December 6, 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), (i) a copy of the annual financial
statements of the Servicer for the fiscal years October 31 2005 and 2006 and
(ii) on or before March 1, 2008 (i.e., within 120 days after the last fiscal
quarter of the fiscal year ended October 31, 2007), a copy of the annual
financial statements of the Servicer for the fiscal year ended October 31, 2007
(each such delivery requirement in this clause (x), an “Annual Financial
Statement Delivery Requirement”) 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) within 45 days after the end of the fiscal quarters
ended July 31, 2007, January 31, 2008, April 30, 2008 and July 31, 2008, a copy
of the quarterly financial statements of the Servicer for the fiscal quarters
ended, respectively, July 31, 2007, January 31, 2008, April 30, 2008 and July
31, 2008 (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 (i) 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 and (ii) on or before February 1, 2008, 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, 2007 (each such
delivery requirement in clauses (i) and (ii), an “Independent Accountant’s
Report Delivery Requirement”).
 

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The Servicer expects to fail to satisfy each Annual Financial Statement Delivery
Requirement, each Quarterly Financial Statement Delivery Requirement and each
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 and 2007
with the Securities Exchange Commission in accordance with the Securities
Exchange Act of 1934, and (iii) expects to fail to timely file its annual report
on Form 10-K for the 2007 Fiscal year and expects to fail to timely file one or
more of its quarterly reports on Form 10-Q for fiscal quarters in 2008 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 November 30, 2008 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 November 30, 2008 unless the Servicer shall have satisfied each Quarterly
Financial Statement Delivery Requirement prior to such date.
 

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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 November 30, 2008 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 and the Agent hereby waives, any Servicer Default arising solely from
the failure of the Servicer to satisfy the Independent Accountant’s Report
Delivery Requirements; provided that this waiver shall only remain effective
until November 30, 2008 unless the Servicer shall have satisfied each
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 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/  DENHAM O. TURTON
Name:      Denham O. Turton
Title:        Authorized Signory

THUNDER BAY FUNDING, LLC,
as Conduit Investor
 
By: Royal Bank of Canada, its
its attorney-in-fact
 
By:     /s/  DENHAM O. TURTON
Name:      Denham O. Turton
Title:        Authorized Signory:
 
THE BANK OF NEW YORK, not in its
individual capacity but solely as Indenture Trustee
 
                                                                                               
By:       /s/ MICHAEL BURACK
                                                                                               
Name:       Micheal 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 2006-RBC 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

ROYAL BANK OF CANADA, as Swap Counterparty
 
 
By:     /s/  M. RUTH PRESTON
Name:      M. Ruth Preston
Title:        Authorized Signatory

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