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.

 
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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]

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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 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
 
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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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