ex4.40


    

      Exhibit
        4.40

      


      Second
        Supplemental
        to 4.75% Subordinated Exchangeable Notes Indenture

      


      This
        Second Supplement to Indenture (the “Second Supplement”) is dated as of March
        24, 2006 by and among Navistar International Corporation, a Delaware corporation
        (the “Company”), and BNY Midwest Trust Company, an Illinois banking corporation
        (the “Trustee”), with respect to the Company’s 4.75% Subordinated Exchangeable
        Notes due 2009 (the “Notes”). Capitalized terms used but not otherwise defined
        in this Second Supplement shall have the meanings ascribed to such terms
        in the
        Indenture (hereinafter defined).

      


      WHEREAS,
        the Company, Navistar Financial Corporation and the Trustee entered into
        that
        certain Indenture, dated as of March 25, 2002, and as amended and supplemented
        by the First Supplement to Indenture, dated as of June 11, 2004, by and among
        the Company, Navistar Financial Corporation and the Trustee (as may be further
        amended and supplemented from time to time in accordance with its terms,
        the
“Indenture”);

      


      WHEREAS,
        the Company desires to amend and waive certain provisions of the Indenture,
        as
        set forth in Article I hereof;

      


      WHEREAS,
        the Holders of at least a majority in aggregate principal amount of Notes
        outstanding (excluding any Notes held by any affiliate of the Company) have
        consented to the amendments and waivers effected by this Second
        Supplement;

      


      WHEREAS,
        pursuant to Section 9.2 of the Indenture, the Trustee is authorized to execute
        and deliver this Second Supplement;

      


      NOW,
        THEREFORE, in consideration of the premises and for other good and valuable
        consideration, the receipt and sufficiency of which are hereby acknowledged,
        the
        parties hereby agree, for the equal and proportionate benefit of all Holders
        of
        the Securities, as follows:

      


      ARTICLE
        I

      INDENTURE
        AMENDMENTS AND WAIVERS

      
 

      
        Section
          1.01  Amendments
          to Articles Three, Four, Five and Six.
          Upon
          written notification to the Trustee by the Company that it has accepted
          to
          purchase and payment (the “Acceptance Date”) pursuant to the offer to purchase
          all of the Notes validly tendered on or before midnight, New York City
          time, on
          March 23, 2006 pursuant to the Offer to Purchase and Consent Solicitation
          Statement, dated as of February 24, 2006, and any amendments, modifications
          or
          supplements there to, the automatically (without further act by any person)
          with
          respect to the Notes:



      


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      Exhibit
        4.40 (continued)

      


      (a) Section
        4.2 (Rule 144A Information; Periodic Reports to the Trustee) and Section
        4.3
        (Compliance Certificate) of the Indenture are deleted in their entirety and
        replaced with the following: “The Company shall comply with Section 314 of the
        TIA.”

      


      (b) Section
        4.6 (Repurchase upon Fundamental Change) of the Indenture is deleted in its
        entirety.

      


      (c) Each
        of
        the following subsections of Section 6.1 (Events of Default) of the Indenture
        are deleted in their entirety: Sections 6.1(c), (d), (e) and (h).

      


      (d) failure
        to comply with the terms of any of the foregoing sections of the Indenture
        shall
        no longer constitute a Default or an Event of Default under the Indenture
        and
        shall no longer have any other consequence under the Indenture;

      


      (e) the
        occurrence of the events described in Sections 6.1(c), (d), (e) and (h) shall
        no
        longer constitute Events of Default; and

      


      (f) all
        definitions set forth in Section 1.1 of the Indenture that relate to defined
        terms used solely in covenants or sections deleted hereby are deleted in
        their
        entirety.

      


      Section
        1.02 Waivers.
        The
        Trustee acknowledges that Holders representing at least a majority in aggregate
        principal amount of the outstanding Notes have: (i) waived any and all Defaults
        or Events of Default that have arisen under the Indenture at any time prior
        to
        the effective time of this Section 1.02, including, but not limited to, any
        Default or Event of Default that may exist as a result of: (a) a failure
        by the
        Company to comply Section 4.2 of the Indenture at any time prior to the
        effective time of this Section 1.02; (b) a failure by the Company to provide
        the
        Trustee with any notice of Default or Event of Default required by Section
        4.3
        of the Indenture; and (c) an acceleration of any Indebtedness or other event
        constituting a Default or Event of Default under Section 6.1(h) of the
        Indenture; (ii) agreed to rescind any notice of Default provided to the Company
        at any time prior to the effective time of this Section 1.02; and (iii) agreed
        to rescind any notice of acceleration of the Notes that has been received
        by the
        Company at any time prior to the effective time of this Section 1.02. Based
        on
        the foregoing, the Trustee hereby revokes any and all notices of Default
        and/or
        acceleration delivered by the Trustee to the Company prior to the effective
        time
        of this Section 1.02. This Section 1.02 shall be effective as of the Acceptance
        Date.

      


      


      


      


      


      


      


      


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      Exhibit
        4.40 (continued)

      


      ARTICLE
        II

      MISCELLANEOUS
        PROVISIONS

      


      Section
        2.01 Instruments
        to be Read Together.
        This
        Second Supplement is an indenture supplement to and in implementation of
        the
        Indenture, and said Indenture and this Second Supplement shall henceforth
        be
        read together.

      


      Section
        2.02 Confirmation.
        The
        Indenture, as amended and supplemented by this Second Supplement, is in all
        respects confirmed and preserved.

      


      Section
        2.03 Counterparts.
        This
        Second Supplement may be executed in any number of counterparts, each of
        which,
        when so executed, shall be deemed to be an original, but all of which shall
        together constitute one and the same instrument.

      


      Section
        2.04 Effectiveness.
        This
        Second Supplement shall become effective immediately upon its execution in
        accordance with the provisions of Article IX of the Indenture.

      


      Section
        2.05 GOVERNING
        LAW.
        THIS
        SECOND SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
        THE
        INTERNAL LAWS OF THE STATE OF NEW YORK. THE COMPANY AGREES TO SUBMIT TO THE
        JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, COUNTY OF NEW YORK,
        IN ANY
        ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS FIRST
        SUPPLEMENT.

      


      Section
        2.06 Disclaimer
        of Trustee’s Responsibility.
        In
        executing this Second Supplement, the Trustee shall be entitled to all the
        privileged and immunities afforded to the Trustee under the terms and conditions
        of the Indenture.

      


      Section
        2.07 Trust
        Indenture Act Controls.
        If any
        provision of this Second Supplement limits, qualifies or conflicts with another
        provision that is required to be included in the Second Supplement or the
        Indenture by the Trust Indenture Act, the required provision shall
        control.

      * * * * *

      


      


      


      


      


      


      


      


      


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      Exhibit
        4.40 (continued)

      


      IN
        WITNESS WHEREOF, the parties hereto have caused this Second Supplement to
        Indenture to be duly executed and attested, all as of the day and year first
        written above.

      NAVISTAR
        INTERNATIONAL CORPORATION 

      


      By:
        __/s/
        Terry M. Endsley_____________

      Name:
        Terry M. Endsley

      Title:
         Vice
        President and Treasurer

      


      BNY
        MIDWEST TRUST COMPANY

      


      By:
        ___/s/
        D.
        G. Donovan __________

      Name:
        D.
        G. Donovan

      Title:
         Vice
        President

       

      


      


      


      


      


      


      


      


      


      


      


      


      


      


      


      


      


      


      


      


      


      


      


      


      


      


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