AMENDMENT NO. 1 TO CREDIT AGREEMENT

AMENDMENT NO. 1 TO CREDIT AGREEMENT

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Exhibit 99(b)(2)

EXECUTION COPY

Dated as of August 2, 2006

AMENDMENT NO. 1 TO THE CREDIT AGREEMENT (this "Amendment"), by and among NAVISTAR INTERNATIONAL CORPORATION, a Delaware Corporation (the "Borrower"), each Subsidiary Guarantor from time to time party thereto (collectively, the "Subsidiary Guarantors", and each individually, a "Subsidiary Guarantor"), each lender from time to time party thereto (collectively, the "Lenders", and each individually, a "Lender"), and CREDIT SUISSE ("CS"), as administrative agent for the Lenders (together with any successor administrative agent appointed pursuant thereto, in such capacity, the "Administrative Agent").

PRELIMINARY STATEMENTS:

(1) The Borrower, the Lenders, the Administrative Agent, the Subsidiary Guarantors, Banc of America Securities LLC, as syndication agent, Citigroup Global Markets Inc. and X.X. Xxxxxx Securities Inc., as documentation agents, and Credit Suisse Securities (USA) LLC and Bank of America Securities LLC, as joint bookrunners and joint lead arrangers, have entered into the Credit Agreement, dated as of February 22, 2006 (the "Credit Agreement"). Capitalized terms not otherwise defined in this Amendment have the same meanings as specified in the Credit Agreement.

(2) The Borrower desires to draw, prior to the Termination Date, up to $195,028,048.61 under the terms of the Credit Agreement (the "Final Drawing"), such funds to be initially placed in escrow and subsequently applied to repay, defease, discharge or purchase, or otherwise cure defaults with respect to, all the 2¹/2% senior convertible notes (the "Convertible Notes"), due December 15, 2007, issued by the Borrower pursuant to the Indenture dated as of December 16, 2002 (the "Convertible Indenture").

(3) The Borrower and the Required Lenders have agreed, on the terms and subject to the conditions set forth herein, to amend the Credit Agreement to effect the transaction described above and other changes as hereinafter set forth.

(4) Accordingly, the parties hereto hereby agree as follows:

SECTION 1. Amendments to Credit Agreement. The Credit Agreement is, effective as of the Amendment No. 1 Effective Date (as hereinafter defined) and subject to the satisfaction or waiver of the conditions precedent set forth in Section 2 hereof, hereby amended as follows:

(a) Section 1.01 is amended to add the following definition in the appropriate alphabetical position:

"Amendment No. 1" means Amendment No. 1 to this Credit Agreement, dated as of August 2, 2006, among the Borrower, the Subsidiary Guarantors party thereto, the Required Lenders party thereto and the Administrative Agent.

(b) Section 2.14 is amended by amending and restating such section in its entirety to read as follows:

"SECTION 2.14 Use of Proceeds. The proceeds of each Advance shall be available (and the Borrower agrees that it shall use such proceeds) (a) to repay, defease, discharge, purchase and/or otherwise provide for the payment of such Existing Notes as the Borrower shall have specified in the applicable Notice of Borrowing (which Existing Notes shall include (i) all Existing Notes which have been accelerated as the result of a default disclosed in the Disclosure Filings, and (ii) such Existing Notes not accelerated at such time but with respect to which the Borrower has received a written notice of default or reasonably believes such Existing Notes to be in default due to the matters disclosed in

the Disclosure Filings and has so noted in the Notice of Borrowing), through a tender offer, defeasance, discharge, escrow or other mechanism reasonably acceptable to the Administrative Agent, all on terms reasonably acceptable to the Lead Arrangers, and for the payment of fees, costs and expenses incurred in connection with the foregoing, or (b) to the extent not fully used in accordance with Section 2.14(a), to repay the Advances in accordance with the escrow arrangements referred to in Section 2(b)(iii) of Amendment No. 1."

"(iii) the proceeds of such Borrowing shall be applied either (A) to the redemption, defeasance, discharge, purchase or other mechanism for the provision of payment of the series of Existing Notes set forth in the applicable Notice of Borrowing (and to the payment of fees, costs and expenses related to such redemption, defeasance, discharge, purchase or other mechanism for the provision of payment), such redemption, defeasance, discharge, purchase or other mechanism for the provision of payment shall be in accordance with applicable law and on documentation (including, without limitation, escrow documentation) reasonably satisfactory to the Administrative Agent and, after giving effect to such redemption, defeasance, discharge, purchase or other mechanism for the provision of payment, (I) all Existing Notes that have been accelerated on or prior to the date of such Borrowing due to a default caused by the matters disclosed in the Disclosure Filings, and (II) such Existing Notes not accelerated at such time but with respect to which the Borrower has received a notice of default or reasonably believes such Existing Notes to be in default due to the matters disclosed in the Disclosure Filings and has so noted in the Notice of Borrowing, shall have been redeemed, defeased, discharged or purchased in full (or provision for the payment thereof shall have been made in a manner satisfactory to the Administrative Agent, including a reasonably satisfactory escrow agreement which will permit the release of such funds to either apply them in accordance with this Section 3.03(a)(iii)(A) or to repay the outstanding Advances to the extent the applicable Existing Notes are no longer in default) or, in the case of any such redemption or purchase of less than all of the Existing Notes of the applicable series, none of the remaining Existing Notes of such series shall be in default or (B) to the funding of the escrow account under the escrow agreement referred to in Section 3.02(e); and"

(d) Section 5.01(k) is amended by amending and restating the opening clause thereof in its entirety to read as follows:

"(k) Existing Debt. On or prior to December 21, 2006, obtain binding waivers with respect to, and/or repay, defease, discharge or purchase, or otherwise cure or obtain waivers with respect to, any defaults with respect to:"

(e) Section 6.01(e)(i) is amended by (i) inserting the letter "(A)" immediately following the phrase "(i) none of the events described in this Section 6.01(e), to the extent", and (ii) replacing the phrase "and which occur prior to the Termination Date, shall" with the phrase "and (B) which occur prior to the Termination Date and are waived, remedied, cured, redeemed, discharged, defeased or repaid on or before December 21, 2006 (to the extent funds have been placed, and remain, in escrow in accordance with Section 2(b)(iii) of Amendment No. 1, pursuant to such an escrow arrangement that remains in full force and effect until such waiver, remedy, cure, redemption, discharge, defeasance or repayment, as applicable, occurs), shall".

SECTION 2. Conditions of Effectiveness to Amendment No. 1. This Amendment shall become effective on the date (the "Amendment No. 1 Effective Date") when, and only when, the Administrative Agent shall have received (a) counterparts of this Amendment executed by the Borrower, the Subsidiary Guarantors and the Required Lenders or, as to any of the Lenders, advice reasonably satisfactory to the Administrative Agent that such Lender has executed this Amendment; and (b) evidence reasonably satisfactory to the Administrative Agent that all of the following conditions shall have been satisfied or waived:

(i) All invoiced reasonable out-of-pocket expenses of the Administrative Agent (including the reasonable fees and expenses of counsel for the Administrative Agent) in connection with the negotiation, preparation and delivery of this Amendment and in connection with ongoing work regarding the Credit Agreement shall have been paid.

(ii) The Borrower shall have (A) drawn down the full Final Drawing under the Credit Agreement and (B) paid in full all invoiced fees and reimbursement amounts due, owing and payable in connection with the foregoing.

(iii) All the proceeds of the Final Drawing, together with an additional amount equal to the amount necessary to fully repay, defease, discharge (including interest accruing subsequent to, but not prior to, December 15, 2006) or purchase, or otherwise cure all defaults with respect to, all the Convertible Notes, shall have been placed in an escrow account with an escrow agent reasonably acceptable to the Administrative Agent (pursuant to an escrow agreement, the terms of which shall be reasonably acceptable to the Administrative Agent), to ensure the full repayment, defeasance, discharge, purchase or other cure of all defaults with respect to the Convertible Notes in accordance with their terms and the terms of the Convertible Indenture by December 21, 2006.

(iv) The Administrative Agent shall have received, in form and substance reasonably satisfactory to the Administrative Agent, a certificate of the Borrower dated as of the Amendment No. 1 Effective Date signed on behalf of the Borrower by a Responsible Officer certifying on behalf of the Borrower that (A) no Default or Event of Default has occurred and is continuing, or would result from transactions contemplated hereby, and (B) the representations and warranties of the Borrower contained in Article IV of the Credit Agreement are true and correct in all material respects on and as of the Amendment No. 1 Effective Date as if made on the Amendment No. 1 Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects as of such earlier date, and (C) all conditions of the Amendment No. 1 Effectiveness Date have been satisfied or waived.

SECTION 3. Reference to and Effect on the Credit Agreement and the Loan Documents. (a) On and after the effectiveness of this Amendment, each reference in the Credit Agreement to "this Agreement", "hereunder", "hereof" or words of like import referring to the Credit Agreement, and each reference in the Notes and each of the other Loan Documents to "the Credit Agreement", "thereunder", "thereof" or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement, as amended by this Amendment.

(b) The Credit Agreement, the Notes and each of the other Loan Documents, as specifically amended by this Amendment, are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed.

(c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender or the Agent

under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents.

SECTION 4. Costs and Expenses The Borrower agrees to pay on demand all reasonable out-of-pocket costs and expenses of the Administrative Agent in connection with the preparation, execution, delivery and administration, modification and amendment of this Amendment and the other instruments and documents to be delivered hereunder (including, without limitation, the reasonable fees and expenses of counsel for the Administrative Agent) in accordance with the terms of Section 9.04 of the Credit Agreement.

SECTION 5. Execution in Counterparts. 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 taken together shall constitute but one and the same agreement. Delivery of an executed counterpart of a signature page to this Amendment by telecopier or other electronic delivery (e.g. "pdf") shall be effective as delivery of a manually executed counterpart of this Amendment.

SECTION 6. Governing Law. This Amendment shall be governed by, and construed in accordance with, the law of the State of New York.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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

NAVISTAR INTERNATIONAL CORPORATION
By:	/s/ X.X. XXXXXXX
	Name:	X.X. XXXXXXX
	Title:	V.P. & TREASURER
INTERNATIONAL TRUCK AND ENGINE CORPORATION, as Subsidiary Guarantor
By:	/s/ X.X. XXXXXXX
	Name:	X.X. XXXXXXX
	Title:	V.P. & TREASURER

CREDIT SUISSE, CAYMAN ISLANDS BRANCH, as Administrative Agent and Lender
By:	/s/ XXXXXX X. XXXXX
	Name:	Xxxxxx X. Xxxxx
	Title:	Managing Director
By:	/s/ XXXX XXXXXXXXXXX
	Name:	XXXX XXXXXXXXXXX
	Title:	VICE PRESIDENT

		LENDER:
		[please print or type name of institution]
		By:	/s/ [ILLEGIBLE]
			Name:
			Akanthos Arbitrage Master Fund, LP
			By Akanthos Capital Mgmt, LLC its GP

			By Xxxxxxx Xxx, Manager

LENDER:
ARES ENHANCED LOAN INVESTMENT STRATEGY, LTD.
By:	Ares Enhanced Loan Management, L.P., Investment Manager
By:	Ares Enhanced Loan GP, LLC Its General Partner
By:	/s/ XXXX XXXXXXX
	Name:	Xxxx Xxxxxxx
	Title:	Vice President

LENDER:
ARES ENHANCED LOAN INVESTMENT STRATEGY II, LTD.
By:	Ares Enhanced Loan Management II, L.P., Investment Manager
By:	Ares Enhanced Loan GP, LLC Its General Partner
By:	/s/ XXXX XXXXXXX
	Name:	Xxxx Xxxxxxx
	Title:	Vice President

LENDER:
ARES IIR CLO LTD.
By:	Ares CLO Management IIR, L.P., Investment Manager
By:	Ares CLO GP, LLC, Its General Partner
By:	/s/ XXXX XXXXXXX
	Name:	Xxxx Xxxxxxx
	Title:	Vice President

LENDER:
ARES VIII CLO LTD.
By:	Ares CLO Management VIII, L.P., Investment Manager
By:	Ares CLO GP VIII, LLC, Its General Partner
By:	/s/ XXXX XXXXXXX
	Name:	Xxxx Xxxxxxx
	Title:	Vice President

LENDER:
ARES IX CLO LTD.
By:	Ares CLO Management IX, L.P., Investment Manager
By:	Ares CLO GP IX, LLC, Its General Partner
By:	/s/ XXXX XXXXXXX
	Name:	Xxxx Xxxxxxx
	Title:	Vice President

LENDER:
ARES X CLO LTD.
By:	Ares CLO Management X, L.P., Investment Manager
By:	Ares CLO GP X, LLC, Its General Partner
By:	/s/ XXXX XXXXXXX
	Name:	Xxxx Xxxxxxx
	Title:	Vice President

LENDER:
Eastland CLO, Ltd.
By:	Highland Capital Management, L.P., As Collateral Manager
By:	Strand Advisors, Inc., Its General Partner
By:	/s/ XXXX XXXXXXXX
	Name:	Xxxx Xxxxxxxx, Assistant Treasurer
	Title:	Strand Advisors, Inc., General Partner of Highland Capital Management, L.P.

LENDER:
Xxxxxxx CLO, Ltd.
By:	Highland Capital Management, L.P., As Collateral Manager
By:	Strand Advisors, Inc., Its General Partner
By:	/s/ XXXX XXXXXXXX
	Name:	Xxxx Xxxxxxxx, Assistant Treasurer
	Title:	Strand Advisors, Inc., General Partner of Highland Capital Management, L.P.

LENDER:
Highland Legacy Limited
By:	Highland Capital Management, L.P., As Collateral Manager
By:	Strand Advisors, Inc. Its General Partner
By:	/s/ XXXX XXXXXXXX
	Name:	Xxxx Xxxxxxxx, Assistant Treasurer
	Title:	Strand Advisors, Inc., General Partner of Highland Capital Management, L.P.

LENDER:
Loan Funding IV LLC
By:	Highland Capital Management, L.P., As Collateral Manager
By:	Strand Advisors, Inc., Its General Partner
By:	/s/ XXXX XXXXXXXX
	Name:	Xxxx Xxxxxxxx, Assistant Treasurer
	Title:	Strand Advisors, Inc., General Partner of Highland Capital Management, L.P.

LENDER:
Loan Funding VII LLC
By:	Highland Capital Management, L.P., As Collateral Manager
By:	Strand Advisors, Inc., Its General Partner
By:	/s/ XXXX XXXXXXXX
	Name:	Xxxx Xxxxxxxx, Assistant Treasurer
	Title:	Strand Advisors, Inc., General Partner of Highland Capital Management, L.P.

		LENDER:
		MACKAY XXXXXXX STATUTORY TRUST—High Yield Corporate Bond Series
		Federal Insurance Company
		ILLINOIS MUNICIPAL RETIREMENT FUND
		THE 1199 HEALTH CARE EMPLOYEES PENSION FUND
		Employees' Retirement System of Rhode Island
		HOUSTON POLICE OFFICERS' PENSION SYSTEM
		City of Los Angeles Fire and Police Pension Plan
		THE MAINSTAY FUNDS, ON BEHALF OF ITS HIGH YIELD CORPORATE BOND FUND SERIES
		MAINSTAY VP SERIES FUND, INC. ON BEHALF OF ITS HIGH YIELD CORPORATE BOND PORTFOLIO
		By:		MacKay Xxxxxxx LLC
		Its:		Investment Advisor
		By:		/s/ XXXXXXX XXXXXX
				Xxxxxxx Xxxxxx
				Xx. Managing Director

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AMENDMENT NO. 1 TO CREDIT AGREEMENT

CREDIT SUISSE CAPITAL LLC

/s/ XXXXXX XXXXX

XXXXXX XXXXX

AUTHORIZED SIGNATORY