect to all distributions that will occur on such Distribution Date);

(xii)                      the aggregate amount of Dealer Notes and funds on deposit in each of the Excess Funding Account, Series Principal Account and Spread Account as of the end of the last day of the related Due Period (after giving effect to payments and adjustments made pursuant to Article IV of this Series Supplement and of the Agreement);

(xiii)                      the Available Subordinated Amount as of the end of the related Transfer Date;

(xiv)                      with respect to Eligible Investments in the Series Principal Account, the Excess Funding Account and the Liquidity Reserve Account, as of the last day of the related Due Period, the aggregate amount of funds invested in Eligible Investments in each such Series Account, a brief description of each such Eligible Investment and amount invested in each such Eligible Investment, the rate of interest applicable to each such Eligible Investment and the rating of each such Eligible Investment;

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(xv)                      the Dealers with the five largest aggregate outstanding principal amounts of Dealer Notes in the 1990 Trust or the Master Trust, as the case may be, as of the end of the related Due Period;

(xvi)                      the aggregate outstanding principal amount of Dealer Notes issued to finance OEM Vehicles as of the end of the related Due Period;

(xvii)                      the percentages and all other information calculated pursuant to Section 6.01 to determine whether an Early Amortization Event has occurred;

(xviii)                      the amount of Excess Interest Collections and Investor Principal Collections treated as Shared Principal Collections, each for the related Due Period, and the amount of such Excess Interest Collections and Shared Principal Collections allocated to other Series; and

(xix)  the amount of Remaining Available Seller's Principal Collections, the amount of Excess Seller's Principal Collections and Remaining Available Seller's Principal Collections treated as Series 1997-1 Shared Seller Principal Collections, the amount of Shared Seller Principal Collections from other Series, and the amount of Shared Seller Principal Collections allocated to Series 1997-1 and to other Series, each for the related Due Period.

(b)           On each Distribution Date related to a Due Period commencing prior to the 1990 Trust Termination Date, the Master Trust Trustee shall furnish to the Paying Agent and the Paying Agent shall forward to each Series 1997-1  Certificateholder the statement to be delivered pursuant to Section 5.02(a) of the 1990 Trust Agreement.

(c)           A copy of each statement provided pursuant to subsections (a) and (b) will be made available for inspection at the Corporate Trust Office.

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(d)           Annual Certificateholder's Tax Statement.  On or about January 31 of each calendar year, beginning with calendar year 1998, the Master Trust Trustee shall furnish to the Servicer and Paying Agent a list of each Person who at any time during the preceding calendar year was a Series 1997-1 Certificateholder and received any payment thereon and the dates such Person held a Series 1997-1 Certificate, and the Paying Agent shall furnish to each such Series 1997-1 Certificateholder a statement prepared by the Paying Agent containing the information prepared by the Master Trust Trustee which is required to be contained in the statement to Series 1997-1 Certificateholders as set forth in Sections 5.02(a)(iii)-(a)(v) above, aggregated for such calendar year or the applicable portion thereof during which such Person was a Series 1997-1 Certificateholder, together with such other customary information  as the Master Trust Trustee or the Servicer deems necessary or desirable to enable the Series 1997-1 Certificateholders to prepare their tax returns, including information (to be supplied by the Servicer to the Master Trust Trustee) regarding original issue discount on the Series 1997-1 Certificates, if any.  Such obligation of the Paying Agent shall be deemed to have been satisfied to the extent that substantially comparable information shall be provided by the Master Trust Trustee pursuant to any requirements of the Internal Revenue Code as from time to time in effect.

ARTICLE VI

EARLY AMORTIZATION EVENTS

SECTION VI.1  Additional Early Amortization Events.  The occurrence of any of the following events shall, immediately upon the occurrence thereof without notice or other action on the part of the Master Trust Trustee or the Series 1997-1 Certificateholders, be deemed to be an Early Amortization Event solely with respect to Series 1997-1:

(a)           the Invested Amount is not reduced to zero by the Expected Payment Date;

(b)           the United States government or any agency or instrumentality thereof files a notice of a lien under Internal Revenue Code §6323 or any similar statutory provision (including, but not limited to, §302(f) or §4068 of ERISA) on the assets of NFC or NFSC which is or may in the future be prior to the lien of the Master Trust Trustee or the assets of the Master Trust (including, without limitation, proceeds of the Dealer Notes);

(c)           failure on the part of the Seller (i) to make any payment, distribution or deposit required under the Agreement within five business days of the date required or (ii) to observe or perform in any material respect any other material covenants or agreements of the Seller, which continues unremedied for a period of 60 days after written notice of such failure shall have been given to the Seller;

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(d)           any representation or warranty made by the Seller pursuant to the Agreement or any information contained in the schedule of Dealer Notes delivered thereunder or this Series Supplement shall prove to have been incorrect in any material respect when made or when delivered, which representation, warranty or schedule, or the circumstances or condition that caused such representation, warranty or schedule to be incorrect, continues to be incorrect or uncured in any material respect for a period of 60 days after written notice of such incorrectness shall have been given to the Seller and as a result of which the interests of the Series 1997-1 Certificateholders are materially and adversely affected, except that an Early Amortization Event shall not be deemed to occur if the Seller has repurchased the related Dealer Notes or all such Dealer Notes, if applicable, during such period in accordance with the provisions of the Agreement;

(e)           after the 1990 Trust Termination Date, the Seller shall become legally unable for any reason to transfer Dealer Notes to the Master Trust in accordance with the provisions of the Agreement;

(f)           on any Transfer Date related to a Due Period commencing after the 1990 Trust Termination Date, the Available Subordinated Amount for such Transfer Date will be reduced to an amount less than the Required Subordinated Amount;

(g)           any Servicer Termination Event shall occur (i) which would have a material adverse effect on the Series 1997-1 Certificateholders and (ii) for which the Servicer has received a notice of termination;

(h)           the delivery by the Seller to the Master Trust Trustee, after the 1990 Trust Termination Date, of a notice stating that the Seller will no longer continue to sell Dealer Notes to the Master Trust commencing on the date specified in such notice;

(i)           after the 1990 Trust Termination Date, the Average Coverage Differential shall be equal to or less than negative two percent (2.00%) on each of three consecutive Determination Dates;

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(j)           at the end of any Due Period commencing after the 1990 Trust Termination Date, the Master Trust Seller's Interest is reduced to an amount less than the Master Trust Minimum Seller's Interest and the Seller has failed to assign additional Dealer Notes to the Master Trust in the amount of such deficiency within ten Business Days following the end of such Due Period;

(k)           on any Determination Date after the 1990 Trust Termination Date, the quotient of (i) the product of (a) the sum of Dealer Note Collections for each of the related Due Period and the two immediately preceding Due Periods and (b) four dividedby (ii) the daily average principal amount of Dealer Notes outstanding during such Due Periods ("Turnover") is less than 1.7;

(l)           on any Determination Date after the 1990 Trust Termination Date, the quotient of (i) the sum of Dealer Note Losses for each of the related Due Period and the five immediately preceding Due Periods and (ii) the sum of Principal Collections for each of the related Due Period and the five immediately preceding Due Periods, is greater than or equal to one percent (1.00%);

(m)                      at any time prior to the 1990 Trust Termination Date, a 1990 Trust Amortization Event occurs under the 1990 Trust with respect to the Class A-5 Investor Certificate (other than a 1990 Trust Amortization Event that also constitutes an Early Amortization Event under the Master Trust), the Seller is required to repurchase the Class A-5 Investor Certificate under Section 2.06 of the 1990 Trust Agreement, or the Scheduled Class Amortization Date occurs with respect to the Class A-5 Investor Certificate;

(n)           any of the Seller, NITC, NIC or NFC shall file a petition commencing a voluntary case under any chapter of the federal bankruptcy laws; or the Seller or NFC shall file a petition or answer or consent seeking reorganization, arrangement, adjustment or composition under any other similar applicable federal law, or shall consent to the filing of any such petition, answer or consent; or the Seller, NITC, NIC or NFC shall appoint, or consent to the appointment of a custodian, receiver, liquidator, trustee, assignee, sequestrator or other similar official in bankruptcy or insolvency of it or of any substantial part of its property; or the Seller, NITC, NIC or NFC shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due;

(o)           any order for relief against any of the Seller, NITC, NIC or NFC shall have been entered by a court having jurisdiction in the premises under any chapter of the federal bankruptcy laws, and such order shall have continued undischarged or unstayed for a period of 120 days; or a decree or order by a court having jurisdiction in the premises shall have been entered approving as properly filed a petition seeking reorganization, arrangement, adjustment, or composition of the Seller, NITC, NIC or NFC under any other similar applicable federal law, and such decree or order shall have continued undischarged or unstayed for a period of 120 days; or a decree or order of a court having jurisdiction in the premises for the appointment of a custodian, receiver, liquidator, trustee, assignee, sequestrator or other similar official in bankruptcy or insolvency of the Seller, NITC, NIC or NFC of any substantial part of their property, or for the winding up or liquidation of their affairs, shall have been entered, and such decree or order shall have remained in force undischarged or unstayed for a period of 120 days; and

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(p)           after the 1990 Trust Termination Date, failure on the part of NITC to make a deposit in the Interest Deposit Account required by the terms of the Interest Deposit Agreement on or before the date occurring five Business Days after the date such deposit is required by the Interest Deposit Agreement to be made.

ARTICLE VII

OTHER SERIES PROVISIONS

SECTION VII.1  Conveyance of Dealer Notes.  Upon the date on which each other Series is either no longer outstanding or the fully funded date has occurred with respect thereto, the Master Trust Trustee shall sell, assign and convey to the Seller or its designee, without recourse, representations or warranty, all right, title and interest of the Master Trust in the Dealer Notes, whether then existing or thereafter created, all  security interests in the Financed Vehicles with respect thereto, all monies due or to become due and all amounts received with respect thereto and all proceeds thereof except for amounts on deposit in the Collections Account that are allocable to Investor Certificates and amounts on deposit in any Series Account.  The Master Trust Trustee shall execute and deliver such instruments of transfer and assignment, in each case without recourse, as shall be reasonably requested by the Seller to vest in the Seller or its designee all right, title and interest which the Master Trust had in all such property.

SECTION VII.2  Tax Treatment.  The Seller has entered into the Agreement and this Series Supplement and the Series 1997-1 Certificates have been issued with the intention that the Series 1997-1 Certificates will qualify under applicable tax law as indebtedness secured by the Master Trust assets attributable to the Series 1997-1 Certificates.  The Seller and each Series 1997-1 Certificateholder and Certificate Owner, by the acceptance of its Series 1997-1 Certificate or Book-Entry Certificate, as applicable, agrees to treat the Series 1997-1 Certificates as indebtedness secured by the Master Trust assets attributable to the Series 1997-1 Certificates, for Federal income taxes, state and local income and franchise taxes and any other taxes imposed on or measured by income in whole or in part.

ARTICLE VIII

FINAL DISTRIBUTIONS

SECTION VIII.1  Sale of Investors' Interest Pursuant to Section 2.07 of the Agreement; Distributions Pursuant to Section 2.03 or 12.03 of the Agreement.

(a)           The amount to be paid by the Seller to the Collections Account with respect to Series 1997-1 in connection with a purchase of the Certificateholders' Interest pursuant to Section 2.07 of the Agreement shall equal the Reassignment Amount for the Distribution Date on which such purchase occurs.

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(b)           With respect to the Reassignment Amount, if any, deposited into the Collections Account pursuant to this Section 8.01 of this Series Supplement or Section 2.07 of the Agreement or any proceeds deposited into the Collections Account pursuant to Section 12.03(c) of the Agreement, the Master Trust Trustee shall, not later than 12:00 noon, New York City time, on the Distribution Date on which such amounts are deposited (or, if such date is not a Distribution Date, on the immediately following Distribution Date) (in the priority set forth below):  (i) first, deposit the Invested Amount on such Distribution Date into the Series Principal Account, (ii) second, deposit the amount of accrued and unpaid interest on the unpaid balance of the Series 1997-1 Certificates in the Distribution Account, and (iii) third, pay the remainder of any such Reassignment Amounts to the Seller.

(c)           Notwithstanding any other provision to the contrary in this Series Supplement or the Agreement, the entire amount deposited in the Series Principal Account on a Distribution Date pursuant to Section 8.01(b) and all other amounts on deposit therein shall be distributed in full to the Series 1997-1 Certificateholders on such Distribution Date and any distribution made pursuant to this paragraph (c) shall be deemed to be a final distribution pursuant to Section 12.03 of the Agreement with respect to Series 1997-1.

SECTION VIII.2  Distribution of Proceeds of Sale, Disposition or Liquidation of the Dealer Notes Pursuant to Section 9.02 of the Agreement.

(a)           Not later than 12:00 noon, New York City time, on the Distribution Date following the date on which the Insolvency Proceeds are deposited into the Collections Account pursuant to Section 9.02(b) of the Agreement, the Master Trust Trustee shall first (in each case, after giving effect to any deposits and distributions otherwise to be made on such Distribution Date) deduct an amount equal to the Invested Amount on such Distribution Date from the portion of the Insolvency Proceeds allocated to Series Allocable Principal Collections and deposit such amount in the Series Principal Account; provided that the amount of such deposit shall not exceed the product of (x) the portion of the Insolvency Proceeds allocated to Series Allocable Principal Collections and (y) 100% minus the Excess Seller's Percentage with respect to the related Due Period.  The remainder of the portion of the Insolvency Proceeds allocated to Series Allocable Principal Collections shall be allocated to the Master Trust Seller's Interest and shall be distributed on such Distribution Date to the Seller.

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(b)           Not later than 12:00 noon, New York City time, on such Distribution Date, the Master Trust Trustee shall first (in each case, after giving effect to any deposits and distributions otherwise to be made on such Distribution Date) deduct an amount equal to the sum of (i) Monthly Interest for such Distribution Date, (ii) any Monthly Interest previously due but not distributed on a prior Distribution Date and (iii) to the extent permitted by law, interest at the Certificate Rate on Monthly Interest that was due but not previously distributed to the Series 1997-1 Certificateholders on a prior Distribution Date, from the portion of the Insolvency Proceeds allocated to Series Allocable Finance Charge Collections and deposit such amount in the Distribution Account; provided that the amount of such distribution shall not exceed the product of (x) the portion of the Insolvency Proceeds allocated to Series Allocable Finance Charge Collections and (y) 100% minus the Excess Seller's Percentage with respect to the related Due Period.  The remainder of the portion of the Insolvency Proceeds allocated to Series Allocable  Finance Charge Collections shall be allocated to the Master Trust Seller's Interest and shall be distributed on such Distribution Date to the Seller.

(c)           Notwithstanding anything to the contrary in this Series Supplement or the Agreement, the entire amount deposited in the Series Principal Account and the Distribution Account pursuant to this Section 8.02 and all other amounts on deposit therein shall be distributed in full to the Series 1997-1 Certificateholders on the Distribution Date on which funds are deposited pursuant to this Section 8.02 (or, if not so deposited on a Distribution Date, on the immediately following Distribution Date) and any distribution made pursuant to this Section 8.02 shall be deemed to be a final distribution pursuant to Section 12.03 of the Agreement with respect to Series 1997-1.

ARTICLE IX

MISCELLANEOUS PROVISIONS

SECTION IX.1  Ratification of Agreement.  As supplemented by this Series Supplement, the Agreement is in all respects ratified and confirmed and the Agreement as so supplemented by this Series Supplement shall be read, taken and construed as one and the same instrument.

SECTION IX.2  Counterparts.  This Series Supplement may be executed in two or more counterparts (and by different parties on separate counterparts) each of which shall be an original, but all of which together shall constitute one and the same instrument.

SECTION IX.3  GOVERNING LAW.  THIS SERIES SUPPLEMENT SHALL BE CONSTRUED, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED, IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, EXCEPT THAT THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE MASTER TRUST TRUSTEE SHALL BE DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS.

[END OF PAGE]

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the Seller, the Servicer  and the Master Trust Trustee have caused this Series Supplement to be duly executed by their respective officers as of the day and year first above written.

NAVISTAR FINANCIAL SECURITIES CORPORATION

  as Seller

By: ______________________________________

Its: ______________________________________

NAVISTAR FINANCIAL CORPORATION

  as Servicer

By: ______________________________________

Its: ______________________________________

THE BANK OF NEW YORK

  as Master Trust Trustee

By: ______________________________________

Its: ______________________________________

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EX-10.145

AMENDMENT NO. 1 TO THE

SERIES 1995-1 SUPPLEMENT

THIS AMENDMENT NO. 1  (this "Amendment") is made as of March 27, 1996, by and among Navistar Financial Securities Corporation, a Delaware corporation ("NFSC"), Navistar Financial Corporation, a Delaware corporation ("NFC"), and The Bank of New York, a New York banking corporation, as Master Trust Trustee (the "Master Trust Trustee").

NFSC, as Seller, NFC, as Servicer, and the Master Trust Trustee are parties to a Series 1995-1 Supplement (the "Series Supplement") dated as of June 8, 1995 to the Pooling and Servicing Agreement dated as of June 8, 1995 among NFSC, as Seller, NFC, as Servicer, the Master Trust Trustee and Chemical Bank, as 1990 Trust Trustee.  In order to ensure that the Master Trust Trustee has sufficient funds to pay Monthly Interest to the Series 1995-1 Certificateholders, the Seller, the Servicer and the Master Trust Trustee have agreed to amend the Series Supplement in the manner set forth herein.  Capitalized terms used herein but not otherwise defined have the meanings set forth in the Series Supplement.

1.           Amendment to Section 2.01.  Section 2.01 of the Series Supplement is hereby amended by adding the following definitions immediately after the definition of "Monthly Interest":

'"Monthly Interest Reserve Amount" shall mean, with respect to each Distribution Date related to a Due Period commencing prior to the 1990 Trust Termination Date, $300,000.

'"Monthly Interest Reserve Deposit Amount" shall mean, with respect to each Distribution Date related to a Due Period commencing prior to the 1990 Trust Termination Date, the excess, if any, of (a) the Monthly Interest Reserve Amount for such Distribution Date over (b) the amount of funds on deposit in the Spread Account on such Distribution Date.

2.           Amendment to Section 4.02.  Section 4.02(b)(i) of the Series Supplement is hereby amended by adding the following sentence immediately prior to the last sentence of such Section:

"Effective as of March __, 1996, the Seller shall cause $300,000 of its funds to be deposited in the Spread Account."

3.           Amendment to Section 4.03.                                                                Section 4.03 of the Series Supplement is hereby amended as follows:

3.1           The paragraph heading to Section 4.03 is hereby deleted in its entirety and replaced with the following:

"Applications of Class A-4 Investor Collections and 1990 Trust Excess Servicing Amounts Prior to the 1990 Trust Termination Date"

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3.2           Clause (a) of Section 4.03 is hereby amended in its entirety and replaced with the following:

"(a)           Class A-4 Investor Certificate Interest Collections.  On each Distribution Date related to a Due Period commencing prior to the 1990 Trust Termination Date, the Master Trust Trustee, acting in accordance with instructions from the Servicer, shall apply Class A-4 Investor Certificate Interest Collections for such Due Period and Investment Income for the related Distribution Period in the following amounts and in the following order of priority:

(i )           Monthly Interest.  An amount equal to Monthly Interest for the related Distribution Period plus any Monthly Interest due with respect to any prior Distribution Period not previously distributed to the Series 1995-1 Certificateholders on a prior Distribution Date, plus to the extent permitted by law, interest at the Certificate Rate that has accrued on Monthly Interest that was due pursuant to this clause (i) but was not previously distributed to the Series 1995-1 Certificateholders on a prior Distribution Date shall be deposited in the Distribution Account.

(ii)           Spread Account.  An amount equal to the Monthly Interest Reserve Deposit Amount (as reduced by the amount of any deposit made pursuant to Section 4.03(c)) shall be deposited in the Spread Account.

(iii)           Negative Carry Reserve Fund Deposit Amount.   For any Distribution Date related to a Due Period occurring during an Investment Period or an Early Amortization Period, an amount equal to the Negative Carry Reserve Fund Deposit Amount shall be deposited in the Negative Carry Reserve Fund.

(iv)           Allocation to Seller.  Any remaining Class A-4 Investor Certificate Interest Collections for the related Due Period and Investment Income for the related Distribution  Period shall be allocated and paid to the Seller.

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If Class A-4 Investor Certificate Interest Collections for the related Due Period and Investment Income for the related Distribution Period are not sufficient to make all distributions required by Section 4.03(a)(i), the Master Trust Trustee shall withdraw funds from the Spread Account to the extent of such insufficiency and apply such funds in the same manner as Class A-4 Investor Certificate Interest Collections pursuant to Section 4.03(a)(i).

If during any Investment Period or Early Amortization Period, Class A-4 Investor Certificate Interest Collections for the related Due Period, Investment Income for the related Distribution  Period  and amounts on deposit in the Spread Account (after giving effect to deposits made pursuant to clause (ii) above and Section 4.03(c)) are not sufficient to make all distributions required by Section 4.03(a)(i), the Master Trust Trustee shall withdraw funds from the Negative Carry Reserve Fund to the extent of such insufficiency and apply such funds in the same manner as Class A-4 Investor Certificate Interest Collections pursuant to Section 4.03(a)(i).  The Negative Carry Subordinated Amount shall be reduced by the product of (i) the amount so applied and (ii) 1.00 plus the Subordinated Percentage."

3.3           The following paragraph is added as a new paragraph (c) to Section 4.03:

(c)           Deposit in Spread Account.    On each Distribution Date related to a Due Period commencing prior to the 1990 Trust Termination Date, the Master Trust Trustee, acting in accordance with instructions from the Servicer, shall, out of 1990 Trust Excess Servicing Amounts otherwise payable to the Seller on the immediately preceding Transfer Date pursuant to Section 4.07 of the Pooling and Servicing Agreement, deposit in the Spread Account an amount equal to the Monthly Interest Reserve Deposit Amount (calculated before giving effect to deposits made pursuant to clause (ii) of paragraph (a) above).

5.           Miscellaneous.  This Amendment shall be construed in accordance with the internal laws of the State of Illinois, without reference to its conflict of law provisions, except that the obligations, rights and remedies of the Master Trust Trustee shall be determined in accordance with the internal laws of the State of New York, without regard to conflict of law provisions.  This Amendment may be executed in two or more counterparts, each of which shall be an original, but all of which together constitute one and the same instrument.  The provisions of this Amendment shall be deemed to be incorporated in, and made a part of, the Series Supplement; and the Series Supplement, as amended by this Amendment, shall be read, taken and construed as one and the same instrument.  Promptly after the execution of this Amendment the Master Trust Trustee shall furnish written notification of the substance of this Amendment to each Series 1995-1 Certificateholder.

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to the Series 1995-1 Supplement to be duly executed by their respective officers as of the date first written above.

NAVISTAR FINANCIAL SECURITIES CORPORATION

as Seller

By:  ______________________________________

Its:  ______________________________________

NAVISTAR FINANCIAL CORPORATION

as Servicer

By:  ______________________________________

Its:  ______________________________________

THE BANK OF NEW YORK

as Master Trust Trustee

By:  ______________________________________

Its:  ______________________________________

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EX-10.146

AMENDMENT NO. 2 TO THE

SERIES 1995-1 SUPPLEMENT

THIS AMENDMENT NO. 2 to Series 1995-1 Supplement (this "Amendment") is made as of August 19, 1997 by and among Navistar Financial Securities Corporation, a Delaware corporation ("NFSC"), Navistar Financial Corporation, a Delaware corporation ("NFC"), and The Bank of New York, a New York banking corporation, as Master Trust Trustee (the "Master Trust Trustee”).

NFSC, as Seller, NFC, as Servicer, and the Master Trust Trustee are parties to a Series 1995-1 Supplement (the "Series Supplement") dated as of June 8, 1995 to the Pooling and Servicing Agreement dated as of June 8, 1995 among NFSC, as Seller, NFC, as Servicer, the Master Trust Trustee and The Chase Manhattan Bank, as 1990 Trust Trustee (the "Pooling and Servicing Agreement). In order to provide for more efficient trust collections and distributions for Investor Certificateholders the Seller, the Servicer and the Master Trust Trustee have agreed to amend the Series Supplement in the manner set forth herein. Capitalized terms used herein but not otherwise defined have the meanings set forth in the Series Supplement.

SECTION 1.       Amendments to Section 2.01.

1.1 Section 2.01 of the Series Supplement is hereby amended by adding the following definition immediately after the definition of "Early Distribution Notice":

"Eligible Investments” shall mean:

(a)          book-entry securities, negotiable instruments or securities represented by instruments in bearer or registered form having (except in the case of clause (iv) below) remaining maturities occurring not later than the Distribution Date next succeeding the Master Trust Trustee's acquisition thereof, except as otherwise described herein, that evidence:

             (i )direct obligations of, and obligations fully guaranteed as to timely payment by, the United States of America;

             (ii)demand deposits, time deposits or certificates of deposit of, or bankers' acceptances issued by, any depository institution or trust company incorporated under the laws of the United States of America or any state thereof (or any domestic branch of a foreign bank) and subject to supervision and examination by federal or state banking or depository institution authorities; provided, however, that at the time of the Master Trust's investment or contractual commitment to invest therein, the commercial paper or other short-term unsecured debt obligations (other than such obligations the rating of which is based on the credit of a person or entity other than such depository institution or trust company) of such depository institution or trust company shall have a credit rating not lower than the highest investment category for short term unsecured debt obligations granted by the applicable Rating Agency from each Rating Agency then Rating the affected Series of Investor Certificates;

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                (iii)commercial paper having, at the time of the Master Trust's investment or contractual commitment to investment therein, a rating not lower than the highest investment category for short term unsecured debt obligations granted by the applicable Rating Agency from each Rating Agency then Rating the affected Series of Investor Certificates;

(iv)except during an Investment Period, investments in money market funds or common trust funds having a rating not lower than the highest investment category for short term unsecured debt obligations granted by the applicable Rating Agency from each Rating Agency then Rating the affected Series of Investor Certificates or otherwise approved in writing by each of such Rating Agencies (including funds for which the Master Trust Trustee or the 1990 Trust Trustee or any of their respective affiliates is investment manager or, advisor, so long as such fund shall have such rating);

(v)repurchase obligations (x) with respect to any security that is a direct obligation of, or fully guaranteed by, the United States of America or any agency or instrumentality thereof the obligations of which are backed by the full faith and credit of the United States of America, in either case, entered into with a depository institution or trust company (acting as principal) described in clause (ii) or (y) the counterparty for which has a rating not lower than the highest investment category for short term unsecured debt obligations granted by the applicable Rating Agency from each Rating Agency then Rating the affected Series of Investor Certificates, the collateral for which is held by a custodial bank for the benefit of the Trust or the Indenture Trustee, is marked to market daily and is maintained in an amount that exceeds the amounts of such repurchase obligation, and which required liquidation of the collateral immediately upon the amount of such collateral being less than the amount of such repurchase obligation (unless the counterparty immediately satisfies the repurchase obligation upon being notified of such shortfall); or

(vi)commercial-paper, master notes where the issuer has, at the time of the Master. Trust's investment or contractual commitment to invest therein, a rating not lower than the highest investment category for short term unsecured debt obligations granted by the applicable Rating Agency from each Rating Agency then Rating the Series 1995-1 Certificates; and

 (b)           any other investment consisting of a financial asset that by its terms converts to cash within a finite period of time, provided that the Rating Agency Condition is satisfied.

Eligible Investments of funds in the Series Principal Account, Negative Carry Reserve Fund and the Liquidity Reserve Account will be subject to the following additional restrictions: (x) no more than 20% of the aggregate Eligible Investments in all such accounts collectively shall be obligations of or investments in any single issuer (except that such 20% limitation shall not apply to Eligible Investments of the type specified in clause (a)(i)); and (y) each Eligible Investment shall be denominated and be payable solely in U.S. dollars, shall bear interest at a specified rate that is, or is based upon, LIBOR or a commercial paper rate, shall entitle the holder to a fixed principal amount at maturity and shall have a yield that is not inversely or disproportionately affected by changes in interest rates:

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  1.2            Section 2.01 of the Series Supplement is hereby amended by adding the following definition immediatelyafter the definition of "Reference Banks":

"Remaining Available Seller's Principal Collections" shall have the meaning specified in Section 4.08(d).

 1.3              Section 2.01 of the Series Supplement is hereby amended by adding the following definition immediately after the definition of "Series 1995-1 Accounts":

"Series 1995-1 Accumulation PeriodPrincipal Shortfall" shall mean, with respect to any Business Day occurring during the Accumulation Period, the excess, if any, of the Controlled Deposit Amount for the Due Period in which such Business Day occurs over the amount of Investor Principal Collections deposited in the Series Principal Account on such Business Day when added to the amount of Investor Principal Collections previously deposited in the Series Principal Account during such Due Period.

     1.4            Section 2.01 of the Series Supplement is hereby amended by adding the following definition immediately after the definition of “Series 1995 -1 Shared Principal Collections”:

“Series 1995-1 Shared Seller Principal Collections”: shall have the meaning specified in Section 4.08(d)(v).

SECTION 2.            Amendments to Section 4.08.

2.1           Section 4.08(c) of the Series Supplement is hereby amended to read as follows:

(c)           Seller’s Principal Collections During the Revolving Period.  During the Revolving Period, all Seller's Principal Collections for such Business Day shall be deemed to be Series 1995-1 Shared Seller Principal Collections and shall be allocated as provided in Section 4.08(d)(iii).

2.2           The final sentence in Section 4.08(d)(i) is hereby deleted in its entirety and replaced with the following:

Any remaining Available Seller's Principal Collections for such Business Day shall be deemed to be "Remaining Available Seller's Principal Collections," which shall be included in Series 1995-1 Shared Seller Principal Collections and allocated as provided in clause (iii) below. During the Accumulation Period, Excess Seller's Principal Collections shall be included in Series 1995-1 Shared Seller Principal Collections and allocated as provided in clause (iii) below.

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        2.3           The final sentence of Section 4.08(d)(ii) is hereby deleted in its entirety and replaced with the following:

Any remaining Available Seller's Principal Collections for such Business Day shall be deemed to be "Remaining Available Seller's Principal Collections." During anyEarly Amortization Period or any Investment Period, all Excess Seller's Principal Collections, all Remaining Available Seller's Principal Collections and all shared seller principal collections of any other Series that provides for shared seller principal collections not allocated in respect of principal shortfalls shall be allocated and paid to the Seller or deposited in the Excess Funding Account to the extent necessary to maintain the Master Seller's Interest at any amount equal to (or, in the Seller's discretion, greater than) the Minimum Master Trust Seller's Interest.

   2.4Section 4.08(d) (iii)  is deleted in its entirety and replaced with the following:

           (iii)            During the Revolving Period or the Accumulation Period, Series 1995-1 Shared Seller Principal Collections, if any, and shared seller principal collections for any other Series that provides for shared seller principal collections shall be determined on each business day and allocated in the following priority: (i) to the 1995-1 Series to the extent of any Series 1995-1 Accumulation Period Principal Shortfall and to any other. Series to the extent such Series provides for the use of shared seller principal collections in respect of principal shortfalls, (ii) to the Excess Funding Account to the extent necessary to maintain the Master Trust Seller's Interest at an amount equal, to (or, in the discretion of the Seller, greater than) the Minimum Master Trust Seller's Interest and (iii) to the Seller. If shared seller principal collections for all Series, including Series 1995-1 Shared Seller Principal Collections, are less than the shortfalls for which shared seller principal collections may be used, including any Series 1995-1 Accumulation Period Principal Shortfall, then such shared seller principal collections will be allocated to all such shortfalls, including any Series 1995-1 Accumulation Period Principal Shortfall, prorata based on the relative amounts of each such shortfall.

  2.5           The following paragraph is added as a new paragraph (d)(v) to Section 4.08:

               (v)           "Series 1995-1 Shared Seller Principal Collections" means on each Business Day (i) during a Revolving Period, all Available Seller's Principal Collections and all Excess Seller's Principal Collections and (ii) during an Accumulation Period, all Remaining Available Seller's Principal Collections and all Excess Seller's Principal Collections. There shall be no Series 1995-1 Shared Seller Principal Collections during any Early Amortization Period or Investment Period.

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2.6           The following paragraph is added as a new paragraph (e) to Section 4:08:

(e) If on any Distribution Date during an Early Amortization Period after the application of all funds to be allocated or distributed on such date the excess, if any, of (x) the Invested Amount over (y) the amount in the Series Principal Account (the "Early Amortization Period Shortfall Amount") is less than or equal to the aggregate amount of funds contained in the Liquidity Reserve Account, then funds shall be withdrawn from the Liquidity Reserve Account in an amount equal to the Early Amortization Period Shortfall Amount and shall be deposited in the Series Principal Account.

SECTION 3.      Amendment to Section 5.02. The following paragraph is added as anew paragraph (a)(xix) to Section 5.02:

(xix) the amount of Remaining Available Seller's Principal Collections, the amount of Excess Seller's Principal Collections and Remaining Available Seller's Principal Collections treated as Series 1995-1 Shared Seller Principal Collections, the amount of Shared Seller Principal Collections from other Series, and the amount of Shared Seller Principal Collections allocated to Series 1995-1 and to other Series, each for the related Due Period.

SECTION 4.       Amendment to Exhibit B-2: The following entries are hereby added to Section 4 of the Form of Monthly Servicer and Settlement Certificate:

     4.47           The amount of Remaining Available Seller’s Principal Collections for the Due Period……………..…$__________

4.48           The amount of Series 1995-1 Shared Seller’s Principal Collections for the Due Period………………....$__________

4.49           The aggregate amount of Shared Seller’s Principal Collections from Other Series for the Due Period..$__________

4.50           The amount of all Shared Seller’s Principal Collections Allocated to Series 1995-1 for the Due Period..$__________

SECTION 5.       Effectiveness of this Amendment. This Amendment shall become effective upon satisfaction of each of the following requirements:

5.1            Delivery by each Rating Agency of its written confirmation that this Amendment shall not cause such Rating Agency to withdraw or lower its outstanding rating of the Series 1995-1 Investor Certificates.

    5.2            Execution and delivery by the Servicer of the Officer's Certificate attached hereto as Exhibit A.

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SECTION 6.       Miscellaneous. This Amendment shall be construed in accordance with the internal laws of the State of Illinois, without reference to its conflict of law provisions, except that the obligations, rights and remedies of the Master Trust Trustee shall be determined in accordance with the internal laws of the State of New York, without regard to conflict of law provisions. This Amendment may be executed in two or more counterparts, each of which shall be an original, but all of which together constitute one and the same instrument. The provisions of this Amendment shall be deemed to be incorporated in, and made a part of, the Series Supplement; andthe Series Supplement, as amended by this Amendment, shall be read, taken and construed as one and the same instrument. Promptly after the execution of this Amendment the Master Trust Trustee shall furnish written notification of the substance of this Amendment to each Series 1995-1 Certificateholder.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to the Series 1995-1 Supplement to be duly executed by their respective officers as of the date first written above.

NAVISTAR FINANCIAL SECURITIES CORPORATION

As Seller

By:       /s/    R.W. CAIN

Name:           R. Wayne Cain

Title:             Vice President

NAVISTAR FINANCIAL CORPORATION

as Servicer

By:        /s/    R. W. CAIN

Name:            R. Wayne Cain

Title:              Vice President

THE BANK OF NEW YORK

as Master Trust Trustee

By: /s/  REYNE A. MACADAEG

Name:         Reyne A. Macadaeg

Title:           Assistant Vice President

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EX-10.147

EXECUTION COPY

AMENDMENT AND WAIVER TO

AMENDED AND RESTATED

CERTIFICATE PURCHASE AGREEMENT

THIS AMENDMENT AND WAIVER TO AMENDED AND RESTATED CERTIFICATE PURCHASE AGREEMENT (this "Amendment") dated as of October 23, 2007, is entered into among Navistar Financial Securities Corporation (the "Seller"), Navistar Financial Corporation ("Servicer"), Kitty Hawk Funding Corporation, ("KHFC"), as a Conduit Purchaser, Liberty Street Funding LLC (f/k/a Liberty Street Funding Corp. "LibertyStreet"), as a Conduit Purchaser, The Bank of Nova Scotia ("BNS"), as a Managing Agent and a Committed Purchaser, and Bank of America, National Association ("Bank ofAmerica"), as a Managing Agent, the Administrative Agent and a Committed Purchaser.

RECITALS

A.The Seller, the Servicer, KHFC, Liberty Street, BNS and Bank of America are parties to that certain Amended and Restated Certificate Purchase Agreement, dated as of December 27, 2004 (as amended, supplemented or otherwise modified through the date hereof, the "Agreement").

B.Such parties desire to amend the Agreement as hereafter set forth.

C.Prior to giving effect to the amendment to Section 7A.01(c) of the Agreement set forth in Section 1 below, Section 7A.01 of the Agreement required that NFC furnish to the Administrative Agent as soon as available and in any event within 45 days after the end of each of the first three fiscal quarters of any fiscal year and 120 days after the end of the last fiscal quarter of any fiscal year, copies of the interim or annual, as applicable, financial statements of NFC, prepared in conformity with generally accepted accounting principles consistently applied. NFC has requested a waiver of any Default (defined below) arising from its failure to deliver copies of the annual and interim financial statements of the fiscal year ending October 2005, the fiscal quarters ending January 31, April 30 and July 31 of 2006, the fiscal year ending October 2006, and the fiscal quarters ending January 31, April 30 and July 31, 2007 on a timely basis (such failure, the "Reporting Default"). Each of the parties hereto hereby agrees to waive the occurrence of any Default to the extent described below.

D.NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.            Amendments to Agreement. By their signatures hereto, each of the parties hereto hereby agrees that the Agreement is hereby amended as follows:

(i)             Section 7A.01(c) of the Agreement is hereby amended and restated in its entirety to read as follows:

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(c) (1) as soon as available and in any event within (i) 45 days after the end of each of the first three fiscal quarters of any fiscal year and (ii) 120 days after the end of the last fiscal quarter of any fiscal year, copies of the interim or annual, as applicable, financial statements of NFC, prepared in conformity with generally accepted accounting principles consistently applied; provided, however that NFC shall not be required to deliver its financial statements for fiscal years 2005 and 2006 and for the fiscal quarters ending January 31, April 30 and July 31 of 2006 and for the fiscal quarters ending January 31, April 30 and July 31 of 2007 until the earlier to occur of December 31, 2007 and five (5) Business Days after the filing thereof with the SEC and (2) as soon as available and in any event within 30 days after the end of each month, the monthly management financial reports required to be delivered pursuant to the Amended and Restated Credit Agreement dated as of July 1, 2005, and the Third Waiver and Consent, dated as of November 20, 2006, among the Servicer, Bank of America, and BNS, among others; provided, however, that such reporting shall not be required so long as the Servicer's parent has filed all reports with the Securities and Exchange Commission required pursuant to Section 13 of the Exchange Act.

(ii)            Section 5.01(m) of the Agreement is hereby amended and restated in its entirety to read as follows:

(m) Effective as of noon on October 25, 2007 and on each Incremental Funding Date thereafter, the Subordinated Percentage shall equal or exceed 20.0%.

2.            Waiver. By their signatures hereto, each of the parties hereto waives any condition or covenant that has not been satisfied, the breach of any representation or warranty made or deemed made, and any occurrence of an Early Amortization Event, event of default, event of termination or similar event (in each case, with respect to all of the foregoing, whether such event is matured or unmatured and collectively referred to herein as a "Default"), under the Agreement, solely to the extent such Default was caused directly by or resulted directly from (a) the Reporting Default, (b) a breach of any representation or warranty in Section 5.01(1) or 5.02(j) of the Agreement resulting from or arising out of any restatement, in connection with the audit conducted for the fiscal year ended October 2005, or October 31, 2006, of any financial statements of NFC or any of its affiliates for any period ending on or before the expiration of the waiver contemplated herein, or any reports, financial statements, certificates or other information containing similar or derived information therefrom with respect to such periods or (c) the failure of NFC, as Servicer, to deliver the reports contemplated by, and due on or about April 15, 2006 and to be due April 15, 2007 pursuant to, Section 3.06(a) and (b) of the Pooling and Servicing Agreement (as defined in the Agreement) by April 15, 2006 and April 15, 2007, respectively, provided that each such report shall be delivered on or before December 31, 2007. Each party (other than NFC and the Seller) hereto hereby expressly reserves, and nothing herein shall be construed as a waiver of NFC's failure to comply with Section 7A.01(c), as amended hereby, any Event of Default (as defined in the Pooling and Servicing Agreement) occurring as a result of the failure referred to in clause (c) without the consent of, or at the direction of, KHFC, Liberty Street, BNS or Bank of America, or NFC's failure to deliver the reports referred to

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in the immediately preceding sentence on or before the earlier of (i) five (5) Business Days after the filing thereof with the SEC and (ii) December 31, 2007.

3.Representations and Warranties. The Seller hereby represents and warrants to KHFC, Liberty Street, BNS and Bank of America that, after giving effect to this Amendment, no Early Amortization Event has occurred and is now continuing, and NFC hereby represents and warrants that, after giving effect to this Amendment, no Early Amortization Event or Servicer Termination Event has occurred and is now continuing.

4.Effect of Amendment. All provisions of the Agreement, as amended by this Amendment, remain in full force and effect. After this Amendment becomes effective, all references in the Agreement to "this Agreement", "hereof”, "herein" or words of similar effect referring to the Agreement in the Agreement or in any other document relating to the Seller's securitization program shall be deemed to be references to the Agreement as amended by this Amendment. This Amendment shall not be deemed to expressly or impliedly waive, amend or supplement any provision of the Agreement other than as set forth herein.

5.Conditions Precedent. The effectiveness of this Amendment is subject to the receipt of each fee specified in the fee letter, dated as of the date hereof.

6.Counterparts. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, and each counterpart shall be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

7.Governing Law. This Amendment shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to any otherwise applicable principles of conflicts of law.

8. Section Headings. The various headings of this Amendment are inserted for convenience only and shall not affect the meaning or interpretation of this Amendment or the Agreement or any provision hereof or thereof.

[signatures on next page]

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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.

NAVISTAR FINANCIAL SECURITIES CORPORATION, as Seller

By:      /s/ JOHN V. MULVANEY, SR.

Name:      John V. Mulvaney, Sr.

Title:        V.P. CFO & Treasurer

NAVISTAR FINANCIAL CORPORATION, as Servicer

By:      /s/ JOHN V. MULVANEY, SR.

Name:      John V. Mulvaney, Sr.

Title:        V.P. CFO & Treasurer

KITTY HAWK FUNDING CORPORATION,

as a Conduit Purchaser for the KHFC Purchaser Group

By:      /s/ PHILLIP A. MARTONE

Name:      Phillip A. Martone

Title:        Vice President

BANK OF AMERICA, NATIONAL ASSOCIATION, as Administrative Agent

By:      /s/ WILLEM VAN BEEK

Name:      Willem Van Beek

Title:        Principle

BANK OF AMERICA, NATIONAL ASSOCIATION,

as a Committed Purchaser and Managing Agent for the KHFC Purchaser Group

By:      /s/WILLEM VAN BEEK

Name:     Willem Van Beek

Title:       Principle

 Purchaser Percentage: 50%

Commitment: $400,0000,000

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THE BANKOF NOVA SCOTIA, as a Committed Purchaser

    Managing Agent for the Liberty Street Purchaser Group

By:       /s/ MOHAMED WALJI

Name:       Mohamed Walji

Title:         Director

Purchaser Percentage: 50%

Commitment: $400,0000,000

LIBERTY STREET FUNDING LLC,a Conduit Purchaser

   for the Liberty Street Purchaser Group

By:       /s/ JILL A. GORDON

Name:       Jill A. Gordon

Title:         Vice President

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EX-10.148

EXECUTION COPYAMENDED

AND RESTATED FEE LETTER

October 23, 2007

Navistar Financial Securities Corporation

Navistar Financial Corporation

c/o Navistar Financial Corporation

425 North Martingale Road

Suite 1800

Schaumburg, IL 60173

Re: Navistar Financial Dealer Note Master Trust, Series 2000-WC

Ladies and Gentlemen:

Reference is made to (i) the Amended and Restated Fee Letter dated May 26, 2006 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the "Original Fee Letter"), among Navistar Financial Securities Corporation ("NFSC"), Navistar Financial Corporation ("NFC"), Bank of America, National Association and The Bank of Nova Scotia, (ii) the Amended and Restated Certificate Purchase Agreement dated as of December 27, 2004, (as amended, restated or otherwise modified from time to time, the "Certificate Purchase Agreement") among NFSC, as Seller (the "Seller"), NFC, as Servicer (the "Servicer"), Kitty Hawk Funding Corporation, as a Conduit Purchaser, Liberty Street Funding LLC (f/k/a Liberty Street Funding Corp.), as a Conduit Purchaser, The Bank of Nova Scotia, as a Managing Agent and as a Committed Purchaser, Bank of America, National Association, as Administrative Agent (the "Administrative Agent"), and Bank of America, National Association, as a Committed Purchaser and a Managing Agent and (iii) the Amendment and Waiver to Amended and Restated Certificate Purchase Agreement dated as of October 23, 2007 (the "October2007 Amendment"), by and among the parties referenced in clause (ii) above. In connection with the execution of the October 2007 Amendment and the amendments and waiver to the Certificate Purchase Agreement effectuated thereby, the parties hereto wish to amend and restate the Original Fee Letter as set forth herein. Capitalized terms used herein and not defined herein shall have the meanings assigned to them in the Certificate Purchase Agreement or the Series Supplement (as defined in the Certificate Purchase Agreement). This letter is the Fee Letter referred to in the Certificate Purchase Agreement and replaces in its entirety the fee letter previously executed among the parties hereto dated as of May 26, 2006.

1. Program Rate; Non-Use Fee Rate. For purposes of the Certificate Purchase Agreement, the "Program Rate" and the "Non-Use Fee Rate" shall mean, on any day, the rate determined by reference to the table set forth immediately below.

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Tier	Program Rate	Non-Use Fee Rate
Tier 1 Rating	40.0 bps	25.0 bps
Tier 2 Rating	50.0 bps	32.5 bps
Tier 3 Rating	75.0 bps	50.0 bps

"Tier 1 Rating" means that the long-term senior unsecured debt of Navistar Financial Corporation is rated Ba3 or higher by Moody's and BB- or higher by S&P, or if neither Moody's nor S&P rates the long-term senior unsecured debt of Navistar Financial Corporation but both rate the long-term unsecured debt of Navistar International Corporation, the long-term senior unsecured debt of Navistar International Corporation is rated Ba3 or higher by Moody's and BB- or higher by S&P.

"Tier 2 Rating" means that the long-term senior unsecured debt of Navistar Financial Corporation is rated by either (but not both) of Moody's and S&P and is rated Ba3 or higher if rated by Moody's or BB- or higher if rated by S&P, or if neither Moody's nor S&P rates the long-term senior unsecured debt of Navistar Financial Corporation but either (but not both) rate the long-term unsecured debt of Navistar International Corporation, the long-term senior unsecured debt of Navistar International Corporation is rated Ba3 or higher if rated by Moody's or BB- or higher if rated by S&P.

"Tier 3 Rating" means (x) neither Moody's nor S&P rates the long-term senior unsecured debt of either Navistar Financial Corporation or Navistar International Corporation or (y) the long-term senior unsecured debt of either Navistar Financial Corporation or Navistar International Corporation is rated lower than Ba3 by Moody's or is rated lower than BB-by S&P.

2.Non-Use Fee. Each of the Seller and the Servicer agree that the Non-Use Fee (defined below) shall be payable in accordance with the terms of the Certificate Purchase Agreement and the Series Supplement.

"Non-Use Fee" means, with respect to any Distribution Period, a monthly commitment fee with respect to such Distribution Period (or portion thereof) falling in the Revolving Period equal to the product of (x) 1/12 of the weighted average of the Non-Use Fee Rates applicable over such Distribution Period times (y) the remainder of (1) the daily average of the Maximum Funded Amount in effect for such Distribution Period multiplied by 102% minus (2) the daily average Funded Amount for such Distribution Period.

The Non-Use Fee shall accrue based upon the number of days in the related Distribution Period (or applicable portion thereof) and a year of 360 days.

3. Notwithstanding Section 4.04(a) of the Series Supplement, all fees payable to the Administrative Agent or Bank of America as a Managing Agent or any Purchaser within the KHFC Purchaser Group pursuant to the Certificate Purchase Agreement or any other Series Document shall be paid to account #XXXXXX XXXXXXX, ABA# 026 009 593, titled

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"GSF Wire Clearing Account", reference "Navistar", attention: Edy Kennedy, or to such other account as may be designated by the Administrative Agent.

4. Notwithstanding Section 4.04(a) of the Series Supplement, all fees payable to BNS as a Managing Agent or any Purchaser within the Liberty Street Purchaser Group pursuant to the Certificate Purchase Agreement or any other Series Document shall be paid to The Bank of Nova Scotia-New York Agency, account #XXXX-XX, ABA#026-002532, titled "Liberty Street Funding Corp.," or to such other account as may be designated by The Bank of Nova Scotia, as Managing Agent for the Liberty Street Purchaser Group.

5.All fees payable hereunder to the Purchasers shall be paid prorata between the Purchaser Groups based upon their respective Funded Amounts.

The Seller and the Servicer also jointly and severally agree to pay all reasonable legal

and other out-of-pocket (due diligence related) expenses of the Administrative Agent and the Managing Agents incurred in connection with the transaction, and any subsequent amendments or waivers related thereto, including the fees and expenses of counsel to the Administrative Agent and the Managing Agents.

[SIGNATURE PAGE FOLLOWS]

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If you are in agreement with the foregoing, please sign and return a counterpart of this letter.

Very truly yours,

BANK OF AMERICA, NATIONAL

ASSOCIATION, as Administrative Agent and Managing Agent for the KHFC PurchaserGroup

By:      /s/ WILLEM VAN BEEK

Name:      Willem Van Beek

Title:        Principal

THE BANK OF NOVA SCOTIA, as Managing Agent for the Liberty Sheet Purchaser Group

By:       /s/ MOHAMED WALJI

Name:       Mohamed Walji

Title:         Director

AGREED AND ACCEPTED:

NAVISTAR FINANCIAL SECURITIES CORPORATION

By:      /s/ JOHN V. MULVANEY, SR.

Name:       John V. Mulvaney, Sr.

Title:         V.P. CFO & Treasurer

NAVISTAR FINANCIAL CORPORATION

By:      /s/ JOHN V. MULVANEY, SR.

Name:       John V. Mulvaney, Sr.

Title:         V.P. CFO & Treasurer

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EX-10.149

Execution Copy

AMENDMENT NO. 2

TO THE

SERIES 2000-VFC SUPPLEMENT

TO THE

POOLING AND SERVICING AGREEMENT

THIS AMENDMENT NO. 2 (this "Amendment") to the Series 2000-VFC Supplement to the Pooling and Servicing Agreement is made as of October 25, 2007, by and among Navistar Financial Securities Corporation, a Delaware corporation, as Seller, Navistar Financial Corporation, a Delaware corporation, as Servicer, and The Bank of New York, a New York banking corporation, as Master Trust Trustee.

The Seller, the Servicer, and the Master Trust Trustee are parties to the Series 2000-VFC Supplement, dated as of January 28, 2000 (the "Series 2000-VFC Supplement"). The Seller, the Servicer and the Master Trust Trustee have agreed to amend the Series 2000-VFC Supplement in the manner set forth herein. Capitalized terms used herein but not otherwise defined have the meanings set forth in the Series 2000-VFC Supplement.

1. Amendment to Section 2.01. The definition of "Subordinated Percentage" contained in Section 2.01 of the Series 2000-VFC Supplement is hereby deleted in its entirety and replaced with the following:

"Subordinated Percentage" shall mean the greater of (a) 20.0% and (b) the subordinated percentage, or calculated equivalent thereof, required by Moody's and S&P to rate any series of Dealer Note Securities issued or to be issued after the date hereof (regardless of whether such Dealer Note Securities are actually issued) at the highest investment category for long-term debt for such rating agency; provided, however, if any outstanding series of Dealer Note Securities rated in the highest investment category by either Moody's or S&P is downgraded, the Subordinated Percentage will be set at the level reasonably determined by the Administrative Agent necessary to support a rating in the highest investment category for long-term debt on the Series 2000-VFC, subject to the consent of the Servicer, which consent shall not be unreasonably withheld; provided further, however, if the revised Subordinated Percentage is not agreed to by the Administrative Agent and the Servicer within 30 days after such downgrade, the Servicer (at its own expense) will retain Moody's to determine within 60 days (or such longer period as shall be specified in a written notice from the Administrative Agent to the Servicer and the Master Trust Trustee) after such downgrade the revised Subordinated Percentage necessary to achieve a rating in the highest investment category for long-term debt by such rating agency on the Series 2000-VFC and the Subordinated Percentage shall be the amount specified by Moody's.

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2. Miscellaneous. This Amendment shall be construed in accordance with the internal laws of the State of Illinois, without reference to its conflict of law provisions, except that the obligations, rights and remedies of the Master Trust Trustee shall be determined in accordance with the internal laws of the State of New York, without regard to conflict of law provisions. This Amendment may be executed in two or more counterparts, each of which shall be an original, but all of which together constitute one and the same instrument. The provisions of this Amendment shall be deemed to be incorporated in, and made a part of, the Series 2000-VFC Supplement; and the Series 2000-VFC Supplement, as amended by this Amendment, shall be read, taken and construed as one and the same instrument. Promptly after the execution of this Amendment the Master Trust Trustee shall furnish written notification of the substance of this Amendment to each Investor Certificateholder.

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WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to the Series 2000-VFC Supplement to be duly executed by their respective officers as of the date first written above.

NAVISTAR FINANCIAL SECURITIES CORPORATION

as Seller

By:      /s/ JOHN V. MULVANEY, SR.

Name:       John V. Mulvaney, Sr.

Title:        V.P. CFO & Treasurer

NAVISTAR FINANCIAL CORPORATION

as Servicer

By:      /s/ JOHN V. MULVANEY, SR.

Name:      John V. Mulvaney, Sr.

Title:       V.P. CFO & Treasurer

THE BANK OF NEW YORK

as Master Trust Trustee

By:      /s/ MICHAEL BURACK

Name:      Michael Burack.

Title:        Assistant Treasurer

Acknowledged and Accepted

BANK OF AMERICA, NATIONAL ASSOCIATION,

as Administrative Agent and Managing Agent for the KHFC Purchaser Group

By:      /s/ WILLEM VAN BEEK

Name:      Willem Van Beek

Title:        Principal

THE BANK OF NOVA SCOTIA,

as Managing Agent for the Liberty Street Purchaser Group

By:       /s/ MOHAMED WALJI

Name:       Mohamed Walji

Title:         Director

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EX-10.150

WAIVER NO. 8

TO RECEIVABLES PURCHASE AGREEMENT

THIS WAIVER NO.8 (this "Waiver"), dated as of October 23, 2007, is among Truck Retail Accounts Corporation, a Delaware corporation ("Seller”), Navistar Financial Corporation, a Delaware corporation ("Navistar"),as initial Servicer (Navistar, together with Seller, the "Seller Parties" and each a "Seller Party"), the entities set forth on the signature pages to this Agreement (together with any of their respective successors and assigns hereunder, the "Financial Institutions"), JS Siloed Trust as assignee of Jupiter Securitization Company LLC ("Trust"), and JPMorgan Chase Bank, N.A. (successor by merger to Bank One, NA (Main Office Chicago)), as agent for the Purchasers hereunder or any successor agent hereunder (together with its successors and assigns hereunder, the "Agent"),and pertains to that certain RECEIVABLES PURCHASE AGREEMENT dated as of April 8, 2004 by and among the parties hereto (as heretofore amended or modified from time to time, the "Agreement"). Unless defined elsewhere herein, capitalized terms used in this Waiver have the meanings assigned to such terms in the Agreement.

PRELIMINARY STATEMENTS

The Seller Parties have requested that the Agent and the Purchasers agree to waive certain provisions of the Agreement and to consent to a certain action of the Seller Parties; and

The Agent and the Purchasers are willing to agree to the requested waivers and consent on the terms hereinafter set forth.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1.                       Waiver.

(a)The requirement in Section 7.1(a)(i) of the Agreement for delivery of annual financial statements of Parent and Transferor for fiscal years 2005 and 2006, the requirement in Section 7.1(a)(ii) of the Agreement for delivery of quarterly financial statements of Parent and Transferor for the first, second and third quarters of fiscal years 2006 and 2007, and the requirements in Sections 7.1(a)(iii) for the delivery of certain compliance certificates related to the aforementioned financial statements, are each hereby waived until the earlier of (i) December 31, 2007 and (ii) the date on which Parent and Transferor shall have timely filed reports on Form 10-K or 10-Q after the date hereof with the Securities and Exchange Commission pursuant to Sections 13 and 15 of the Securities Exchange Act of 1934, as amended (the "Exchange Act").

(b)Any condition or required representation or warranty that has not been satisfied or made or deemed made, and any Amortization Event or Potential Amortization Event,

E-388

in each case, as a result of the breach of any representation or warranty in Section 5.1(g) of the Agreement as a result of or arising out of any restatement, in connection with the audit conducted for the fiscal year ended October 31, 2005 or October 31, 2006, of any financial statements of Transferor or any of its affiliates for any period ending on or before October 31, 2007, or any reports, financial statements, certificates or other information containing similar information with respect to such periods, are each hereby waived.

Section 2.                      Consent. The Waiver No. 3, dated as of the date hereof, attached hereto as Exhibit A, is hereby consented to pursuant to Section 7.1 of the Agreement.

Section 3.                      Agreement by Transferor. Notwithstanding anything to the contrary in the Agreement, to induce the parties to enter into this Waiver, until the expiration of the waiver provided in Section 1(a), Transferor agrees to deliver to the Agent:

(a)As soon as available after the end of each of the fiscal years of Transferor ended October 31, 2005 and October 31, 2006, a copy of the annual report for such year for the Parent and its Subsidiaries, including therein (i) a consolidated balance sheet of the Parent and its Subsidiaries as of the end of such fiscal year and (ii) a consolidated statement of income and a consolidated statement of cash flows of the Parent and its Subsidiaries for such fiscal year, in each case prepared in accordance with Rule 3-10 of Regulation S-X, consistent with the Parent's past practice (unless otherwise required to conform with the results of the audit or changes in GAAP), on the basis of management's good faith calculations and fairly presenting in all material respects the consolidated financial condition of the Parent and its Subsidiaries as at such date and the consolidated results of operations of the Parent and its Subsidiaries for the period ended on such date; provided that, in the event of any change in generally accepted accounting principles used in the preparation of such financial statements, the Parent shall also provide a reconciliation.

(b)As soon as available after the end of the fiscal quarters ended January 31, 2006, April 30, 2006, July 31, 2006, January 31, 2007, April 30, 2007 and July 31, 2007 (i) a consolidated balance sheet of the Parent and its Subsidiaries as of the end of such quarter, (ii) a consolidated statement of income and a consolidated statement of cash flows of the Parent and its Subsidiaries for the period commencing at the end of the previous fiscal quarter and ending with the end of such fiscal quarter, and (iii) a consolidated statement of income and a consolidated statement of cash flows of the Parent and its Subsidiaries for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, all prepared in accordance with Rule 3-10 of Regulation S-X, consistent with the Parent's past practice (unless otherwise required to conform with the results of the audit or changes in GAAP), on the basis of management's good faith calculations and fairly presenting in all material respects, subject to year end audit adjustments and the absence of footnotes, the consolidated financial condition of the Parent and its Subsidiaries as at such dates and the consolidated results of operations of the Parent and its Subsidiaries for the periods ended on such dates, setting forth in each case in comparative form the corresponding figures for the corresponding date or period of the preceding fiscal year, all in reasonable detail and duly certified (subject to normal year-end audit adjustments and the absence of footnotes) by a financial officer of the Parent consistent with the Parent's past practices; provided that, in the event a reconciliation from past practices to generally accepted accounting principles in the preparation of such financial statements is available, the Parent shall also provide such reconciliation.

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(c)As soon as available, and in any event within 60 days after the end of each fiscal quarter (other than the last fiscal quarter of a fiscal year) or 90 days after the end of the last fiscal quarter of a fiscal year of Navistar, ended on or after October 31, 2007, management financial reports of Navistar setting forth (i) a preliminary consolidated balance sheet and consolidated statements of income in a management format, (ii) serviced portfolio information (iii) funding availability under its contractual arrangements with Truck Retail Installment Paper Corp. and under the Transferor Credit Agreement and (iv) calculations demonstrating compliance with Section 8.01 of the Transferor Credit Agreement, in each case prepared in a manner materially consistent with the Transferor's past practices (unless otherwise required to conform with the results of the audit or changes in GAAP) and, to the extent relevant, on the basis of management's good faith efforts, in such form and detail reasonably satisfactory to the Agent; provided, however, that such reporting shall not be required so long as the Transferor has filed all reports with the Securities and Exchange Commission required pursuant to Section 13 of the Exchange Act. The parties hereto acknowledge that such management financial reports are not final and are subject to change in connection with either the preparation, for the corresponding fiscal quarter, of a report on Form 10-Q or 10-K, as a result of or arising out of any restatement, in connection with the audit conducted for the fiscal year ended October 31, 2005 or October 31, 2006, as the case may be.

(d)As soon as available, and in any event within 30 days after the end of each month, commencing with the month of October 2007, monthly management financial reports of the Parent in respect of the sales and income by segment and cash balances, Indebtedness, capital expenditures and depreciation and amortization of the Parent and its consolidated Subsidiaries prepared in a manner consistent with the Parent's past practices (unless otherwise required to conform with the results of the audit or changes in GAAP) and on the basis of management's good faith calculations, in such form and detail reasonably satisfactory to the Agent; provided,however, that such reporting shall not be required so long as the Parent has filed all reports with the Securities and Exchange Commission required pursuant to Section 13 of the Exchange Act.

Section 4.                       Representations and Warranties. In order to induce the parties to enter into this Waiver, each of the Seller Parties hereby represents and warrants to the Agent and the Purchasers that (a) after giving affect to this Waiver, each of such Seller Party's representations and warranties contained in Article V of the Agreement is true and correct as of the date hereof, (b) the execution and delivery by such Seller Party of this Waiver, and the performance of its obligations hereunder, are within its corporate or limited partnership, as applicable, powers and authority and have been duly authorized by all necessary corporate or limited partnership, as applicable, action on its part, and (c) this Waiver has been duly executed and delivered by such Seller Party and constitutes the legal, valid and binding obligation of such Seller Party enforceable against such Seller Party in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

Section 5.                      Conditions Precedent. This Waiver shall become effective as of the date first above written upon receipt by the Agent of (a) counterparts hereof duly executed by each of the parties hereto, and (b) payment in immediately available funds of a fully earned and nonrefundable waiver fee in the amount of $125,000.

Section 6.                      Miscellaneous.

(a) THIS WAIVER SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS.

(c) Except as expressly modified hereby, the Agreement remains unaltered and in full force and effect and is hereby ratified and confirmed. This Waiver shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns (including any trustee in bankruptcy).

(c)            This Waiver may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.

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IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be executed and delivered by their duly authorized officers as of the date hereof.

TRUCK RETAIL ACCOUNTS CORPORATION

By:      /s/ JOHN V. MULVANEY, SR.

Name:       John V. Mulvaney, Sr.

Title:         V.P. CFO & Treasurer

NAVISTAR FINANCIAL CORPORATION,

By:      /s/ JOHN V. MULVANEY, SR.

Name:       John V. Mulvaney, Sr.

Title:         V.P. CFO & Treasurer

JS SILOED TRUST

BY: JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE TRUSTEE

By:      /s/ ALAN P. ENGLISH.

Name:      Alan P. English

Title:        Vice President

JPMORGAN CHASE BANK, N.A. (successor by

merger to Bank One, NA (Main Office Chicago),

INDIVIDUALLY AS A FINANCIAL INSTITUTION AND

AS AGENT

By:      /s/ ALAN P. ENGLISH.

Name:      Alan P. English

Title:        Vice President

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Exhibit A

[Attached]

E-392

EX-10.151

WAIVER NO. 3

TO RECEIVABLES SALE AGREEMENT

THIS WAIVER NO. 3 (this "Waiver"}, dated as of October 23, 2007, is among Navistar Financial Corporation, a Delaware corporation ("Navistar”), as Transferor, and Truck Retail Accounts Corporation, a Delaware corporation, as Transferee and pertains to that certain RECEIVABLES SALE AGREEMENT dated as of April 8, 2004 by and among the parties

hereto (as heretofore amended or modified from time to time, the "Agreement”.  Unless defined elsewhere herein, capitalized terms used in this Waiver have the meanings assigned to such terms in the Agreement.

PRELIMINARY STATEMENTS

The Transferor has requested that the Transferee agree to waive certain provisions of the Agreement; and

The Transferee is willing to agree to the requested waivers on the terms hereinafter set forth.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section I.                      Waiver.

(a)The requirement in Section 4.1(a)(i) of the Agreement for delivery of annual financial statements of Parent and Transferor for fiscal years 2005 and 2006, the requirement in Section 4.1(a)(ii) of the Agreement for delivery of quarterly financial statements of Parent and Transferor for the first, second and third quarters of fiscal years 2006 and 2007, and the requirements in Sections 4.1(a)(iii) for the delivery of certain compliance certificates related to the aforementioned financial statements, are each hereby waived until the earlier of (i) December 31, 2007 and (ii) the date on which Parent and Transferor shall have timely filed reports on Form 10-K or 10-Q after the date hereof with the Securities and Exchange Commission pursuant to Sections 13 and 15 of the Securities Exchange Act of 1934, as amended (the "Exchange Act").

(b)Any condition or required representation or warranty that has not been satisfied or made or deemed made, as a result of the breach of any representation or warranty in Section 2.1(f) of the Agreement as a result of or arising out of any restatement, in connection with the audit conducted for the fiscal year ended October 31, 2005 or October 31, 2006, of any financial statements of Transferor or any of its affiliates for any period ending on or before October 31, 2007, or any reports, financial statements, certificates or other information containing similar information with respect to such periods, is hereby waived.

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Section 2.                      Agreement by Transferor. Notwithstanding anything to the contrary in the Agreement, to induce the parties to enter into this Waiver, until the expiration of the waiver provided in Section 1(a), Transferor agrees to deliver to the Transferee:

(a)As soon as available after the end of each of the fiscal years of Transferor ended October 31, 2005 and October 31, 2006, a copy of the annual report for such year for the Parent and its Subsidiaries, including therein (i) a consolidated balance sheet of the Parent and its Subsidiaries as of the end of such fiscal year and (ii) a consolidated statement of income and a consolidated statement of cash flows of the Parent and its Subsidiaries for such fiscal year, in each case prepared in accordance with Rule 3-10 of Regulation S-X, consistent with the Parent's past practice (unless otherwise required to conform with the results of the audit or changes in GAAP), on the basis of management's good faith calculations and fairly presenting in all material respects the consolidated financial condition of the Parent and its Subsidiaries as at such date and the consolidated results of operations of the Parent and its Subsidiaries for the period ended on such date; provided that, in the event of any change in generally accepted accounting principles used in the preparation of such financial statements, the Parent shall also provide a reconciliation.

(b)As soon as available after the end of the fiscal quarters ended January 31, 2006, April 30, 2006, July 31, 2006, January 31, 2007, April 30, 2007 and July 31, 2007 (i) a consolidated balance sheet of the Parent and its Subsidiaries as of the end of such quarter, (ii) a consolidated statement of income and a consolidated statement of cash flows of the Parent and its Subsidiaries for the period commencing at the end of the previous fiscal quarter and ending with the end of such fiscal quarter, and (iii) a consolidated statement of income and a consolidated statement of cash flows of the Parent and its Subsidiaries for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, all prepared in accordance with Rule 3-10 of Regulation S-X, consistent with the Parent's past practice (unless otherwise required to conform with the results of the audit or changes in GAAP), on the basis of management's good faith calculations and fairly presenting in all material respects, subject to year end audit adjustments and the absence of footnotes, the consolidated financial condition of the Parent and its Subsidiaries as at such dates and the consolidated results of operations of the Parent and its Subsidiaries for the periods ended on such dates, setting forth in each case in comparative form the corresponding figures for the corresponding date or period of the preceding fiscal year, all in reasonable detail and duly certified (subject to normal year-end audit adjustments and the absence of footnotes) by a Financial Officer of the Parent consistent with the Parent's past practices; provided that, in the event a reconciliation from past practices to generally accepted accounting principles in the preparation of such financial statements is available, the Parent shall also provide such reconciliation.

(c)As soon as available, and in any event within 60 days after the end of each fiscal quarter (other than the last fiscal quarter of a fiscal year) or 90 days after the end of the last fiscal quarter of a fiscal year of Navistar, ended on or after October 31, 2007, management financial reports of Navistar setting forth (i) a preliminary consolidated balance sheet and consolidated statements of income in a management format , (ii) serviced portfolio information (iii) funding availability under its contractual arrangements with Truck Retail Installment Paper Corp. and under the Transferor Credit Agreement and (iv) calculations demonstrating compliance with Section 8.01 of the Transferor Credit Agreement, in each case prepared in a

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manner materially consistent with the Transferor's past practices (unless otherwise required to conform with the results of the audit or changes in GAAP) and, to the extent relevant, on the basis of management's good faith efforts, in such form and detail reasonably satisfactory to the Agent; provided, however, that such reporting shall not be required so long as the Transferor has filed all reports with the Securities and Exchange Commission required pursuant to Section 13 of the Exchange Act. The parties hereto acknowledge that such management financial reports are not final and are subject to change in connection with either the preparation, for the corresponding fiscal quarter, of a report on Form I0-Q or 10-K, as a result of or arising out of any restatement, in connection with the audit conducted for the fiscal year ended October 31, 2005 or October 31, 2006, as the case may be.

(d)            As soon as available, and in any event within 30 days after the end of each month, commencing with the month of October 2007, monthly management financial reports of the Parent in respect of the sales and income by segment and cash balances, Indebtedness, capital expenditures and depreciation and amortization of the Parent and its consolidated Subsidiaries prepared in a manner consistent with the Parent's past practices (unless otherwise required to conform with the results of the audit or changes in GAAP) and on the basis of management's good faith calculations, in such form and detail reasonably satisfactory to the Agent; provided,however, that such reporting shall not be required so long as the Parent has filed all reports with the Securities and Exchange Commission required pursuant to Section 13 of the Exchange Act.

Section 3.                       Representations and Warranties. In order to induce the parties to enter into this Waiver, the Transferor represents and warrants to the Transferee that (a) after giving affect to this Waiver, each of Transferor's representations and warranties contained in Article II of the Agreement is true and correct as of the date hereof, (b) the execution and delivery by the Transferor of this Waiver, and the performance of its obligations hereunder, are within its corporate or limited partnership, as applicable, powers and authority and have been duly authorized by all necessary corporate or limited partnership, as applicable, action on its part, and (c) this Waiver has been duly executed and delivered by the Transferor and constitutes the legal, valid and binding obligation of such Seller Party enforceable against the Transferor in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

Section 4. Condition Precedent. This Waiver shall become effective as of the date first above written upon receipt by the Agent of counterparts hereof duly executed by each of the parties hereto.

Section 5.                       Miscellaneous.

(a) THIS WAIVER SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS.

(c) Except as expressly modified hereby, the Agreement remains unaltered and in full force and effect and is hereby ratified and confirmed. This Waiver shall be binding

upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns (including any trustee in bankruptcy).

E-395

upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns (including any trustee in bankruptcy).

(c)           This Waiver may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.

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IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be executed and delivered by their duly authorized officers as of the date hereof.

NAVISTAR FINANCIAL CORPORATION,

By:      /s/ JOHN V. MULVANEY, SR.

Name:      John V. Mulvaney, Sr.

Title:        V.P. CFO & Treasurer

TRUCK RETAIL ACCOUNTS CORPORATION

By:      /s/ JOHN V. MULVANEY, SR.

Name:       John V. Mulvaney, Sr.

Title:         V.P. CFO & Treasurer

E-397

EX-10.152

EXECUTION COPY

Navistar Financial Corporation Navistar Financial Retail Receivables Corporation 425 N Martingale Road Suite 1800 Schaumburg, Illinois 60173             Re: Waiver   Ladies/Gentlemen: October 23, 2007

Please refer to the Receivables Purchase Agreement, dated as of July 30, 2004 (as in effect on the date hereof, the "Receivables Purchase Agreement") among Navistar Financial Retail Receivables Corporation, as Seller, Navistar Financial Corporation, as Servicer, Thunder Bay Funding, LLC, as Company, and Royal Bank of Canada, as Agent. Capitalized terms used but not defined herein have the respective meanings ascribed to them in the Receivables Purchase Agreement.

The Receivables Purchase Agreement requires, among other things, the following:

(i)Section 5.1(a) requires that the Servicer deliver to the Agent (x) within 120 days after the close of each fiscal year, a copy of the annual report for the Servicer for such fiscal year on Form 10-K (the "10-K Delivery Requirement") and (y) within 45 days after the close of the first three quarterly periods of a fiscal year, a copy of the quarterly report for the Servicer for such fiscal year on form 10-Q (the "10-Q Delivery Requirement"); and

(ii)Section 6.10 requires that on or before February 1 of each year, beginning February 1, 2005, the Servicer shall cause a firm of independent accountants to deliver to the Agent an independent Accountant's Report for the preceding fiscal year (the "Independent Accountant's Report Delivery Requirement").

For (x) the fiscal year ended on October 31, 2005 (the "2005 Fiscal Year"), the Servicer has failed to satisfy the 10-K Delivery Requirement and has failed to satisfy the Independent Accountant's Report Delivery Requirement and (y) the fiscal year ended on October 31, 2006 (the "2006 Fiscal Year"), the Servicer has failed to satisfy the 10-K Delivery Requirement and expects to fail to satisfy the Independent Accountant's Report Delivery Requirement.

Additionally, the Servicer has notified the Agent that it (i) has failed to timely file its annual reports on Form 10-K for the 2005 Fiscal Year and the 2006 Fiscal Year with the Securities and Exchange Commission in accordance with the Securities and Exchange Act of 1934, (ii) has failed to timely file quarterly reports on Form 10-Q for all of its fiscal quarters in 2006 with the Securities Exchange Commission in accordance with the Securities Exchange Act of 1934, and (iii) has failed to timely file one or moreof its quarterly reports on Form 10-Q for fiscal quarters in 2007 with the Securities and Exchange Commission in accordance with the Securities and Exchange Act of 1934 (the occurrence of any such failure, a "Periodic ReportingFailure").

E-398

The Servicer has requested that the Agent waive any potential Servicer Defaults arising from the matters described above. The Agent hereby agrees to waive the occurrence of any Servicer Defaults to the extent described below.

1. The Agent hereby waives any Servicer Default arising solely from the failure to satisfy the 10-K Delivery Requirements for the 2005 Fiscal Year and the 2006 Fiscal Year; provided that this waiver shall only remain effective until December 31, 2007 unless the Servicer shall have satisfied the 10-K Delivery Requirements for the 2005 Fiscal Year and the 2006 Fiscal Year prior to such date.

2. The Agent hereby waives any Servicer Default arising solely from the failure to satisfy the 10-Q Delivery Requirements for any fiscal quarter in the 2006 fiscal year of the Servicer and any fiscal quarter in the 2007 fiscal year of the Servicer; provided that this waiver shall only remain effective until December 31, 2007 unless the Servicer shall have satisfied the 10-Q Delivery Requirements for each fiscal quarter in the 2006 and the 2007 fiscal year of the Servicer prior to such date.

3. The Agent hereby waives any Servicer Default arising under Section 5.1(c) of the Receivables Purchase Agreement from any Periodic Reporting Failure; provided that this waiver shall only remain effective until December 31, 2007 unless the Servicer shall have caused the annual reports and quarterly reports giving rise to any Periodic Reporting Failure to be filed with the Securities and Exchange Commission prior to such date.

4. The Agent hereby waives any Servicer Default arising solely from the failure of the Servicer to satisfy the Independent Accountant's Report Delivery Requirement; provided that this waiver shall only remain effective until December 31, 2007 unless the Servicer shall have satisfied the Independent Accountant's Report Delivery Requirement prior to such date.

The Agent hereby expressly reserves, and nothing herein shall be construed as a waiver of, (i) any Servicer Default specified in paragraphs 1, 2, 3 and 4 above, to the extent that the effectiveness of the waiver of such Servicer Default shall lapse as described therein and (ii) any rights with respect to any breach constituting a Servicer Default or Potential Servicer Default existing or arising for any other reason.

This waiver may be executed in any number of counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original but all such counterparts shall together constitute one and the same waiver. This waiver shall be a contract made under and governed by the internal laws of the State of New York applicable to contracts made and to be performed entirely within such State.

E-399

IN WITNESS WHEREOF, the undersigned has caused this waiver to be duly executed and delivered by their respective duly authorized officers on the day and year first above written.

ROYAL BANK OF CANADA, as Agent

By:            /s/ KAREN STONE

Name:             Karen E. Stone

Title:              Authorized Signatory

ACKNOWLEDGED AND AGREED:

NAVISTAR FINANCIAL CORPORATION

By:         /s/ JOHN V. MULVANEY, SR.

Name:          John V. Mulvaney, Sr.

Title:           V.P. CFO & Treasurer

NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION

By:      /s/ JOHN V. MULVANEY, SR.

Name:      John V. Mulvaney, Sr.

Title:       V.P. CFO & Treasurer

E-400

EX-10.153

EXECUTION COPY

Navistar Financial Corporation Navistar Financial Retail Receivables Corporation 425 N Martingale Road Suite 1800 Schaumburg, Illinois 60173   Re: Waiver   Ladies/Gentlemen: October 23, 2007

Please refer to the Receivables Purchase Agreement, dated as of April 29, 2005 (as in effect on the date hereof, the "Receivables Purchase Agreement") among Navistar Financial Retail Receivables Corporation, as Seller, Navistar Financial Corporation, as Servicer, Thunder Bay Funding, LLC, as Company, and Royal Bank of Canada, as Agent. Capitalized terms used but not defined herein have the respective meanings ascribed to them in the Receivables Purchase Agreement.

The Receivables Purchase Agreement requires, among other things, the following:

(i)Section 5.1(a) requires that the Servicer deliver to the Agent (x) within 120 days after the close of each fiscal year, a copy of the annual report for the Servicer for such fiscal year on Form 10-K (the "10-K Delivery Requirement") and (y) within 45 days after the close of the first three quarterly periods of a fiscal year, a copy of the quarterly report for the Servicer for such fiscal year on form 10-Q (the "10-Q Delivery Requirement"); and

(ii)Section 6.10 requires that on or before February 1 of each year, beginning February 1, 2006, the Servicer shall cause a firm of independent accountants to deliver to the Agent an independent Accountant's Report for the preceding fiscal year (the "IndependentAccountant's Report Delivery Requirement").

For (x) the fiscal year ended on October 31, 2005 (the "2005 Fiscal Year"), the Servicer has failed to satisfy the 10-K Delivery Requirement and has failed to satisfy the Independent Accountant's Report Delivery Requirement and (y) the fiscal year ended on October 31, 2006 (the "2006 Fiscal Year"), the Servicer has failed to satisfy the 10-K Delivery Requirement and expects to fail to satisfy the Independent Accountant's Report Delivery Requirement.

Additionally, the Servicer has notified the Agent that it (i) has failed to timely file its annual reports on Form 10-K for the 2005 Fiscal Year and the 2006 Fiscal Year with the Securities and Exchange Commission in accordance with the Securities and Exchange Act of 1934, (ii) has failed to timely file quarterly reports on Form 10-Q for all of its fiscal quarters in 2006 with the Securities Exchange Commission in accordance with the Securities Exchange Act of 1934, and (iii) has failed to timely file one or more of its quarterly reports on Form 10-Q for fiscal quarters in 2007 with the Securities and Exchange Commission in accordance with the Securities and Exchange Act of 1934 (the occurrence of any such failure, a "Periodic ReportingFailure").

E-401

of 1934, and (iii) has failed to timely file one or more of its quarterly reports on Form 10-Q for fiscal quarters in 2007 with the Securities and Exchange Commission in accordance with the Securities and Exchange Act of 1934 (the occurrence of any such failure, a "Periodic ReportingFailure").

The Servicer has requested that the Agent waive any potential Servicer Defaults arising from the matters described above. The Agent hereby agrees to waive the occurrence of any Servicer Defaults to the extent described below.

1. The Agent hereby waives any Servicer Default arising solely from the failure to satisfy the 10-K Delivery Requirements for the 2005 Fiscal Year and the 2006 Fiscal Year; provided that this waiver shall only remain effective until December 31, 2007 unless the Servicer shall have satisfied the 10-K Delivery Requirements for the 2005 Fiscal Year and the 2006 Fiscal Year prior to such date.

2. The Agent hereby waives any Servicer Default arising solely from the failure to satisfy the 10-Q Delivery Requirements for any fiscal quarter in the 2006 fiscal year of the Servicer and any fiscal quarter in the 2007 fiscal year of the Servicer; provided that this waiver shall only remain effective until December 31, 2007 unless the Servicer shall have satisfied the 10-Q Delivery Requirements for each fiscal quarter in the 2006 and the 2007 fiscal year of the Servicer prior to such date.

3. The Agent hereby waives any Servicer Default arising under Section 5.1(c) of the Receivables Purchase Agreement from any Periodic Reporting Failure; provided that this waiver shall only remain effective until December 31, 2007 unless the Servicer shall have caused the annual reports and quarterly reports giving rise to any Periodic Reporting Failure to be filed with the Securities and Exchange Commission prior to such date.

4. The Agent hereby waives any Servicer Default arising solely from the failure of the Servicer to satisfy the Independent Accountant's Report Delivery Requirement; provided that this waiver shall only remain effective until December 31, 2007 unless the Servicer shall have satisfied the Independent Accountant's Report Delivery Requirement prior to such date.

The Agent hereby expressly reserves, and nothing herein shall be construed as a waiver of, (i) any Servicer Default specified in paragraphs 1, 2, 3 and 4 above, to the extent that the effectiveness of the waiver of such Servicer Default shall lapse as described therein and (ii) any rights with respect to any breach constituting a Servicer Default or Potential Servicer Default existing or arising for any other reason.

This waiver may be executed in any number of counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original but all such counterparts shall together constitute one and the same waiver. This waiver shall be a contract made under and governed by the internal laws of the State of New York applicable to contracts made and to be performed entirely within such State.

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IN WITNESS WHEREOF, the undersigned has caused this waiver to be duly executed and delivered by their respective duly authorized officers on the day and year first above written.

By:   JP Morgan Chase Bank, N.A., its

its attorney-in-fact

ROYAL BANK OF CANADA, as Agent

By:      /s/ KAREN E. STONE

Name:      Karen E. Stone

Title:        Authorized Signatory

AGREED AND ACCEPTED:

NAVISTAR FINANCIAL CORPORATION

By:      /s/ JOHN V. MULVANEY, SR.

Name:      John V. Mulvaney, Sr.

Title:       V.P. CFO & Treasurer

NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION

By:      /s/ JOHN V. MULVANEY, SR.

Name:      John V. Mulvaney, Sr.

Title:       V.P. CFO & Treasurer

E-403

EX-10.154

EXECUTION COPY

    October 23, 2007

Navistar Financial Corporation

Attention: General Counsel

425 N. Martingale Road, Suite 1800

Schaumburg, Illinois 60173

LaSalle Bank National Association

Attention: Global Securities and Trust

                    Services-Navistar 2006-ARC

Suite 1625

Chicago, Illinois 60603

Re:            Defaults and Events of Default Ladies/Gentlemen:

Please refer to (a) the Indenture dated as of September 1, 2006 (as amended, the "Indenture") between Navistar Financial 2006-ARC Owner Trust, a Delaware statutory trust, and LaSalle Bank National Association, a national banking association, as indenture trustee (in such capacity, the "Indenture Trustee"), (b) the Note Purchase Agreement dated as of September 1, 2006 (the "Note Purchase Agreement"), among Navistar Financial Retail Receivables Corporation (the "Seller"), Navistar Financial Corporation (`NFC"), Amsterdam Funding Corporation, as a Conduit Investor, and ABN AMRO Bank, N.V., as Funding Agent and an Alternate Investor , (c) the Servicing Agreement dated as of September 1, 2006 (the "Servicing Agreement"), among Navistar Leasing Company, Harco Leasing Company, Inc., Navistar Financial Retail Receivables Corporation, The Bank of New York Trust Company, N.A., as Collateral Agent, JP Morgan Trust Company, National Association (as successor-in-interest to Bank One, National Association), as Portfolio Trustee, Navistar Financial 2006-ARC Owner Trust, as Issuer, NFC, as Servicer, and LaSalle Bank, National Association, as Indenture Trustee, and (d) the ISDA Master Agreement dated as of September 1, 2006 between LaSalle Bank National Association (in such capacity, the "Swap Counterparty") and Navistar Financial Corporation. Capitalized terms used but not otherwise defined herein have the respective meanings assigned thereto (including by incorporation by reference) in the Indenture, or if not defined therein, in the Note Purchase Agreement.

By its signature below, effective as of the date hereof, (i) each of the Funding Agent, the Alternate Investor and the Conduit Investor waives a breach of the covenant set forth in Section 5.02(c) of the Note Purchase Agreement arising as a result of the failure of NFC to deliver its financial statements for fiscal year 2005 and for the fiscal quarters ending January 31, April 30 and July 31 of 2006 by January 31, 2007, the financial statements for fiscal year 2006 within 120 days after the end thereof and for fiscal quarters ended January 31, April 30 and July 31, 2007 within 45 days after the end thereof (such financial statements, collectively, the "Financial Statements"), (ii) each of the Funding Agent, the Alternate Investor and the Conduit Investor waives and instructs the Indenture Trustee to waive, and the Indenture Trustee and the Swap Counterparty hereby waive, any failure of the Servicer under Section 3.02 of the Servicing Agreement to deliver the Accountant's Report (as defined in the Servicing Agreement) required to be delivered on or before February 1, 2007, (iii) each of the Funding Agent, the Alternate

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Investor and the Conduit Investor waives and instructs the Indenture Trustee to waive, and the Indenture Trustee hereby waives, any failure of the Seller under Section 5.1 (p) of the Indenture to deliver the Independent Accountant's Report of KPMG LLP addressed to the board of directors of the Seller with respect to minimum servicing standards for the year ended October 31, 2005, required to be delivered on or before September 30, 2006, and (iv) each of such parties hereto waives the occurrence of a default, Default, Event of Default or Servicer Default arising solely from the breach of the covenants described in the foregoing clauses (i),(ii) and (iii), whether such event is matured or unmatured, under the Indenture, the Servicing Agreement or the Note Purchase Agreement; provided that each of the Seller, the Servicer, the Issuer, the Swap Counterparty and the Indenture Trustee acknowledge that an immediate Event of Default under the Indenture and the Interest Rate Swap and Servicer Default will occur if, and to the extent such failures constitute an Event of Default under the Indenture or the Interest Rate Swap or a Servicer Default, as applicable, without the need for the giving of any notices by any party or the passage of any grace period, the Funding Agent and Swap Counterparty shall not have received the Financial Statements and the Accountant's Report (as defined in the Servicing Agreement) by the earlier of (i) December 31, 2007 and (ii) five (5) Business Days after the filing of such Financial Statements with the SEC, unless the Funding Agent, the Conduit Investors, the Majority Investors and the Swap Counterparty, shall have provided a further waiver of the covenant violation described in this sentence on or before such date.

LaSalle Bank National Association, as Swap Counterparty, hereby agrees that it will not request any financial statements or other information pursuant to Part 3(b) of the Schedule to the ISDA Master Agreement dated as of September 1, 2006, between it and NFC until the earlier of (i) December 31, 2007 and (ii) five (5) Business Days after the filing of such financial statements with the SEC.

The foregoing waiver shall become effective as of the date hereof when the Funding Agent has received: (1) counterparts of this letter executed by the Seller, the Servicer, the Conduit Investors, the Alternate Investor, the Indenture Trustee, the Issuer and the Swap Counterparty and (2) each of Standard & Poor's and Moody's confirms in writing to the Conduit Investor that such waiver shall not result in a reduction or withdrawal of its rating of the Commercial Paper issued by the Conduit Investor; it being understood that such rating confirmation does not constitute an assessment by Standard & Poor's or Moody's of the financial strength of NFC.

Except as specifically waived above, all of the terms, conditions and covenants of the Note Purchase Agreement, the Indenture and the other Transaction Documents shall remain in full force and effect and are hereby ratified and confirmed in all respects. Further, the Funding Agent, as agent for the Conduit Investor, acknowledges, represents and warrants that it holds all of the Outstanding Amount of the Controlling Class.

Notwithstanding anything contained herein to the contrary, this waiver has been signed by LaSalle Bank National Association, in its capacity as Indenture Trustee, not in its individual capacity but solely as Indenture Trustee and in no event shall LaSalle Bank National Association have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer.

E-405

No failure or delay by any party in exercising any right hereunder shall operate as a waiver thereof, nor shall any single or partial waiver thereof preclude any other or further exercise thereof or the exercise of any other right hereunder.

Notwithstanding anything contained herein to the contrary, this waiver has been executed by Deutsche Bank Trust Company Delaware (as successor to Chase Bank USA, National Association), not in its individual capacity but solely in its capacity as Owner Trustee and in no event shall Deutsche Bank Trust Company Delaware (as successor to Chase Bank USA, National Association), in its individual capacity or, except as expressly provided in the Trust Agreement, as Owner Trustee of the Issuer have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer. For all purposes of this Agreement, in the performance of its duties or obligations hereunder, or in the performance of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Article VI of the Trust Agreement.

[Signatures Follow]

E-406

                  This letter may be executed in any number of counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original but all such counterparts shall together constitute one and the same letter. This letter shall be governed by the laws of the State of New York, without reference to its conflict of law provisions, and the obligations, rights and remedies of the parties hereto shall be determined in accordance with such laws.

Very truly yours

ABN AMRO BANK, N.V., as Funding Agent andAlternate Investor

By:          /s/THOMAS EDUCATE

Name:             Thomas Educate

Title:               Managing Director

By:         /s/  ADNAN BHANPURI

Name:           Adnan Bhanpuri

Title:             Vice President

AMSTERDAM FUNDING CORPORATION, as

Conduit Investor

By:         /s/ JILL A. GORDON

Name:          Jill A. Gordon

Title:            Vice President

LASALLE BANK NATIONAL ASSOCIATION,

as Indenture Trustee

By:         /s/  BRIAN D. AMES

Name:           Brian D. Ames

Title:             First Vice President

LASALLE BANK NATIONAL ASSOCIATION

as Swap Counterparty

By:         /s/  CHAS MCDONALD

Name:           Chas McDonald

Title:             Senior Vice President

E-407

Acknowledged and Agreed,

as of October 23, 2007

NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION,

as Seller and Certificateholder

By:        /s/ JOHN V. MULVANEY, SR.

Name:         John V. Mulvaney, Sr.

Title:           V.P., CFO & Treasurer

NAVISTAR FINANCIAL Corporation,

as Servicer

By:         /s/ JOHN V. MULVANEY, SR.

Name:          John V. Mulvaney, Sr.

Title:            V.P., CFO & Treasurer

NAVISTAR FINANCIAL 2006 – ARC OWNER TRUST

By:  Deutsche Bank Trust Company Delaware (as successor to

Chase Bank USA, National Associated), not in its

individual capacity, but solely as Owner Trustee on behalf of the Trust

By:          /s/ MICHELE HY VOON

Name            Michele HY Voon

Title:             Attorney-in-fact

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EX-10.155

EXECUTION COPY

                                                                                                                                            October 23, 2007

Navistar Financial Corporation

Navistar Financial Retail Receivables Corporation

425 N. Martingale Road

Suite 1800

Schaumburg, Illinois 60173

Re:  Waiver

Ladies/Gentlemen:

Please refer to (i) the Note Purchase Agreement, dated as of October 20, 2006 (as in effect on the date hereof, the "Note Purchase Agreement") among Navistar Financial Retail Receivables Corporation ("NFRRC"), as Seller, Navistar Financial Corporation, individually ("NFC") and as Servicer, Thunder Bay Funding, LLC, as Conduit Investor, and Royal Bank of Canada, as Agent and (ii) the Servicing Agreement, dated as of October 20, 2006, among NFRRC, Navistar Financial 2006-RBC Owner Trust, as Issuer, NFC, as Servicer, and The Bank of New York, as Indenture Trustee. The Agent (on behalf of the Conduit Investor and the other Investors) is the holder of record of 100% of the Floating Rate Asset Backed Note, No. R-1, issued by the Issuer pursuant to the Indenture. Capitalized terms used but not defined herein have the respective meanings ascribed to them (or incorporated by reference in) the Servicing Agreement.

The Note Purchase Agreement or the Servicing Agreement, as applicable, requires, among other things, the following:

(i)Section 5.02(c) of the Note Purchase Agreement requires that the Servicer deliver to the Agent (x) on or before July 31, 2007 (or earlier under certain circumstances specified therein), (x) a copy of the annual financial statements of the Servicer for the fiscal years October 31, 2005 and 2006 (each such delivery requirement, an "Annual Financial Statement DeliveryRequirement") and (y) (i) on or before July 31, 2007 (or earlier in certain circumstances specified therein), a copy of the quarterly financial statements of the Servicer for the fiscal quarters ended January 31, April 30 and July 31, 2006 and for the fiscal quarters ended January 31 and April 30, 2007 and (ii) on or before September 15, 2007 (i.e., within 45 days after the end of the July 31, 2007 fiscal quarter), a copy of the quarterly financial statements of the Servicer for the fiscal quarter ended July 31, 2007 (each such delivery requirement in this clause (y), a "Quarterly Financial Statement Delivery Requirement"); and

(ii)Section 3.02(a) of the Servicing Agreement requires that on or before July 31, 2007 (or earlier under certain circumstances specified therein), the Servicer shall cause a firm of independent accountants to deliver to the Agent an independent Accountant's Report for the

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fiscal year ended October 31, 2006 (the "Independent Accountant's Report DeliveryRequirement").

The Servicer expects to fail to satisfy each Annual Financial Statement Delivery Requirement, each Quarterly Financial Statement Delivery Requirement and the Independent Accountant's Report Delivery Requirement.

Additionally, the Servicer has notified the Agent that it (i) has failed to timely file its annual reports on Form 10-K for the 2005 Fiscal Year and the 2006 Fiscal Year with the Securities and Exchange Commission in accordance with the Securities and Exchange Act of 1934, (ii) has failed to timely file quarterly reports on Form 10-Q for all of its fiscal quarters in 2006 with the Securities Exchange Commission in accordance with the Securities Exchange Act of 1934, and (iii) has failed to timely file one or more of its quarterly reports on Form 10-Q for fiscal quarters in 2007 with the Securities and Exchange Commission in accordance with the Securities and Exchange Act of 1934 (the occurrence of any such failure, a "Periodic Reporting Failure").

The Servicer has requested that the Agent waive any potential Servicer Defaults arising from the matters described above. The Agent hereby agrees to waive the occurrence of any Servicer Defaults to the extent described below.

1. The Agent (in accordance with Section 7.06 of the Servicing Agreement) hereby directs the Indenture Trustee to waive, and each of Indenture Trustee, the Conduit Investor and the Agent hereby waives, any Servicer Default arising solely from the failure to satisfy the Annual Financial Statement Delivery Requirements; provided that this waiver shall only remain effective until December 31, 2007 unless the Servicer shall have satisfied each Annual Financial Statement Delivery Requirement prior to such date.

2. The Agent (in accordance with Section 7.06 of the Servicing Agreement) hereby directs the Indenture Trustee to waive, and each of Indenture Trustee, the Conduit Investor and the Agent hereby waives, any Servicer Default arising solely from the failure to satisfy the Quarterly Financial Statement Delivery Requirements; provided that this waiver shall only remain effective until December 31, 2007 unless the Servicer shall have satisfied each Quarterly Financial Statement Delivery Requirement prior to such date.

3. The Agent (in accordance with Section 7.06 of the Servicing Agreement) hereby directs the Indenture Trustee to waive, and each of Indenture Trustee, the Conduit Investor and the Agent hereby waives, any Servicer Default or default arising under Section 5.05 of the Note Purchase Agreement from any Periodic Reporting Failure; provided that this waiver shall only remain effective until December 31, 2007 unless the Servicer shall have caused the annual reports and quarterly reports giving rise to any Periodic Reporting Failure to be filed with the Securities and Exchange Commission prior to such date.

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4. The Agent (in accordance with Section 7.06 of the Servicing Agreement) hereby directs the Indenture Trustee to waive, and each of Indenture Trustee and the Agent hereby waives, any Servicer Default arising solely from the failure of the Servicer to satisfy the Independent Accountant's Report Delivery Requirement; provided that this waiver shall only remain effective until December 31, 2007 unless the Servicer shall have satisfied the Independent Accountant's Report Delivery Requirement prior to such date.

Each of the Indenture Trustee, the Conduit Investor and the Agent hereby expressly reserves, and nothing herein shall be construed as a waiver of, (i) any Servicer Default or default under the Note Purchase Agreement specified in paragraphs I, 2, 3 and 4 above, to the extent that the effectiveness of the waiver of such Servicer Default or default under the Note Purchase Agreement shall lapse as described therein and (ii) any rights with respect to any breach constituting a Servicer Default, Potential Servicer Default or default under the Note Purchase Agreement existing or arising for any other reason.

This waiver may be executed in any number of counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original but all such counterparts shall together constitute one and the same waiver. This waiver shall be a contract made under and governed by the internal laws of the State of New York applicable to contracts made and to be performed entirely within such State.

E-411

IN WITNESS WHEREOF, the undersigned has caused this waiver to be duly executed and delivered by their respective duly authorized officers on the day and year first above written

ROYAL BANK OF CANADA, as Agent

By:           /s/ROGER PELLEGRINI

                Name:           Roger Pelegrini

                Title:            Authorized Signatory

THUNDER BAY FUNDING, LLC, as Conduit Investor

By:  Royal Bank of Canada its

 its attorney-in-fact

By:           /s/ROGER PELLEGRINI

                Name:           Roger Pelegrini

                Title:            Authorized Signatory

THE BANK OF NEW YORK, not in its individual

capacity but solely as Indenture Trustee

                By:        /s/MICHAEL BURACK

                Name:        Michael Burack

                Title            Assistant Treasurer

E-412

Acknowledged and Agreed:

NAVISTAR FINANCIAL CORPORATION

            By:           /s/JOHN V. MULVANEY, SR.

            Name:           John V. Mulvaney, Sr.

            Title:            V.P., CFO & Treasurer

NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION

            By:           /s/JOHN V. MULVANEY, SR.

            Name:           John V. Mulvaney, Sr.

            Title:            V.P., CFO & Treasurer

NAVISTAR FINANCIAL 2006-RBC OWNER TRUST

By: Deutsche Bank Trust Company Delaware, not in i

ts individual capacity, but solely as Owner Trustee

            By:            /s/MICHELE HY VOON

            Name:            Michele HY Voon

            Title:              Attorney-in-fact

ROYAL BANK OF CANADA, as Swap Counterparty

            By:           /s/ BRIAN OSMAR

           Name              Brian Osmar

           Title:               Senior Vice President

E-413

EX-10.156

EXECUTION COPY

Navistar Financial Corporation Navistar Financial Retail Receivables Corporation 425 N Martingale Road Suite 1800 Schaumburg, Illinois 60173   Re: Waiver   Ladies/Gentlemen: October 23, 2007

Please refer to (i) the Note Purchase Agreement, dated as of June 22, 2007 (as in effect on the date hereof, the "Note Purchase Agreement") among Navistar Financial Retail Receivables Corporation ("NFRRC"), as Seller, Navistar Financial Corporation, individually ("NFC") and as Servicer, Liberty Street Funding, LLC, as the Conduit Investor, and The Bank of Nova Scotia, as Agent for the Investors and (ii) the Servicing Agreement, dated as of June 22, 2007, among NFRRC, Navistar Financial 2007-BNS Owner Trust, as Issuer, NFC, as Servicer, and The Bank of New York, as Indenture Trustee. The Agent (on behalf of the Conduit Investor and the other Investors) is the holder of record of 100% of the Floating Rate Asset Backed Note, No. R-l, issued by the Issuer pursuant to the Indenture. Capitalized terms used but not defined herein have the respective meanings ascribed to them (or incorporated by reference in) the Servicing Agreement.

The Note Purchase Agreement or the Servicing Agreement, as applicable, requires, among other things, the following:

(i) Section 5.02(c) of the Note Purchase Agreement requires that the Servicer deliver to the Agent (x) on or before October 31, 2007 (or earlier under certain circumstances specified therein), (x) a copy of the annual financial statements of the Servicer for the fiscal years October 31, 2005 and 2006 (each such delivery requirement, an "Annual Financial Statement DeliveryRequirement") and (y) on or before October 31, 2007 (or earlier in certain circumstances specified therein), a copy of the quarterly financial statements of the Servicer for the fiscal quarters ended January 31, April 30 and July 31, 2006 and for the fiscal quarters ended January 31, April 30, and July 31, 2007 (each such delivery requirement in this clause (y), a "Quarterly Financial Statement Delivery Requirement"); and

The Servicer expects to fail to satisfy each Annual Financial Statement Delivery Requirement and each Quarterly Financial Statement Delivery Requirement.

Additionally, the Servicer has notified the Agent that it (i) has failed to timely file its annual  reports on Form 10-K for the 2005 Fiscal Year and the 2006 Fiscal Year with the Securities and Exchange Commission in accordance   with   the  Securities  and  Exchange  Act  of 1934, (ii) has failed to timely file quarterly reports on Form 10-Q for all of its fiscal quarters in 2006 with the Securities Exchange Commission in accordance with the Securities Exchange Actof of 1934, and (iii) has failed to timely file one or more of its quarterly reports on Form 10-Q for fiscal quarters in

E-414

2007 with the Securities and Exchange Commission in accordance with the Securities and Exchange Act of 1934 (the occurrence of any such failure, a "Periodic ReportingFailure").

The Servicer has requested that the Agent waive any potential Servicer Defaults arising from the matters described above. The Agent hereby agrees to waive the occurrence of any Servicer Defaults to the extent described below.

1. The Agent (in accordance with Section 7.06 of the Servicing Agreement) hereby directs the Indenture Trustee to waive, and each of Indenture Trustee, the Conduit Investor and the Agent hereby waives, any Servicer Default arising solely from the failure to satisfy the Annual Financial Statement Delivery Requirements; provided that this waiver shall only remain effective until December 31, 2007 unless the Servicer shall have satisfied each Annual Financial Statement Delivery Requirement prior to such date.

2. The Agent (in accordance with Section 7.06 of the Servicing Agreement) hereby directs the Indenture Trustee to waive, and each of Indenture Trustee, the Conduit Investor and the Agent hereby waives, any Servicer Default arising solely from the failure to satisfy the Quarterly Financial Statement Delivery Requirements; provided that this waiver shall only remain effective until December 31, 2007 unless the Servicer shall have satisfied each Quarterly Financial Statement Delivery Requirement prior to such date.

3. The Agent (in accordance with Section 7.06 of the Servicing Agreement) hereby directs the Indenture Trustee to waive, and each of Indenture Trustee, the Conduit Investor and the Agent hereby waives, any Servicer Default or default arising under Section 5.05 of the Note Purchase Agreement from any Periodic Reporting Failure; provided that this waiver shall only remain effective until December 31, 2007 unless the Servicer shall have caused the annual reports and quarterly reports giving rise to any Periodic Reporting Failure to be filed with the Securities and Exchange Commission prior to such date.

Each of the Indenture Trustee, the Conduit Investor and the Agent hereby expressly reserves, and nothing herein shall be construed as a waiver of, (i) any Servicer Default or default under the Note Purchase Agreement specified in paragraphs 1, 2, and 3 above, to the extent that the effectiveness of the waiver of such Servicer Default or default under the Note Purchase Agreement shall lapse as described therein and (ii) any rights with respect to any breach constituting a Servicer Default, Potential Servicer Default or default under the Note Purchase Agreement existing or arising for any other reason.

This waiver may be executed in any number of counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original but all such counterparts shall together constitute one and the same waiver. This waiver shall be a contract made under and governed by the internal laws of the State of New York applicable to contracts made and to be performed entirely within such State.

E-415

IN WITNESS WHEREOF, the undersigned has caused this waiver to be duly executedand delivered by their respective duly authorized officers on the day and year first above written.

THE BANK OF NOVA SCOTIA,

As Agent

By:      /s/ MOHAMED WALJI

Name:      Mohamed Walji

Title:        Director

LIBERTY STREET FUNDING, LLC,

As Conduit Investor

By:      /s/ JILL A. GORDON

Name:      Jill A. Gordon

Title:        Vice President

THE BANK OF NEW YORK, not in its

individual Capacity but solely as Indenture Trustee

By:      /s/ MICHAEL BURACK

Name:      Michael Burack

Title:        Assistant Treasurer

E-416

Acknowledged and Agreed:

NAVISTAR FINANCIAL CORPORATION

By:      /s/ JOHN V. MULVANEY, SR.

Name:       John V. Mulvaney, Sr.

Title:        V.P. CFO & Treasurer

NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION

By:      /s/ JOHN V. MULVANEY, SR.

Name:       John V. Mulvaney, Sr.

Title:        V.P. CFO & Treasurer

NAVISTAR FINANCIAL 2007-BNS OWNER TRUST

By:  Deutsche Bank Trust Company Delaware, not in its

Individual capacity, but solely as Owner Trustee

By:      /s/ MICHELE HY VOON

Name:       Michele HY Voon

Title:         Attorney-in-Fact

THE BANK OF NOVA SCOTIA,

As Swap Counterparty

By:      /s/ MICHAEL J. MILLIE

Name:      MICHAEL J. MILLIE

Title:        Director

E-417

EX-10.157

AMENDMENT TO

NOTE PURCHASE AGREEMENT

THIS AMENDMENT TO NOTE PURCHASE AGREEMENT (this "Amendment") dated as of October 23, 2007, is entered into among Navistar Financial Retail Receivables Corporation (the "Seller"), Navistar Financial Corporation ("Servicer"), May Hawk Funding Corporation, ("KHFC"), as a Conduit Investor, and Bank of America, National Association ("Bank of America"), as Agent, the Administrator and an Alternate Investor.

RECITALS

A.The Seller, the Servicer, KHFC and Bank of America are parties to that certain Note Purchase Agreement, dated as of February 27, 2006 (as amended, supplemented or otherwise modified through the date hereof, the "Agreement").

B.Such parties desire to amend the Agreement as hereafter set forth.

C.NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.             Amendments to Agreement. By their signatures hereto, each of the parties hereto hereby agrees to the following amendments to the Agreement:

(a)The Agreement is hereby amended by amending and restating

Section 3.01(a)(v) of the Agreement in its entirety to read as follows:

"(v) except for those caused by the failure of NFC and its affiliates to deliver its financial statements and related financial information for the fiscal years ended October 31, 2005 or October 31, 2006, or for fiscal quarters ending January 31, April 30 and July 31 of 2006, or for fiscal quarters ending January 31, April 30 and July 31 of 2007, in each case, prior to December 31, 2007, the Seller (i) is not in violation of its Certificate of Incorporation or By-Laws and (ii) is not in breach or violation of any of the terms or provisions of, or with the giving of notice or lapse of time, or both, would be in default under, any contract, indenture, mortgage, deed of trust, loan agreement, note, lease, partnership agreement, or other agreement or instrument to which the Seller is a party or by which it may be bound or to which any of its properties or assets may be subject, except for such violations or defaults that would not have a Material Adverse Effect;"

(b)The Agreement is hereby amended by amending and restating Section

3.01(b)(vi) of the Agreement in its entirety to read as follows:

E-418

"(vi ) except for those caused by the failure of NFC and its affiliates to deliver its financial statements and related financial information for the fiscal years ended October 31, 2005 or October 31, 2006, or for fiscal quarters ending January 31, April 30 and July 31 of 2006, or for fiscal quarters ending January 31, April 30 and July 31 of 2007, in each case, prior to December 31, 2007, NFC (i) is not in violation of its Certificate of Incorporation or By-Laws and (ii) is not in breach or violation of any of the terms or provisions of, or with the giving of notice or lapse of time, or both, would be in default under, any contract, indenture, mortgage, deed of trust, loan agreement, note, lease, partnership agreement, or other agreement or instrument to which the Seller is a party or by which it may be bound or to which any of its properties or assets may be subject, except for such violations or defaults that would not have a Material Adverse Effect;"

(c)           The Agreement is hereby amended by amending and restating Section

5.02(c) of the Agreement in its entirety to read as follows:

"(c)(1) as soon as available and in any event within (i) 45 days after the end of each of the first three fiscal quarters of any fiscal year and (ii) 120 days after the end of the last fiscal quarter of any fiscal year, copies of the interim or annual, as applicable, financial statements of NFC, prepared in confoiiinty with generally accepted accounting principles consistently applied; provided, however that NFC shall not be required to deliver its financial statements for the fiscal year 2005 or for the fiscal year 2006, for the fiscal quarters ending January 31, April 30 and July 31 of 2006, or for the fiscal quarters ending January 31, April 30 and July 31 of 2007 until the earlier to occur of December 31, 2007 and five (5) Business Days after the filing thereof with the SEC and (2) as soon as available and in any event within 30 days after the end of each month, the monthly management financial reports required to be delivered pursuant to the Amended and Restated Credit Agreement dated as of July 1, 2005, and the Third Waiver and Consent, dated as of November 20, 2006, among the Servicer and Bank of America, among others; provided, however, that such reporting shall not be required so long as the Servicer's parent has filed all reports with the Securities and Exchange Commission required pursuant to Section 13 of the Exchange Act; and"

E-419

2.Waiver. By its signature hereto, each of the parties hereto waives any condition or covenant that has not been satisfied, the breach of any representation or warranty made or deemed made, and any occurrence of an Event of Default, termination event or similar event (in each case, with respect to all of the foregoing, whether such event is matured or unmatured and collectively referred to herein as a "Default"), under the Agreement, solely to the extent such Default was caused directly by or resulted directly from a breach of any representation or warranty in Section 3.01(a)(xii) or Section 3.01(b)(x) of the Agreement resulting from or arising out of any restatement, in connection with the audit conducted for the fiscal year 2005 or the fiscal year 2006, of any financial statements of NFC or any of its affiliates for any period ending on or before the expiration of the waiver contemplated herein, or any reports, financial statements, certificates or other information containing similar or derived information therefrom with respect to such periods. Each party (other than NFC and the Seller) hereto hereby expressly reserves, and nothing herein shall be construed as a waiver of NFC's failure to comply with Sections 3.01(a)(v), 3.01(b)(vi) and 5.02(c), as amended hereby, or any Servicer Default occurring as a result of NFC's failure to deliver the reports referred to in the immediately preceding sentence on or before the earlier of (i) five (5) Business Days after the filing thereof with the SEC and (ii) December 31, 2007.

3.Representations and Warranties. The Seller hereby represents and warrants to KHFC and Bank of America that, after giving effect to this Amendment, no Event of Default has occurred and is now continuing, and NFC hereby represents and warrants that, after giving effect to this Amendment, no Event of Default or Servicer Default has occurred and is now continuing.

4.Effect of Amendment. All provisions of the Agreement, as extended by this Amendment, remain in full force and effect. After this Amendment becomes effective, all references in the Agreement to "this Agreement", "hereof', "herein" or words of similar effect referring to the Agreement in the Agreement or in any other document relating to the Seller's securitization program shall be deemed to be references to the Agreement as extended by this Amendment. This Amendment shall not be deemed to expressly or impliedly waive, amend or supplement any provision of the Agreement other than as set forth herein.

5.Conditions Precedent. The effectiveness of this Amendment is subject to the receipt of the fee specified in the fee letter, dated as of the date hereof.

6.Counterparts. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, and each counterpart shall be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

E-420

7.Governing Law. This Amendment shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to any otherwise applicable principles of conflicts of law.

8.            Section Headings. The various headings of this Amendment are inserted for convenience only and shall not affect the meaning or interpretation of this Amendment or the Agreement or any provision hereof or thereof.

[signatures on next page]

E-421

WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.

NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION, as Seller

By:     /s/ JOHN V. MULVANEY, SR.

Name:      John V. Mulvaney, Sr.

Title:        V.P., CFO & Treasurer

NAVISTAR FINANCIAL CORPORATION, as Servicer

By:   /s/ JOHN V. MULVANEY, SR.

Name:    John V. Mulvaney, Sr.

Title:      V.P., CFO & Treasurer

KITTY HAWK FUNDING CORPORATION, as a Conduit Investor

By:    /s/ PHILLIP A. MARTONE

Name:     Phillip A. Martone

Title:       Vice President

BANK OF AMERICA, NATIONAL ASSOCIATION, as Agent,

Administrator and as an Alternate Investor

By:  /s/  WILLEM VAN BEEK

Name:    Willem Van Beek

Title:      Principal

E-422

EX-10.158

WAIVER Dated as of October 22, 2007

Navistar Financial Corporation

International Truck Leasing Corporation

425 N. Martingale Rd.

Schaumburg, IL 60173

International Truck Leasing Corp.

425 N, Martingale Rd.

Schaumburg, IL 60I73

Re: Waiver Dear Sirs:

Banc of America Leasing & Capital LLC ("BALCAP") and International Truck Leasing Corp ("ITLC") are parties to that certain Master Purchase Agreement dated as of June 30, 2004 (together with all amendments and modifications thereto, the "Agreement"). Unless defined elsewhere herein, capitalized terms used in this Waiver have the meanings assigned to such terms in the Agreement.

ITLC has requested that BALCAP extend its waiver (dated as of January 8, 2007) of certain provisions of the Agreement as more specifically set forth herein. BALCAP does hereby waive such provisions as herein provided, subject however, to the limitations set forth below:

A.   BALCAP waives compliance with the provisions of Exhibit D to Master Purchase Agreement, Section (b), Financial Statement for the period through and including the earlier of (i ) December 31, 2007 and (ii) the date on which Navistar Financial Corporation shall have timely filed a report on Form 10-K or 10-Q with the Securities and Exchange Commission.

B.   BALCAP waives the condition precedent specified in clause l(b)(vi ) of Exhibit B to the Master Purchase Agreement as it relates directly to the failure of NFC or any of its affiliates to deliver or file any financial statement, SEC report or related information during the period of the waiver described above in Section A, ("Financial Statement Default"), so long as such other creditor has not declared an. event of default with respect to Navistar Financial Corporation or accelerated the debt of Navistar Financial Corporation due to aFinancial Statement Default.

BALCAP`s waiver as provided herein shall be strictly limited to the matters set forth above, and shall not constitute a waiver, surrender, or modification of any other rights, remedies, privileges or benefits under the Agreement or any related documents. This letter and the waiver set forth herein shall not constitute a course of dealing, and each of the provisions of the Agreement and any related document, shall remain in full force and effect.

Very truly yours,

Banc of America Leasing & Capital LLC

By:  /s/ DENNIS MCGUSHIN

              Dennis McGushin

              Senior Vice President

  By:       /s/ DENNIS MCGUSHIN

Name:    Dennis Mc

Its:          Senior Vice Presiden

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EX-10.159

EXECUTION COPY

Navistar Financial Corporation

Navistar Financial Retail Receivables Corporation

425 N Martingale Road

Suite 1800

Schaumburg, Illinois 60173

Re: Waiver

Ladies and Gentleman:

Please refer to (i) the Note Purchase Agreement, dated as of February 16, 2007 (as in effect on the date hereof, the "Note Purchase Agreement") among Navistar Financial Retail Receivables Corporation ("NFRRC"), as Seller, Navistar Financial Corporation, individually ("NFC") and as Servicer, Falcon Asset Securitization Company, LLC, and Park Avenue Receivables Company, LLC, as Assignee, collectively, as the Conduit Investor, and JP Morgan Chase Bank, National Association, as Agent for the Investors and (ii) the Servicing Agreement, dated as of February 16, 2007, among NFRRC, Navistar Financial 2007-JPM Owner Trust, as Issuer, NFC, as Servicer, and The Bank of New York, as Indenture Trustee. The Agent (on behalf of the Conduit Investor and the other Investors) is the holder of record of 100% of the Floating Rate Asset Backed Note, No. R-1, issued by the Issuer pursuant to the Indenture. Capitalized terms used but not defined herein have the respective meanings ascribed to them (or incorporated by reference in) the Servicing Agreement.

The Note Purchase Agreement or the Servicing Agreement, as applicable, requires, among other things, the following:

(i) Section 5.02(c) of the Note Purchase Agreement requires that the Servicer deliver to the Agent (x) on or before October 31, 2007 (or earlier under certain circumstances specified therein), (x) a copy of the annual financial statements of the Servicer for the fiscal years October 31 2005 and 2006 (each such delivery requirement, an "Annual Financial Statement DeliveryRequirement") and (y) on or before October 31, 2007 (or earlier in certain circumstances specified therein), a copy of the quarterly financial statements of the Servicer for the fiscal quarters ended January 31, April 30 and July 31, 2006 and for the fiscal quarters ended January 31, April 30, and July 31, 2007 (each such delivery requirement in this clause (y), a "QuarterlyFinancial Statement Delivery Requirement"); and

The Servicer expects to fail to satisfy each Annual Financial Statement Delivery Requirement, and each Quarterly Financial Statement Delivery Requirement.

Additionally, the Servicer has notified the Agent that it (i) has failed to timely file its annual reports on Form 10-K for the 2005 Fiscal Year and the 2006 Fiscal Year with the Securities and Exchange Commission in accordance with the Securities and Exchange Act of 1934, (ii) has failed to timely file quarterly reports on Form 10-Q for all of its fiscal quarters in 2006 with the Securities Exchange Commission in accordance with the Securities Exchange Act of 1934, and (iii) has failed to timely file one or more of its quarterly reports on Form 10-Q for fiscal quarters in 2007 with the Securities and Exchange Commission in accordance with the Securities and Exchange Act of 1934 (the occurrence of any such failure, a "Periodic ReportingFailure").

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The Servicer has requested that the Agent waive any potential Servicer Defaults arising from the matters described above. The Agent hereby agrees to waive the occurrence of any Servicer Defaults to the extent described below.

1. The Agent (in accordance with Section 7.06 of the Servicing Agreement) hereby directs the Indenture Trustee to waive, and each of Indenture Trustee, the Conduit Investor and the Agent hereby waives, any Servicer Default arising solely from the failure to satisfy the Annual Financial Statement Delivery Requirements; provided that this waiver shall only remain effective until December 31, 2007 unless the Servicer shall have satisfied each Annual Financial Statement Delivery Requirement prior to such date.

2. The Agent (in accordance with Section 7.06 of the Servicing Agreement) hereby directs the Indenture Trustee to waive, and each of Indenture Trustee, the Conduit Investor and the Agent hereby waives, any Servicer Default arising solely from the failure to satisfy the Quarterly Financial Statement Delivery Requirements; provided that this waiver shall only remain effective until December 31, 2007 unless the Servicer shall have satisfied each Quarterly Financial Statement Delivery Requirement prior to such date.

3. The Agent (in accordance with Section 7.06 of the Servicing Agreement) hereby directs the Indenture Trustee to waive, and each of Indenture Trustee, the Conduit Investor and the Agent hereby waives, any Servicer Default or default arising under Section 5.05 of the Note Purchase Agreement from any Periodic Reporting Failure; provided that this waiver shall only remain effective until December 31, 2007 unless the Servicer shall have caused the annual reports and quarterly reports giving rise to any Periodic Reporting Failure to be filed with the Securities and Exchange Commission prior to such date.

Each of the Indenture Trustee, the Conduit Investor and the Agent hereby expressly reserves, and nothing herein shall be construed as a waiver of, (i) any Servicer Default or default under the Note Purchase Agreement specified in paragraphs 1, 2, and 3 above, to the extent that the effectiveness of the waiver of such Servicer Default or default under the Note Purchase Agreement shall lapse as described therein and (ii) any rights with respect to any breach constituting a Servicer Default, Potential Servicer Default or default under the Note Purchase Agreement existing or arising for any other reason.

This waiver may be executed in any number of counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original but all such counterparts shall together constitute one and the same waiver. This waiver shall be a contract made under and governed by the internal laws of the State of New York applicable to contracts made and to be performed entirely within such State.

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IN WITNESS WHEREOF, the undersigned has caused this waiver to be duly executed and delivered by their respective duly authorized officers on the day and year first above written.

JP MORGAN CHASE BANK, N.A., as Agent

By:      /s/ ALAN P. ENGLISH

Name:      Alan P. English

Title:        Vice President

FALCON ASSET SECURITIZATION

COMPANY, LLC,

as Conduit Investor

By:   JP Morgan Chase Bank, N.A., its

its attorney-in-fact

By:      /s/ ALAN P. ENGLISH

Name:      Alan P. English

Title:        Vice President

PARK AVENUE RECEIVABLES COMPANY

LLC, as Conduit Investor

By:   JP Morgan Chase Bank, N.A., its

its attorney-in-fact

By:      /s/ ALAN P. ENGLISH

Name:      Alan P. English

Title:        Vice President

THE BANK OF NEW YORK, not in its individual

capacity but solely as Indenture Trustee

By:    /s/ MICHAEL BURACK

Name:    Michael Burack

Title:      Assistant Treasurer

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Acknowledged and Agreed:

NAVISTAR FINANCIAL CORPORATION

By:      /s/ JOHN V. MULVANEY, SR.

Name:      John V. Mulvaney, Sr.

Title:        V.P. CFO & Treasurer

NAVISTAR FINANCIAL RETAIL RECEIVABLES CORPORATION

By:      /s/ JOHN V. MULVANEY, SR.

Name:      John V. Mulvaney, Sr.

Title:        V.P. CFO & Treasurer

NAVISTAR FINANCIAL 2007-JPM OWNER TRUST

By: Deutsche Bank Trust Company Delaware, not in its individual capacity, but solely as Owner Trustee

By:      /s/ MICHELE HY VOON

Name:      Michele Hy Voon.

Title:        Attorney-in-Fact

JP MORGAN CHASE BANK, N.A., as Swap Counterparty

By:      /s/ ALAN P. ENGLISH

Name:      Alan P. English

Title:        Vice President

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EX-12

NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES

CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES

Exhibit 12

	For the Years Ended October 31,
	2005	2004	2003
		(in millions)
Earnings
Income from continuing operations before taxes	$123.4	$113.7	$71.7
Less: Equity in net (loss)/income of affiliated companies	--	--	--
Fixed Charges	133.3	98.9	123.9
Earnings before fixed charges	$256.7	$212.6	$195.6
Fixed charges
Interest expense	133.3	98.9	123.9
Dividend on Preferred Stock	--	--	--
Total fixed charges	$133.3	$98.9	$123.9
Ratio of earnings to fixed charges	1.93	2.15	1.58

For the purpose of our ratio, earnings consist of the sum of pre-tax income from continuing operations before adjustment for minority interest in consolidated subsidiaries, less equity in net income or loss of affiliated companies, plus fixed charges. Fixed charges consist of consolidated interest expense of the US Borrower and its consolidated Subsidiaries, and dividends on any preferred stock of the US Borrower or other scheduled payments of a similar nature.

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EX-15

EXHIBIT 15

FINANCIAL STATEMENT SCHEDULES

MILLIONS OF DOLLARS

(unaudited)

THREE-YEAR SUMMARY OF FINANCIAL AND OPERATING DATA

Results of Continuing Operations:	2005			2004			2003
Revenues	$	354.0		$	312.6		$	328.1
Income from Continuing Operations		79.2			74.5			42.5
Dividends paid		----			----			50.0
Percentage of income from continuing operations
to average shareowner’s equity		16.8	%		19.3	%		12.	%
Financial Data:
Finance Receivables, net	$	3,410.2		$	3,020.7		$	2,72.0
Total assets		4,588.3			3,945.5			4,271.4
Total debt		3,962.1			3,319.4			3,743.9
Shareholder’s equity		512.9			432.0			338.0
Debt to equity ratio	7.7:1			7.7:1			11.1:1
Number of employees at October 31		283			260			245
Result of Discontinued Operations:
Revenues	$	----		$	----		$	----
Income (loss)	$	----		$	----		$	(2.4	)
Number of employees at October 31		----			----			----

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EXHIBIT 15

FINANCIAL STATEMENT SCHEDULES

MILLIONS OF DOLLARS

(unaudited)

Gross Finance Receivables and Leases Originated:	2005			2004			2003
Wholesale notes	$	5,296.4		$	4,312.4		$	3,168.7
Retail notes and leases:
New		1,604.4			1,343.7			1,004.5
Used		283.9			264.8			307.4
Total		1,888.3			1,608.5			1,311.9
Total	$	7,184.7		$	5,920.9		$	4,480.6
Serviced Retail Notes and Leases with Installments Past Due Over 60 days:	2005			2004			2003
Original amount of notes and leases	$	34.1		$	28.3		$	28.6
Balance of notes and leases		12.7			9.7			10.7
Balance as a percentage of total outstanding  notes and leases		0.35	%		0.30	%		0.36	%
Serviced Retail Notes and Leases Repossessions:	2005			2004			2003
Retail note and lease repossessions acquired as a percentage of average serviced retail note and lease balances		0.86	%		1.42	%		2.85	%
Acquisitions of vehicle inventory	$	49.4		$	40.0		$	68.2
Vehicle inventory, end of period		8.4			26.6			34.8

E-430

FINANCIAL STATEMENT SCHEDULES

MILLIONS OF DOLLARS

(unaudited)

Credit Loss Experience on Serviced Receivables:	2005			2004			2003
NFC
Net losses (recoveries):
Retail notes and leases:	$	6.8		$	10.5		$	14.7
Wholesale notes		0.0			0.0			0.0
Accounts		0.1			1.9			0.0
Total	$	6.9		$	12.4		$	14.7
International
Net losses (recoveries):
Retail notes and leases:	$	6.6		$	10.4		$	24.1
Total	$	13.5		$	22.8		$	38.8
NFC
Percent net losses (recoveries)  to liquidations:
Retail notes and leases:		0.50	%		0.80	%		1.10	%
Wholesale notes		0.00	%		0.00	%		0.00	%
Total		0.50	%		0.80	%		1.10	%
International
Percent  net losses (recoveries) to liquidations:
Retail notes and leases:		0.49	%		0.79	%		1.80	%
NFC
Percent net losses (recoveries) to related average gross portfolio outstanding:
Retail notes and leases:		0.20	%		0.36	%		0.51	%
Wholesale notes		0.00	%		0.00	%		0.00	%
Accounts		0.00	%		0.05	%		0.00	%
Total		0.20	%		0.41	%		0.51	%
International
Percent  net losses (recoveries) to related average gross portfolio outstanding:
Retail notes and leases:		0.2	%		0.35	%		0.84	%

E-431

EX-21

Exhibit 21

NAVISTAR FINANCIAL CORPORATION

AND SUBSIDIARIES

----------------------------------

SUBSIDIARIES OF THE REGISTRANT

AS OF OCTOBER 31, 2005

STATE OR COUNTRY IN

WHICH SUBSIDIARY

ORGANIZED

Subsidiaries that are 100% owned by Navistar

Financial Corporation:

Navistar Financial Retail Receivables Corporation	Delaware
Navistar Financial Securities Corporation	Delaware
Truck Engine Receivables Financing Co	Delaware
Truck Retail Accounts Corporation	Delaware
Truck Retail Instalment Paper Corp	Delaware
International Truck Leasing Corporation	Delaware

Subsidiaries not shown by name in the above listing, if considered in the aggregate as a single subsidiary, would not constitute a significant subsidiary.

E-432

EX-31.1

Exhibit 31.1

NAVISTAR FINANCIAL CORPORATION

AND SUBSIDIARIES

CERTIFICATION

I, Pamela J. Turbeville, certify that:

1. I have reviewed this annual report on Form 10-K of Navistar Financial Corporation, subsidiary of International Truck and Engine Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

E-433

d) Disclosed in this report any change in the registrant’s internal control over financial reportingthat occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date:   December 7, 2007	/s/	PAMELA J. TURBEVILLE
		Pamela J. Turbeville
		(Principal Executive Officer)

E-434

EX-31.2

Exhibit 31.2

NAVISTAR FINANCIAL CORPORATION

AND SUBSIDIARIES

CERTIFICATION

I, John V. Mulvaney, certify that:

1. I have reviewed this annual report on Form 10-K of Navistar Financial Corporation (“NFC”), subsidiary of International Truck and Engine Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of NFC as of, and for, the periods presented in this report;

4. NFC’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for NFC and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to NFC, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of NFC’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in NFC’s internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during NFC’s most recent fiscal quarter (NFC’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, NFC’s internal control over financial reporting; and

E-435

5. NFC’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to NFC’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect NFC’s ability to record, process, summarize and report information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in NFC’s internal controls over financial reporting.

Date:   December 7, 2007	/s/	JOHN V. MULVANEY
		John V. Mulvaney
		(Principal Financial Officer)

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EX-32

Exhibit 32

CERTIFICATIONS PURSUANT TO

SECTION 1350 OF CHAPTER 63 OF

TITLE 18 OF THE UNITED STATES CODE

In connection with the Annual Report of Navistar Financial Corporation (“NFC"), subsidiary of International Truck and Engine Corporation, on Form 10-K for the period ended October 31, 2005 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Pamela J. Turbeville, Principal Executive Officer and I, John V. Mulvaney, Principal Financial Officer of NFC, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)   The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of NFC.

Date:  December 7, 2007	/s/	PAMELA J. TURBEVILLE
		Pamela J. Turbeville
		Principal Executive Officer

Date: December 7, 2007	/s/	JOHN V.  MULVANEY, SR.
		John V. Mulvaney, Sr.
		Principal Financial Officer

This certification accompanies the Report pursuant to § 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by NFC for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section.  This certification shall also not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that NFC specifically incorporates it by reference.

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