Caterpillar Inc.
Caterpillar Inc.: Files Form 10-Q FQE 30 September 2021
Caterpillar Inc. Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to CATERPILLAR INC. (Exact name of registrant as specified in its charter) Delaware 37-0602744 (State or other jurisdiction of incorporation) (IRS Employer I.D. No.) (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: (224) 551-4000 Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report: N/A Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol (s) Name of each exchange on which registered Common Stock ($1.00 par value) CAT New York Stock Exchange 1 8% Debentures due February 15, 2023 CAT23 New York Stock Exchange 5.3% Debentures due September 15, 2035 CAT35 New York Stock Exchange 1 In addition to the New York Stock Exchange, Caterpillar common stock is also listed on stock exchanges in France and Switzerland. 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 ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ At September 30, 2021, 540,941,600 shares of common stock of the registrant were outstanding. Table of Contents Table of Contents Part I. Financial Information Item 1. Financial Statements 3 Management’s Discussion and Analysis of Financial Condition and Results of Item 2. 49 Item 3. Quantitative and Qualitative Disclosures About Market Risk 79 Item 4. Controls and Procedures 79 Part II. Other Information Item 1. Legal Proceedings 80 Item 1A. Risk Factors 80 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 80 Item 3. Defaults Upon Senior Securities * Item 4. Mine Safety Disclosures * Item 5. Other Information * Item 6. Exhibits 81 * Item omitted because no answer is called for or item is not applicable. 2 Table of Contents Part I. FINANCIAL INFORMATION Caterpillar Inc.
See accompanying notes to Consolidated Financial Statements. 3 Table of Contents Caterpillar Inc.
See accompanying notes to Consolidated Financial Statements. 4 Table of Contents Caterpillar Inc.
1 Profit attributable to common shareholders. 2 Diluted by assumed exercise of stock-based compensation awards using the treasury stock method. See accompanying notes to Consolidated Financial Statements. 5 Table of Contents Caterpillar Inc.
See accompanying notes to Consolidated Financial Statements. 6 Table of Contents Caterpillar Inc.
See accompanying notes to Consolidated Financial Statements. 7 Table of Contents Caterpillar Inc.
1 See Note 12 for additional information. See accompanying notes to Consolidated Financial Statements. 8 Table of Contents Caterpillar Inc.
1 Dividends per share of common stock of $2.14 and $2.06 were declared in the nine months ended September 30, 2021 and 2020, respectively. 2 See Note 12 for additional information. See accompanying notes to Consolidated Financial Statements. 9 Table of Contents Caterpillar Inc.
Cash equivalents primarily represent short-term, highly liquid investments with original maturities of generally three months or less. See accompanying notes to Consolidated Financial Statements. 10 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Information in our financial statements and related commentary are presented in the following categories: Machinery, Energy & Transportation (ME&T) – We define ME&T as Caterpillar Inc. and its subsidiaries, excluding Financial Products. ME&T’s information relates to the design, manufacturing and marketing of our products. Financial Products – We define Financial Products as our finance and insurance subsidiaries, primarily Caterpillar Financial Services Corporation (Cat Financial) and Caterpillar Insurance Holdings Inc. (Insurance Services). Financial Products’ information relates to the financing to customers and dealers for the purchase and lease of Caterpillar and other equipment. B. Basis of presentation In the opinion of management, the accompanying unaudited financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of (a) the consolidated results of operations for the three and nine months ended September 30, 2021 and 2020, (b) the consolidated comprehensive income for the three and nine months ended September 30, 2021 and 2020, (c) the consolidated financial position at September 30, 2021 and December 31, 2020, (d) the consolidated changes in shareholders’ equity for the three and nine months ended September 30, 2021 and 2020 and (e) the consolidated cash flow for the nine months ended September 30, 2021 and 2020. The financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (U.S. GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with the audited financial statements and notes thereto included in our company’s annual report on Form 10-K for the year ended December 31, 2020 (2020 Form 10-K). The December 31, 2020 financial position data included herein is derived from the audited consolidated financial statements included in the 2020 Form 10-K but does not include all disclosures required by U.S. GAAP. Certain amounts for prior periods have been reclassified to conform to the current period financial statement presentation. Cat Financial has end-user customers that are variable interest entities (VIEs) of which we are not the primary beneficiary. Although we have provided financial support to these entities and therefore have a variable interest, we do not have the power to direct the activities that most significantly impact their economic performance. Our maximum exposure to loss from our involvement with these VIEs is limited to the credit risk inherently present in the financial support that we have provided. These risks were evaluated and reflected in our financial statements as part of our overall portfolio of finance receivables and related allowance for credit losses. See Note 11 for further discussions on a consolidated VIE.
A. Adoption of new accounting standards Reference rate reform (Accounting Standards Update (ASU) 2020-04) – In March 2020, the Financial Accounting Standards Board (FASB) issued accounting guidance to ease the potential burden in accounting for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance is optional and may be elected over time as reference rate reform activities occur between March 12, 2020 through December 31, 2022. In January 2021, we elected to adopt optional expedients impacting our derivative instruments. In addition, in October 2021, we elected to adopt optional expedients for contract modifications. The adoption of the optional expedients will not have a material impact on our financial statements. 11 Table of Contents We adopted the following ASUs effective January 1, 2021, none of which had a material impact on our financial statements: ASU Description 2020-01 Investments – Equity securities, equity method and joint ventures and derivatives and hedging 2020-08 Codification improvements – Receivables – Nonrefundable fees and other costs 2021-01 Reference rate reform – Scope B. Accounting standards issued but not yet adopted We consider the applicability and impact of all ASUs. We assessed the ASUs and determined that they either were not applicable or were not expected to have a material impact on our financial statements.
Trade receivables represent amounts due from dealers and end users for the sale of our products. In addition, Cat Financial provides wholesale inventory financing for a dealer’s purchase of inventory. We include wholesale inventory receivables in Receivables – trade and other and Long-term receivables – trade and other in the Consolidated Statement of Financial Position. Short-term trade receivables from dealers and end users were $6,476 million, $6,310 million and $7,648 million as of September 30, 2021, December 31, 2020 and December 31, 2019, respectively. We recognize short-term trade receivables from dealers and end users in Receivables – trade and other in the Consolidated Statement of Financial Position. Long-term trade receivables from dealers and end users were $667 million, $657 million and $693 million as of September 30, 2021, December 31, 2020 and December 31, 2019, respectively. We recognize long-term trade receivables from dealers and end users in Long-term receivables – trade and other in the Consolidated Statement of Financial Position. We invoice in advance of recognizing the sale of certain products. We recognize advanced customer payments as a contract liability in Customer advances and Other liabilities in the Consolidated Statement of Financial Position. Contract liabilities were $1,577 million, $1,526 million and $1,654 million as of September 30, 2021, December 31, 2020 and December 31, 2019, respectively. We reduce the contract liability when revenue is recognized. During the three and nine months ended September 30, 2021, we recognized $121 million and $795 million, respectively, of revenue that was recorded as a contract liability at the beginning of 2021. During the three and nine months ended September 30, 2020, we recognized $144 million and $843 million, respectively, of revenue that was recorded as a contract liability at the beginning of 2020. As of September 30, 2021, we have entered into contracts with dealers and end users for which sales have not been recognized as we have not satisfied our performance obligations and transferred control of the products. The dollar amount of unsatisfied performance obligations for contracts with an original duration greater than one year is $5.8 billion, with about one-third of the amount expected to be completed and revenue recognized in the twelve months following September 30, 2021. We have elected the practical expedient not to disclose unsatisfied performance obligations with an original contract duration of one year or less. Contracts with an original duration of one year or less are primarily sales to dealers for machinery, engines and replacement parts. See Note 16 for further disaggregated sales and revenues information.
Accounting for stock-based compensation requires that the cost resulting from all stock-based payments be recognized in the financial statements based on the grant date fair value of the award. Our stock-based compensation primarily consists of stock options, restricted stock units (RSUs) and performance-based restricted stock units (PRSUs). We recognized pretax stock-based compensation expense of $58 million and $169 million for the three and nine months ended September 30, 2021, respectively, and $55 million and $169 million for the three and nine months ended September 30, 2020, respectively. 12 Table of Contents The following table illustrates the type and fair value of the stock-based compensation awards granted during the nine months ended September 30, 2021 and 2020, respectively: Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020 Weighted- Weighted- Weighted- Weighted- Average Fair Average Grant Average Fair Average Grant Shares Granted Value Per Share Date Stock Price Shares Granted Value Per Share Date Stock Price
The following table provides the assumptions used in determining the fair value of the stock-based awards for the nine months ended September 30, 2021 and 2020, respectively:
As of September 30, 2021, the total remaining unrecognized compensation expense related to nonvested stock-based compensation awards was $175 million, which will be amortized over the weighted-average remaining requisite service periods of approximately 1.9 years. 5. Derivative financial instruments and risk management Our earnings and cash flow are subject to fluctuations due to changes in foreign currency exchange rates, interest rates and commodity prices. Our Risk Management Policy (policy) allows for the use of derivative financial instruments to prudently manage foreign currency exchange rate, interest rate and commodity price exposures. Our policy specifies that derivatives are not to be used for speculative purposes. Derivatives that we use are primarily foreign currency forward, option and cross currency contracts, interest rate contracts and commodity forward and option contracts. Our derivative activities are subject to the management, direction and control of our senior financial officers. We present at least annually to the Audit Committee of the Board of Directors on our risk management practices, including our use of financial derivative instruments. We recognize all derivatives at their fair value on the Consolidated Statement of Financial Position. On the date the derivative contract is entered into, we designate the derivative as (1) a hedge of the fair value of a recognized asset or liability (fair value hedge), (2) a hedge of a forecasted transaction or the variability of cash flow (cash flow hedge) or (3) an undesignated instrument. We record in current earnings changes in the fair value of a derivative that is qualified, designated and highly effective as a fair value hedge, along with the gain or loss on the hedged recognized asset or liability that is attributable to the hedged risk. We record in Accumulated other comprehensive income (loss) (AOCI) changes in the fair value of a derivative that is qualified, designated and highly effective as a cash flow hedge, to the extent effective, on the Consolidated Statement of Financial Position until we reclassify them to earnings in the same period or periods during which the hedged transaction affects earnings. We report changes in the fair value of undesignated derivative instruments in current earnings. We classify cash flows from designated derivative financial instruments within the same category as the item being hedged on the Consolidated Statement of Cash Flow. We include cash flows from undesignated derivative financial instruments in the investing category on the Consolidated Statement of Cash Flow. We formally document all relationships between hedging instruments and hedged items, as well as the risk-management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives that are designated as fair value hedges to specific assets and liabilities on the Consolidated Statement of Financial Position and linking cash flow hedges to specific forecasted transactions or variability of cash flow. 13 Table of Contents We also formally assess, both at the hedge’s inception and on an ongoing basis, whether the designated derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flow of hedged items. When a derivative is determined not to be highly effective as a hedge or the underlying hedged transaction is no longer probable, we discontinue hedge accounting prospectively, in accordance with the derecognition criteria for hedge accounting. Foreign Currency Exchange Rate Risk Foreign currency exchange rate movements create a degree of risk by affecting the U.S. dollar value of sales made and costs incurred in foreign currencies. Movements in foreign currency rates also affect our competitive position as these changes may affect business practices and/or pricing strategies of non-U.S.-based competitors. Additionally, we have balance sheet positions denominated in foreign currencies, thereby creating exposure to movements in exchange rates. Our ME&T operations purchase, manufacture and sell products in many locations around the world. As we have a diversified revenue and cost base, we manage our future foreign currency cash flow exposure on a net basis. We use foreign currency forward and option contracts to manage unmatched foreign currency cash inflow and outflow. Our objective is to minimize the risk of exchange rate movements that would reduce the U.S. dollar value of our foreign currency cash flow. Our policy allows for managing anticipated foreign currency cash flow for up to approximately five years. As of September 30, 2021, the maximum term of these outstanding contracts was approximately 60 months. We generally designate as cash flow hedges at inception of the contract any Australian dollar, Brazilian real, British pound, Canadian dollar, Chinese yuan, Indian rupee, Japanese yen, Mexican peso, Norwegian Krona, Singapore dollar or Thailand baht forward or option contracts that meet the requirements for hedge accounting and the maturity extends beyond the current quarter-end. We perform designation on a specific exposure basis to support hedge accounting. The remainder of ME&T foreign currency contracts are undesignated. In managing foreign currency risk for our Financial Products operations, our objective is to minimize earnings volatility resulting from conversion and the remeasurement of net foreign currency balance sheet positions and future transactions denominated in foreign currencies. Our policy allows the use of foreign currency forward, option and cross currency contracts to offset the risk of currency mismatch between our assets and liabilities and exchange rate risk associated with future transactions denominated in foreign currencies. Our foreign currency forward and option contracts are primarily undesignated. We designate fixed-to-fixed cross currency contracts as cash flow hedges to protect against movements in exchange rates on foreign currency fixed-rate assets and liabilities. Interest Rate Risk Interest rate movements create a degree of risk by affecting the amount of our interest payments and the value of our fixed-rate debt. Our practice is to use interest rate contracts to manage our exposure to interest rate changes. Our ME&T operations generally use fixed-rate debt as a source of funding. Our objective is to minimize the cost of borrowed funds. Our policy allows us to enter into fixed-to-floating interest rate contracts and forward rate agreements to meet that objective. We designate fixed-to-floating interest rate contracts as fair value hedges at inception of the contract, and we designate certain forward rate agreements as cash flow hedges at inception of the contract. Financial Products operations has a match-funding policy that addresses interest rate risk by aligning the interest rate profile (fixed or floating rate and duration) of Cat Financial’s debt portfolio with the interest rate profile of our receivables portfolio within predetermined ranges on an ongoing basis. In connection with that policy, we use interest rate derivative instruments to modify the debt structure to match assets within the receivables portfolio. This matched funding reduces the volatility of margins between interest-bearing assets and interest-bearing liabilities, regardless of which direction interest rates move. Our policy allows us to use fixed-to-floating, floating-to-fixed and floating-to-floating interest rate contracts to meet the match-funding objective. We designate fixed-to-floating interest rate contracts as fair value hedges to protect debt against changes in fair value due to changes in the benchmark interest rate. We designate most floating-to-fixed interest rate contracts as cash flow hedges to protect against the variability of cash flows due to changes in the benchmark interest rate. 14 Table of Contents We have, at certain times, liquidated fixed-to-floating and floating-to-fixed interest rate contracts at both ME&T and Financial Products. We amortize the gains or losses associated with these contracts at the time of liquidation into earnings over the original term of the previously designated hedged item. Commodity Price Risk Commodity price movements create a degree of risk by affecting the price we must pay for certain raw materials. Our policy is to use commodity forward and option contracts to manage the commodity risk and reduce the cost of purchased materials. Our ME&T operations purchase base and precious metals embedded in the components we purchase from suppliers. Our suppliers pass on to us price changes in the commodity portion of the component cost. In addition, we are subject to price changes on energy products such as natural gas and diesel fuel purchased for operational use. Our objective is to minimize volatility in the price of these commodities. Our policy allows us to enter into commodity forward and option contracts to lock in the purchase price of a portion of these commodities within a five-year horizon. All such commodity forward and option contracts are undesignated. The location and fair value of derivative instruments reported in the Consolidated Statement of Financial Position were as follows: (Millions of dollars) Consolidated Statement of Financial Asset (Liability) Fair Value Position Location September 30, 2021 December 31, 2020
15 Table of Contents The total notional amounts of the derivative instruments were as follows: (Millions of dollars) September 30, 2021 December 31, 2020
The notional amounts of the derivative financial instruments do not represent amounts exchanged by the parties. We calculate the amounts exchanged by the parties by referencing the notional amounts and by other terms of the derivatives, such as foreign currency exchange rates, interest rates or commodity prices. The effect of derivatives designated as hedging instruments on the Consolidated Statement of Results of Operations was as follows: Cash Flow Hedges Three Months Ended September 30, 2021
Three Months Ended September 30, 2020 Recognized in Earnings
16 Table of Contents Cash Flow Hedges Nine Months Ended September 30, 2021
Nine Months Ended September 30, 2020
17 Table of Contents The effect of derivatives not designated as hedging instruments on the Consolidated Statement of Results of Operations was as follows:
We enter into International Swaps and Derivatives Association (ISDA) master netting agreements within ME&T and Financial Products that permit the net settlement of amounts owed under their respective derivative contracts. Under these master netting agreements, net settlement generally permits the company or the counterparty to determine the net amount payable for contracts due on the same date and in the same currency for similar types of derivative transactions. The master netting agreements generally also provide for net settlement of all outstanding contracts with a counterparty in the case of an event of default or a termination event. Collateral is generally not required of the counterparties or of our company under the master netting agreements. As of September 30, 2021 and December 31, 2020, no cash collateral was received or pledged under the master netting agreements. 18 Table of Contents The effect of the net settlement provisions of the master netting agreements on our derivative balances upon an event of default or termination event was as follows:
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Inventories (principally using the last-in, first-out (LIFO) method) were comprised of the following:
A. Intangible assets Intangible assets were comprised of the following:
December 31, 2020
Amortization expense for the three and nine months ended September 30, 2021 was $75 million and $228 million, respectively. Amortization expense for the three and nine months ended September 30, 2020 was $78 million and $236 million, respectively. Amortization expense related to intangible assets is expected to be: (Millions of dollars)
B. Goodwill No goodwill was impaired during the nine months ended September 30, 2021 or 2020. 20 Table of Contents The changes in carrying amount of goodwill by reportable segment for the nine months ended September 30, 2021 were as follows:
1 See Note 21 for additional details. 2 Other adjustments are comprised primarily of foreign currency translation. 3 Includes All Other operating segment (See Note 16). 8. Investments in debt and equity securities We have investments in certain debt and equity securities, primarily at Insurance Services, which we record at fair value and primarily include in Other assets in the Consolidated Statement of Financial Position. We classify debt securities primarily as available-for-sale. We include the unrealized gains and losses arising from the revaluation of available-for-sale debt securities, net of applicable deferred income taxes, in equity (AOCI in the Consolidated Statement of Financial Position). We include the unrealized gains and losses arising from the revaluation of the equity securities in Other income (expense) in the Consolidated Statement of Results of Operations. We generally determine realized gains and losses on sales of investments using the specific identification method for available-for-sale debt and equity securities and include them in Other income (expense) in the Consolidated Statement of Results of Operations. The cost basis and fair value of available-for-sale debt securities with unrealized gains and losses included in equity (AOCI in the Consolidated Statement of Financial Position) were as follows: 21
Available-for-sale debt securities in an unrealized loss position:
December 31, 2020 Less than 12 months 1 12 months or more 1 Total (Millions of dollars) Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses Corporate bonds Corporate bonds………….. $ 13 $ – $ 4 $ – $ 17 $ – Total………………….. $ 13 $ – $ 4 $ – $ 17 $ 1 Indicates the length of time that individual securities have been in a continuous unrealized loss position. Corporate Bonds The unrealized losses on our investments in corporate bonds relate to changes in interest rates and credit-related yield spreads since time of purchase. We do not intend to sell the investments, and it is not likely that we will be required to sell the investments before recovery of their amortized cost basis. In addition, we did not expect credit-related losses on these investments as of September 30, 2021. 22 Table of Contents The cost basis and fair value of available-for-sale debt securities at September 30, 2021, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to prepay and creditors may have the right to call obligations. September 30, 2021 (Millions of dollars) Cost Basis Fair Value Due in one year or less…………………………………………. $ 154$ 156 Due after one year through five years ………………………………………..730 753 Due after five years through ten years ………………………………………..271 278 Due after ten years ……………………………………………………62 63 U.S. governmental agency mortgage-backed securities ……………………………..340 349 Residential mortgage-backed securities ………………………………………..4 4 Commercial mortgage-backed securities ……………………………………….97 100 Total debt securities – available-for-sale………………………………. $ 1,658 $ 1,703 Sales of available-for-sale debt securities: Three Months Ended Nine Months Ended September 30 September 30 (Millions of dollars) 2021 2020 2021 2020 Proceeds from the sale of available-for-sale securities………. $ 97 $ 74 $ 322 $ 197 Gross gains from the sale of available-for-sale securities ……………..1 – 3 1 In addition, we had $543 million of investments in time deposits classified as held-to-maturity debt securities as of September 30, 2021. All these investments mature within one year and we include them in Prepaid expenses and other current assets in the Consolidated Statement of Financial Position. We did not have any investments classified as held-to-maturity debt securities as of December 31, 2020. We record held-to-maturity debt securities at amortized cost, which approximates fair value. We did not have any unrealized gains or losses on these securities as of September 30, 2021 and December 31, 2020. For the three months ended September 30, 2021 and 2020, the net unrealized gains (losses) for equity securities held at September 30, 2021 and 2020 were $46 million and $9 million, respectively. For the nine months ended September 30, 2021 and 2020, the net unrealized gains (losses) for equity securities held at September 30, 2021 and 2020 were $65 million and $(1) million, respectively. 23 Table of Contents 9. Postretirement benefits A. Pension and postretirement benefit costs Curtailments, settlements and termination benefits 1 – – – 25 – – Net periodic benefit cost (benefit) 2……………. $ (291) $ (231) $ (11) $ (39) $ 88 $ 112 1 Total lump-sum transfers out of certain pension plans exceeded the service and interest cost for 2020, which required us to follow settlement accounting and remeasure the plans’ obligations as of March 31, 2020, June 30, 2020 and September 30, 2020. 2 The service cost component is included in Operating costs in the Consolidated Statement of Results of Operations. All other components are included in Other income (expense) in the Consolidated Statement of Results of Operations. We made $69 million and $229 million of contributions to our pension and other postretirement plans during the three and nine months ended September 30, 2021, respectively. We currently anticipate full-year 2021 contributions of approximately $310 million. B. Defined contribution benefit costs Total company costs related to our defined contribution plans, which are included in Operating Costs in the Consolidated Statement of Results of Operations, were as follows:
The increase in the U.S. defined contribution benefit costs for the nine months ended September 30, 2021 was primarily due to the fair value adjustments related to our non-qualified deferred compensation plans. 24 Table of Contents
Revenues from finance and operating leases, primarily included in Revenues of Financial Products on the Consolidated Statement of Results of Operations, were as follows: (Millions of dollars) Three Months Ended Nine Months Ended September 30 September 30
We present revenues net of sales and other related taxes.
Caterpillar dealer performance guarantees We have provided an indemnity to a third-party insurance company for potential losses related to performance bonds issued on behalf of Caterpillar dealers. The bonds have varying terms and are issued to insure governmental agencies against nonperformance by certain dealers. We also provided guarantees to third-parties related to the performance of contractual obligations by certain Caterpillar dealers. These guarantees have varying terms and cover potential financial losses incurred by the third parties resulting from the dealers’ nonperformance. In 2016, we provided a guarantee to an end user related to the performance of contractual obligations by a Caterpillar dealer. Under the guarantee, which expires in 2025, non-performance by the Caterpillar dealer could require Caterpillar to satisfy the contractual obligations by providing goods, services or financial compensation to the end user up to an annual designated cap. Supplier consortium performance guarantee We have provided a guarantee to a customer in Europe related to the performance of contractual obligations by a supplier consortium to which one of our Caterpillar subsidiaries is a member. The guarantee covers potential damages incurred by the customer resulting from the supplier consortium’s non-performance. The damages are capped except for failure of the consortium to meet certain obligations outlined in the contract in the normal course of business. The guarantee will expire when the supplier consortium performs all of its contractual obligations, which is expected to be completed in 2022. We have dealer performance guarantees and third-party performance guarantees that do not limit potential payment to end users related to indemnities and other commercial contractual obligations. In addition, we have entered into contracts involving industry standard indemnifications that do not limit potential payment. For these unlimited guarantees, we are unable to estimate a maximum potential amount of future payments that could result from claims made. No significant loss has been experienced or is anticipated under any of these guarantees. At both September 30, 2021 and December 31, 2020, the related recorded liability was $5 million. The maximum potential amount of future payments (undiscounted and without reduction for any amounts that may possibly be recovered under recourse or collateralized provisions) we could be required to make under the guarantees was as follows:
25 Table of Contents Cat Financial provides guarantees to purchase certain loans of Caterpillar dealers from a special-purpose corporation (SPC) that qualifies as a variable interest entity. The purpose of the SPC is to provide short-term working capital loans to Caterpillar dealers. This SPC issues commercial paper and uses the proceeds to fund its loan program. Cat Financial receives a fee for providing this guarantee. Cat Financial is the primary beneficiary of the SPC as its guarantees result in Cat Financial having both the power to direct the activities that most significantly impact the SPC’s economic performance and the obligation to absorb losses, and therefore Cat Financial has consolidated the financial statements of the SPC. As of September 30, 2021 and December 31, 2020, the SPC’s assets of $899 million and $1,026 million, respectively, were primarily comprised of loans to dealers, and the SPC’s liabilities of $899 million and $1,025 million, respectively, were primarily comprised of commercial paper. The assets of the SPC are not available to pay Cat Financial’s creditors. Cat Financial may be obligated to perform under the guarantee if the SPC experiences losses. No loss has been experienced or is anticipated under this loan purchase agreement. We determine our product warranty liability by applying historical claim rate experience to the current field population and dealer inventory. Generally, we base historical claim rates on actual warranty experience for each product by machine model/engine size by customer or dealer location (inside or outside North America). We develop specific rates for each product shipment month and update them monthly based on actual warranty claim experience. First Nine Months (Millions of dollars) 2021 2020 Warranty liability, beginning of period………………………………. $ 1,612 $ 1,541 Reduction in liability (payments) ………………………………………..(638) (652) Increase in liability (new warranties) ……………………………………….716 678 Warranty liability, end of period…………………………………. $ 1,690 $ 1,567 12. Profit per share Computations of profit per share: Three Months Ended Nine Months Ended September 30 September 30 (Dollars in millions except per share data) 2021 2020 2021 2020 Profit for the period (A) 1……………………………. $ 1,426 $ 668 $ 4,369 $ 2,218 Determination of shares (in millions): Weighted-average number of common shares outstanding (B) ………….544.0 542.3 545.8 543.9 Shares issuable on exercise of stock awards, net of shares assumed to be purchased out of proceeds at average market price ………………….3.6 4.1 4.4 3.9 Average common shares outstanding for fully diluted computation (C) 2 …..547.6 546.4 550.2 547.8 Profit per share of common stock: Assuming no dilution (A/B)…………………………. $ 2.62 $ 1.23 $ 8.00 $ 4.08 Assuming full dilution (A/C) 2………………………… $ 2.60 $ 1.22 $ 7.94 $ 4.05 Shares outstanding as of September 30 (in millions) 540.9 543.3 1 Profit attributable to common shareholders. 2 Diluted by assumed exercise of stock-based compensation awards using the treasury stock method. For the three and nine months ended September 30, 2021 and 2020, we excluded 1.1 million and 4.8 million of outstanding stock options, respectively, from the computation of diluted earnings per share because the effect would have been antidilutive. In July 2018, the Board approved a share repurchase authorization (the 2018 Authorization) of up to $10.0 billion of Caterpillar common stock effective January 1, 2019, with no expiration. As of September 30, 2021, approximately $3.1 billion remained available under the 2018 Authorization. 26 Table of Contents For the three and nine months ended September 30, 2021, we repurchased 6.6 million and 7.8 million shares of Caterpillar common stock, at an aggregate cost of $1.4 billion and $1.6 billion, respectively. For the three months ended September 30, 2020, we did not repurchase any shares of Caterpillar common stock. For the nine months ended September 30, 2020, we repurchased 10.1 million shares of Caterpillar common stock at an aggregate cost of $1.3 billion. We made these purchases through a combination of accelerated stock repurchase agreements with third-party financial institutions and open market transactions. 13. Accumulated other comprehensive income (loss) We present comprehensive income and its components in the Consolidated Statement of Comprehensive Income. Changes in the balances for each component of AOCI were as follows: 27
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The Company is regulated by federal, state and international environmental laws governing its use, transport and disposal of substances and control of emissions. In addition to governing our manufacturing and other operations, these laws often impact the development of our products, including, but not limited to, required compliance with air emissions standards applicable to internal combustion engines. We have made, and will continue to make, significant research and development and capital expenditures to comply with these emissions standards. We are engaged in remedial activities at a number of locations, often with other companies, pursuant to federal and state laws. When it is probable we will pay remedial costs at a site, and those costs can be reasonably estimated, we accrue the investigation, remediation, and operating and maintenance costs against our earnings. We accrue costs based on consideration of currently available data and information with respect to each individual site, including available technologies, current applicable laws and regulations, and prior remediation experience. Where no amount within a range of estimates is more likely, we accrue the minimum. Where multiple potentially responsible parties are involved, we consider our proportionate share of the probable costs. In formulating the estimate of probable costs, we do not consider amounts expected to be recovered from insurance companies or others. We reassess these accrued amounts on a quarterly basis. The amount recorded for environmental remediation is not material and is included in Accrued expenses in the Consolidated Statement of Financial Position. We believe there is no more than a remote chance that a material amount for remedial activities at any individual site, or at all the sites in the aggregate, will be required. On January 7, 2015, the Company received a grand jury subpoena from the U.S. District Court for the Central District of Illinois. The subpoena requested documents and information from the Company relating to, among other things, financial information concerning U.S. and non-U.S. Caterpillar subsidiaries (including undistributed profits of non-U.S. subsidiaries and the movement of cash among U.S. and non-U.S. subsidiaries). The Company has received additional subpoenas relating to this investigation requesting additional documents and information relating to, among other things, the purchase and resale of replacement parts by Caterpillar Inc. and non-U.S. Caterpillar subsidiaries, dividend distributions of certain non-U.S. Caterpillar subsidiaries, and Caterpillar SARL (CSARL) and related structures. On March 2-3, 2017, agents with the Department of Commerce, the Federal Deposit Insurance Corporation and the Internal Revenue Service executed search and seizure warrants at three facilities of the Company in the Peoria, Illinois area, including its former corporate headquarters. The warrants identify, and agents seized, documents and information related to, among other things, the export of products from the United States, the movement of products between the United States and Switzerland, the relationship between Caterpillar Inc. and CSARL, and sales outside the United States. It is the Company’s understanding that the warrants, which concern both tax and export activities, are related to the ongoing grand jury investigation. The Company is continuing to cooperate with this investigation. The Company is unable to predict the outcome or reasonably estimate any potential loss; however, we currently believe that this matter will not have a material adverse effect on the Company’s consolidated results of operations, financial position or liquidity. In addition, we are involved in other unresolved legal actions that arise in the normal course of business. The most prevalent of these unresolved actions involve disputes related to product design, manufacture and performance liability (including claimed asbestos exposure), contracts, employment issues, environmental matters, intellectual property rights, taxes (other than income taxes) and securities laws. The aggregate range of reasonably possible losses in excess of accrued liabilities, if any, associated with these unresolved legal actions is not material. In some cases, we cannot reasonably estimate a range of loss because there is insufficient information regarding the matter. However, we believe there is no more than a remote chance that any liability arising from these matters would be material. Although it is not possible to predict with certainty the outcome of these unresolved legal actions, we believe that these actions will not individually or in the aggregate have a material adverse effect on our consolidated results of operations, financial position or liquidity.
The provision for income taxes for the nine months ended September 30, 2021 reflected an estimated annual tax rate of 25 percent, compared with 31 percent for the nine months ended September 30, 2020, excluding the discrete items discussed in the following paragraph. The comparative tax rate for full-year 2020 was approximately 28 percent. The decrease in the estimated annual tax rate from full-year 2020 was primarily related to changes in the expected geographic mix of profits from a tax perspective for 2021. 29 Table of Contents In addition, we recorded a discrete tax benefit of $61 million for the nine months ended September 30, 2021, compared with $21 million for the nine months ended September 30, 2020, for the settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S. GAAP compensation expense. The company also recorded a discrete tax benefit of $36 million to reflect changes in estimates related to prior year U.S. taxes for the nine months ended September 30, 2021 compared to $80 million for the nine months ended September 30, 2020. Finally, we recorded a $10 million tax charge related to the $55 million of remeasurement net gain resulting from the settlements of pension obligations for the nine months ended September 30, 2020. On January 31, 2018, we received a Revenue Agent’s Report from the Internal Revenue Service (IRS) indicating the end of the field examination of our U.S. income tax returns for 2010 to 2012. In the audits of 2007 to 2012 including the impact of a loss carryback to 2005, the IRS has proposed to tax in the United States profits earned from certain parts transactions by Caterpillar SARL (CSARL), based on the IRS examination team’s application of the “substance-over-form” or “assignment-of-income” judicial doctrines. We are vigorously contesting the proposed increases to tax and penalties for these years of approximately $2.3 billion. We believe that the relevant transactions complied with applicable tax laws and did not violate judicial doctrines. We have filed U.S. income tax returns on this same basis for years after 2012. Based on the information currently available, we do not anticipate a significant change to our unrecognized tax benefits for this position within the next 12 months. We currently believe the ultimate disposition of this matter will not have a material adverse effect on our consolidated financial position, liquidity or results of operations. 16. Segment information
Our Executive Office is comprised of a Chief Executive Officer (CEO), four Group Presidents, a Chief Financial Officer (CFO), a Chief Legal Officer and General Counsel and a Chief Human Resources Officer. The Group Presidents and CFO are accountable for a related set of end-to-end businesses that they manage. The Chief Legal Officer and General Counsel leads the Law, Security and Public Policy Division. The Chief Human Resources Officer leads the Human Resources Organization. The CEO allocates resources and manages performance at the Group President/CFO level. As such, the CEO serves as our Chief Operating Decision Maker, and operating segments are primarily based on the Group President/CFO reporting structure. Three of our operating segments, Construction Industries, Resource Industries and Energy & Transportation are led by Group Presidents. One operating segment, Financial Products, is led by the CFO who also has responsibility for Corporate Services. Corporate Services is a cost center primarily responsible for the performance of certain support functions globally and to provide centralized services; it does not meet the definition of an operating segment. One Group President leads one smaller operating segment that is included in the All Other operating segment. The Law, Security and Public Policy Division and the Human Resources Organization are cost centers and do not meet the definition of an operating segment.
We have five operating segments, of which four are reportable segments. Following is a brief description of our reportable segments and the business activities included in the All Other operating segment: Construction Industries: A segment primarily responsible for supporting customers using machinery in infrastructure and building construction applications. Responsibilities include business strategy, product design, product management and development, manufacturing, marketing and sales and product support. The product portfolio includes asphalt pavers; backhoe loaders; compactors; cold planers; compact track and multi-terrain loaders; mini, small, medium and large track excavators; motor graders; pipelayers; road reclaimers; skid steer loaders; telehandlers; small and medium track-type tractors; track-type loaders; utility vehicles; wheel excavators; compact, small and medium wheel loaders; and related parts and work tools. Inter-segment sales are a source of revenue for this segment. 30 Table of Contents Resource Industries: A segment primarily responsible for supporting customers using machinery in mining, heavy construction and quarry and aggregates. Responsibilities include business strategy, product design, product management and development, manufacturing, marketing and sales and product support. The product portfolio includes large track-type tractors; large mining trucks; hard rock vehicles; longwall miners; electric rope shovels; draglines; hydraulic shovels; rotary drills; large wheel loaders; off-highway trucks; articulated trucks; wheel tractor scrapers; wheel dozers; landfill compactors; soil compactors; select work tools; machinery components; electronics and control systems and related parts. In addition to equipment, Resource Industries also develops and sells technology products and services to provide customers fleet management, equipment management analytics, autonomous machine capabilities, safety services and mining performance solutions. Resource Industries also manages areas that provide services to other parts of the company, including integrated manufacturing, research and development for drivetrains, hydraulic systems, electronics and software for Cat machines and engines. Inter-segment sales are a source of revenue for this segment. Energy & Transportation: A segment primarily responsible for supporting customers using reciprocating engines, turbines, diesel-electric locomotives and related services across industries serving Oil and Gas, Power Generation, Industrial and Transportation applications, including marine- and rail-related businesses. Responsibilities include business strategy, product design, product management and development, manufacturing, marketing and sales and product support. The product and services portfolio includes turbines, centrifugal gas compressors, and turbine-related services; reciprocating engine-powered generator sets; integrated systems used in the electric power generation industry; reciprocating engines and integrated systems and solutions for the marine and oil and gas industries; reciprocating engines supplied to the industrial industry as well as Cat machinery; and diesel-electric locomotives and components and other rail-related products and services, including remanufacturing and leasing. Responsibilities also include the remanufacturing of Caterpillar reciprocating engines and components and remanufacturing services for other companies; and product support of on-highway vocational trucks for North America. Inter-segment sales are a source of revenue for this segment. Financial Products Segment: Provides financing alternatives to customers and dealers around the world for Caterpillar products, as well as financing for vehicles, power generation facilities and marine vessels that, in most cases, incorporate Caterpillar products. Financing plans include operating and finance leases, installment sale contracts, repair/rebuild financing, working capital loans and wholesale financing plans. The segment also provides insurance and risk management products and services that help customers and dealers manage their business risk. Insurance and risk management products offered include physical damage insurance, inventory protection plans, extended service coverage and maintenance plans for machines and engines, and dealer property and casualty insurance. The various forms of financing, insurance and risk management products offered to customers and dealers help support the purchase and lease of Caterpillar equipment. The segment also earns revenues from ME&T, but the related costs are not allocated to operating segments. Financial Products’ segment profit is determined on a pretax basis and includes other income/expense items. All Other operating segment: Primarily includes activities such as: business strategy; product management and development; manufacturing and sourcing of filters and fluids, undercarriage, ground-engaging tools, fluid transfer products, precision seals, rubber sealing and connecting components primarily for Cat(R) products; parts distribution; integrated logistics solutions; distribution services responsible for dealer development and administration, including a wholly owned dealer in Japan; dealer portfolio management and ensuring the most efficient and effective distribution of machines, engines and parts; brand management and marketing strategy; and digital investments for new customer and dealer solutions that integrate data analytics with state-of-the-art digital technologies while transforming the buying experience. Results for the All Other operating segment are included as a reconciling item between reportable segments and consolidated external reporting. C. Segment measurement and reconciliations There are several methodology differences between our segment reporting and our external reporting. The following is a list of the more significant methodology differences:
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Reconciling items are created based on accounting differences between segment reporting and our consolidated external reporting. Please refer to pages 33 to 36 for financial information regarding significant reconciling items. Most of our reconciling items are self-explanatory given the above explanations. For the reconciliation of profit, we have grouped the reconciling items as follows:
For the three and nine months ended September 30, 2021 and 2020, sales and revenues by geographic region reconciled to consolidated sales and revenues were as follows: 32 Table of Contents
1 Includes revenues from Construction Industries, Resource Industries, Energy & Transportation and All Other operating segment of $87 million and $81 million in the three months ended September 30, 2021 and 2020, respectively.
1 Includes revenues from Construction Industries, Resource Industries, Energy & Transportation and All Other operating segment of $263 million and $274 million in the nine months ended September 30, 2021 and 2020, respectively. 33 Table of Contents For the three and nine months ended September 30, 2021 and 2020, Energy & Transportation segment sales by end user application were as follows: Energy & Transportation External Sales Three Months Ended September 30 Nine Months Ended September 30 (Millions of dollars) 2021 2020 2021 2020 Oil and gas………………………….. $ 1,088 $ 734 $ 3,140 $ 2,622 Power generation 1,010 1,034 3,025 2,783 Industrial ……………………………………948 730 2,660 2,209 Transportation 1,095 977 3,094 3,020 Energy & Transportation External Sales………$ 4,141 $ 3,475 $ 11,919 $ 10,634
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17. Cat Financial financing activities Portfolio segments A portfolio segment is the level at which Cat Financial develops a systematic methodology for determining its allowance for credit losses. Cat Financial’s portfolio segments and related methods for estimating expected credit losses are as follows: Customer Cat Financial provides loans and finance leases to end-user customers primarily for the purpose of financing new and used Caterpillar machinery, engines and equipment for commercial use, the majority of which operate in construction-related industries. Cat Financial also provides financing for vehicles, power generation facilities and marine vessels that, in most cases, incorporate Caterpillar products. The average original term of Cat Financial’s customer finance receivable portfolio was approximately 50 months with an average remaining term of approximately 27 months as of September 30, 2021. Cat Financial typically maintains a security interest in financed equipment and requires physical damage insurance coverage on the financed equipment, both of which provide Cat Financial with certain rights and protections. If Cat Financial’s collection efforts fail to bring a defaulted account current, Cat Financial generally can repossess the financed equipment, after satisfying local legal requirements, and sell it within the Caterpillar dealer network or through third-party auctions. Cat Financial estimates the allowance for credit losses related to its customer finance receivables based on loss forecast models utilizing probabilities of default and the estimated loss given default based on past loss experience adjusted for current conditions and reasonable and supportable forecasts capturing country and industry-specific economic factors. During the three and nine months ended September 30, 2021, Cat Financial’s forecasts for the markets in which it operates reflected a general improvement in economic conditions, which had deteriorated due to the COVID-19 pandemic, resulting from a growing economy, improved unemployment rates and a decrease in delinquencies. The company believes the economic forecasts employed represent reasonable and supportable forecasts, followed by a reversion to long-term trends. Dealer Cat Financial provides financing to Caterpillar dealers in the form of wholesale financing plans. Cat Financial’s wholesale financing plans provide assistance to dealers by financing their mostly new Caterpillar equipment inventory and rental fleets on a secured and unsecured basis. In addition, Cat Financial provides a variety of secured and unsecured loans to Caterpillar dealers. 36 Table of Contents Cat Financial estimates the allowance for credit losses for dealer finance receivables based on historical loss rates with consideration of current economic conditions and reasonable and supportable forecasts. In general, Cat Financial’s Dealer portfolio segment has not historically experienced large increases or decreases in credit losses based on changes in economic conditions due to its close working relationships with the dealers and their financial strength. Therefore, Cat Financial made no adjustments to historical loss rates during the three and nine months ended September 30, 2021. Classes of finance receivables Cat Financial further evaluates portfolio segments by the class of finance receivables, which is defined as a level of information (below a portfolio segment) in which the finance receivables have the same initial measurement attribute and a similar method for assessing and monitoring credit risk. Cat Financial’s classes, which align with management reporting for credit losses, are as follows:
Receivable balances, including accrued interest, are written off against the allowance for credit losses when, in the judgment of management, they are considered uncollectible (generally upon repossession of the collateral). The amount of the write-off is determined by comparing the fair value of the collateral, less cost to sell, to the amortized cost. Subsequent recoveries, if any, are credited to the allowance for credit losses when received. 37 Table of Contents An analysis of the allowance for credit losses was as follows:
1 Adjustment to adopt new accounting guidance related to credit losses. Credit quality of finance receivables At origination, Cat Financial evaluates credit risk based on a variety of credit quality factors including prior payment experience, customer financial information, credit ratings, loan-to-value ratios, probabilities of default, industry trends, macroeconomic factors and other internal metrics. On an ongoing basis, Cat Financial monitors credit quality based on past-due status as there is a meaningful correlation between the past-due status of customers and the risk of loss. In determining past-due status, Cat Financial considers the entire finance receivable past due when any installment is over 30 days past due. Customer The tables below summarize the aging category of Cat Financial’s amortized cost of finance receivables in the Customer portfolio segment by origination year: 38 Table of Contents
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Finance receivables in the Customer portfolio segment are substantially secured by collateral, primarily in the form of Caterpillar and other machinery. For those contracts where the borrower is experiencing financial difficulty, repayment of the outstanding amounts is generally expected to be provided through the operation or repossession and sale of the machinery. Dealer As of September 30, 2021, Cat Financial’s total amortized cost of finance receivables within the Dealer portfolio segment was current, with the exception of $78 million that was 91+ days past due in Latin America, all of which was originated in 2017. As of December 31, 2020, Cat Financial’s total amortized cost of finance receivables within the Dealer portfolio segment was current, with the exception of $81 million that was 91+ days past due in Latin America. Of these past due receivables, $78 million were originated in 2017 and $3 million were originated prior to 2016. 40 Table of Contents Non-accrual finance receivables Recognition of income is suspended and the finance receivable is placed on non-accrual status when management determines that collection of future income is not probable. Contracts on non-accrual status are generally more than 120 days past due or have been restructured in a troubled debt restructuring (TDR). Recognition is resumed and previously suspended income is recognized when the collection of remaining amounts is considered probable. Payments received while the finance receivable is on non-accrual status are applied to interest and principal in accordance with the contractual terms. Interest earned but uncollected prior to the receivable being placed on non-accrual status is written off through Provision for credit losses when, in the judgment of management, it is considered uncollectible. In Cat Financial’s Customer portfolio segment, finance receivables which were on non-accrual status and finance receivables over 90 days past due and still accruing income were as follows: September 30, 2021 December 31, 2020 Amortized Cost Amortized Cost
There was $1 million and $2 million of interest income recognized during the three months ended September 30, 2021 and 2020, respectively, for customer finance receivables on non-accrual status. There was $9 million and $8 million of interest income recognized during the nine months ended September 30, 2021 and 2020, respectively, for customer finance receivables on non-accrual status. As of September 30, 2021 and December 31, 2020, finance receivables in Cat Financial’s Dealer portfolio segment on non-accrual status were $78 million and $81 million, respectively, all of which was in Latin America. There were no finance receivables in Cat Financial’s Dealer portfolio segment more than 90 days past due and still accruing income as of September 30, 2021 and December 31, 2020 and no interest income was recognized on dealer finance receivables on non-accrual status during the three and nine months ended September 30, 2021 and 2020. Troubled debt restructurings A restructuring of a finance receivable constitutes a TDR when the lender grants a concession it would not otherwise consider to a borrower experiencing financial difficulties. Concessions granted may include extended contract maturities, inclusion of interest only periods, below market interest rates, payment deferrals and reduction of principal and/or accrued interest. Cat Financial individually evaluates TDR contracts and establishes an allowance based on the present value of expected future cash flows discounted at the receivable’s effective interest rate, the fair value of the collateral for collateral-dependent receivables or the observable market price of the receivable. 41 Table of Contents There were no finance receivables modified as TDRs during the three and nine months ended September 30, 2021 and 2020 for the Dealer portfolio segment. Cat Financial’s finance receivables in the Customer portfolio segment modified as TDRs were as follows:
The Post-TDR amortized costs in the Customer portfolio segment with a payment default (defined as 91+ days past due) which had been modified within twelve months prior to the default date, were as follows:
42 Table of Contents 18. Fair value disclosures A. Fair value measurements The guidance on fair value measurements defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. This guidance also specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. In accordance with this guidance, fair value measurements are classified under the following hierarchy:
When available, we use quoted market prices to determine fair value, and we classify such measurements within Level 1. In some cases where market prices are not available, we make use of observable market based inputs to calculate fair value, in which case the measurements are classified within Level 2. If quoted or observable market prices are not available, fair value is based upon valuations in which one or more significant inputs are unobservable, including internally developed models that use, where possible, current market-based parameters such as interest rates, yield curves and currency rates. These measurements are classified within Level 3. We classify fair value measurements according to the lowest level input or value-driver that is significant to the valuation. We may therefore classify a measurement within Level 3 even though there may be significant inputs that are readily observable. Fair value measurement includes the consideration of nonperformance risk. Nonperformance risk refers to the risk that an obligation (either by a counterparty or Caterpillar) will not be fulfilled. For financial assets traded in an active market (Level 1 and certain Level 2), the nonperformance risk is included in the market price. For certain other financial assets and liabilities (certain Level 2 and Level 3), our fair value calculations have been adjusted accordingly. Investments in debt and equity securities We have investments in certain debt and equity securities, primarily at Insurance Services, that are recorded at fair value. Fair values for our U.S. treasury bonds and large capitalization value and smaller company growth equity securities are based upon valuations for identical instruments in active markets. Fair values for other government bonds, corporate bonds and mortgage-backed debt securities are based upon models that take into consideration such market-based factors as recent sales, risk-free yield curves and prices of similarly rated bonds. We also have investments in time deposits classified as held-to-maturity debt securities. The fair value of these investments is based upon valuations observed in less active markets than Level 1. These investments have a maturity of less than one year and are recorded at amortized costs, which approximate fair value. In addition, Insurance Services has an equity investment in a real estate investment trust (REIT) which is recorded at fair value based on the net asset value (NAV) of the investment and is not classified within the fair value hierarchy. See Note 8 for additional information on our investments in debt and equity securities. Derivative financial instruments The fair value of interest rate contracts is primarily based on a standard industry accepted valuation model that utilizes the appropriate market-based forward swap curves and zero-coupon interest rates to determine discounted cash flows. The fair value of foreign currency and commodity forward, option and cross currency contracts is based on standard industry accepted valuation models that discount cash flows resulting from the differential between the contract price and the market-based forward rate. 43 Table of Contents Assets and liabilities measured on a recurring basis at fair value, primarily related to Financial Products, included in our Consolidated Statement of Financial Position as of September 30, 2021 and December 31, 2020 were as follows:
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In addition to the amounts above, certain Cat Financial loans are subject to measurement at fair value on a nonrecurring basis and are classified as Level 3 measurements. A loan is measured at fair value when management determines that collection of contractual amounts due is not probable and the loan is individually evaluated. In these cases, an allowance for credit losses may be established based either on the present value of expected future cash flows discounted at the receivables’ effective interest rate, the fair value of the collateral for collateral-dependent receivables, or the observable market price of the receivable. In determining collateral value, Cat Financial estimates the current fair market value of the collateral less selling costs. Cat Financial had loans carried at fair value of $150 million and $243 million as of September 30, 2021 and December 31, 2020, respectively. B. Fair values of financial instruments In addition to the methods and assumptions we use to record the fair value of financial instruments as discussed in the Fair value measurements section above, we use the following methods and assumptions to estimate the fair value of our financial instruments: Cash and cash equivalents Carrying amount approximates fair value. Restricted cash and short-term investments Carrying amount approximates fair value. We include restricted cash and short-term investments in Prepaid expenses and other current assets in the Consolidated Statement of Financial Position. Finance receivables We estimate fair value by discounting the future cash flows using current rates, representative of receivables with similar remaining maturities. Wholesale inventory receivables We estimate fair value by discounting the future cash flows using current rates, representative of receivables with similar remaining maturities. 45 Table of Contents Short-term borrowings Carrying amount approximates fair value. Long-term debt We estimate fair value for fixed and floating rate debt based on quoted market prices. Guarantees The fair value of guarantees is based upon our estimate of the premium a market participant would require to issue the same guarantee in a stand-alone arms-length transaction with an unrelated party. If quoted or observable market prices are not available, fair value is based upon internally developed models that utilize current market-based assumptions. Fair values of our financial instruments were as follows:
1 Includes time deposits of $543 million as of September 30, 2021. There were no time deposits as of December 31, 2020. See Note 8 for additional information. 2 Represents finance leases and failed sale leasebacks of $8,065 million and $7,961 million at September 30, 2021 and December 31, 2020, respectively. 46 Table of Contents 19. Other income (expense)
(Millions of dollars) 2021 2020 2021 2020 Investment and interest income………………………….. $ 20 $ 21 $ 64 $ 91 Foreign exchange gains (losses) 1 47 (43) 110 (122) License fee income ……………………………………..31 27 88 75 Net periodic pension and OPEB income (cost), excluding service cost 111 2 333 270 2 Gains (losses) on securities 50 9 92 (12) Miscellaneous income (loss) ………………………………..(34) – 64 (37) Total…………………………………………. $ 225 $ 14 $ 751 $ 265 1 Includes gains (losses) from foreign exchange derivative contracts. See Note 5 for further details. 2 Includes a net remeasurement loss of $(77) million and a net remeasurement gain of $55 million for the three and nine months ended September 30, 2020, respectively, from the settlement of certain pension obligations. See Note 9 for further details. 20. Restructuring costs Our accounting for employee separations is dependent upon how the particular program is designed. For voluntary programs, we recognize eligible separation costs at the time of employee acceptance unless the acceptance requires explicit approval by the company. For involuntary programs, we recognize eligible costs when management has approved the program, the affected employees have been properly notified and the costs are estimable. Restructuring costs for the three and nine months ended September 30, 2021 and 2020 were as follows: Three Months Ended Nine Months Ended (Millions of dollars) September 30 September 30 2021 2020 2021 2020 Employee separations 1………………………… $ 17 $ 98 $ 79 $ 232 Contract terminations 1 1 – 1 3 Long-lived asset impairments 1 8 2 12 25 Other 2 9 12 32 36 Total restructuring costs………………………..$ 35 $ 112 $ 124 $ 296 1 Recognized in Other operating (income) expenses. 2 Represents costs related to our restructuring programs, primarily for accelerated depreciation, inventory write-downs, equipment relocation and project management, all of which are primarily included in Cost of goods sold. For the nine months ended September 30, 2021, the restructuring costs were primarily related to actions across the company including strategic actions to address certain product lines. For the nine months ended September 30, 2020, the restructuring costs were primarily related to various voluntary and involuntary employee separation programs implemented across the company and strategic actions to address certain product lines, which were partially offset by a gain on the sale of a manufacturing facility that had been closed. In 2021, all restructuring costs are excluded from segment profit. In 2020, only certain restructuring costs were excluded from segment profit. Restructuring costs included in segment profit were as follows: 47 Table of Contents
The following table summarizes the 2021 and 2020 employee separation activity: (Millions of dollars) Nine Months Ended September 30 2021 2020 Liability balance, beginning of period…………………………………. $ 164 $ 48 Increase in liability (separation charges) ……………………………………….79 232 Reduction in liability (payments) ………………………………………….(159) (131) Liability balance, end of period…………………………………….$ 84 $ 149 Most of the liability balance at September 30, 2021 is expected to be paid in 2021 and 2022. 21. Acquisitions SPM Oil & Gas On February 1, 2021, Caterpillar completed the acquisition of varying equity interests and assets of the Weir Group PLC, collectively known as SPM Oil & Gas (SPM). Headquartered near Fort Worth, Texas, SPM Oil & Gas produces a full line of pumps, flow iron, consumable parts, wellhead and pressure control products that are offered via an extensive global network of service centers. This acquisition, included in the Energy & Transportation segment, is consistent with our strategy of providing our customers expanded offerings and services which will now be one of the broadest in the well service industry. The purchase price, net of $22 million of acquired cash, was approximately $361 million. We financed the transaction with available cash. Tangible assets as of the acquisition date were $515 million, recorded at their fair values, and primarily included cash of $22 million, receivables of $101 million, inventories of $159 million, leased assets of $105 million, and property, plant, and equipment of $117 million. Finite-lived intangible assets acquired of $23 million included developed technology and trade names and will be amortized on a straight-line basis over a weighted-average amortization period of approximately 8 years. Liabilities assumed as of the acquisition date were $187 million, recorded at their fair values, and primarily included lease liabilities of $105 million and accounts payable of $33 million. Goodwill of $32 million represented the excess of the consideration transferred over the net assets acquired. These values represent a preliminary allocation of purchase price subject to finalization of post-closing procedures. Assuming this transaction had been made at the beginning of any period presented, the consolidated pro forma results would not be materially different from reported results. 48 Table of Contents Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our unaudited financial statements and related notes included elsewhere in this report and our discussion of significant risks to the company’s business under Part I, Item 1A. Risk Factors of the 2020 Form 10-K. Highlights for the third quarter of 2021 include:
Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Profit Before Profit Profit Before Profit Profit Before Profit Profit Before Profit (Dollars in millions except per share data) Taxes Per Share Taxes Per Share Taxes Per Share Taxes Per Share Profit………………………….. $ 1,775 $ 2.60 $ 863 $ 1.22 $ 5,642 $ 7.94 $ 3,054 $ 4.05 Restructuring costs …………………………….35 0.06 112 0.18 124 0.19 296 0.48 Remeasurement (gains) losses of pension obligations . – – 77 0.12 – – (55) (0.08) Adjusted profit…………………….. $ 1,810 $ 2.66 $ 1,052 $ 1.52 $ 5,766 $ 8.13 $ 3,295 $ 4.44
Overview Total sales and revenues for the third quarter of 2021 were $12.397 billion, an increase of $2.516 billion, or 25 percent, compared with $9.881 billion in the third quarter of 2020. The increase was primarily due to higher sales volume driven by higher end-user demand for equipment and services and the impact from changes in dealer inventories, along with favorable price realization. Dealers decreased inventories by $600 million during the third quarter of 2020, compared with a decrease of $300 million during the third quarter of 2021. Sales were higher across the three primary segments. Third-quarter 2021 profit per share was $2.60, compared with $1.22 profit per share in the third quarter of 2020. Profit per share for both quarters included restructuring costs, while the third quarter of 2020 also included a pre-tax net remeasurement loss of $77 million, or $0.12 per share, resulting from the settlements of pension obligations. Profit for the third quarter of 2021 was $1.426 billion, an increase of $758 million, or 113 percent, compared with $668 million for the third quarter of 2020. The increase was primarily due to higher sales volume and favorable price realization. 49 Table of Contents Sales and revenues were $37.173 billion for the nine months ended September 30, 2021, an increase of $6.660 billion, or 22 percent, compared with $30.513 billion for the nine months ended September 30, 2020. Profit per share for the nine months ended September 30, 2021, was $7.94, an increase of $3.89, or 96 percent, compared with $4.05 for the nine months ended September 30, 2020. Profit per share for both periods included restructuring costs, while the nine months ended September 30, 2020, also included a pre-tax remeasurement net gain of $55 million, or $0.08 per share, resulting from the settlements of pension obligations. Profit for the nine months ended September 30, 2021, was $4.369 billion, an increase of $2.151 billion, or 97 percent, compared with $2.218 billion for the nine months ended September 30, 2020. Response to COVID-19 and Global Business Conditions: We continue to implement safeguards in our facilities to protect team members, including increased frequency of cleaning and disinfecting, social distancing practices and other measures consistent with specific governmental requirements and guidance from health authorities. We’ve offered assistance to some governments and public health authorities in the vaccine distribution process, and as vaccines become available, we are assisting in onsite vaccine distribution for employees in some of our facilities. We continue to monitor a variety of external factors including the ongoing impact of the COVID-19 pandemic around the world, supply chain disruptions and associated cost and labor pressures. Areas of particular focus include certain components, transportation and raw materials. Transportation shortages have resulted in delays and increased costs. In addition, our suppliers are dealing with availability issues and freight delays, which leads to pressure on production in our facilities. Contingency plans have been developed and continue to be modified to minimize supply chain challenges that may impact our ability to meet increasing customer demand. To help mitigate supply chain challenges, we have proactively redirected components and altered our assembly processes. We continue to assess the environment and are taking appropriate price actions in response to rising costs. We will continue to monitor the situation as conditions remain fluid and evolve, but we expect these pressures to continue into next year. Notes:
50 Table of Contents Consolidated Results of Operations THREE MONTHS ENDED SEPTEMBER 30, 2021 COMPARED WITH THREE MONTHS ENDED SEPTEMBER 30, 2020 CONSOLIDATED SALES AND REVENUES
The chart above graphically illustrates reasons for the change in consolidated sales and revenues between the third quarter of 2020 (at left) and the third quarter of 2021 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company’s Board of Directors and employees. Total sales and revenues for the third quarter of 2021 were $12.397 billion, an increase of $2.516 billion, or 25 percent, compared with $9.881 billion in the third quarter of 2020. The increase was primarily due to higher sales volume driven by higher end-user demand for equipment and services and the impact from changes in dealer inventories, along with favorable price realization. Dealers decreased inventories by $600 million during the third quarter of 2020, compared with a decrease of $300 million during the third quarter of 2021. Sales were higher across the three primary segments. North America sales increased 31 percent due to higher end-user demand for equipment and services, the impact of changes in dealer inventories and favorable price realization. Dealers decreased inventories more during the third quarter of 2020 than during the third quarter of 2021. Sales increased 77 percent in Latin America due to higher end-user demand for equipment and services across most of the region, the impact of changes in dealer inventories and favorable price realization. Dealers decreased inventories more during the third quarter of 2020 than during the third quarter of 2021. EAME sales increased 24 percent due to higher end-user demand for equipment and services, the impact of changes in dealer inventories, favorable price realization and favorable currency impacts primarily related to the euro and British pound. Dealers decreased inventories during the third quarter of 2020, compared to remaining about flat during the third quarter of 2021. Asia/Pacific sales increased 8 percent driven by higher end-user demand for equipment and services, partially offset by the impacts from changes in dealer inventories. Dealers decreased inventories during the third quarter of 2021, compared with an increase during the third quarter of 2020. Dealers decreased inventories by $600 million during the third quarter of 2020, compared with a decrease of $300 million during the third quarter of 2021. Dealers are independent, and the reasons for changes in their inventory levels vary, including their expectations of future demand and product delivery times. Dealers’ demand expectations take into account seasonal changes, macroeconomic conditions, machine rental rates and other factors. Delivery times can vary based on availability of product from Caterpillar factories and product distribution centers. We do not expect a significant dealer inventory increase in 2021. 51 Table of Contents
Sales and Revenues by Geographic Region External Sales and Total Sales and North America Latin America EAME Asia/Pacific Revenues Inter-Segment Revenues
1 Includes revenues from Machinery, Energy & Transportation of $87 million and $81 million in the third quarter of 2021 and 2020, respectively. 52 Table of Contents CONSOLIDATED OPERATING PROFIT
The chart above graphically illustrates reasons for the change in consolidated operating profit between the third quarter of 2020 (at left) and the third quarter of 2021 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company’s Board of Directors and employees. The bar titled Other includes consolidating adjustments and Machinery, Energy & Transportation other operating (income) expenses. Operating profit for the third quarter of 2021 was $1.664 billion, an increase of $679 million, or 69 percent, compared with $985 million in the third quarter of 2020. The increase was primarily due to higher sales volume and favorable price realization, partially offset by higher selling, general and administrative (SG&A) and research and development (R&D) expenses as well as higher manufacturing costs. Unfavorable manufacturing costs reflected higher variable labor and burden, primarily freight, higher period manufacturing and material costs, partially offset by favorable cost absorption and lower warranty expense. Cost absorption was favorable as inventory increased during the third quarter of 2021, compared with remaining about flat during the third quarter of 2020. The increase in both SG&A/R&D expenses and period manufacturing costs was mainly driven by higher short-term incentive compensation expense, which was reinstated in 2021, and investments aligned with the company’s strategy for profitable growth, including acquisition-related expenses. Short-term incentive compensation expense, which was reinstated in 2021, was about $350 million in the third quarter, compared to no short-term incentive compensation expense recognized in the third quarter of 2020. Operating profit margin was 13.4 percent for the third quarter of 2021, compared with 10.0 percent for the third quarter of 2020.
53 Table of Contents Other Profit/Loss and Tax Items
The company experienced foreign currency exchange net gains in the third quarter of 2021, primarily due to the euro, compared with net losses in the third quarter of 2020.
In the third quarter of 2021, the company recorded a $39 million benefit due to the change from the second-quarter estimated annual tax rate of 26 percent. In addition, the company recorded discrete tax benefits of $36 million to reflect changes in estimates related to prior year U.S. taxes in the third quarter of 2021 compared to $80 million in the third quarter of 2020. In the third quarter of 2020, a discrete tax benefit of $13 million was recorded for the settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S. GAAP compensation expense along with a $12 million tax benefit related to the $77 million of remeasurement losses resulting from the settlements of pension obligations. Construction Industries Construction Industries’ total sales were $5.255 billion in the third quarter of 2021, an increase of $1.199 billion, or 30 percent, compared with $4.056 billion in the third quarter of 2020. The increase was due to higher sales volume and favorable price realization. The increase in sales volume was driven by higher end-user demand and the impact from changes in dealer inventories. Overall, dealers decreased inventories more during the third quarter of 2020 than during the third quarter of 2021.
Construction Industries’ profit was $859 million in the third quarter of 2021, an increase of $274 million, or 47 percent, compared with $585 million in the third quarter of 2020. The increase was mainly due to higher sales volume and favorable price realization, partially offset by unfavorable manufacturing costs, which largely reflected higher variable labor and burden, primarily freight, and material costs. Construction Industries’ profit as a percent of total sales was 16.3 percent in the third quarter of 2021, compared with 14.4 percent in the third quarter of 2020. Resource Industries Resource Industries’ total sales were $2.406 billion in the third quarter of 2021, an increase of $590 million, or 32 percent, compared with $1.816 billion in the third quarter of 2020. The increase was primarily due to higher sales volume driven by higher end-user demand for equipment and aftermarket parts, partially offset by the impacts of changes in dealer inventories. 54 Table of Contents Dealers decreased inventories more during the third quarter of 2021 than during the third quarter of 2020. End-user demand was higher in both mining and heavy construction and quarry and aggregates. Resource Industries’ profit was $297 million in the third quarter of 2021, an increase of $130 million, or 78 percent, compared with $167 million in the third quarter of 2020. The increase was mainly due to higher sales volume and favorable price realization, partially offset by unfavorable manufacturing costs. Increased manufacturing costs reflected higher variable labor and burden, primarily freight, and material costs. Resource Industries’ profit as a percent of total sales was 12.3 percent in the third quarter of 2021, compared with 9.2 percent in the third quarter of 2020. Energy & Transportation
Energy & Transportation’s total sales were $5.077 billion in the third quarter of 2021, an increase of $916 million, or 22 percent, compared with $4.161 billion in the third quarter of 2020. Sales increased across all applications and inter-segment sales except Power Generation, which decreased slightly.
Energy & Transportation’s profit was $696 million in the third quarter of 2021, an increase of $204 million, or 41 percent, compared with $492 million in the third quarter of 2020. The increase was due to higher sales volume, partially offset by unfavorable manufacturing costs and higher SG&A/R&D expenses. Increased manufacturing costs were mainly driven by higher variable labor and burden, primarily freight, period manufacturing costs and material, partially offset by the absence of inventory write-downs that occurred in the third quarter of 2020. In addition, segment profit was favorably impacted by other operating income/expense. Both SG&A/R&D expenses and period manufacturing costs were driven by higher short-term incentive compensation expense and investments aligned with growth initiatives, including acquisition-related expenses. Energy & Transportation’s profit as a percent of total sales was 13.7 percent in the third quarter of 2021, compared with 11.8 percent in the third quarter of 2020. Financial Products Segment Financial Products’ segment revenues were $762 million in the third quarter of 2021, an increase of $38 million, or 5 percent, from the third quarter of 2020. Financial Products’ segment profit was $173 million in the third quarter of 2021, an increase of $31 million, or 22 percent, compared with $142 million in the third quarter of 2020. The increase was mainly due to a favorable impact from returned or repossessed equipment, lower provision for credit losses at Cat Financial and higher net yield on average earning assets. These favorable impacts were partially offset by an increase in SG&A expenses primarily due to higher short-term incentive compensation expense. 55 Table of Contents At the end of the third quarter of 2021, past dues at Cat Financial were 2.41 percent, compared with 3.81 percent at the end of the third quarter of 2020. Past dues decreased across all portfolio segments as global markets generally improved. Write-offs, net of recoveries, were $76 million for the third quarter of 2021, compared with $125 million for the third quarter of 2020. As of September 30, 2021, Cat Financial’s allowance for credit losses totaled $378 million, or 1.41 percent of finance receivables, compared with $402 million, or 1.46 percent of finance receivables, at June 30, 2021. The allowance for credit losses at yearend 2020 was $479 million, or 1.77 percent of finance receivables. Corporate Items and Eliminations Expense for corporate items and eliminations was $293 million in the third quarter of 2021, a decrease of $68 million from the third quarter of 2020. Higher corporate costs were more than offset by lower restructuring costs, favorable impacts of segment methodology differences and a favorable change in fair value adjustments related to deferred compensation plans. 56 Table of Contents NINE MONTHS ENDED SEPTEMBER 30, 2021 COMPARED WITH NINE MONTHS ENDED SEPTEMBER 30, 2020 CONSOLIDATED SALES AND REVENUES
The chart above graphically illustrates reasons for the change in consolidated sales and revenues between the nine months ended September 30, 2020 (at left) and the nine months ended September 30, 2021 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company’s Board of Directors and employees. Total sales and revenues were $37.173 billion for the nine months ended September 30, 2021, an increase of $6.660 billion, or 22 percent, compared with $30.513 billion for the nine months ended September 30, 2020. The increase was primarily due to higher sales volume driven by higher end-user demand for equipment and services and the impact from changes in dealer inventories. Dealers decreased inventories about $1.8 billion during the nine months ended September 30, 2020, compared with remaining about flat during the nine months ended September 30, 2021. Favorable currency impacts related to the euro, Australian dollar and Chinese yuan also contributed to the sales improvement, along with favorable price realization. Sales were higher in the three primary segments and across all regions. North America sales increased 21 percent driven by higher end-user demand for equipment and services and the impact from changes in dealer inventories. Dealers decreased inventories more during the nine months ended September 30, 2020, than during the nine months ended September 30, 2021. Sales increased 57 percent in Latin America due to higher end-user demand for equipment and services and the impact from changes in dealer inventories. Dealers decreased inventories during the nine months ended September 30, 2020, compared with an increase during the nine months ended September 30, 2021. EAME sales increased 24 percent due to higher end-user demand for equipment and services, the impact from changes in dealer inventories and favorable currency impacts related to a stronger euro and British pound. Dealers increased inventories more during the nine months ended September 30, 2021, than during the nine months ended September 30, 2020. Asia/Pacific sales increased 17 percent driven by higher end-user demand for equipment and services, the impact from changes in dealer inventories and favorable currency impacts related to a stronger Australian dollar and Chinese yuan. Dealers decreased inventories more during the nine months ended September 30, 2020, than during the nine months ended September 30, 2021. Dealers decreased inventories about $1.8 billion during the nine months ended September 30, 2020, compared with remaining about flat during the nine months ended September 30, 2021. Dealers are independent, and the reasons for changes in their inventory levels vary, including their expectations of future demand and product delivery times. Dealers’ demand expectations take into account seasonal changes, macroeconomic conditions, machine rental rates and other factors. Delivery times can vary based on availability of product from Caterpillar factories and product distribution centers. We do not expect a significant dealer inventory increase in 2021. 57 Table of Contents
Sales and Revenues by Geographic Region
1 Includes revenues from Machinery, Energy & Transportation of $263 million and $274 million in the nine months ended September 30, 2021 and 2020, respectively. 58 Table of Contents CONSOLIDATED OPERATING PROFIT
The chart above graphically illustrates reasons for the change in consolidated operating profit between the nine months ended September 30, 2020 (at left) and the nine months ended September 30, 2021 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company’s Board of Directors and employees. The bar titled Other includes consolidating adjustments and Machinery, Energy & Transportation’s other operating (income) expenses. Operating profit for the nine months ended September 30, 2021, was $5.267 billion, an increase of $2.094 billion, or 66 percent, compared with $3.173 billion for the nine months ended September 30, 2020. The increase was due to higher sales volume, favorable price realization, lower restructuring expenses (included in other) and higher profit from Financial Products, partially offset by higher SG&A/R&D expenses and unfavorable manufacturing costs. The increase in SG&A/R&D expenses was driven by higher short-term incentive compensation expense, which was reinstated in 2021. Unfavorable manufacturing costs reflected increased period manufacturing costs primarily due to higher short-term incentive compensation expense and higher labor-related costs. Higher variable labor and burden, primarily freight, and higher material costs were mostly offset by favorable cost absorption and lower warranty expense. Cost absorption was favorable as inventory increased more during the nine months ended September 30, 2021, than during the nine months ended September 30, 2020. Short-term incentive compensation expense, which was reinstated in 2021, was $1.1 billion for the nine months ended September 30, 2021, compared to no short-term incentive compensation expense recognized for the nine months ended September 30, 2020. For 2021, short-term incentive compensation expense is expected to be about $1.4 billion, compared to no short-term incentive compensation expense recognized in 2020. Short-term incentive compensation expense is directly related to financial and operational performance, measured against targets set annually. Operating profit margin was 14.2 percent for the nine months ended September 30, 2021, compared with 10.4 percent for the nine months ended September 30, 2020.
59 Table of Contents Other Profit/Loss and Tax Items
The company experienced foreign currency exchange net gains in the nine months ended September 30, 2021, compared with net losses in the nine months ended September 30, 2020. The favorable impact of unrealized gains (losses) on marketable securities was due to unrealized gains in the nine months ended September 30, 2021, compared with unrealized losses in the nine months ended September 30, 2020.
In addition, we recorded a discrete tax benefit of $61 million for the nine months ended September 30, 2021, compared with $21 million for the nine months ended September 30, 2020, for the settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S. GAAP compensation expense. The company also recorded a discrete tax benefit of $36 million to reflect changes in estimates related to prior year U.S. taxes for the nine months ended September 30, 2021, compared to $80 million for the nine months ended September 30, 2020. Finally, we recorded a $10 million tax charge related to the $55 million of remeasurement net gain resulting from the settlements of pension obligations for the nine months ended September 30, 2020. Construction Industries Construction Industries’ total sales were $16.370 billion for the nine months ended September 30, 2021, an increase of $3.960 billion, or 32 percent, compared with $12.410 billion for the nine months ended September 30, 2020. The increase was due to higher sales volume, favorable price realization and favorable currency impacts related to the euro, Chinese yuan and Australian dollar. The increase in sales volume was driven by higher end-user demand for equipment and aftermarket parts and the impact from changes in dealer inventories. Dealers decreased inventories during the nine months ended September 30, 2020, compared with an increase during the nine months ended September 30, 2021.
Construction Industries’ profit was $2.918 billion for the nine months ended September 30, 2021, an increase of $1.175 billion, or 67 percent, compared with $1.743 billion for the nine months ended September 30, 2020. The increase was mainly due to higher sales volume and favorable price realization, partially offset by unfavorable manufacturing costs and higher SG&A/ R&D expenses. Unfavorable manufacturing costs reflected higher period manufacturing costs and material. The increase in period manufacturing costs was driven by higher short-term incentive compensation expense and higher labor costs. Higher SG&A/ R&D expenses were driven primarily by higher short-term incentive compensation expense, partially offset by other cost reductions. 60 Table of Contents Construction Industries’ profit as a percent of total sales was 17.8 percent for the nine months ended September 30, 2021, compared with 14.0 percent for the nine months ended September 30, 2020. Resource Industries Resource Industries’ total sales were $7.201 billion for the nine months ended September 30, 2021, an increase of $1.475 billion, or 26 percent, compared with $5.726 billion for the nine months ended September 30, 2020. The increase was due to higher sales volume driven by higher end-user demand for equipment and aftermarket parts and the impact from changes in dealer inventories. Dealers decreased inventories more during the nine months ended September 30, 2020, than during the nine months ended September 30, 2021. End-user demand was higher in mining, as well as heavy construction and quarry and aggregates. Resource Industries’ profit was $986 million for the nine months ended September 30, 2021, an increase of $363 million, or 58 percent, compared with $623 million for the nine months ended September 30, 2020. The increase was mainly due to higher sales volume, partially offset by higher SG&A/R&D expenses. The increase in SG&A/R&D expenses was driven by higher short-term incentive compensation expense. Resource Industries’ profit as a percent of total sales was 13.7 percent for the nine months ended September 30, 2021, compared with 10.9 percent for the nine months ended September 30, 2020. Energy & Transportation
Energy & Transportation’s total sales were $14.559 billion for the nine months ended September 30, 2021, an increase of $1.900 billion, or 15 percent, compared with $12.659 billion for the nine months ended September 30, 2020. Sales increased across all applications.
Energy & Transportation’s profit was $2.093 billion for the nine months ended September 30, 2021, an increase of $375 million, or 22 percent, compared with $1.718 billion for the nine months ended September 30, 2020. The increase was due to higher sales volume, partially offset by higher SG&A/R&D expenses and unfavorable manufacturing costs. Increased manufacturing costs were mainly driven by higher period manufacturing costs and higher variable labor and burden, primarily freight, partially offset by the absence of inventory write-downs that occurred in the third quarter of 2020. In addition, segment profit was favorably impacted by other operating income/expense. The increase in both SG&A/R&D expenses and period manufacturing costs was primarily due to higher short-term incentive compensation expense and acquisition-related expenses. Energy & Transportation’s profit as a percent of total sales was 14.4 percent for the nine months ended September 30, 2021, compared with 13.6 percent for the nine months ended September 30, 2020. 61 Table of Contents Financial Products Segment Financial Products’ segment revenues were $2.297 billion for the nine months ended September 30, 2021, a decrease of $4 million from the nine months ended September 30, 2020. Financial Products’ segment profit was $660 million for the nine months ended September 30, 2021, an increase of $265 million, or 67 percent, compared with $395 million for the nine months ended September 30, 2020. The increase was primarily due to lower provision for credit losses at Cat Financial, a favorable impact from equity securities in Insurance Services, a favorable impact from returned or repossessed equipment and higher net yield on average earning assets. These favorable impacts were partially offset by an increase in SG&A expenses primarily due to higher short-term incentive compensation expense. Corporate Items and Eliminations Expense for corporate items and eliminations was $1.162 billion in the nine months ended September 30, 2021, an increase of $56 million from the nine months ended September 30, 2020. Favorable impacts of segment reporting methodology differences and lower restructuring costs were more than offset by higher corporate costs, higher expenses due to timing differences and an unfavorable change in fair value adjustments related to deferred compensation plans. RESTRUCTURING COSTS We expect to incur from $150 million to $200 million of restructuring costs in 2021. We expect that prior restructuring actions will result in an incremental benefit to operating costs, primarily Cost of goods sold and SG&A expenses of about $200 million in 2021 compared with 2020. Additional information related to restructuring costs is included in Note 20 – “Restructuring Costs” of Part I, Item 1 “Financial Statements”. GLOSSARY OF TERMS
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LIQUIDITY AND CAPITAL RESOURCES We generate significant capital resources from operating activities, which are the primary source of funding for our ME&T operations. Funding for these businesses is also available from commercial paper and long-term debt issuances. Financial Products’ operations are funded primarily from commercial paper, term debt issuances and collections from its existing portfolio. We had positive operating cash flow in the first nine months of 2021 within both our ME&T and Financial Products’ operations. On a consolidated basis, we ended the first nine months of 2021 with $9.45 billion of cash, an increase of $94 million from year-end 2020. We intend to maintain a strong cash and liquidity position. Consolidated operating cash flow for the first nine months of 2021 was $5.79 billion, up $1.53 billion compared to the same period last year. The increase was primarily due to higher profit before taxes adjusted for non-cash items, including higher accruals for short-term incentive compensation. In addition, lower payments for short-term incentive compensation favorably impacted cash flow. Partially offsetting these items were increased working capital requirements during the first nine months of 2021 compared to the same period last year. Within working capital, changes in inventory and accounts receivable unfavorably impacted cash flow but were partially offset by favorable changes in accounts payable and accrued expenses. 64 Table of Contents Total debt as of September 30, 2021 was $36.78 billion, a decrease of $379 million from year-end 2020. Debt related to ME&T decreased $1.37 billion in the first nine months of 2021 due to the repayment of debt. In addition, during the first quarter of 2021, we issued $500 million of ten-year bonds at 1.9 percent and utilized the net proceeds to redeem all of our $500 million 2.6 percent notes due in 2022. Debt related to Financial Products increased $993 million, primarily due to an increase in commercial paper due to short term funding needs. As of September 30, 2021, we had three global credit facilities with a syndicate of banks totaling $10.50 billion (Credit Facility) available in the aggregate to both Caterpillar and Cat Financial for general liquidity purposes. Based on management’s allocation decision, which can be revised from time to time, the portion of the Credit Facility available to ME&T as of September 30, 2021 was $2.75 billion. Information on our Credit Facility is as follows:
At September 30, 2021, Caterpillar’s consolidated net worth was $16.75 billion, which was above the $9.00 billion required under the Credit Facility. The consolidated net worth is defined in the Credit Facility as the consolidated shareholders’ equity including preferred stock but excluding the pension and other postretirement benefits balance within Accumulated other comprehensive income (loss). At September 30, 2021, Cat Financial’s covenant interest coverage ratio was 2.31 to 1. This was above the 1.15 to 1 minimum ratio calculated as (1) profit excluding income taxes, interest expense and net gain (loss) from interest rate derivatives to (2) interest expense calculated at the end of each calendar quarter for the rolling four quarter period then most recently ended, required by the Credit Facility. In addition, at September 30, 2021, Cat Financial’s six-month covenant leverage ratio was 7.06 to 1. This was below the maximum ratio of debt to net worth of 10 to 1, calculated (1) on a monthly basis as the average of the leverage ratios determined on the last day of each of the six preceding calendar months and (2) at each December 31, required by the Credit Facility. In the event Caterpillar or Cat Financial does not meet one or more of their respective financial covenants under the Credit Facility in the future (and are unable to obtain a consent or waiver), the syndicate of banks may terminate the commitments allocated to the party that does not meet its covenants. Additionally, in such event, certain of Cat Financial’s other lenders under other loan agreements where similar financial covenants or cross default provisions are applicable may, at their election, choose to pursue remedies under those loan agreements, including accelerating the repayment of outstanding borrowings. At September 30, 2021, there were no borrowings under the Credit Facility. Our total credit commitments and available credit as of September 30, 2021 were: September 30, 2021 Machinery, (Millions of dollars) Energy & Financial Consolidated Transportation Products Credit lines available: Global credit facilities……………………………….. $ 10,500 $ 2,750 $ 7,750 Other external 3,278 184 3,094 Total credit lines available 13,778 2,934 10,844 Less: Commercial paper outstanding (2,619) – (2,619) Less: Utilized credit…………………………………………..(669) – (669) Available credit……………………………………. $ 10,490 $ 2,934 $ 7,556 The other external consolidated credit lines with banks as of September 30, 2021 totaled $3.28 billion. These committed and uncommitted credit lines, which may be eligible for renewal at various future dates or have no specified expiration date, are used primarily by our subsidiaries for local funding requirements. Caterpillar or Cat Financial may guarantee subsidiary borrowings under these lines. 65 Table of Contents We receive debt ratings from the major credit rating agencies. Moody’s, Fitch and S&P maintain a “mid-A” debt rating. A downgrade of our credit ratings by any of the major credit rating agencies would result in increased borrowing costs and could make access to certain credit markets more difficult. In the event economic conditions deteriorate such that access to debt markets becomes unavailable, ME&T’s operations would rely on cash flow from operations, use of existing cash balances, borrowings from Cat Financial and access to our committed credit facilities. Our Financial Products’ operations would rely on cash flow from its existing portfolio, existing cash balances, access to our committed credit facilities and other credit line facilities of Cat Financial, and potential borrowings from Caterpillar. In addition, we maintain a support agreement with Cat Financial, which requires Caterpillar to remain the sole owner of Cat Financial and may, under certain circumstances, require Caterpillar to make payments to Cat Financial should Cat Financial fail to maintain certain financial ratios. We facilitate voluntary supply chain finance programs (the “Programs”) through participating financial institutions. The Programs are available to a wide range of suppliers and allows them the option to manage their cash flow. We are not a party to the agreements between the participating financial institutions and the suppliers in connection with the Programs. The range of payment terms we negotiate with our suppliers is consistent, irrespective of whether a supplier participates in the Programs. The amounts payable to participating financial institutions for suppliers who voluntarily participate in the Programs and included in Accounts payable in the Consolidated Statement of Financial Position were $725 million and $533 million at September 30, 2021 and December 31, 2020, respectively. The amounts settled through the Programs and paid to participating financial institutions were $2.9 billion and $2.4 billion during the first nine months of 2021 and 2020, respectively. We account for payments made under the Programs, the same as our other Accounts payable, as a reduction to our cash flows from operations. We do not believe that changes in the availability of supply chain financing will have a significant impact on our liquidity. Machinery, Energy & Transportation Net cash provided by operating activities was $4.90 billion in the first nine months of 2021, compared with $2.07 billion for the same period in 2020. The increase was primarily due to higher profit before taxes adjusted for non-cash items, including higher accruals for short-term incentive compensation. In addition, lower payments for short-term incentive compensation favorably impacted cash flow. Partially offsetting these items were increased working capital requirements during the first nine months of 2021 compared to the same period last year. Within working capital, changes in inventory and accounts receivable unfavorably impacted cash flow but were partially offset by favorable changes in accounts payable and accrued expenses. Net cash used by investing activities in the first nine months of 2021 was $487 million, compared with net cash used of $66 million in the first nine months of 2020. The change was primarily due to increased investment activity mostly offset by increased activity related to intercompany lending with Financial Products. During 2021, we invested $543 million in bank time deposits with varying maturity dates within one year. We also acquired the Oil & Gas division of the Weir Group PLC for $361 million, net of cash acquired, in February 2021. Net cash used for financing activities during the first nine months of 2021 was $4.67 billion, compared with net cash used of $742 million in the same period of 2020. The change was primarily due to the repayment of debt and lower proceeds from debt issuances. In addition, during the first nine months of 2021, we repurchased $1.62 billion of Caterpillar common stock compared with $1.13 billion during the same period a year ago. While our short-term priorities for the use of cash may vary from time to time as business needs and conditions dictate, our long-term cash deployment strategy is focused on the following priorities. Our top priority is to maintain a strong financial position in support of a mid-A rating. Next, we intend to fund operational requirements and commitments. Then, we intend to fund priorities that profitably grow the company and return capital to shareholders through dividend growth and share repurchases. Additional information on cash deployment is as follows: Strong financial position – Our top priority is to maintain a strong financial position in support of a mid-A rating. We track a diverse group of financial metrics that focus on liquidity, leverage, cash flow and margins which align with our cash deployment actions and the various methodologies used by the major credit rating agencies. Operational excellence and commitments – Capital expenditures were $693 million during the first nine months of 2021, compared to $685 million for the same period in 2020. We expect ME&T’s capital expenditures in 2021 to be about $1.0 billion to $1.1 billion. We made $229 million of contributions to our pension and other postretirement benefit plans during the first nine months of 2021. We currently anticipate full-year 2021 contributions of approximately $310 million. In comparison, we made $217 million of contributions to our pension and other postretirement benefit plans during the first nine months of 2020. Fund strategic growth initiatives and return capital to shareholders – We intend to utilize our liquidity and debt capacity to fund targeted investments that drive long-term profitable growth focused in the areas of expanded offerings and services, including acquisitions. 66 Table of Contents As part of our capital allocation strategy, ME&T free cash flow is a liquidity measure we use to determine the cash generated and available for financing activities including debt repayments, dividends and share repurchases. We define ME&T free cash flow as cash from ME&T operations excluding discretionary pension and other postretirement benefit plan contributions less capital expenditures. A goal of our capital allocation strategy is to return substantially all ME&T free cash flow to shareholders through the cycles in the form of dividends and share repurchases, while maintaining our mid-A rating. Our share repurchase plans are subject to the company’s cash deployment priorities and are evaluated on an ongoing basis considering the financial condition of the company and the economic outlook, corporate cash flow, the company’s liquidity needs, and the health and stability of global credit markets. The timing and amount of future repurchases may vary depending on market conditions and investing priorities. In July 2018, the Board of Directors approved an authorization to repurchase up to $10 billion of Caterpillar common stock (the 2018 Authorization) effective January 1, 2019, with no expiration. In the second quarter of 2021, we resumed our share repurchase program under the 2018 Authorization. In the first nine months of 2021, we repurchased $1.62 billion of Caterpillar common stock, with $3.1 billion remaining under the 2018 Authorization as of September 30, 2021. Our basic shares outstanding as of September 30, 2021 were approximately 541 million. Each quarter, our Board of Directors reviews the company’s dividend for the applicable quarter. The Board evaluates the financial condition of the company and considers the economic outlook, corporate cash flow, the company’s liquidity needs, and the health and stability of global credit markets to determine whether to maintain or change the quarterly dividend. In October 2021, the Board of Directors approved maintaining our quarterly dividend at $1.11 per share and we continue to expect our strong financial position to support the dividend. Dividends paid totaled $1.73 billion in the first nine months of 2021. Financial Products Financial Products operating cash flow was $1.10 billion in the first nine months of 2021, compared with $1.04 billion for the same period a year ago. Net cash used for investing activities was $468 million for the first nine months of 2021, compared with net cash provided of $885 million for the same period in 2020. The change was primarily due to portfolio related activity. Net cash used for financing activities was $289 million for the first nine months of 2021 compared with $2.10 billion for the same period in 2020. The change was primarily due to higher portfolio funding requirements. RECENT ACCOUNTING PRONOUNCEMENTS For a discussion of recent accounting pronouncements, see Part I, Item 1. Note 2 – “New accounting guidance”. CRITICAL ACCOUNTING ESTIMATES For a discussion of the company’s critical accounting estimates, see Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2020 Annual Report on Form 10-K. There have been no significant changes to our critical accounting estimates since our 2020 Annual Report on Form 10-K. OTHER MATTERS Information related to legal proceedings appears in Note 14-Environmental and Legal Matters of Part II, Item 8 “Financial Statements and Supplementary Data.” Retirement Benefits We recognize mark-to-market gains and losses immediately through earnings upon the remeasurement of our pension and OPEB plans. Mark-to-market gains and losses represent the effects of actual results differing from our assumptions and the effects of changing assumptions. We will record the annual mark-to-market adjustment as of the measurement date, December 31, 2021. The discount rates for our U.S. pension plans were 2.8 percent and 2.4 percent as of September 30, 2021 and December 31, 2020, respectively. Asset returns as of September 30, 2021 for our U.S. pension plans were 1.5 percent compared to an expected return on plan assets for 2021 of 4.2 percent. It is difficult to predict the December 31, 2021 adjustment amount, as it is dependent on several factors including discount rate, actual returns on plan assets and other actuarial assumptions. 67 Table of Contents At the end of the third quarter of 2021, the dollar amount of backlog believed to be firm was approximately $20.6 billion, about $2.2 billion higher than the second quarter of 2021. The order backlog increased across the three primary segments, with the largest increase in Resource Industries. Of the total backlog at September 30, 2021, approximately $3.9 billion was not expected to be filled in the following twelve months. 68 Table of Contents NON-GAAP FINANCIAL MEASURES We provide the following definitions for the non-GAAP financial measures used in this report. These non-GAAP financial measures have no standardized meaning prescribed by U.S. GAAP and therefore are unlikely to be comparable to the calculation of similar measures for other companies. Management does not intend these items to be considered in isolation or as a substitute for the related GAAP measures. We believe it is important to separately quantify the profit impact of two significant items in order for our results to be meaningful to our readers. These items consist of (i) restructuring costs, which were incurred to generate longer-term benefits and (ii) remeasurement (gains) losses resulting from the settlements of pension obligations in 2020. We do not consider these items indicative of earnings from ongoing business activities and believe the non-GAAP measure provides investors with useful perspective on underlying business results and trends and aids with assessing our period-over-period results. In addition, we provide a calculation of ME&T free cash flow as we believe it is an important measure for investors to determine the cash generation available for financing activities including debt repayments, dividends and share repurchases. Reconciliations of adjusted results to the most directly comparable GAAP measures are as follows: Reconciliations of ME&T free cash flow to the most directly comparable GAAP measure, net cash provided by operating activities are as follows: (Millions of dollars) Nine Months Ended September 30 1 See reconciliation of ME&T net cash provided by operating activities to consolidated net cash provided by operating activities on pages 77 – 78. 69 Table of Contents Supplemental Consolidating Data We are providing supplemental consolidating data for the purpose of additional analysis. The data has been grouped as follows: Consolidated – Caterpillar Inc. and its subsidiaries. Machinery, Energy & Transportation – We define ME&T as it is presented in the supplemental data as Caterpillar Inc. and its subsidiaries, excluding Financial Products. ME&T’s information relates to the design, manufacturing and marketing of our products. Financial Products – We define Financial Products as it is presented in the supplemental data as our finance and insurance subsidiaries, primarily Caterpillar Financial Services Corporation (Cat Financial) and Caterpillar Insurance Holdings Inc. (Insurance Services). Financial Products’ information relates to the financing to customers and dealers for the purchase and lease of Caterpillar and other equipment. Consolidating Adjustments – Eliminations of transactions between ME&T and Financial Products. The nature of the ME&T and Financial Products businesses is different, especially with regard to the financial position and cash flow items. Caterpillar management utilizes this presentation internally to highlight these differences. We believe this presentation will assist readers in understanding our business. Pages 71 to 78 reconcile ME&T and Financial Products to Caterpillar Inc. consolidated financial information. Certain amounts for prior periods have been reclassified to conform to the current period presentation. 70 Table of Contents Caterpillar Inc.
1 Elimination of Financial Products’ revenues earned from ME&T. 2 Elimination of net expenses recorded by ME&T paid to Financial Products. 3 Elimination of discount recorded by ME&T on receivables sold to Financial Products and of interest earned between ME&T and Financial Products as well as dividends paid by Financial Products to ME&T. 4 Elimination of equity profit (loss) earned from Financial Products’ subsidiaries partially owned by ME&T subsidiaries. 5 Elimination of noncontrolling interest profit (loss) recorded by Financial Products for subsidiaries partially owned by ME&T subsidiaries. 6 Profit attributable to common shareholders. 71 Table of Contents Caterpillar Inc.
1 Elimination of Financial Products’ revenues earned from ME&T. 2 Elimination of net expenses recorded by ME&T paid to Financial Products. 3 Elimination of discount recorded by ME&T on receivables sold to Financial Products and of interest earned between ME&T and Financial Products as well as dividends paid by Financial Products to ME&T. 4 Elimination of equity profit (loss) earned from Financial Products’ subsidiaries partially owned by ME&T subsidiaries. 5 Elimination of noncontrolling interest profit (loss) recorded by Financial Products for subsidiaries partially owned by ME&T subsidiaries. 6 Profit attributable to common shareholders. 72 Table of Contents Caterpillar Inc.
1 Elimination of Financial Products’ revenues earned from ME&T. 2 Elimination of net expenses recorded by ME&T paid to Financial Products. 3 Elimination of discount recorded by ME&T on receivables sold to Financial Products and of interest earned between ME&T and Financial Products as well as dividends paid by Financial Products to ME&T. 4 Elimination of equity profit (loss) earned from Financial Products’ subsidiaries partially owned by ME&T subsidiaries. 5 Elimination of noncontrolling interest profit (loss) recorded by Financial Products for subsidiaries partially owned by ME&T subsidiaries. 6 Profit attributable to common shareholders. 73 Table of Contents Caterpillar Inc.
1 Elimination of Financial Products’ revenues earned from ME&T. 2 Elimination of net expenses recorded by ME&T paid to Financial Products. 3 Elimination of interest expense recorded between Financial Products and ME&T. 4 Elimination of discount recorded by ME&T on receivables sold to Financial Products and of interest earned between ME&T and Financial Products as well as dividends paid by Financial Products to ME&T. 5 Elimination of equity profit (loss) earned from Financial Products’ subsidiaries partially owned by ME&T subsidiaries. 6 Elimination of noncontrolling interest profit (loss) recorded by Financial Products for subsidiaries partially owned by ME&T subsidiaries. 7 Profit attributable to common shareholders. 74 Table of Contents Caterpillar Inc.
1 Elimination of receivables between ME&T and Financial Products. 2 Reclassification of ME&T’s trade receivables purchased by Financial Products and Financial Products’ wholesale inventory receivables. 3 Elimination of ME&T’s insurance premiums that are prepaid to Financial Products. 4 Reclassification reflecting required netting of deferred tax assets/liabilities by taxing jurisdiction. 5 Elimination of other intercompany assets between ME&T and Financial Products. 6 Elimination of payables between ME&T and Financial Products. 7 Elimination of prepaid insurance in Financial Products’ other liabilities. 8 Elimination of debt between ME&T and Financial Products. 9 Eliminations associated with ME&T’s investments in Financial Products’ subsidiaries. 75 Table of Contents Caterpillar Inc.
1 Elimination of receivables between ME&T and Financial Products. 2 Reclassification of ME&T’s trade receivables purchased by Financial Products and Financial Products’ wholesale inventory receivables. 3 Elimination of ME&T’s insurance premiums that are prepaid to Financial Products. 4 Reclassification reflecting required netting of deferred tax assets/liabilities by taxing jurisdiction. 5 Elimination of other intercompany assets between ME&T and Financial Products. 6 Elimination of debt between ME&T and Financial Products. 7 Elimination of payables between ME&T and Financial Products. 8 Elimination of prepaid insurance in Financial Products’ other liabilities. 9 Eliminations associated with ME&T’s investments in Financial Products’ subsidiaries. 76 Table of Contents Caterpillar Inc.
1 Elimination of equity profit earned from Financial Products’ subsidiaries partially owned by ME&T subsidiaries. 2 Elimination of non-cash adjustments and changes in assets and liabilities related to consolidated reporting. 3 Reclassification of Financial Products’ cash flow activity from investing to operating for receivables that arose from the sale of inventory. 4 Elimination of net proceeds and payments to/from ME&T and Financial Products. 5 Elimination of dividend activity between Financial Products and ME&T. 77 Table of Contents Caterpillar Inc.
1 Elimination of equity profit earned from Financial Products’ subsidiaries partially owned by ME&T subsidiaries. 2 Elimination of non-cash adjustments and changes in assets and liabilities related to consolidated reporting. 3 Reclassification of Financial Products’ cash flow activity from investing to operating for receivables that arose from the sale of inventory. 4 Elimination of net proceeds and payments to/from ME&T and Financial Products. 5 Elimination of dividend activity between Financial Products and ME&T. 78 Table of Contents Forward-looking Statements Certain statements in this Form 10-Q relate to future events and expectations and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “believe,” “estimate,” “will be,” “will,” “would,” “expect,” “anticipate,” “plan,” “forecast,” “target,” “guide,” “project,” “intend,” “could,” “should” or other similar words or expressions often identify forward-looking statements. All statements other than statements of historical fact are forward-looking statements, including, without limitation, statements regarding our outlook, projections, forecasts or trend descriptions. These statements do not guarantee future performance and speak only as of the date they are made, and we do not undertake to update our forward-looking statements. Caterpillar’s actual results may differ materially from those described or implied in our forward-looking statements based on a number of factors, including, but not limited to: (i) global and regional economic conditions and economic conditions in the industries we serve; (ii) commodity price changes, material price increases, fluctuations in demand for our products or significant shortages of material; (iii) government monetary or fiscal policies; (iv) political and economic risks, commercial instability and events beyond our control in the countries in which we operate; (v) international trade policies and their impact on demand for our products and our competitive position, including the imposition of new tariffs or changes in existing tariff rates; (vi) our ability to develop, produce and market quality products that meet our customers’ needs; (vii) the impact of the highly competitive environment in which we operate on our sales and pricing; (viii) information technology security threats and computer crime; (ix) inventory management decisions and sourcing practices of our dealers and our OEM customers; (x) a failure to realize, or a delay in realizing, all of the anticipated benefits of our acquisitions, joint ventures or divestitures; (xi) union disputes or other employee relations issues; (xii) adverse effects of unexpected events; (xiii) disruptions or volatility in global financial markets limiting our sources of liquidity or the liquidity of our customers, dealers and suppliers; (xiv) failure to maintain our credit ratings and potential resulting increases to our cost of borrowing and adverse effects on our cost of funds, liquidity, competitive position and access to capital markets; (xv) our Financial Products segment’s risks associated with the financial services industry; (xvi) changes in interest rates or market liquidity conditions; (xvii) an increase in delinquencies, repossessions or net losses of Cat Financial’s customers; (xviii) currency fluctuations; (xix) our or Cat Financial’s compliance with financial and other restrictive covenants in debt agreements; (xx) increased pension plan funding obligations; (xxi) alleged or actual violations of trade or anti-corruption laws and regulations; (xxii) additional tax expense or exposure, including the impact of U.S. tax reform; (xxiii) significant legal proceedings, claims, lawsuits or government investigations; (xxiv) new regulations or changes in financial services regulations; (xxv) compliance with environmental laws and regulations; (xxvi) the duration and geographic spread of, business disruptions caused by, and the overall global economic impact of, the COVID-19 pandemic; and (xxvii) other factors described in more detail under the section entitled “Part I – Item 1A. Risk Factors” of Caterpillar’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as such factors may be updated from time to time in Caterpillar’s periodic filings with the Securities and Exchange Commission. Item 3. Quantitative and Qualitative Disclosures About Market Risk The information required by this Item is incorporated by reference from Note 5 – “Derivative financial instruments and risk management” included in Part I, Item 1 and Management’s Discussion and Analysis included in Part I, Item 2 of this Form 10Q. Item 4. Controls and Procedures Evaluation of disclosure controls and procedures An evaluation was performed under the supervision and with the participation of the company’s management, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the design and operation of the company’s disclosure controls and procedures, as that term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this quarterly report. Based on that evaluation, the CEO and CFO concluded that the company’s disclosure controls and procedures were effective as of the end of the period covered by this quarterly report. Changes in internal control over financial reporting During the third quarter of 2021, there has been no change in the company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting. 79 Table of Contents PART II. OTHER INFORMATION The information required by this Item is incorporated by reference from Note 14 – “Environmental and legal matters” included in Part I, Item 1 of this Form 10-Q. Item 1A. Risk Factors There have been no material changes to the risk factors we previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
1 In July 2018, the Board approved a share repurchase authorization of up to $10.0 billion of Caterpillar common stock effective January 1, 2019, with no expiration (the 2018 Authorization). As of September 30, 2021, approximately $3.1 billion remained available under the 2018 Authorization. 2 During the third quarter of 2021, we entered into an ASR with a third-party financial institution to purchase $750 million of our common stock. In August 2021, upon payment of the $750 million to the financial institution, we received 2.9 million shares. In September 2021, upon final settlement of the ASR, we received an additional 0.7 million shares. In total, we repurchased 3.6 million shares under this ASR at an average price per share of $206.21. 3 In July, August and September of 2021, we repurchased 2.2 million, 0.2 million and 0.6 million shares respectively, for an aggregate of $622 million in open market transactions at an average price per share of $211.64, $208.70 and $200.00, respectively. Non-U.S. Employee Stock Purchase Plans As of September 30, 2021, we had 28 employee stock purchase plans (the “EIP Plans”) that are administered outside the United States for our non-U.S. employees, which had approximately 12,000 active participants in the aggregate. During the third quarter of 2021, approximately 73,000 shares of Caterpillar common stock were purchased by the EIP Plans pursuant to the terms of such plans. 80 Table of Contents Item 6. Exhibits 10.1 Credit Agreement (2021 364-Day Facility), dated September 2, 2021,among Caterpillar Inc., Caterpillar Financial Services Corporation, Caterpillar International Finance Designated Activity Company, and Caterpillar Finance Kabushiki Kaisha, certain financial institutions named therein, Citibank, N.A., as agent, Citibank Europe PLC, UK Branch, as Local Currency Agent, and MUFG Bank, Ltd. as Japan Local Currency Agent (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 8, 2021) 10.2 Local Currency Addendum, dated as of September 2, 2021, to the Credit Agreement (2021 364-Day Facility) (incorporated by reference from Exhibit 10.2 to the Company’s Current Report on Form 8-K filed September 8, 2021) 10.3 Japan Local Currency Addendum, dated as of September 2, 2021, to the Credit Agreement (2021 364-Day Facility) (incorporated by reference from Exhibit 10.3 to the Company’s Current Report on Form 8-K filed September 8, 2021) 10.4 Amendment No. 1 to Second Amended and Restated Credit Agreement (Three-Year Facility), Amendment No. 1 to Local Currency Addendum and Amendment No. 1 to Japan Local Currency Addendum, dated as of September 2, 2021, among Caterpillar Inc., Caterpillar Financial Services Corporation, Caterpillar International Finance Designated Activity Company, and Caterpillar Finance Kabushiki Kaisha, certain financial institutions named therein, Citibank, N.A., as agent, Citibank Europe PLC, UK Branch, as Local Currency Agent, and MUFG Bank, Ltd. as Japan Local Currency Agent 10.5 Amendment No. 1 to Second Amended and Restated Credit Agreement (Five-Year Facility), Amendment No. 1 to Local Currency Addendum and Amendment No. 1 to Japan Local Currency Addendum, dated as of September 2, 2021, among Caterpillar Inc., Caterpillar Financial Services Corporation, Caterpillar International Finance Designated Activity Company, and Caterpillar Finance Kabushiki Kaisha, certain financial institutions named therein, Citibank, N.A., as agent, Citibank Europe PLC, UK Branch, as Local Currency Agent, and MUFG Bank, Ltd. as Japan Local Currency Agent (incorporated by reference from Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on September 8, 2021) 31.1 Certification of Chief Executive Officer of Caterpillar Inc., as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification of Chief Financial Officer of Caterpillar Inc., as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32 Certification of Chief Executive Officer of Caterpillar Inc. and Chief Financial Officer of Caterpillar Inc., as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101.INS Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 104 Cover Page Interactive File (embedded within the Inline XBRL document and included in Exhibit 101) The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time. 81 Table of Contents SIGNATURES Pursuant to the requirements 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. CATERPILLAR INC. November 3, 2021 /s/ D. James Umpleby III Chairman of the Board & Chief Executive Officer November 3, 2021 November 3, 2021 November 3, 2021
/s/ Andrew R.J. Bonfield Andrew R.J. Bonfield /s/ Suzette M. Long Suzette M. Long /s/ G. Michael Marvel G. Michael Marvel
Chief Legal Officer and General Counsel Chief Accounting Officer EXHIBIT 10.4 AMENDMENT NO. 1 This AMENDMENT NO. 1 TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (THREE-YEAR FACILITY), AMENDMENT NO. 1 TO LOCAL CURRENCY ADDENDUM and AMENDMENT NO. 1 TO JAPAN LOCAL CURRENCY ADDENDUM (this “Amendment”), dated as of September 2, 2021, is entered into by and among:
PRELIMINARY STATEMENTS The Borrowers, the Banks and the Agents are parties to the Second Amended and Restated Credit Agreement (Three-Year Facility) dated as of September 5, 2019 (as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, the “Existing Credit Agreement”). CFSC, CIF, the Local Currency Banks, the Administrative Agent and the Local Currency Agent are parties to the Local Currency Addendum dated as of September 5, 2019 (as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, the “Existing Local Currency Addendum”). CFSC, CFKK, the Japan Local Currency Banks, the Administrative Agent and the Japan Local Currency Agent are parties to the Japan Local Currency Addendum dated as of September 5, 2019 (as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, the “Existing Japan Local Currency Addendum”). The Borrowers have requested that the Existing Credit Agreement, the Existing Local Currency Addendum and the Existing Japan Local Currency Addendum be amended as hereinafter set forth. The Existing Credit Agreement, as amended by this Amendment, is referred to herein as the “Amended Credit Agreement”. The Existing Local Currency Addendum, as amended by this Amendment, is referred to herein as the “Amended Local Currency Addendum”. The Existing Japan Local Currency Addendum, as amended by this Amendment, is referred to herein as the “Amended Japan Local Currency Addendum”. In consideration of the premises set forth above, the terms and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows. SECTION 1. Defined Terms. Each capitalized term used herein and not defined herein shall have the meaning ascribed thereto in the Amended Credit Agreement. SECTION 2. Amendments to the Existing Credit Agreement. Effective as of the date hereof, subject to the satisfaction of the conditions precedent set forth in Section 4 below: 2.1. the Existing Credit Agreement is hereby amended in its entirety pursuant to Annex I hereto; 2.2. the Existing Local Currency Addendum is hereby amended in its entirety pursuant to Annex II hereto; and 2.3. the Existing Japan Local Currency Addendum is hereby amended in its entirety pursuant to Annex III hereto. SECTION 3. Reaffirmation of CFSC Guaranty. CFSC hereby reaffirms all of its obligations under Article IX of the Amended Credit Agreement and acknowledges and agrees that such obligations remain in full force and effect and are hereby ratified, reaffirmed and confirmed. SECTION 4. Conditions Precedent. This Amendment shall become effective and be deemed effective as of the date hereof (the “Amendment Effective Date”) upon the Administrative Agent’s receipt of the following: 4.1. duly executed counterparts of this Amendment from each Borrower, the Agents, and each Bank; 4.2. the Administrative Agent shall have received, for the account of each applicable Bank, any upfront fees to be paid by any Borrower to such Banks in connection with this Amendment; 2 4.3. certified copies of the resolutions of the Board of Directors of each Borrower evidencing corporate authority to execute and deliver this Amendment; 4.4. an opinion letter of counsel for each of Caterpillar and CFSC, given upon their express instructions, in form and substance reasonably acceptable to the Administrative Agent; 4.5. an opinion letter of Mayer Brown LLP, counsel for the Borrowers, given upon their express instructions, in form and substance reasonably acceptable to the Administrative Agent; and 4.6. a Beneficial Ownership Certification in relation to each Borrower that qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, to the extent such documentation is requested at least five (5) Business Days prior to the Amendment Effective Date. SECTION 5. Covenants, Representations and Warranties of the Borrowers. 5.1. Upon the effectiveness of this Amendment, each Borrower hereby reaffirms all covenants, representations and warranties made by it in the Amended Credit Agreement, the Amended Local Currency Addendum and the Amended Japan Local Currency Addendum and agrees that all such covenants, representations and warranties shall be deemed to have been re-made as of the date hereof. 5.2. Each Borrower hereby represents and warrants that (a) this Amendment constitutes a legal, valid and binding obligation of such Borrower, enforceable against such Borrower in accordance with its terms, except as enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditor’s rights generally and by the effect of general principles of equity and (b) on the date hereof, no Event of Default exists with respect to such Borrower and no event exists which, with the giving of notice, the lapse of time or both, would constitute an Event of Default with respect to such Borrower. SECTION 6. Reference to and Effect on the Existing Credit Agreement, the Existing Local Currency Addendum and the Existing Japan Local Currency Addendum. 6.1. Upon the effectiveness of this Amendment, each reference in the Amended Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like import shall mean and be a reference to the Existing Credit Agreement as amended hereby, and each reference to any such agreement in any other document, instrument or agreement executed and/or delivered in connection with such agreement shall mean and be a reference to such agreement as amended hereby. In addition, this Amendment constitutes a Loan Document. 6.2. Upon the effectiveness of this Amendment, each reference in the Amended Local Currency Addendum to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like import shall mean and be a reference to the Existing Local Currency Addendum as amended hereby, and each reference to any such agreement in any other document, instrument or 3 agreement executed and/or delivered in connection with such agreement shall mean and be a reference to such agreement as amended hereby. 6.3. Upon the effectiveness of this Amendment, each reference in the Amended Japan Local Currency Addendum to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like import shall mean and be a reference to the Existing Japan Local Currency Addendum as amended hereby, and each reference to any such agreement in any other document, instrument or agreement executed and/or delivered in connection with such agreement shall mean and be a reference to such agreement as amended hereby. 6.4. Except as specifically amended above, the Existing Credit Agreement, the Existing Local Currency Addendum, the Existing Japan Local Currency Addendum, the Notes and all other documents, instruments and agreements executed and/or delivered in connection therewith shall remain in full force and effect and are hereby ratified and confirmed. 6.5. The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of any party under the Existing Credit Agreement, the Existing Local Currency Addendum, the Existing Japan Local Currency Addendum, the Notes or any other document, instrument or agreement executed in connection therewith, nor constitute a waiver of any provision contained therein, except as specifically set forth herein. SECTION 7. 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 and delivered shall be deemed to be an original and all of which taken together shall constitute one and the same instrument. A facsimile or PDF copy of any signature hereto shall have the same effect as the original of such signature. The parties may execute this Amendment using Electronic Signatures as contemplated by Section 8.11 of the Amended Credit Agreement. SECTION 8. Governing Law; Submission to Jurisdiction; Service of Process; Waiver of Jury Trial. This Amendment shall be governed by, and construed in accordance with, the law of the State of New York (without regard for conflict of law principles that would result in the application of any law other than the internal law of the State of New York). This Amendment shall be subject to the submission to jurisdiction and service of process provisions and requirements set forth in Section 8.08 of the Amended Credit Agreement, and the waiver of jury trial provisions and requirements set forth in Section 8.12 of the Amended Credit Agreement. SECTION 9. Headings. Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose SECTION 10. Additional Bank; Departing Banks. 10.1. Upon the effectiveness hereof, Banco Santander, S.A., New York Branch (the “Additional Bank”) shall constitute a Bank under the Amended Credit Agreement, with its Commitment and Revolving Credit Commitment appearing in Schedule I to the Amended Credit Agreement. The Additional Bank shall be deemed and constitute a Bank under the Amended Credit Agreement and the other Loan Documents and shall be bound by the provisions of this 4 Amendment, the Amended Credit Agreement and the other Loan Documents (including, without limitation, funding obligations in respect of its Commitment and Revolving Credit Commitment as and when required under the Amended Credit Agreement). The Additional Lender acknowledges and agrees that it has received a copy of the Amended Credit Agreement, together with copies of financial statements and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Amendment and to become a Bank, which analysis and decision has been made independently of and without reliance upon the Agents or any other Bank. The Additional Bank confirms it will, independently and without reliance on the Agents, or any other Bank, and 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 Amended Credit Agreement and the Loan Documents, and it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Bank. 10.2. Upon the effectiveness hereof, each of Deutsche Bank AG New York Branch and Mizuho Bank, Ltd. (each, a “Departing Bank”) shall no longer constitute a Bank under the Amended Credit Agreement or any other Loan Document. Each Departing Bank’s Commitment and Revolving Credit Commitment under the Existing Credit Agreement immediately prior to giving effect to this Amendment shall be terminated, and no Departing Bank shall be a “Bank” party to the Amended Credit Agreement. Each Departing Bank shall no longer have any rights or obligations under the Amended Credit Agreement or any other Loan Document (other than rights and obligations under those provisions of the Existing Credit Agreement that expressly survive termination thereof, which shall survive). The remainder of this page is intentionally blank. 5 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers or representatives thereunto duly authorized as of the date first above written. CATERPILLAR INC. By: /s/ Richard D. Moore Name: Richard D. Moore Title: Corporate Treasurer CATERPILLAR FINANCIAL SERVICES CORPORATION By: /s/ Rob De Camp Title: Treasurer CATERPILLAR INTERNATIONAL FINANCE DESIGNATED ACTIVITY COMPANY By: /s/ Rob De Camp CATERPILLAR FINANCE KABUSHIKI KAISHA By: /s/ Rob De Camp Signature Page to CITIBANK, N.A., as Administrative Agent By: /s/ Susan Olsen Name: Susan Olsen Title: Vice President Signature Page to CITIBANK EUROPE PLC, UK BRANCH, as Local Currency Agent By: /s/ Cairy Balley Name: Cairy Balley Signature Page to MUFG BANK, LTD., as Japan Local Currency Agent By: /s/ Tomoyuki Koike Name: Tomoyuki Koike Title: Managing Director, Head of Osaka Corporate Banking Division No. 3 Signature Page to CITIBANK, N.A., as a Bank and a Local Currency Bank By: /s/ Susan Olsen Name: Susan Olsen Signature Page to BANK OF AMERICA, N.A., as a Bank By: /s/ Brian Lukehart Name: Brian Lukehart Title: Director Signature Page to BANK OF AMERICA, N.A., LONDON BRANCH (formerly Bank of America Merrill Lynch International Limited), as a Local Currency Bank By: /s/ Christopher Coney Signature Page to JPMORGAN CHASE BANK, N.A., as a Bank and a Local Currency Bank By: /s/ Jonathan R. Bennett Signature Page to BARCLAYS BANK PLC, as a Bank and a Local Currency Bank By: /s/ Craig Malloy Title: Director Signature Page to SOCIÉTÉ GÉNÉRALE, as a Bank and a Local Currency Bank By: /s/ Kimberly Metzger Signature Page to MUFG BANK, LTD., as a Bank By: /s/ John Margetanski Name: John Margetanski Title: Director Signature Page to AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED, as a Bank By: /s/ Robert Grillo Name: Robert Grillo Title: Executive Director Signature Page to BNP PARIBAS, as a Bank and a Local Currency Bank By: !s! Tony Baratta Name: Tony Baratta Title: Managing Director By: !s! Nader Tannous Title: Director Signature Page to HSBC BANK USA, NATIONAL ASSOCIATION, as a Bank By: /s/ Matthew McLaurin Signature Page to SUMITOMO MITSUI BANKING CORPORATION, as a Bank By: /s/ Gail Motonaga Name: Gail Motonaga Signature Page to TORONTO DOMINION (TEXAS) LLC, as a Bank By: /s/ Brian MacFarlane Name: Brian MacFarlane Signature Page to U.S. BANK NATIONAL ASSOCIATION, as a Bank By: /s/ James N. DeVries Name: James N. DeVries Title: Senior Vice President Signature Page to COMMERZBANK AG, NEW YORK BRANCH, as a Bank and a Local Currency Bank By: /s/ Matthew Ward Name: Matthew Ward Title: Managing Director By: /s/ Thomas Devitt Name: Thomas Devitt Signature Page to DEUTSCHE BANK AG NEW YORK BRANCH, as a Departing Bank By: /s/ Annie Chung By: /s/ Marko Lukin Name: Marko Lukin Signature Page to ING BANK N.V., DUBLIN BRANCH, as a Bank By: /s/ Barry Fehily Name: Barry Fehily Title: Managing Director By: /s/ Louise Gough Name: Louise Gough Signature Page to LLOYDS BANK PLC, as a New Bank, a Bank and a Local Currency Bank By: /s/ Sam Marriott Name: Sam Marriott Title: Associate Director Signature Page to BANCO BILBAO VIZCAYA ARGENTARIA S.A., NEW YORK BRANCH, as a Bank By: /s/ Andres Barbosa Name: Andres Barbosa By: /s/ Rita Walz-Cuccioli Signature Page to MIZUHO BANK, LTD., as a Departing Bank By: /s/ Donna De Magistris Signature Page to THE NORTHERN TRUST COMPANY, as a Bank By: /s/ Keith L. Burson Name: Keith L. Burson Title: Senior Vice President Signature Page to KBC BANK NV, NEW YORK BRANCH, as a Bank and a Local Currency Bank By: /s/ Francis X. Payne By: /s/ Robbie Claes Name: Robbie Claes Title: Managing Director Signature Page to STANDARD CHARTERED BANK, as a Bank By: /s/ Kristopher Tracy Name: Kristopher Tray Title: Director, Financing Solutions Signature Page to CHINA CONSTRUCTION BANK CORPORATION, BEIJING BRANCH, as a Bank By: /s/ Suosheng Li Name: Suosheng Li Title: General Manager Signature Page to INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED, NEW YORK BRANCH, as a Bank By: /s/ Christine Cai By: /s/ Yuanyuan Peng Name: Yuanyuan Peng Title: Executive Director Signature Page to THE BANK OF NEW YORK MELLON, as a Bank By: /s/ Thomas J. Tarasovich, Jr. Signature Page to WESTPAC BANKING CORPORATION, as a Bank By: /s/ Daniel Sutton Name: Daniel Sutton Signature Page to ITAU UNIBANCO S.A. – MIAMI BRANCH, as a Bank By: /s/ Nuno Conceicao By: Paul Cardoso Name: Title: Signature Page to THE BANK OF NOVA SCOTIA, as a Bank By: David Vishny Name: David Vishny Title: Managing Director Signature Page to WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Bank By: /s/ Matt J. Perrizo Signature Page to BANCO SANTANDER, S.A., NEW YORK BRANCH, as an Additional Bank By: /s/ Andres Barbosa Name: Andres Barbosa By: /s/ Rita Walz-Cuccioli Signature Page to Annex I Existing Credit Agreement, as modified Attached SECOND AMENDED AND RESTATED CREDIT AGREEMENT Dated as of September 5, 2019, as amended pursuant to Amendment No. 1 dated as of September 2, 2021, among CATERPILLAR INC., CATERPILLAR FINANCIAL SERVICES CORPORATION, CATERPILLAR INTERNATIONAL FINANCE DESIGNATED ACTIVITY COMPANY, and CATERPILLAR FINANCE KABUSHIKI KAISHA, as Borrowers THE FINANCIAL INSTITUTIONS NAMED HEREIN, as Banks CITIBANK, N.A., CITIBANK EUROPE PLC, UK BRANCH, MUFG BANK, LTD., as Japan Local Currency Agent CITIBANK, N.A., BofA SECURITIES, INC., JPMORGAN CHASE BANK, N.A., as Joint Lead Arrangers 1 Titles as of Amendment No. 1 Effective Date. TABLE OF CONTENTS ARTICLE I DEFINITIONS AND ACCOUNTING TERMS………………. 1 SECTION 1.01. Certain Defined Terms………………………….. 1 SECTION 1.02. Computation of Time Periods……………………….29 SECTION 1.03. Accounting Terms………………………………29 SECTION 1.04. Rates……………………………………..30 ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES……………..30 SECTION 2.01. The Revolving Credit Advances; Allocation of Commitments…….30 SECTION 2.02. Making the Revolving Credit Advances…………………31 SECTION 2.03. [Reserved]…………………………………..34 SECTION 2.04. Fees………………………………………39 SECTION 2.05. Reduction of the Commitments; Bank Additions…………….39 SECTION 2.06. Repayment of Advances…………………………..42 SECTION 2.07. Interest on Advances…………………………….42 SECTION 2.08. Interest Rate Determination………………………..43 SECTION 2.09. Prepayments of Advances…………………………43 SECTION 2.10. Increased Costs; Capital Adequacy; Illegality………………44 SECTION 2.11. Payments and Computations………………………..47 SECTION 2.12. Taxes……………………………………..48 SECTION 2.13. Sharing of Payments, Etc.………………………….50 SECTION 2.14. Tax Forms…………………………………..50 SECTION 2.15. Market Disruption; Denomination of Amounts in Dollars……….51 SECTION 2.16. Extensions of the Commitments………………………55 SECTION 2.17. Defaulting Banks………………………………56 SECTION 2.18. Funding Vehicle……………………………….57 ARTICLE III CONDITIONS OF LENDING…………………………57 SECTION 3.01. Conditions Precedent to Initial Advances…………………57 SECTION 3.02. Conditions Precedent to Each Borrowing…………………59 SECTION 3.03. Conditions Precedent to Certain Borrowings……………….59 ARTICLE IV REPRESENTATIONS AND WARRANTIES……………….59 SECTION 4.01. Representations and Warranties of the Borrowers……………59 SECTION 4.02. Additional Representations and Warranties of CFSC, CIF and CFKK .63 ARTICLE V COVENANTS OF THE BORROWERS…………………..63 SECTION 5.01. Affirmative Covenants…………………………..63 SECTION 5.02. Negative Covenants……………………………..66 SECTION 5.03. Financial Covenant of Caterpillar……………………..67 SECTION 5.04. Financial and Other Covenants of CFSC…………………67 ARTICLE VI EVENTS OF DEFAULT……………………………68 SECTION 6.01. Events of Default………………………………68 ARTICLE VII AGENCY…………………………………… 71 SECTION 7.01. Appointment and Authority………………………..71 SECTION 7.02. Agent Individually……………………………..72 SECTION 7.03. Duties of Agent; Exculpatory Provisions…………………73 SECTION 7.04. Reliance by Agent……………………………..74 SECTION 7.05. Delegation of Duties…………………………….75 SECTION 7.06. Resignation or Removal of Agent…………………….75 SECTION 7.07. Non-Reliance on Agents and Other Banks………………..76 SECTION 7.08. No Other Duties, etc.…………………………….77 SECTION 7.09. Indemnification……………………………….77 SECTION 7.10. Bank ERISA Matters……………………………78 SECTION 7.11. Erroneous Payments.…………………………….79 ARTICLE VIII MISCELLANEOUS……………………………..82 SECTION 8.01. Amendments, Etc.……………………………..82 SECTION 8.02. Notices; Communications, Etc.………………………83 SECTION 8.03. No Waiver; Remedies……………………………86 SECTION 8.04. Costs, Expenses and Taxes…………………………87 SECTION 8.05. Right of Set-off………………………………. 88 SECTION 8.06. Binding Effect………………………………..89 SECTION 8.07. Assignments and Participations………………………89 SECTION 8.08. Governing Law; Submission to Jurisdiction; Service of Process……91 SECTION 8.09. Caterpillar as Agent for the Borrowers………………….92 SECTION 8.10. Judgment Currency……………………………..93 SECTION 8.11. Execution in Counterparts…………………………93 SECTION 8.12. Waiver of Jury Trial…………………………….94 SECTION 8.13. USA Patriot Act Notification……………………….94 SECTION 8.14. Confidentiality………………………………..94 SECTION 8.15. Treatment of Information.…………………………95 SECTION 8.16. Amendment and Restatement; Departing Bank……………..97 SECTION 8.17. No Fiduciary Duty……………………………..98 SECTION 8.18. Arrangers…………………………………..98 SECTION 8.19. Acknowledgement and Consent to Bail-In of Affected Financial 98 Institutions ARTICLE IX CFSC GUARANTY………………………………99 SECTION 9.01. The Guaranty…………………………………99 SECTION 9.02. Guaranty Unconditional…………………………..99 SECTION 9.03. Discharge Only Upon Payment In Full; Reinstatement in Certain 100 Circumstances SECTION 9.04. Waiver by CFSC………………………………100 SECTION 9.05. Subrogation………………………………….101 SECTION 9.06. Stay of Acceleration…………………………….101 SCHEDULES Schedule I Commitments Schedule II Commitment Fee and Applicable Margin Table Schedule III Departing Bank Schedule EXHIBITS Exhibit A Form of Note Exhibit B-1 Form of Notice of Revolving Credit Borrowing Exhibit B-2 Form of Notice of Local Currency Borrowing Exhibit B-3 Form of Notice of Japan Local Currency Borrowing Exhibit B-4 Form of Notice of Allocation Exhibit B-5 Form of Notice of Bank Addition Exhibit C-1 Form of Assignment and Acceptance Exhibit C-2 Form of Assumption and Acceptance Exhibit D Form of Opinion of Counsel for each of Caterpillar and CFSC Exhibit E [Reserved] Exhibit F-1 Form of Compliance Certificate (Caterpillar) Exhibit F-2 Form of Compliance Certificate (CFSC) Exhibit G-1 Form of Local Currency Addendum Exhibit G-2 Form of Japan Local Currency Addendum SECOND AMENDED AND RESTATED CREDIT AGREEMENT Dated as of September 5, 2019 Caterpillar Inc., a Delaware corporation (“Caterpillar”), Caterpillar Financial Services Corporation, a Delaware corporation (“CFSC”), Caterpillar International Finance Designated Activity Company, a designated activity company organized under the laws of Ireland (“CIF”), Caterpillar Finance Kabushiki Kaisha, an entity organized under the laws of Japan (“CFKK”), the financial institutions listed on the signature pages hereof and those financial institutions that become “Added Banks” pursuant to Section 2.05(c), in each case together with their respective successors and assigns (the “Banks”), Citibank, N.A. (“Citibank”), as agent (the “Agent”) for the Banks hereunder, Citibank Europe plc, UK Branch (formerly known as Citibank International Limited), as the Local Currency Agent, and MUFG Bank, Ltd., as the Japan Local Currency Agent, agree as follows: ARTICLE I DEFINITIONS AND ACCOUNTING TERMS SECTION I.01. Certain Defined Terms. 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): “Accumulated Other Comprehensive Income” means (i) with respect to Caterpillar, on any date of determination, the accumulated other comprehensive income(loss) balance as presented in Caterpillar’s financial statements compiled in accordance with generally accepted accounting principles, and (ii) with respect to CFSC, on any date of determination, the aggregate amount, as such amount appears in CFSC’s financial statements, compiled in accordance with generally accepted accounting principles, of (x) CFSC’s translation adjustments related to its foreign currency transactions, (y) adjustments to the market value of CFSC’s derivative instruments and (z) adjustments to the market value of CFSC’s retained interests in securitized receivables. “Activities” has the meaning specified in Section 7.02(b). “Added Bank” means any Bank which becomes a Bank hereunder, or whose Commitment is increased (to the extent of such increase), pursuant to an Assumption and Acceptance as provided in Section 2.05(c). “Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Agent. “Advance” means a Revolving Credit Advance, a Local Currency Advance or a Japan Local Currency Advance. “Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution. 1 “Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. “Agent’s Group” has the meaning specified in Section 7.02(b). “Agreed Currencies” means (i) Dollars, (ii) so long as such currency remains an Eligible Currency, Pounds Sterling and Euro, and (iii) any other Eligible Currency which the Borrowers request the Agent to include as an Agreed Currency hereunder and which is acceptable to each Bank with a Revolving Credit Commitment; provided, that the Agent shall promptly notify each Bank of each such request and each such Bank shall be deemed not to have agreed to each such request unless its written consent thereto has been received by the Agent within five (5) Business Days from the date of such notification by the Agent to such Bank. “Agreement” means this Second Amended and Restated Credit Agreement (Three-Year Facility) as it may from time to time be further amended, restated, supplemented or otherwise modified from time to time. “Allocated Commitment” has the meaning specified in Section 2.01(b). “Allocation” has the meaning specified in Section 2.01(b). “Allocation Percentage” means, with respect to Caterpillar or CFSC at any time, such Borrower’s Allocation at such time divided by the Total Commitment at such time. “Alternative Financial Information Service” means, with respect to an Agreed Currency, a generally recognized financial information service (if any) selected by the Agent in consultation with the Borrowers that reports interest settlement rates for deposits in such Agreed Currency. “Amendment No. 1” means Amendment No. 1 to this Agreement, dated as of the Amendment No. 1 Effective Date. “Amendment No. 1 Effective Date” means the date on which the conditions to effectiveness of Amendment No. 1 were satisfied or waived, which date was September 2, 2021. “Anti-Corruption Laws” means the United States Foreign Corrupt Practices Act of 1977 and all applicable laws, rules, and regulations of any applicable jurisdiction concerning or relating to bribery, corruption or money laundering. “Applicable Lending Office” means, with respect to each Bank, such Bank’s Domestic Lending Office in the case of a Base Rate Advance, such Bank’s Eurocurrency Lending Office in the case of a Eurocurrency Rate Advance, such Bank’s RFR Lending Office in the case of an RFR Advance, such Bank’s (or its Affiliate’s) office, branch or agency, as specified by such Bank in the Local Currency Addendum, in the case of a Local Currency Advance, and such Bank’s (or its Affiliate’s) office, branch or agency, as specified by such Bank in the Japan Local Currency Addendum, in the case of a Japan Local Currency Advance. 2 “Applicable Margin” means, from time to time, with respect to any Advance, the percentages per annum set forth in Schedule II hereto based upon the then applicable Credit Rating for the applicable Borrower and its corresponding Advance; provided that (a) if the respective Credit Ratings for a Borrower issued by S&P and Moody’s differ by one level, then the pricing Level for the higher of such Credit Ratings shall apply; (b) if there is a split in Credit Ratings of more than one level, then the pricing Level that is one level lower than the pricing Level of the higher Credit Rating shall apply; (c) if a Borrower has only one Credit Rating, the pricing Level for such Credit Rating shall apply; and (d) if a Borrower does not have any Credit Rating, pricing Level V shall apply. Each change in the Applicable Margin resulting from a publicly announced change in the Credit Ratings shall be effective during the period commencing on the date of the public announcement thereof and ending on the date immediately preceding the effective date of the next such change. The Applicable Margin for RFR Advances denominated in Pounds Sterling includes a SONIA Credit Adjustment. The Applicable Margin for RFR Advances denominated in Japanese Yen includes a TONAR Credit Adjustment. “Approved Electronic Communications” means each Communication that any Borrower is obligated to, or otherwise chooses to, provide to the Agent pursuant to this Agreement, the Local Currency Addendum or the Japan Local Currency Addendum or the transactions contemplated herein or therein, including any financial statement, financial and other report, notice, request, certificate and other information material; provided, however, that, solely with respect to delivery of any such Communication by any Borrower to the Agent and without limiting or otherwise affecting either the Agent’s right to effect delivery of such Communication by posting such Communication to the Approved Electronic Platform or the protections afforded hereby to the Agent in connection with any such posting, “Approved Electronic Communication” shall exclude (i) any notice that relates to a request for an extension of credit (including any election of an interest rate or Interest Period relating thereto), (ii) any notice of Conversion, Redenomination or continuation, and any other notice, demand, communication, information, document and other material relating to a request for a new, or a Conversion, Redenomination or continuation of an existing, Advance, (iii) any notice pursuant to Section 2.09 and any other notice relating to the payment of any principal or other amount due under this Agreement prior to the scheduled date therefor, (iv) all notices of any Event of Default or unmatured Event of Default, (v) any notice, demand, communication, information, document and other material required to be delivered to satisfy any of the conditions set forth in Article III or any other condition to any Advance or other extension of credit hereunder or any condition precedent to the effectiveness of this Agreement and (vi) service of process. “Approved Electronic Platform” has the meaning specified in Section 8.02(d). “Arrangers” means Citibank, BofA Securities, Inc., JPMorgan, Barclays Bank PLC, MUFG Bank, Ltd., and Société Générale. “Assignment and Acceptance” means an assignment and acceptance entered into by an assigning Bank and an assignee, and accepted by the Agent, in accordance with Section 8.07 and in substantially the form of Exhibit C-1 hereto. “Assumption and Acceptance” means an assumption and acceptance executed by an Added Bank and the Borrowers, and accepted by the Agent, in accordance with Section 2.05(c) and in substantially the form of Exhibit C-2 hereto. 3 “Available Revolving Credit Commitment” means, as to any Bank at any time, such Bank’s Revolving Credit Commitment at such time minus the sum of the aggregate Dollar Amount of such Bank’s outstanding Revolving Credit Advances and, if such Bank is a Local Currency Bank, its Non-Same Day Local Currency Advances. “Available Tenor” means, as of any date of determination and with respect to any then-current Benchmark for any Agreed Currency, as applicable, (x) if any then-current Benchmark is a term rate, any tenor for such Benchmark that is or may be used for determining the length of an Interest Period or (y) otherwise, any payment period for interest calculated with reference to such Benchmark, as applicable, pursuant to this Agreement as of such date. “Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution. “Bail-In Legislation” means (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation, rule or requirement for such EEA Member Country from time to time that is described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings). “Bank” has the meaning specified in the introductory paragraph hereof. To the extent applicable, any reference to a Bank or the Banks includes a reference to a Local Currency Bank, the Local Currency Banks, a Japan Local Currency Bank or the Japan Local Currency Banks, and, to the extent applicable, any reference to a Bank includes a reference to its Affiliate, branch or agency which is a Local Currency Bank or a Japan Local Currency Bank. For the avoidance of doubt, the term “Banks” excludes any Departing Bank. “Bank Addition” has the meaning specified in Section 2.05(c). 1 “Bank Appointment Period” has the meaning specified in Section 7.06. 2 “Bank Insolvency Event” means, with respect to any Bank, that (i) such Bank or its Parent Company has been adjudicated as, or determined by any Governmental Authority having regulatory authority over such Bank or its Parent Company or its assets to be, insolvent, or is generally unable to pay its debts as they become due, or admits in writing its inability to pay its debts as they become due, or makes a general assignment for the benefit of its creditors, or (ii) other than pursuant to an Undisclosed Administration that is not expected to impair or delay a Bank’s ability to satisfy its funding obligations hereunder, such Bank or its Parent Company is the subject of a bankruptcy, insolvency, reorganization, liquidation or similar proceeding, or a receiver, trustee, conservator, intervenor or sequestrator or the like has been appointed for such Bank or its Parent Company, or such Bank or its Parent Company has taken any action in furtherance of or indicating its consent to or acquiescence in any such proceeding or appointment. 4 “Bank of America” means Bank of America, N.A. “Base Rate” means, for any date during any Interest Period or any other period, a fluctuating interest rate per annum as shall be in effect from time to time which rate per annum shall at all times be equal to the highest of:
If the Base Rate is being used as an alternative rate of interest pursuant to Section 2.15(c), then the Base Rate shall be the greater of clause (a) and (b) above and shall be determined without reference to clause (c) above. For the avoidance of doubt, if the Base Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement. “Base Rate Advance” means an Advance in Dollars which bears interest as provided in Section 2.07(a). “Benchmark” means, initially, (i) with respect to amounts denominated in Dollars, USD LIBOR, (ii) with respect to amounts denominated in Pounds Sterling, SONIA, (iii) with respect to amounts denominated in Japanese Yen, TONAR, and (iv) with respect to any amounts denominated in Euro, EURIBOR; provided that if a replacement of an initial or subsequent Benchmark has occurred pursuant to Section 2.15(c), then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate. Any reference to “Benchmark” shall include, as applicable, the published component used in the calculation thereof. “Benchmark Replacement” means, for any Available Tenor: (1) For purposes of clause (i) of Section 2.15(c), the first alternative set forth below that can be determined by the Agent: a) the sum of: (i) Term SOFR and (ii) 0.11448% (11.448 basis points) for an Available Tenor of one-month’s duration, 0.26161% (26.161 basis points) for an Available Tenor of three-months’ duration, 0.42826% (42.826 basis points) for an Available Tenor of six-months’ duration and 0.71513% (71.513 basis points) for an Available Tenor of twelve-months’ duration; provided, that if any Available Tenor of USD LIBOR does not correspond to an Available Tenor of Term SOFR, the Benchmark 5 Replacement for such Available Tenor of USD LIBOR shall be the closest corresponding Available Tenor (based on tenor) for Term SOFR and if such Available Tenor of USD LIBOR corresponds equally to two Available Tenors of Term SOFR, the corresponding tenor of Term SOFR with the shorter duration shall be applied, or b) the sum of: (i) Daily Simple SOFR and (ii) the spread adjustment selected or recommended by the Relevant Governmental Body for the replacement of the tenor of USD LIBOR with a SOFR-based rate having approximately the same length as the interest payment period specified in clause (a) of this definition (which spread adjustment, for the avoidance of doubt, shall be 0.11448% (11.448 basis points); and (2) For purposes of clause (ii) of Section 2.15(c), the sum of (a) the alternate benchmark rate and (b) an adjustment (which may be a positive or negative value or zero), in each case, that has been selected by the Agent and the Borrowers as the replacement for such Available Tenor of such Benchmark giving due consideration to any evolving or then-prevailing market convention, including any applicable recommendations made by the Relevant Governmental Body, for syndicated credit facilities at such time denominated in the applicable Agreed Currency in the U.S. syndicated loan market; provided that, if the Benchmark Replacement as determined pursuant to clause (1) or (2) above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents. “Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Base Rate,” the definition of “Business Day,” the definition of “Interest Period,” the definition of “SONIA”, the definition of “TONAR”, timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the length of lookback periods, the applicability of breakage provisions, the formula for calculating any successor rates identified pursuant to the definition of “Benchmark Replacement”, the formula, methodology or convention for applying the successor Floor to the successor Benchmark Replacement and other technical, administrative or operational matters) that the Agent in its reasonable discretion decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Agent in a manner substantially consistent with market practice (or, if the Agent in its reasonable discretion decides that adoption of any portion of such market practice is not administratively feasible or if the Agent in its reasonable discretion determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents). “Benchmark Transition Event” means, with respect to any then-current Benchmark other than USD LIBOR, the occurrence of one or more of the following events: a public statement or publication of information by or on behalf of the administrator of any then-current Benchmark, the regulatory supervisor for the administrator of such Benchmark, the 6 Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, the central bank for the Agreed Currency applicable to such Benchmark, an insolvency official with jurisdiction over the administrator for such Benchmark, a resolution authority with jurisdiction over the administrator for such Benchmark or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark, announcing or stating that (a) such administrator has ceased or will cease on a specified date to provide all Available Tenors of such Benchmark, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark or (b) all Available Tenors of such Benchmark are or will no longer be representative and that representativeness will not be restored. “Beneficial Ownership Certification” means a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation. “Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230. “Board of Directors” means either the board of directors of a Borrower or any duly authorized committee of that board. “Borrower” means each of Caterpillar, CFSC, CIF and CFKK, and “Borrowers” means all of the foregoing. “Borrower Agent” has the meaning specified in Section 8.09. “Borrowing” means a Revolving Credit Borrowing, a Local Currency Borrowing or a Japan Local Currency Borrowing. “Business Day” means a day of the year (i) on which banks are not required or authorized to close in New York City, New York or Chicago, Illinois, (ii) if the applicable Business Day relates to any Eurocurrency Rate Advance, on which dealings are carried on in the London interbank market, (iii) if the applicable Business Day relates to any Eurocurrency Rate Advance in Euro or any other Agreed Currency other than Dollars or Pounds Sterling, a day on which dealings are carried on in the London interbank market and on which the Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET) System is operating or, as the case may be, on which banks and foreign exchange markets are open for business in the principal financial center for the Agreed Currency concerned, (iv) if the applicable Business Day relates to any RFR Advance, an RFR Business Day, and (v) if the applicable Business Day relates to a Japan Local Currency Advance, on which banks are generally open in Tokyo for the conduct of substantially all of their commercial lending activities and on which dealings in Japanese Yen are carried on in the Tokyo interbank market. “Capitalization” means, as at any date, the sum of (i) Caterpillar Consolidated Debt at such date, plus (ii) stockholders’ equity (including preferred stock) of Caterpillar at such date. “Caterpillar Consolidated Debt” means, as at any date, the aggregate Debt of Caterpillar and its Subsidiaries (other than CFSC) at such date. 7 “Caterpillar Purchase Claims” means the outstanding liens on or claims against or in respect of any of the accounts receivable of Caterpillar or any of its Subsidiaries (excluding CFSC and CFSC’s Subsidiaries) arising out of the sale or securitization by Caterpillar or any of its Subsidiaries (excluding CFSC and CFSC’s Subsidiaries) of such accounts receivable. “CFKK Event of Default” means an Event of Default with respect to CFKK. “CFSC Consolidated Debt” means, for any period of determination, the aggregate Debt of CFSC and its Subsidiaries determined on a consolidated basis for such period. The calculation of CFSC Consolidated Debt shall exclude any non-recourse secured borrowings related to the securitization of accounts receivable which have been legally sold to a bankruptcy remote special purpose vehicle. For purposes of this definition, retained interest in a securitization is not considered “recourse”. “CFSC Event of Default” means an Event of Default with respect to CFSC. “CFSC Guaranty” means the guaranty by CFSC of the obligations of (a) CIF under this Agreement and the Local Currency Addendum and (b) CFKK under this Agreement and the Japan Local Currency Addendum, which guaranty is contained in Article IX. “CFSC Purchase Claims” means the outstanding liens on or claims against or in respect of any of the accounts receivable of CFSC or any of its Subsidiaries arising out of the sale or securitization by CFSC or any such Subsidiaries of such accounts receivable. “Change of Control” means (a) with respect to CFSC, that Caterpillar shall cease to own free and clear of all liens, claims, security interests or other encumbrances, 100% of the outstanding shares of voting stock of CFSC on a fully diluted basis, (b) with respect to CIF, that CFSC shall cease to own, free and clear of all liens, claims, security interests or other encumbrances, directly or indirectly through a wholly-owned Subsidiary of CFSC, 100% of the outstanding shares of voting stock of CIF on a fully diluted basis and (c) with respect to CFKK, that either (i) CFSC and Caterpillar, in the aggregate, shall cease to own, free and clear of all liens, claims, security interests or other encumbrances, directly or indirectly through one or more Subsidiaries of CFSC or Caterpillar, 90% or more of the outstanding shares of voting of stock of CFKK on a fully diluted basis or (ii) CFSC shall cease to own, free and clear of all liens, claims, security interests or other encumbrances, directly or indirectly through one or more of its Subsidiaries, 80% or more of the outstanding shares of voting stock of CFKK on a fully diluted basis. “CIF Event of Default” means an Event of Default with respect to CIF. “Closing Date” means September 5, 2019. “Co-Syndication Agents” means Bank of America and JPMorgan. “Code” means the Internal Revenue Code of 1986, as amended from time to time, and any successor statute. “Commitment” means, for each Bank, the obligation of such Bank to make (a) Revolving Credit Advances, (b) if it is a Local Currency Bank, Local Currency Advances and 8 (c) if it is a Japan Local Currency Bank, Japan Local Currency Advances, in an aggregate amount not to exceed the amount set forth opposite such Bank’s name under the “Commitment” heading on Schedule I hereto, or on the signature page of the Assignment and Acceptance or Assumption and Acceptance by which it became a Bank hereunder, as such amount may be increased or reduced pursuant to the terms of this Agreement. 3 “Commitment Fee” has the meaning specified in Section 2.04(a). 4 “Commitment Fee Rate” has the meaning specified in Section 2.04(a). 5 “Communications” means each notice, demand, communication, information, document and other material provided for hereunder or under the Local Currency Addendum or the Japan Local Currency Addendum or otherwise transmitted between the parties hereto relating to this Agreement, the Local Currency Addendum or the Japan Local Currency Addendum, any Borrower or its Affiliates, or the transactions contemplated by this Agreement, the Local Currency Addendum or the Japan Local Currency Addendum, including, without limitation, all Approved Electronic Communications. “Consolidated Net Tangible Assets” means as of any particular time, for any Borrower, the aggregate amount of assets after deducting therefrom (a) all current liabilities, (b) any current liability which has been reclassified as a long term liability because such liability by its terms is extendable or renewable at the option of the obligor thereon to a time more than 12 months after the time as of which the amount thereof is being computed, and (c) all goodwill, excess of cost over assets acquired, patents, copyrights, trademarks, trade names, unamortized debt discount and expense and other like intangibles, all as shown in the most recent consolidated financial statements of such Borrower and its Subsidiaries prepared in accordance with generally accepted accounting principles. “Consolidated Net Worth” means as at any date, (i) for Caterpillar, the consolidated stockholders’ equity (including preferred stock but excluding “Pension and other post-retirement benefits” that are reflected in “Accumulated Other Comprehensive Income (loss)”) of Caterpillar at such date, and (ii) for CFSC, the stockholders’ equity (including preferred stock but excluding “Accumulated Other Comprehensive Income” and non-controlling interests as defined in accordance with generally accepted accounting principles) of CFSC on such date. “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto. “Convert”, “Conversion”, and “Converted” each refer to a conversion of Advances of one Type into Advances of another Type pursuant to Section 2.10 or 2.15(a). “Credit Rating” means, at any time, with respect to Caterpillar or CFSC, the credit rating on such Borrower’s long-term senior unsecured debt then most recently publicly announced by either Moody’s or S&P, and “Credit Ratings” means with respect to each such Borrower, such credit ratings from both Moody’s and S&P. In the case of each of CFKK and 9 CIF, “Credit Rating” and “Credit Ratings” mean, at any time, the Credit Rating and Credit Ratings of CFSC at such time, as determined pursuant to the preceding sentence. “Current Termination Date” means, with respect to any Bank at any time, September 2, 2024 or such later date to which the “Current Termination Date” shall then have been extended with the consent of such Bank pursuant to Section 2.16. “Daily Simple RFR” means, for any day (an “RFR Rate Day”), a rate per annum equal to, for any Obligation, interest, fees, commissions or other amounts denominated in, or calculated with respect to, (a) Pounds Sterling, the greater of (i) SONIA for the day (such day “i“) that is five RFR Business Days prior to (A) if such RFR Rate Day is an RFR Business Day, such RFR Rate Day or (B) if such RFR Rate Day is not an RFR Business Day, the RFR Business Day immediately preceding such RFR Rate Day, in each case, as such SONIA is published by the SONIA Administrator on the SONIA Administrator’s Website, and (ii) the Floor, and (b) Japanese Yen, the greater of (i) TONAR for the day (such day “i“) that is five RFR Business Days prior to (A) if such RFR Rate Day is an RFR Business Day, such RFR Rate Day or (B) if such RFR Rate Day is not an RFR Business Day, the RFR Business Day immediately preceding such RFR Rate Day, in each case, as such TONAR is published by the TONAR Administrator on the TONAR Administrator’s Website, and (ii) the Floor. If by 5:00 pm (local time for the applicable RFR) on the second (2nd) RFR Business Day immediately following any day “i“, the RFR in respect of such day “i” has not been published on the applicable RFR Administrator’s Website and a Benchmark Replacement Date with respect to the applicable Daily Simple RFR has not occurred, then the RFR for such day “i” will be the RFR as published in respect of the first preceding RFR Business Day for which such RFR was published on the RFR Administrator’s Website; provided that any RFR determined pursuant to this sentence shall be utilized for purposes of calculation of Daily Simple RFR for no more than three (3) consecutive RFR Rate Days. Any change in Daily Simple RFR due to a change in the applicable RFR shall be effective from and including the effective date of such change in the RFR without notice to the Borrowers. “Daily Simple SOFR” means, for any day, SOFR, with the conventions for this rate (which will include a lookback) being established by the Agent in accordance with the conventions for this rate selected or recommended by the Relevant Governmental Body for determining “Daily Simple SOFR” for syndicated business loans; provided, that if the Agent decides that any such convention is not administratively feasible for the Agent, then the Agent may establish another convention in its reasonable discretion. “Debt” means (i) indebtedness for borrowed money, (ii) obligations evidenced by bonds, debentures, notes or other similar instruments, (iii) obligations to pay the deferred purchase price of property or services, (iv) obligations as lessee under leases which shall have been or should be, in accordance with generally accepted accounting principles, recorded as capital leases, (v) obligations under direct or indirect guaranties in respect of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or obligations of others of the kinds referred to in clauses (i) through (iv) above, and (vi) liabilities in respect of unfunded vested benefits under Plans covered by Title IV of ERISA; provided, however, for purposes of Sections 5.03 and 5.04(a) and (b) only, clause (vi) above shall include only those liabilities of the applicable Borrower and all ERISA Affiliates for such Borrower’s then current fiscal year (and, if such liabilities are still 10 outstanding, for prior fiscal years) to (a) all single employer plans (as defined in Section 4001(a)(15) of ERISA) to meet the minimum funding standard requirements of Section 412(a) of the Code (without regard to any waiver under Section 412(c) of the Code) and (b) all multiemployer plans (as defined in Section 4001(a)(3) of ERISA) for all required contributions and payments. “Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, examinership or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally. “Defaulting Bank” means, at any time, subject to Section 2.17(d), (i) any Bank that has failed for two or more consecutive Business Days to comply with its obligations under this Agreement to make available its ratable portion of a Borrowing (each, a “funding obligation”), unless such Bank has notified the Agent and a Borrower in writing that such failure is the result of such Bank’s determination that one or more conditions precedent to funding has not been satisfied (which conditions precedent, together with the applicable default, if any, will be specifically identified in such writing), (ii) any Bank that has notified the Agent or a Borrower in writing, or has stated publicly, that it does not intend to comply with its funding obligations hereunder, unless such writing or statement states that such position is based on such Bank’s determination that one or more conditions precedent to funding cannot be satisfied (which conditions precedent, together with the applicable default, if any, will be specifically identified in such writing or public statement), (iii) any Bank that has, for three or more Business Days after written request of the Agent or a Borrower, failed to confirm in writing to the Agent and the Borrowers that it will comply with its prospective funding obligations hereunder (provided that such Bank shall cease to be a Defaulting Bank pursuant to this clause (iii) upon the Agent’s and the Borrowers’ receipt of such written confirmation), (iv) any Bank with respect to which a Bank Insolvency Event has occurred and is continuing with respect to such Bank or its Parent Company, or (v) any Bank that has become the subject of a Bail-In Action; provided that a Bank shall not be a Defaulting Bank solely by virtue of the ownership or acquisition of any equity interest in such Bank or its Parent Company by a Governmental Authority or an instrumentality thereof. Any determination by the Agent that a Bank is a Defaulting Bank under any of clauses (i) through (v) above will be conclusive and binding absent manifest error, and such Bank will be deemed to be a Defaulting Bank (subject to Section 2.17(d)) upon notification of such determination by the Agent to the Borrowers and the Banks. The Agent will promptly send to all parties hereto a copy of any notice to the Borrowers provided for in this definition. “Departing Bank” means each “Bank” under the Existing Credit Agreement that does not have a Commitment hereunder and is identified on the Departing Bank Schedule hereto. “Departing Bank Schedule” means Schedule III hereto, which schedule identifies each Departing Bank as of the Closing Date. “Designated Persons” means a Person: (i) listed in the annex to, or otherwise the subject of the provisions of, any Executive Order; 11
“Dollar Amount” means, for any currency at any date (i) the amount of such currency if such currency is Dollars or (ii) the Equivalent Amount of Dollars if such currency is any currency other than Dollars. “Dollars” and the sign “$” each means lawful money of the United States of America. “Domestic Lending Office” means, with respect to any Bank, the office of such Bank specified as its “Domestic Lending Office” on its respective signature page hereto or such other office of such Bank as such Bank may from time to time specify to the Borrowers and the Agent. “Earlier Termination Date” has the meaning specified in Section 2.16(c). “Early Opt-in Effective Date” means, with respect to any Early Opt-in Election, the sixth (6th) Business Day after the date notice of such Early Opt-in Election is provided to the Banks, so long as the Agent has not received, by 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Early Opt-in Election is provided to the Banks, written notice of objection to such Early Opt-in Election from Banks comprising the Majority Banks. “Early Opt-in Election” means, if the then-current Benchmark is a LIBOR, the occurrence of the following: (1) (a) with respect to Dollars, a notification by the Agent to (or the request by the Borrowers to the Agent to notify) each of the other parties hereto that at least five currently outstanding Dollar-denominated syndicated credit facilities in the U.S. syndicated loan market at such time contain (as a result of amendment or as originally executed) a SOFR-based rate (including SOFR, a term SOFR or any other rate based upon SOFR) as a benchmark rate (and such syndicated credit facilities are identified in such notice and are publicly available for review); or (b) with respect to a Non-Hardwired Currency, a notification by the Agent to (or the request by the Borrowers to the Agent to notify) each of the other parties hereto that at least five currently outstanding syndicated credit facilities which include such Non-Hardwired Currency at such time in the U.S. syndicated loan market contain or are being executed or amended, as applicable, to incorporate or adopt a new benchmark interest rate to replace the then current Benchmark with respect to such Non-Hardwired Currency as a benchmark rate (and such 12 syndicated credit facilities are identified in such notice and are publicly available for review), and (2) in each case, the joint election by the Agent and the Borrowers to trigger a fallback from the applicable LIBOR and the provision by the Agent of written notice of such election to the Banks. “EEA Financial Institution” means (a) any institution established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent. “EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway. “EEA Resolution Authority” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution. “Eligible Currency” means any currency other than Dollars with respect to which the Agent or a Borrower has not given notice in accordance with Section 2.15(a) and that is readily available, freely traded, in which deposits are customarily offered to banks in the London interbank market, convertible into Dollars in the international interbank market, available to the Banks in such market and as to which an Equivalent Amount may be readily calculated. If, after the designation by the Banks of any currency as an Agreed Currency or Local Currency:
Each of the events described in clauses (i) and (ii) above shall be referred to herein as a “Disqualifying Event”. 13 “Eligible Financial Institution” means, as of the date of any assignment as contemplated in Section 8.07(a)(i), a commercial bank or financial institution (i) with a credit rating on its long-term senior unsecured debt of either (a) “BBB+” or better from S&P or (b) “Baa1” or better from Moody’s; and (ii) having shareholders’ equity of not less than $5,000,000,000. “Equivalent Amount” means, for any currency with respect to any amount of Dollars at any date, the equivalent in such currency of such amount of Dollars, calculated on the basis of the arithmetic mean of the buy and sell spot rates of exchange of the Agent, the Local Currency Agent or the Japan Local Currency Agent, as applicable (by reference to an appropriate Bloomberg screen, Alternative Financial Information Service screen or other generally recognized financial information service selected by the Agent, the Local Currency Agent or the Japan Local Currency Agent, as applicable, in consultation with the Borrowers), in the London interbank market (or other market where the Agent’s or the Local Currency Agent’s, as applicable, foreign exchange operations in respect of such currency are then being conducted) or, in the case of Japanese Yen, in the Tokyo interbank market for such other currency at or about 11:00 a.m. (local time applicable to the transaction in question) two (2) Business Days prior to the date on which such amount is to be determined (provided that if an Equivalent Amount is being determined with respect to (x) the making of a Local Currency Advance in Pounds Sterling or Euro, such amount shall be determined at or about 11:00 a.m. (London time) for Pounds Sterling, and 11:00 a.m. (Brussels time) for Euro, on the date of such Local Currency Advance or (y) the making of a Japan Local Currency Advance on a same-day basis, such amount shall be determined at or about 11:00 a.m. (Tokyo time) on the date of such Japan Local Currency Advance), rounded up to the nearest amount of such currency as determined by the Agent, the Local Currency Agent or the Japan Local Currency Agent, as applicable, from time to time; provided, however, that if at the time of any such determination, for any reason, no such spot rate is being quoted, the Agent or the Local Currency Agent (or the Japan Local Currency Agent, if applicable) may use any reasonable method it deems appropriate (after consultation with the Borrowers) to determine such amount, and such determination shall be conclusive, absent manifest error. “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor statute. “ERISA Affiliate” means each trade or business (whether or not incorporated) which, together with a Borrower or a Subsidiary of such Borrower, would be deemed to be a “single employer” within the meaning of Section 4001 of ERISA. “ERISA Termination Event” means (i) a “Reportable Event” described in Section 4043 of ERISA and the regulations issued thereunder (other than a “Reportable Event” not subject to the provision for 30-day notice to the PBGC under such regulations), or (ii) the withdrawal of a Borrower or any of its ERISA Affiliates from a “single employer plan” during a plan year in which it was a “substantial employer”, both of such terms as defined in Section 4001(a) of ERISA, or (iii) the filing of a notice of intent to terminate a Plan or the treatment of a Plan amendment as a termination under Section 4041 of ERISA, or (iv) the institution of proceedings to terminate a Plan by the PBGC or (v) any other event or condition which might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan or (vi) the partial or complete withdrawal of a Borrower or any 14 ERISA Affiliate of such Borrower from a “multiemployer plan” as defined in Section 4001(a) of ERISA. “Erroneous Payment” has the meaning assigned to it in Section 7.11(a). “Erroneous Payment Deficiency Assignment” has the meaning assigned to it in Section 7.11 (d)(i). “Erroneous Payment Impacted Class” has the meaning assigned to it in Section 7.11(d)(i). “Erroneous Payment Return Deficiency” has the meaning assigned to it in Section 7.11(d)(i). “Erroneous Payment Subrogation Rights” has the meaning assigned to it in Section 7.11(e). “EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time. “Euro” means the Euro referred to in the Council Regulation E.C. No. 1103/97 dated 17 June 1997 passed by the Council of the European Union, or, if different, the then lawful currency of the member states of the European Union that participate in the third stage of the Economic and Monetary Union. “Eurocurrency Base Rate” means, with respect to a Eurocurrency Rate Advance for the relevant Interest Period:
15 Any Eurocurrency Base Rate determined on the basis of the rate displayed on a Bloomberg screen (or other applicable screen) in accordance with the foregoing provisions of this subparagraph shall be subject to corrections, if any, made in such rate and displayed by Bloomberg (or other applicable service) within one hour of the time when such rate is first displayed by such service; provided, that, if such rate is below zero, it will be deemed to be zero. “Eurocurrency Lending Office” means, with respect to any Bank, the office of such Bank specified as its “Eurocurrency Lending Office” on its respective signature page hereto (or, if no such office is specified, its Domestic Lending Office), or such other office of such Bank as such Bank may from time to time specify to the Borrowers and the Agent. A Bank may specify different offices for its Advances denominated in Dollars and its Advances denominated in other Agreed Currencies, respectively, and the term “Eurocurrency Lending Office” shall refer to any or all such offices, collectively, as the context may require when used in respect of such Bank. “Eurocurrency Liabilities” has the meaning assigned to that term in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time. “Eurocurrency Rate” means, with respect to a Revolving Credit Advance or a Local Currency Advance for the relevant Interest Period, an interest rate obtained by dividing (i) the Eurocurrency Base Rate applicable to such Interest Period by (ii) a percentage equal to 100% minus the Eurocurrency Rate Reserve Percentage, such Eurocurrency Rate to be adjusted automatically on and as of the effective date of any change in the Eurocurrency Rate Reserve Percentage; provided, that if such rate is below zero, it will be deemed to be zero. “Eurocurrency Rate Advance” means a Revolving Credit Advance denominated in Dollars or in an Agreed Currency which bears interest as provided in Section 2.07(b) or a Local Currency Advance which bears interest as provided in Section 2.07(b) and the Local Currency Addendum. “Eurocurrency Rate Reserve Percentage” means, for any date:
16 Authority and/or the Prudential Regulation Authority, the European Central Bank or any other applicable Governmental Authority. “Events of Default” has the meaning specified in Section 6.01. “Executive Order” is defined in the definition of “Sanctions Laws and Regulations”. “Existing Credit Agreement” means that certain Amended and Restated Credit Agreement (Three-Year Facility), dated as of September 10, 2015, among Caterpillar, CIF, CFSC and CFKK, as borrowers thereunder, certain financial institutions party thereto, MUFG, as Japan Local Currency Agent, Citibank Europe plc, UK Branch, as Local Currency Agent, and Citibank, as agent for such financial institutions, as amended from time to time prior to the date hereof. “Extended Termination Date” has the meaning specified in Section 2.16(c). “Extension Confirmation Date” has the meaning specified in Section 2.16(b). “Extension Confirmation Notice” has the meaning specified in Section 2.16(b). “Extension Request” has the meaning specified in Section 2.16(a). “Facility Termination Date” means the earlier to occur of (i) the Current Termination Date then in effect and (ii) the date of termination in whole of the Commitments pursuant to Section 2.05(a) or 6.01. “FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code. “Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York. “Five-Year Agreement” is defined in the definition of “Other Credit Agreements”. “Floor” means the benchmark rate floor, if any, provided in this Agreement initially (as of the execution of this Agreement, the modification, amendment or renewal of this Agreement or otherwise) with respect to the initial Benchmark for each Agreed Currency provided for hereunder. The Floor equals 0% for all Agreed Currencies as of the date hereof. “Governmental Authority” means any federal, state, municipal, national or other government, governmental department, commission, board, bureau, court, agency or instrumentality or political subdivision thereof or any entity, officer or examiner exercising 17 executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government or any court, in each case whether associated with a state of the United States, the United States, or a foreign entity or government (including any supra-national bodies such as the European Union or the European Central Bank). “Information Memorandum” means the Confidential Information Memorandum dated July 2021 in the form approved by the Borrowers concerning the Borrowers and their Subsidiaries which, at the Borrowers’ request and on their behalf, was prepared in relation to the transactions contemplated by this Agreement, as amended pursuant to Amendment No. 1, and distributed by the Arranger to selected financial institutions before the date of this Agreement. “Insignificant Subsidiary” means, on any date, any Subsidiary of Caterpillar or CFSC whose aggregate asset value, as reasonably calculated by Caterpillar in accordance with generally accepted accounting principles, is at less than or equal to $50,000,000 on such date. “Interest Expense” means, for any period of determination, all interest (without duplication), whether paid in cash or accrued as a liability, attributable to CFSC Consolidated Debt (including imputed interest on any capital lease of CFSC or its Subsidiaries) in accordance with generally accepted accounting principles. “Interest Period” means, for each Advance, other than an RFR Advance, comprising part of the same Borrowing, the period commencing on the date of such Advance, or the date of the Conversion, continuation or Redenomination, as applicable, of such Advance, and ending on the last day of the period selected by a Borrower pursuant to the provisions below. The duration of each such Interest Period shall be (a) in the case of a Base Rate Advance or a Japan Base Rate Advance, 30 days, (b) in the case of a Eurocurrency Rate Advance in Euro, 1, 3 or 6 months and (c) in the case of any other Eurocurrency Rate Advance, 1, 3 or 6 months, in each case as a Borrower may, in the Notice of Borrowing requesting such Advance, select; provided, however, that:
“Interpolated Rate” means, at any time, with respect to any Eurocurrency Rate Advance denominated in any Agreed Currency and for any Interest Period, the rate per annum determined by the Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the Screen Rate for the longest period (for which that Screen Rate is available for the applicable 18 Agreed Currency) that is shorter than the Interest Period and (b) the Screen Rate for the shortest period (for which that Screen Rate is available for the applicable Agreed Currency) that exceeds the Interest Period, with such rates being determined on the days and times set forth in the definition of Eurocurrency Base Rate. “Japan Base Rate” means, for any Interest Period or any other period, a fluctuating interest rate per annum equal to the rate of interest announced publicly by MUFG in Tokyo, Japan, from time to time, as MUFG’s short-term base rate. “Japan Base Rate Advance” means a Japan Local Currency Advance which bears interest as provided in Section 2.07(a). “Japan Local Currency Addendum” means the local currency addendum dated as of the date hereof among CFKK, CFSC, the Japan Local Currency Banks named therein, the Japan Local Currency Agent and the Agent, substantially in the form of Exhibit G-2. “Japan Local Currency Advance” means any Advance in Japanese Yen, made to CFKK pursuant to Sections 2.03C and 2.03D and the Japan Local Currency Addendum. “Japan Local Currency Agent” means MUFG, as agent under the Japan Local Currency Addendum, or any successor agent under the Japan Local Currency Addendum. “Japan Local Currency Bank” means each Bank (or any Affiliate, branch or agency thereof) party to the Japan Local Currency Addendum. In the event any agency, branch or Affiliate of a Bank shall be party to the Japan Local Currency Addendum, such agency, branch or Affiliate shall, to the extent of any commitment extended and any Advances made by it, have all the rights of such Bank hereunder; provided, however, that, except as otherwise expressly provided herein, such Bank shall continue, to the exclusion of such agency or Affiliate, to have all the voting and consensual rights vested in it by the terms hereof. “Japan Local Currency Borrowing” means a borrowing comprised of simultaneous Japan Local Currency Advances made to CFKK by each of the Japan Local Currency Banks pursuant to Sections 2.03C and 2.03D and the Japan Local Currency Addendum. “Japan Local Currency Commitment” has the meaning specified in Section 2.03C(a). “Japanese Yen” means the lawful currency of Japan. “Joint Fee Letter” means the Joint Fee Letter, dated July 20, 2021, among the Borrowers, Citibank, Bank of America, JPMorgan, and certain of the Arrangers. “JPMorgan” means JPMorgan Chase Bank, N.A. “Leverage Ratio” has the meaning specified in Section 5.04(a). 19 “LIBOR” means USD LIBOR, EURIBOR, and any other Eurocurrency Rate in effect from time to time for an Agreed Currency not covered by the foregoing and not corresponding with an RFR. “Loan Documents” means this Agreement, the Local Currency Addendum, the Japan Local Currency Addendum, and the Notes, as each may be amended, restated, supplemented or otherwise modified from time to time. “Local Currency” means (i) only so long as such currency remains an Eligible Currency, Pounds Sterling or Euro and (ii) any other Agreed Currency which CIF requests the applicable Local Currency Banks to include as a Local Currency hereunder and which is reasonably acceptable to each such Local Currency Bank. “Local Currency Addendum” means the local currency addendum dated as of the date hereof among CIF, CFSC, the Local Currency Banks named therein, the Local Currency Agent and the Agent, substantially in the form of Exhibit G-1. “Local Currency Advance” means any Advance in a Local Currency, made to CIF pursuant to Sections 2.03A and 2.03B and the Local Currency Addendum. “Local Currency Agent” means Citibank Europe plc, UK Branch, as agent under the Local Currency Addendum, or any successor agent under the Local Currency Addendum. “Local Currency Bank” means each Bank (or any affiliate, branch or agency thereof) party to the Local Currency Addendum. In the event any agency, branch or affiliate of a Bank shall be party to the Local Currency Addendum, such agency, branch or affiliate shall, to the extent of any commitment extended and any Advances made by it, have all the rights of such Bank hereunder; provided, however, that, except as otherwise expressly provided herein, such Bank shall continue to the exclusion of such agency or Affiliate to have all the voting and consensual rights vested in it by the terms hereof. “Local Currency Borrowing” means a borrowing comprised of simultaneous Local Currency Advances made to CIF by each of the Local Currency Banks pursuant to Sections 2.03A and 2.03B and the Local Currency Addendum. “Local Currency Commitment” has the meaning specified in Section 2.03A(a). “Majority Banks” means at any time Banks holding more than 50% of the Commitments, or if the Commitments have been terminated, Banks holding more than 50% of the then aggregate unpaid principal amount of the Advances. “Majority Japan Local Currency Banks” means Japan Local Currency Banks holding more than 50% of the Japan Local Currency Commitments. “Majority Local Currency Banks” means Local Currency Banks holding more than 50% of the Local Currency Commitments. “Margin Stock” has the meaning set forth in Regulation U of the Board of Governors of the Federal Reserve System, as in effect from time to time. 20 “Moody’s” means Moody’s Investors Service, Inc. or any successor thereto, and if Moody’s ceases to issue ratings of the type described herein with respect to the Borrowers, then the Borrowers and the Agent, with the consent of the Majority Banks, shall agree upon a mutually acceptable replacement debt rating agency and shall further agree, upon determination of such replacement agency, to determine appropriate equivalent ratings levels to replace those contained herein. “MUFG” means MUFG Bank, Ltd. “Net Gain/(Loss) From Interest Rate Derivatives” has the meaning as reflected in the financial caption Other income(expense), in CFSC’s Consolidated Statement of Profit as compiled under generally accepted accounting principles. “Non-Defaulting Bank” means, at any time, a Bank that is not a Defaulting Bank. “Non-Hardwired Currencies” means Euro and any other Agreed Currency from time to time that is not Dollars or an Agreed Currency corresponding with an RFR. “Non-Same Day Local Currency Advances” means Local Currency Advances other than Same Day Local Currency Advances. “Note” has the meaning specified in Section 2.02(f). “Notice of Allocation” has the meaning specified in Section 2.01(b). “Notice of Bank Addition” has the meaning specified in Section 2.05(c). “Notice of Borrowing” means a Notice of Local Currency Borrowing, a Notice of Japan Local Currency Borrowing or a Notice of Revolving Credit Borrowing, as applicable. “Notice of Japan Local Currency Borrowing” has the meaning specified in Section 2.03D(a). “Notice of Local Currency Borrowing” has the meaning specified in Section 2.03B(a). “Notice of Revolving Credit Borrowing” has the meaning specified in Section 2.02(a). “Obligations” means all advances to, and debts, liabilities and obligations of, the Borrowers arising under any Loan Document or otherwise with respect to any Advance, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against the Borrowers or any Affiliate thereof of any proceeding under any debtor relief laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed or allowable claims in such proceeding. Without limiting the foregoing, the Obligations include (a) the obligation to pay principal, interest, charges, expenses, fees, indemnities and other amounts payable by the Borrowers under any Loan Document and (b) 21 the obligation of the Borrowers to reimburse any amount in respect of any of the foregoing that the Agent or any Bank, in each case in its sole discretion, may elect to pay or advance on behalf of the Borrowers. “OFAC” is defined in the definition of “Sanctions Laws and Regulations”. “Other Credit Agreements” means (a) that certain Credit Agreement (2021 364-Day Facility), dated as of September 2, 2021, among the Borrowers, as borrowers thereunder, certain financial institutions party thereto, MUFG, as Japan Local Currency Agent, Citibank Europe plc, UK Branch, as Local Currency Agent, and Citibank, as agent for such banks, and (b) that certain Second Amended and Restated Credit Agreement (Five-Year Facility), dated as of September 5, 2019 (the “Five-Year Agreement”), among the Borrowers, as borrowers thereunder, certain financial institutions party thereto, MUFG, as Japan Local Currency Agent, Citibank Europe plc, UK Branch, as Local Currency Agent, and Citibank, as agent for such banks, in each case, as the same may be amended, restated, supplemented or otherwise modified from time to time. “Other Rate Early Opt-in Election” means an Early Opt-in Election has occurred under clause (1)(b) and (2) of the definition of “Early Opt-in Election”. “Parent Company” means, with respect to a Bank, the bank holding company (as defined in Federal Reserve Board Regulation Y), if any, of such Bank and/or any Person owning, beneficially or of record, directly or indirectly, a majority of the shares of such Bank. “Payment Office” means (a) with respect to Advances other than Same Day Local Currency Advances and Japan Local Currency Advances, (i) for Dollars, the principal office of Citibank in New York City, located on the date hereof at 388 Greenwich Street, New York, New York 10013, (ii) for any other Agreed Currency, the office of Citibank located on the date hereof at 1615 Brett Road, Building No. 3, New Castle, Delaware 19720; (b) with respect to Same Day Local Currency Advances, the office of the Local Currency Agent set forth in the Local Currency Addendum; and (c) with respect to any Japan Local Currency Advance, the office of the Japan Local Currency Agent set forth in the Japan Local Currency Addendum, or in any case, such other office of the Agent, the Local Currency Agent or the Japan Local Currency Agent, as applicable, as shall be from time to time selected by it by written notice to the Borrowers and the Banks. “Payment Recipient” has the meaning assigned to it in Section 7.11(a). “PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto. “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. “Plan” means any multiemployer plan or single employer plan, each as defined in Section 4001 and subject to Title IV of ERISA, which is maintained, or at any time during the five calendar years preceding the date of this Agreement was maintained, for employees of a Borrower or a Subsidiary of such Borrower or an ERISA Affiliate. 22 “Plan Asset Regulations” means 29 CFR § 2510.3-101 et seq., as modified by Section 3(42) of ERISA, as amended from time to time. “Pounds Sterling” means the lawful currency of the United Kingdom. “Prior 364-Day Agreement” means that certain Credit Agreement (2018 364-Day Facility), dated as of September 6, 2018, among Caterpillar, CFSC, CFKK and CIF, as borrowers, the financial institutions party thereto, MUFG, as Japan Local Currency Agent, Citibank Europe plc, UK Branch, as Local Currency Agent, and Citibank, as agent for such financial institutions. “Prior Five-Year Agreement” means that certain Amended and Restated Credit Agreement (Five-Year Facility), dated as of September 10, 2015, among Caterpillar, CFSC, CFKK and CIF, as borrowers, the financial institutions party thereto, MUFG, as Japan Local Currency Agent, Citibank Europe plc, UK Branch, as Local Currency Agent, and Citibank, as agent for such financial institutions, as amended from time to time prior to the date hereof. “Purchase Claims” means Caterpillar Purchase Claims or CFSC Purchase Claims, or both, as applicable. “Redenominate,” “Redenomination” and “Redenominated” each refer to a redenomination comprising all or part of the same Borrowing from an Agreed Currency to Dollars or from Dollars to another Agreed Currency, or the continuation of such Advances in the same Agreed Currency, in each case pursuant to Section 2.10 or 2.15. “Register” has the meaning specified in Section 8.07(c). “Related Parties” means, with respect to any Person, such Person’s Affiliates and such Person’s and such Person’s Affiliates’ respective managers, administrators, members, trustees, partners, directors, officers, employees, agents, fund managers and advisors. “Relevant Governmental Body” means (a) with respect to a Benchmark Replacement in respect of Dollars, the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or any successor thereto and (b) with respect to a Benchmark Replacement in respect of any other Agreed Currency, (1) the central bank, regulator or other supervisory authority for the Agreed Currency in which such amounts are denominated hereunder or any central bank or other supervisor which is responsible for supervising either (A) such Benchmark Replacement or (B) the administrator of such Benchmark Replacement or (2) any working group or committee officially endorsed or convened by (A) the central bank for the Agreed Currency in which such amounts are denominated, (B) any central bank or other supervisor that is responsible for supervising either (i) such Benchmark Replacement or (ii) the administrator of such Benchmark Replacement, (C) a group of those central banks or other supervisors or (D) the Financial Stability Board or any part thereof. “Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority. 23 6 “Restricting Information” means material non-public information with respect to any of the Borrowers or their securities. “Revolving Credit Advance” means an advance by a Bank to a Borrower as part of a Revolving Credit Borrowing and refers to a Base Rate Advance, a Eurocurrency Rate Advance, or an RFR Advance, each of which shall be a “Type” of Advance. “Revolving Credit Borrowing” means a borrowing consisting of simultaneous Revolving Credit Advances of the same Type made to a Borrower by each of the Banks pursuant to Section 2.01. “Revolving Credit Commitment” means, for each Bank, the obligation of such Bank to make Revolving Credit Advances and, if such Bank is a Local Currency Bank, Non-Same Day Local Currency Advances, in an aggregate amount not to exceed the amount set forth opposite such Bank’s name under the “Revolving Credit Commitment” heading on Schedule I hereto, or on the signature page of the Assignment and Acceptance or Assumption and Acceptance by which it became a Bank hereunder, as such amount may be increased or reduced pursuant to the terms of this Agreement; provided, however, that if such Bank’s Same Day Local Currency Commitment or Japan Local Currency Commitment is terminated in whole or in part without a corresponding reduction or termination of the Commitments, then such Bank’s Revolving Credit Commitment shall equal the sum of (x) the amount set forth as such Bank’s Revolving Credit Commitment on Schedule I to this Agreement or on such Bank’s signature page to its Assignment and Acceptance or its Assumption and Acceptance, as applicable, plus (y) the amount of such Bank’s terminated Same Day Local Currency Commitment or Japan Local Currency Commitment, as applicable. No such change shall result in a Bank’s Revolving Credit Commitment exceeding its Commitment. For each Bank that is not a Local Currency Bank or Japan Local Currency Bank, such Bank’s Revolving Credit Commitment will be equal to its Commitment. For each Bank that is Local Currency Bank or a Japan Local Currency Bank, such Bank’s Revolving Credit Commitment will be equal to its Commitment minus the sum of its Same Day Local Currency Commitment and its Japan Local Currency Commitment. “Revolving Credit Obligations” means, at any time, the aggregate outstanding Advances at such time minus the sum of the outstanding Same Day Local Advances and the outstanding Japan Local Currency Advances at such time. “Revolving Credit Termination Date” means the earlier to occur of (i) the Current Termination Date then in effect and (ii) the date of termination in whole of the Commitments pursuant to Section 2.05(a) or 6.01. “RFR” means, for any Obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to, (a) Pounds Sterling, SONIA, and (b) Japanese Yen, TONAR. “RFR Administrator” means the SONIA Administrator or the TONAR Administrator, as applicable. “RFR Advance” means an Advance that bears interest at a rate based on a Daily Simple RFR. 24 “RFR Business Day” means, for any Obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to, (a) Pounds Sterling, any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which banks are closed for general business in London, (c) Japanese Yen, any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which banks are closed for general business in Japan; provided, that for purposes of notice requirements in respect of requesting Borrowings or prepaying Advances, such day also shall be required to be a Business Day. “RFR Interest Payment Date” means, as to any RFR Advance, each date that is on the numerically corresponding day in each calendar month that is one month after the Borrowing of such Advance; provided that, as to any such RFR Advance, (i) if any such date would be a day other than a Business Day, such date shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such date shall be the next preceding Business Day and (ii) the RFR Interest Payment Date with respect to any Borrowing that occurs on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in any applicable calendar month) shall be the last Business Day of any such succeeding applicable calendar month; provided, that for purposes of this clause (b), the date of a Borrowing of an Advance initially shall be the date on which such Advance is made and thereafter shall be the effective date of the most recent conversion or continuation of such Advance or Borrowing, and (B) the Current Termination Date or Extended Termination Date, as applicable. “RFR Lending Office” means, with respect to any Bank, the office of such Bank specified as its “RFR Lending Office” on its respective signature page hereto (or, if no such office is specified, its Domestic Lending Office), or such other office of such Bank as such Bank may from time to time specify to the Borrowers and the Agent. A Bank may specify different offices for its Advances denominated in different Agreed Currencies, and the term “RFR Lending Office” shall refer to any or all such offices, collectively, as the context may require when used in respect of such Bank. “RFR Rate Day” has the meaning specified in the definition of “Daily Simple RFR”. “S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business, or any successor thereto, and if S&P ceases to issue ratings of the type described herein with respect to the Borrowers, then the Borrowers and the Agent, with the consent of the Majority Banks, shall agree upon a mutually acceptable replacement debt rating agency and shall further agree, upon determination of such replacement agency, to determine appropriate equivalent ratings levels to replace those contained herein. “Same Day Local Currency Advances” means any Advances under the Same Day Local Currency Subfacility. “Same Day Local Currency Commitment” has the meaning specified in Section 2.03A(a). “Same Day Local Currency Subfacility” means the subfacility under the Local Currency Addendum which provides for the Local Currency Banks to make Local Currency 25 Advances available to CIF under the Local Currency Addendum on a same day notice basis in an amount outstanding at any time not to exceed the Dollar Amount of $150,000,000. “Sanctioned Country” means, at any time, a country, region or territory which is itself the subject or target of any Sanctions Laws and Regulations (at the time of this Agreement, Crimea, Cuba, Iran, North Korea and Syria). “Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions Laws and Regulations-related list of designated Persons maintained by OFAC, the U.S. Department of State, the United Nations Security Council, or an applicable Governmental Authority in Ireland, the European Union, any European Union member state, the United Kingdom, Australia, Japan, or Hong Kong, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or controlled by any such Person or Persons described in the foregoing clauses (a) or (b), including, without limitation, any Person in which one or more SDNs have 50% or greater ownership interest. “Sanctions Laws and Regulations” means:
“Screen Rate” means, for any Eurocurrency Rate Advance, the applicable interest rate therefor as determined pursuant to the definition of Eurocurrency Base Rate. “SOFR” means, with respect to any Business Day, a rate per annum equal to the secured overnight financing rate for such Business Day published by the SOFR Administrator on the SOFR Administrator’s Website on the immediately succeeding Business Day. “SOFR Administrator” means the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate). “SOFR Administrator’s Website” means the website of the Federal Reserve Bank of New York, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time. “SONIA” means, with respect to any Business Day, a rate per annum equal to the Sterling Overnight Index Average for such Business Day published by the SONIA Administrator on the SONIA Administrator’s Website on the immediately succeeding Business Day. “SONIA Administrator” means the Bank of England (or any successor administrator of the Sterling Overnight Index Average). 26 “SONIA Administrator’s Website” means the Bank of England’s website, currently at http://www.bankofengland.co.uk, or any successor source for the Sterling Overnight Index Average identified as such by the SONIA Administrator from time to time. “SONIA Credit Adjustment” means an amount equal to 0.0326. “Subsidiary” means, with respect to any Borrower, a corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by such Borrower or by one or more other Subsidiaries, or by such Borrower and one or more other Subsidiaries. For the purposes of this definition, “voting stock” means stock which ordinarily has voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency. “Support Agreement” means that certain Support Agreement dated as of December 21, 1984, amended June 14, 1995, between Caterpillar and CFSC, as the same may be amended or modified in accordance with the terms of Section 5.04(c) and in effect from time to time. “TARGET Settlement Day” means any Business Day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET) System is open. “Term SOFR” means, for the applicable corresponding tenor with respect to any Available Tenor, the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body. “TONAR” means, with respect to any Business Day, a rate per annum equal to the Tokyo Overnight Average Rate for such Business Day published by the TONAR Administrator on the TONAR Administrator’s Website on the immediately succeeding Business Day. “TONAR Administrator” means the Bank of Japan (or any successor administrator of the Tokyo Overnight Average Rate). “TONAR Administrator’s Website” means the Bank of Japan’s website, currently at http://www.boj.or.jp, or any successor source for the Tokyo Overnight Average Rate identified as such by the TONAR Administrator from time to time. “TONAR Advance” means a Japan Local Currency Advance which bears interest at a rate based on TONAR as provided in Section 2.07(c). “TONAR Credit Adjustment” means an amount equal to 0.00. “Total Commitment” means, at any time, the sum of all of the Banks’ Commitments at such time. “Total Japan Local Currency Commitment” has the meaning specified in Section 2.03C(a). 27 “Total Local Currency Commitment” has the meaning specified in Section 2.03A(a). “Total Revolving Credit Commitment” means, at any time, the sum of all of the Banks’ Revolving Credit Commitments at such time (which shall be an amount equal to the Total Commitment at such time minus the sum of the aggregate Dollar Amount of the Same Day Local Currency Subfacility at such time and the aggregate Dollar Amount of the Total Japan Local Currency Commitment at such time). “Type”, when used in reference to any Revolving Credit Advance, has the meaning specified in the definition of “Revolving Credit Advance”, when used in reference to a Japan Local Currency Advance, refers to a Japan Base Rate Advance or a TONAR Advance, and when used in reference to a Local Currency Advance, has the meaning specified in the definition of “Local Currency Advance”, each of which shall be a “Type” of Advance. “UK Financial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms. “UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution. “Undisclosed Administration” means the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official by a supervisory authority or regulator with respect to a Bank under the Dutch Financial Supervision Act 2007 (as amended from time to time and including any successor legislation). “USA Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56,115 Stat. 272 (2001), as amended. “USD LIBOR” means the London interbank offered rate for Dollars (which, as of the date hereof, is determined pursuant to clause (a) of the definition of Eurocurrency Base Rate). “Write-Down and Conversion Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers. 28 SECTION I.02. Computation of Time Periods. In this Agreement in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding”. SECTION I.03. Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles in the United States consistent with those applied in the preparation of the financial statements referred to in Section 4.01(e) and all references contained herein to generally accepted accounting principles shall mean United States generally accepted accounting principles. SECTION I.04. Rates. The Agent does not warrant or accept responsibility for, and shall not have any liability with respect to (a) the continuation of, administration of, submission of, calculation of or any other matter related to the Base Rate, the Eurocurrency Rate, any RFR, SOFR, SONIA, TONAR, any Benchmark, any component definition thereof or rates referenced in the definition thereof or any alternative, successor or replacement rate thereto (including any Benchmark Replacement), including whether the composition or characteristics of any such alternative, successor or replacement rate (including any Benchmark Replacement) will be similar to, or produce the same value or economic equivalence of, or have the same volume or liquidity as, the Base Rate, the Eurocurrency Rate, any RFR, SOFR, SONIA, TONAR, or any other Benchmark prior to its discontinuance or unavailability, or (b) the effect, implementation or composition of any Benchmark Replacement Conforming Changes or any other alternative, successor or replacement rate pursuant to the terms of this Agreement. The Agent and its Affiliates may engage in transactions that affect the calculation of the Base Rate, any Benchmark, the Eurocurrency Rate, any RFR, SOFR, SONIA, TONAR, any alternative, successor or replacement rate (including any Benchmark Replacement) or any relevant adjustments thereto, in each case, in a manner adverse to the Borrowers. The Agent may select information sources or services in its reasonable discretion to ascertain the Base Rate, the Eurocurrency Rate, any RFR, SOFR, SONIA, TONAR, or any Benchmark, any component definition thereof or rates referenced in the definition thereof, in each case pursuant to the terms of this Agreement, and shall have no liability to the Borrowers, any Bank or any other person or entity for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error or calculation of any such rate (or component thereof) provided by any such information source or service. ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES SECTION II.01. The Revolving Credit Advances; Allocation of Commitments. (a) Each Bank severally agrees, on the terms and conditions hereinafter set forth, to make Revolving Credit Advances in any Agreed Currency to Caterpillar and CFSC from time to time on any Business Day during the period from the Closing Date until the Revolving Credit Termination Date in a Dollar Amount not to exceed such Bank’s Available Revolving Credit Commitment at such time; provided, however, that at no time shall the Dollar Amount of (i) the outstanding Advances exceed the Total Commitment, (ii) the Revolving Credit Obligations exceed the Total Revolving Credit Commitment, (iii) any Bank’s Revolving Credit 29 Advances, Local Currency Advances and Japan Local Currency Advances exceed such Bank’s Commitment, (iv) all Revolving Credit Advances to Caterpillar exceed Caterpillar’s Allocation at such time, (v) all Revolving Credit Advances to CFSC plus the Dollar Amount of all Local Currency Advances and Japan Local Currency Advances exceed CFSC’s Allocation at such time, (vi) any Bank’s Revolving Credit Advances to Caterpillar exceed such Bank’s Allocated Commitment for Caterpillar at such time, or (vii) any Bank’s Revolving Credit Advances to CFSC plus such Bank’s Local Currency Advances and Japan Local Currency Advances at such time exceed such Bank’s Allocated Commitment for CFSC at such time. Each Revolving Credit Borrowing shall be in an aggregate Dollar Amount not less than $10,000,000 or an integral multiple of $1,000,000 in excess thereof and shall consist of Revolving Credit Advances of the same Type and the same Agreed Currency made on the same day to the same Borrower by the Banks ratably according to their respective Available Revolving Credit Commitments. Within the limits of each Bank’s Allocated Commitment to a Borrower, such Borrower may from time to time borrow, repay pursuant to Section 2.06 or prepay pursuant to Section 2.09, and reborrow under this Section 2.01.
30 SECTION II.02. Making the Revolving Credit Advances.
31 Advances of the same Type and Agreed Currency for a period equal to the requested Interest Period (which is assumed to be one-month for purposes of any RFR Advance). A certificate describing in reasonable detail the amount of such losses, costs and expenses, submitted to such Borrower and the Agent by such Bank, shall create a rebuttable presumption of such losses, costs or expenses.
32 Affiliate of any Bank shall be deemed a party to this Agreement or shall have any rights, liability or obligation under this Agreement unless such Bank and such Affiliate shall have executed and delivered, and the Agent shall have accepted, an Assignment and Acceptance in accordance with Section 8.07, and then such Affiliate shall have rights and obligations hereunder only to the extent contemplated therein. (f) Each Bank shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrowers to such Bank resulting from each Advance made by such Bank from time to time, including the amounts of principal and interest payable and paid to such Bank from time to time hereunder. The Agent shall also maintain accounts in which it will record (a) the amount of each Advance made hereunder, the Type thereof and the Interest Period with respect thereto, (b) the amount of any principal or interest due and payable or to become due and payable from the applicable Borrower to each Bank hereunder and (c) the amount of any sum received by the Agent, the Local Currency Agent or the Japan Local Currency Agent, as applicable, hereunder from the applicable Borrower and each Bank’s share thereof. Entries recorded pursuant to the foregoing shall be prima facie evidence of the existence and amounts of the Borrowers’ obligations; provided, however, that the failure of the Agent or any Bank to maintain such accounts or any error therein shall not in any manner affect the obligation of the applicable Borrower to repay its obligations hereunder in accordance with their terms. Any Bank may request that its Revolving Credit Advances be evidenced by a promissory note in substantially the form of Exhibit A (a “Note”). In such event, the applicable Borrower shall prepare, execute and deliver to such Bank such Note payable to the order of such Bank. Thereafter, the Advances evidenced by such Note and interest thereon shall at all times (prior to any assignment pursuant to Section 8.07) be represented by one or more Notes payable to the order of the payee named therein, except to the extent that any such Bank subsequently returns any such Note for cancellation and requests that such Advances once again be evidenced as described above. SECTION II.03. [Reserved]. SECTION 2.03A. Terms of Local Currency Facility. (a) The Local Currency Addendum sets forth (i) the maximum amount (expressed in Dollar Amount) available to be borrowed from all Local Currency Banks under the Local Currency Addendum (the “Total Local Currency Commitment”), which shall not exceed $1,000,000,000, (ii) with respect to each Local Currency Bank, the maximum amount (expressed in Dollar Amount) available to be borrowed from such Local Currency Bank thereunder (such Bank’s “Local Currency Commitment”), and (iii) with respect to each Local Currency Bank, the maximum amount (expressed in Dollar Amount) available to be borrowed from such Local Currency Bank under the Same Day Local Currency Subfacility (such Bank’s “Same Day Local Currency Commitment”). In no event shall a Local Currency Bank’s Local Currency Commitment (or, if such Local Currency Bank is also a Japan Local Currency Bank, the sum of its Local Currency Commitment and its Japan Local Currency Commitment) at any time exceed such Bank’s Commitment. No Same Day Local Currency Advance shall be made in an Agreed Currency other than Pounds Sterling or Euro without the prior written approval of all of the Local Currency Banks and the Local Currency Agent. 33
SECTION 2.03B. Making the Local Currency Advances. (a) Each Local Currency Borrowing shall be made on a Business Day upon notice given by CIF to the Agent and the Local Currency Agent, such notice to be given at the time specified in the Local Currency Addendum. Each Local Currency Borrowing shall be in an aggregate Dollar Amount not less than $10,000,000 or an integral multiple of $1,000,000 in excess thereof and shall consist of Local Currency Advances of the same Local Currency made on the same day to CIF by the Local Currency Banks ratably according to their respective Local Currency Commitments. The Agent (or in the case of a Same Day Local Currency Advance, the Local Currency Agent) shall give each Local Currency Bank prompt notice thereof by facsimile or electronic mail. Each such notice of a Local Currency Borrowing (a “Notice of Local Currency Borrowing”) shall be by facsimile or electronic mail, confirmed immediately in writing, in substantially the form of Exhibit B-2 hereto, specifying therein the requested (i) date of such Borrowing, (ii) Local Currency of such Borrowing, (iii) Interest Period for such Borrowing (where applicable) and (iv) aggregate amount of such Borrowing. (b) Subject to any alternative procedures set forth in the Local Currency Addendum, each Local Currency Bank, for the account of its Applicable Lending Office, shall make such Local Currency Bank’s ratable portion of such Local Currency Borrowing on the 34 proposed date thereof by wire transfer of immediately available funds to the Agent (or in the case of a Same Day Local Currency Advance, the Local Currency Agent) by the time specified in the Local Currency Addendum or Notice of Local Currency Borrowing, and the Agent (or in the case of a Same Day Local Currency Advance, the Local Currency Agent) shall make such funds available to CIF at the applicable Payment Office.
35 failure of any other Local Currency Bank to make the Local Currency Advance to be made by such other Local Currency Bank on the date of any Local Currency Borrowing. SECTION 2.03C. Terms of Japan Local Currency Facility.
SECTION 2.03D. Making the Japan Local Currency Advances. (a) Each Japan Local Currency Borrowing shall be made on a Business Day upon notice given by CFKK to the Japan Local Currency Agent, with a copy to the Agent, such notice to be given at the time specified in the Japan Local Currency Addendum. Each Japan Local Currency Borrowing shall be in an aggregate Dollar Amount not less than $10,000,000 or an integral multiple of 36 $1,000,000 in excess thereof and shall consist of Japan Local Currency Advances of the same Type made on the same day to CFKK by the Japan Local Currency Banks ratably according to their respective Japan Local Currency Commitments. The Japan Local Currency Agent shall give each Japan Local Currency Bank prompt notice thereof by facsimile or electronic mail. Each such notice of a Japan Local Currency Borrowing (a “Notice of Japan Local Currency Borrowing”) shall be by facsimile or electronic mail, confirmed immediately in writing, in substantially the form of Exhibit B-3 hereto, specifying therein the requested (i) date of such Borrowing, (ii) Type of Japan Local Currency Advances comprising such Japan Local Currency Borrowing, (iii) Interest Period for such Borrowing and (iv) aggregate amount of such Borrowing.
37 Currency Bank’s Japan Local Currency Advance as part of such Japan Local Currency Borrowing for purposes of this Agreement. (e) The failure of any Japan Local Currency Bank to make the Japan Local Currency Advance to be made by it as part of any Japan Local Currency Borrowing shall not relieve any other Japan Local Currency Bank of its obligation hereunder to make its Japan Local Currency Advance on the date of such Japan Local Currency Borrowing, but no Japan Local Currency Bank shall be responsible for the failure of any other Japan Local Currency Bank to make the Japan Local Currency Advance to be made by such other Japan Local Currency Bank on the date of any Japan Local Currency Borrowing. SECTION II.04. Fees. (a) Each of Caterpillar and CFSC shall pay to the Agent, for the account of each Bank, a fee (each a “Commitment Fee” and collectively, the “Commitment Fees”) calculated on a daily basis by multiplying the Commitment Fee Rate in effect on each day by the amount of such Bank’s unused Allocated Commitment for such Borrower as in effect on such day. The Commitment Fee shall be payable quarterly in arrears, commencing on January 2, 2020, for the period commencing on the Closing Date and ending on December 31, 2019, inclusive, on the first Business Day of each calendar quarter thereafter for the period of the immediately preceding calendar quarter, and on the Facility Termination Date for the period since the last payment of Commitment Fees. The “Commitment Fee Rate,” as of any date of determination, shall at all times be determined in accordance with the table set forth on Schedule II hereto, such rate to change for any Borrower when and as any Credit Rating of such Borrower changes (and subject to the split rating rules set forth in the definition of Applicable Margin). The Commitment Fees allocable to each of Caterpillar and CFSC shall be the several obligation of each. (b) The Borrowers shall pay (i) to the Agent, solely for its own account, the fees specified in the Administrative Agent Fee Letter, dated July 20, 2021, among the Borrowers, Citibank and the Agent, (ii) to the Agent, for the ratable account of each Bank, or to certain of the Arrangers, for their own separate accounts, as applicable, the fees specified in the Joint Fee Letter, in each case on the dates specified therein, and (iii) to the Agent, for the benefit of certain of the Arrangers, for their own separate accounts, as applicable, the fees specified in the Passive JLA Fee Letter, dated September 2, 2021, in each case on the date specified therein. No Person other than the Agent, Citibank, Bank of America, JPMorgan and the Arrangers, as applicable, shall have any interest in such fees. SECTION II.05. Reduction of the Commitments; Bank Additions. (a) Subject to Section 2.17(c), the Borrowers shall have the right, upon at least three (3) Business Days’ notice to the Agent, to terminate in whole or reduce ratably in part the unused portions of the respective Commitments and Allocated Commitments of the Banks; provided that the aggregate amount of the Allocated Commitments of the Banks to (i) Caterpillar shall not be reduced to an amount which is less than the aggregate principal Dollar Amount of the Advances to Caterpillar then outstanding and (ii) CFSC shall not be reduced to an amount which is less than the sum of the aggregate principal Dollar Amount of the Advances to CFSC and the Local Currency Advances and Japan Local Currency Advances then outstanding, and provided, further, that each partial reduction shall be in the aggregate amount of $5,000,000 or an integral multiple thereof. Any such reduction of each Bank’s Commitment will be an automatic reduction of such Bank’s Revolving Credit Commitment in an identical amount. 38
39 have hereunder after giving effect to such Bank Addition. If the conditions set forth in the proviso contained in the first sentence of this Section 2.05(c) have been satisfied, the Agent shall forward to such Added Bank and the Borrowers for execution by such Added Bank and the Borrowers an Assumption and Acceptance. The Added Bank shall, upon such execution, return the executed Assumption and Acceptance to the Agent, for the Agent’s acceptance thereof, together with a processing and recordation fee of $3,500. Upon such execution, delivery and acceptance, from and after the effective date specified in each Assumption and Acceptance, the Added Bank shall, in addition to the rights and obligations hereunder held by it immediately prior to such effective date (if any), have the rights and obligations hereunder that have been assumed by it pursuant to such Assumption and Acceptance and, in the case of a bank not previously a Bank hereunder, shall become a Bank hereunder. By executing and delivering an Assumption and Acceptance, each Added Bank confirms to and agrees with each party hereto as follows: (i) neither the Agent nor any Bank makes any representation or warranty, nor assumes any responsibility with respect to, any statements, warranties or representations made in or in connection with this Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other instrument or document furnished pursuant hereto; and (ii) neither the Agent nor any Bank makes any representation or warranty, nor assumes any responsibility with respect to, the financial condition of any Borrower or the performance or observance by any Borrower of any of its obligations under this Agreement or any other instrument or document furnished pursuant hereto. The Agent shall maintain at its address referred to in Section 8.02 a copy of each Assumption and Acceptance delivered to and accepted by it. Such copies shall be available for inspection by the Borrowers or any Bank at any reasonable time and from time to time upon reasonable prior notice. Upon its receipt of an Assumption and Acceptance executed by an Added Bank and the Borrowers, the Agent shall, if such Assumption and Acceptance has been completed and is in substantially the form of Exhibit C-2 hereto, (i) accept such Assumption and Acceptance, and (ii) give prompt notice thereof to the Borrowers. Within five (5) Business Days after receipt of such notice, if requested by an Added Bank, each Borrower, at its own expense, shall execute and deliver to the Agent a new Note or Notes to the order of such Added Bank. Such new Note or Notes shall be dated the effective date of such Assumption and Acceptance and shall otherwise be in substantially the form of Exhibit A hereto. (d) If there are any Revolving Credit Advances outstanding on the effective date of any Assumption and Acceptance, the Added Bank shall purchase from the other Banks such participations in such Revolving Credit Advances as shall be necessary to cause such Added Bank to share ratably (based on the proportion that such Added Bank’s Revolving Credit Commitment bears to the Total Revolving Credit Commitment after giving effect to the Bank Addition) in each such Revolving Credit Advance. To purchase such participations, the Added Bank shall before 12:00 noon (New York City time) on the effective date of its Assumption and Acceptance, make available for the account of its Applicable Lending Office to the Agent at its address referred to in Section 8.02, in the applicable Agreed Currency and in same day funds, 40 such Added Bank’s ratable portion (based on the proportion that such Added Bank’s Revolving Credit Commitment (or the increase in such Added Bank’s Revolving Credit Commitment, in the case of an Added Bank which is an existing Bank hereunder) bears to the Total Revolving Credit Commitment after giving effect to the Bank Addition) of each Revolving Credit Borrowing then outstanding, together with an amount equal to such ratable portion of the interest which has accrued to such date and remains unpaid on such Revolving Credit Borrowing. After the Agent’s receipt of such funds, the Agent will promptly make such same day funds available to the account of each Bank in an amount to such Bank’s ratable portion of such payment by the Added Bank. In addition, if such Added Bank acquires a Local Currency Commitment or a Japan Local Currency Commitment, automatically upon and simultaneously with becoming an Added Bank, such Added Bank shall have acquired a ratable risk participation in all then outstanding Local Currency Advances or Japan Local Currency Advances, as applicable, with such ratable risk participation based on such Added Bank’s Local Currency Commitment or Japan Local Currency Commitment as a fraction of the aggregate of all Local Currency Commitments or Japan Local Currency Commitments, as applicable. SECTION II.06. Repayment of Advances. Each Borrower shall repay the principal amount (or the portion thereof remaining after giving effect to any earlier partial prepayments thereof) of each Advance made to such Borrower by each Bank on the last day of the Interest Period for such Advance. RFR Advances shall be repaid on the RFR Interest Payment Date therefor. SECTION II.07. Interest on Advances. Each Borrower shall pay interest on the unpaid principal amount of each Advance made to such Borrower by each Bank from the date of such Advance until such principal amount shall be paid in full, at the following rates per annum:
41
SECTION II.08. Interest Rate Determination. The Agent shall give prompt notice to the Borrowers and the Banks (or the Local Currency Banks or Japan Local Currency Banks, as applicable) of the applicable interest rate determined by the Agent for purposes of Section 2.07(a) or (b) (or by each Japan Local Currency Bank for the purpose of determining the applicable interest rate under Section 2.07(c), if applicable). SECTION II.09. Prepayments of Advances. (a) Any Borrower may, upon at least three (3) Business Days’ prior notice to the Agent, stating (i) the proposed date and aggregate principal amount of the prepayment and (ii) the Advances (which shall be part of the same Borrowing) to which such prepayment is to be applied, and if such notice is given such Borrower shall, prepay the outstanding principal amounts of the Advances comprising part of the same Borrowing in whole or ratably in part, together with accrued interest to the date of such prepayment on the principal amount prepaid; provided, however, that (x) each partial prepayment shall be in an aggregate principal Dollar Amount of not less than $10,000,000 and in an integral Dollar Amount multiple of $1,000,000 in excess thereof and (y) in the case of any such prepayment of a Eurocurrency Rate Advance or an RFR Advance, such Borrower shall be obligated to reimburse the applicable Banks in respect thereof pursuant to Section 8.04(b). (b) If on any date that the Dollar Amount of (i) Eurocurrency Rate Advances or RFR Advances outstanding in an Agreed Currency, (ii) Local Currency Advances or (iii) Japan Local Currency Advances, is determined pursuant to Section 2.15 (each such date, a “Computation Date”), it is determined that as a result of currency fluctuations with respect to the Advances to which such Computation Date applies, the aggregate Dollar Amount of (x) all outstanding Advances exceeds the Total Commitment, or (y) all outstanding Revolving Credit Obligations exceeds the Total Revolving Credit Commitment, the Borrowers shall on such date prepay (without premium or penalty other than any payment required pursuant to Section 8.04(b)) an aggregate principal amount of Revolving Credit Advances ratably to the Banks in an amount equal to or, at the option of the Borrowers, greater than such excess, with accrued interest to the date of such prepayment on the principal amount prepaid. For purposes of the determination referred to in the previous sentence, if a Disqualifying Event of the type described 42 in clause (ii) of the definition of “Eligible Currency” exists, then such determination shall be made in consultation with Bank of America and JPMorgan using any method they deem reasonably appropriate, and such determination shall be conclusive. The Borrowers may determine which Borrowing such prepayment shall be allocated to, and any such prepayment of Eurocurrency Rate Advances or RFR Advances shall be subject to the provisions of Section 8.04(b). SECTION II.10. Increased Costs; Capital Adequacy; Illegality. (a) If, due to either (i) the introduction of or any change (other than any change by way of imposition or increase of reserve requirements, in the case of Eurocurrency Rate Advances, to the extent already included in the Eurocurrency Rate Reserve Percentage) in or in the interpretation of any law or regulation or (ii) the compliance with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), there shall be any increase in the cost to any Bank of agreeing to make or making, funding or maintaining Eurocurrency Rate Advances or RFR Advances, then the applicable Borrower shall from time to time, upon written demand by such Bank (with a copy of such demand to the Agent), pay to the Agent for the account of such Bank additional amounts sufficient to compensate such Bank for such increased cost; provided, that (x) such Bank shall have certified in writing to the applicable Borrower that it is generally seeking, or intends to generally seek, comparable compensation from similarly situated borrowers under similar credit facilities (to the extent such Bank has the right under such similar credit facilities to do so) with respect to such change regarding such increased cost and (y) such additional amounts shall not be duplicative of any amounts to the extent otherwise paid by the applicable Borrower under any other provision of this Agreement (including, without limitation, any reserve requirements included in determining the Eurocurrency Rate). A certificate describing in reasonable detail the amount of such increased cost, submitted to the Borrowers and the Agent by such Bank, shall create a rebuttable presumption of such increased cost. If any such increase in cost is attributable to specific Advances made to a particular Borrower, compensation for such increased cost shall be paid by such Borrower (or if such Borrower is CIF or CFKK, by CFSC). In all other cases, compensation for such increased cost shall be paid by Caterpillar. (b) If any Bank determines that compliance with any law or regulation or any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law) affects or would affect the amount of capital or liquidity required or expected to be maintained by such Bank or by any Person controlling such Bank and that the amount of such capital or liquidity requirement is increased by or based upon the existence of such Bank’s Advances or commitment to lend hereunder, then, upon written demand by such Bank (with a copy of such demand to the Agent), the applicable Borrower shall immediately pay to the Agent for the account of such Bank, from time to time as specified by such Bank, additional amounts sufficient to compensate such Bank (or, if applicable, such Person controlling such Bank) in the light of such circumstances, to the extent that such Bank reasonably determines such increase in capital or liquidity requirement to be allocable to the existence of such Bank’s commitment to lend hereunder; provided, that (x) such Bank shall have certified in writing to the applicable Borrower that it is generally seeking, or intends to generally seek, comparable compensation from similarly situated borrowers under similar credit facilities (to the extent such Bank has the right under such similar credit facilities to do so) with respect to such change regarding such increased cost and (y) such additional amounts shall not be duplicative of any amounts to the extent otherwise paid by the applicable Borrower under any other provision 43 of this Agreement (including, without limitation, any reserve requirements included in determining the Eurocurrency Rate). A certificate describing in reasonable detail such amounts submitted to the applicable Borrower by such Bank shall create a rebuttable presumption of such amounts. If any such increase in capital or liquidity requirement is attributable to specific Advances made to a particular Borrower or to the Allocated Commitments to a particular Borrower or Borrowers, compensation for such increase in capital or liquidity requirement shall be paid by such Borrower (or if such Borrower is CIF or CFKK, by CFSC). In all other cases, compensation for such increased capital or liquidity requirement shall be paid by Caterpillar.
44 Advance shall be, a Base Rate Advance, (2) each such outstanding RFR Advance will automatically, on the day such notice is delivered, Convert into, and with respect to a requested Advance as part of a requested Borrowing, such Advance shall be, a Base Rate Advance, and (3) the right of the requesting Borrower to select the Eurocurrency Rate or RFR for such Borrowing, and the right of any Borrower to Convert Advances into, or continue Advances as, Eurocurrency Rate Advances or RFR Advances, or to select the Eurocurrency Rate or RFR for any subsequent Borrowing, shall be suspended until the Agent shall notify the Borrowers and the Banks that the circumstances causing such suspension no longer exist, and each Advance comprising such Borrowing shall be a Base Rate Advance.
45 the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a change in law and be eligible for redress pursuant to clause (a), (b) and (c), as applicable, of this Section 2.10, regardless of the date enacted, adopted or issued. SECTION II.11. Payments and Computations.
46 last day) occurring in the period for which such interest or Commitment Fees are payable. Each determination by the Agent, the Local Currency Agent or the Japan Local Currency Agent, as the case may be, of an interest rate hereunder shall be conclusive and binding for all purposes, absent manifest error.
SECTION II.12. Taxes. (a) Any and all payments by any of the Borrowers hereunder, under the Local Currency Addendum, under the Japan Local Currency Addendum or under each of the Notes shall be made, in accordance with Section 2.11, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of each Bank, the Local Currency Agent, the Japan Local Currency Agent and the Agent, (i) taxes imposed on its net income, and franchise taxes imposed on it, by the jurisdiction under the laws of which such Bank, the Local Currency Agent, the Japan Local Currency Agent or the Agent (as the case may be) is organized or any political subdivision thereof and, in the case of each Bank, taxes imposed on its income, and franchise taxes imposed on it, by the jurisdiction of such Bank’s Applicable Lending Office or any political subdivision thereof and (ii) any U.S. federal withholding taxes imposed under FATCA (all such non excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as “Taxes”). If any Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder, under the Local Currency Addendum, under the Japan Local Currency Addendum or under any Note to any Bank, the Local Currency Agent, the Japan Local Currency Agent or the Agent, (i) the sum payable by such Borrower shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.12) such Bank, the Local Currency Agent, the Japan Local Currency Agent or the Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Borrower shall make such deductions and (iii) such Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law. 47
48 (g) For purposes of determining withholding Taxes imposed under FATCA, from and after the effective date of this Agreement, the Borrowers and the Agent shall treat (and the Banks hereby authorize the Agent to treat) the Advances as not qualifying as a “grandfathered obligation” within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i). SECTION II.13. Sharing of Payments, Etc. If any Bank shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set off, or otherwise) on account of the Revolving Credit Advances made by it (other than pursuant to Sections 2.02(c), 2.05(d), 2.10, 2.12 or 8.04) in excess of its ratable share of payments on account of the Revolving Credit Advances obtained by all the Banks, such Bank shall forthwith notify the Agent thereof and purchase from the other Banks such participations in the Revolving Credit Advances made by them as shall be necessary to cause such purchasing Bank to share the excess payment ratably with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Bank, such purchase from each Bank shall be rescinded and such Bank shall repay to the purchasing Bank the purchase price to the extent of such recovery together with an amount equal to such Bank’s ratable share (according to the proportion of (i) the amount of such Bank’s required repayment to (ii) the total amount so recovered from the purchasing Bank) of any interest or other amount paid or payable by the purchasing Bank in respect of the total amount so recovered. Each Borrower agrees that any Bank so purchasing a participation from another Bank pursuant to this Section 2.13 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set off) with respect to such participation as fully as if such Bank were the direct creditor of such Borrower in the amount of such participation. SECTION II.14. Tax Forms. Each Bank that is not a United States person (as such term is defined in Section 7701(a)(30) of the Code), other than any Local Currency Bank or Japan Local Currency Bank that is an Affiliate, branch or agency of a Bank, shall submit to the Borrowers and the Agent, on or before the Closing Date (or in the case of any Person becoming a Bank hereunder pursuant to Section 2.05(c) or Section 8.07, on or before the date of acceptance by the Agent of the applicable Assumption and Acceptance or Assignment and Acceptance), duly completed and signed copies of either Form W-8BEN or Form W-8BEN-E (relating to such Bank and entitling it to a complete exemption from withholding on all amounts to be received by such Bank at any Applicable Lending Office designated by such Bank, including fees, under this Agreement) or Form W-8 ECI (relating to all amounts to be received by such Bank at any Applicable Lending Office designated by such Bank, including fees, under this Agreement) of the United States Internal Revenue Service and Form W-8BEN or Form W-8BEN-E (relating to the foreign status exemption from United States federal income tax backup withholding), or, in any such case, such successor forms as shall be adopted from time to time by the relevant United States taxing authorities. Thereafter and from time to time, each such Bank shall, to the extent that it may lawfully do so, submit to the Borrowers and the Agent such additional duly completed and signed copies of one or the other of such forms (or such successor forms as shall be adopted from time to time by the relevant United States taxing authorities) as may be (i) requested by the Borrowers or the Agent from such Bank and (ii) required under then current United States law or regulations to determine the United States withholding taxes on payment in respect of all amounts to be received by such Bank at any Applicable Lending Office designated by such Bank, including fees, under this Agreement. Upon the request of the Borrowers or the Agent, each Bank that is a United States person (as such term is defined in Section 7701(a)(30) of the Code) shall submit to the Borrowers and the 49 Agent a certificate to the effect that it is such a United States person. If any Bank determines that it is unable to submit to the Borrowers and the Agent any form or certificate that such Bank is obligated to submit pursuant to this Section 2.14, or that such Bank is required to withdraw or cancel any such form or certificate previously submitted, such Bank shall promptly notify the Borrower and the Agent of such fact. In addition, if a payment made to a Bank hereunder, under the Local Currency Addendum, under the Japan Local Currency Addendum or under any of the Notes would be subject to U.S. federal withholding tax imposed by FATCA if such Bank were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Bank shall deliver to the Borrowers and the Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrowers or the Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrowers or the Agent as may be necessary for the Borrowers and the Agent to comply with their obligations under FATCA and to determine that such Bank has complied with such Bank’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this Section 2.14, “FATCA” shall include any amendments made to FATCA after the date of this Agreement. SECTION II.15. Market Disruption; Denomination of Amounts in Dollars. (a) Market Disruption. Notwithstanding the satisfaction of all conditions referred to in Article III and this Article II with respect to any Borrowing in any Agreed Currency other than Dollars, if there shall occur on or prior to the date of such Borrowing, or the continuation, Conversion or Redenomination of such Borrowing in or to an Agreed Currency other than Dollars, any change in national or international financial, political or economic conditions or currency exchange rates, exchange controls or interest rate quotation sources which would (i) in the reasonable opinion of the Borrowers, the Majority Local Currency Banks (in the case of a Local Currency Borrowing), the Agent or the Banks having at least 66-2/3% of the Available Revolving Credit Commitments, in the case of a Revolving Credit Borrowing, make it impracticable for the Eurocurrency Rate Advances or RFR Advances comprising such Borrowing to be denominated in the Agreed Currency specified by the applicable Borrower, then the Agent shall forthwith give notice thereof to such Borrower, the Local Currency Banks and the Banks, or the applicable Borrower shall give notice to the Agent, the Local Currency Banks and the Banks, as the case may be, and such Eurocurrency Rate Advances or RFR Advances shall not be denominated in such currency but shall be made on the date of such Borrowing, or continued, Converted or Redenominated, as applicable, on the date of such continuation, Conversion or Redenomination, in Dollars, in an aggregate principal amount equal to the Dollar Amount of the aggregate principal amount specified in the related Notice of Borrowing, or the Dollar Amount of the Advances being continued, Converted or Redenominated, as applicable, as Base Rate Advances, unless the applicable Borrower notifies the Agent at least one (1) Business Day before such date that (x) in the case of a requested Borrowing, it elects not to borrow on such date or (y) in the case of a requested Borrowing, continuation, Conversion or Redenomination, it elects to borrow on such date in a different Agreed Currency, or continue the applicable Advances in, or Convert or Redenominate the applicable Advances to, a different Agreed Currency, in which the denomination of such Advances would in the opinion of the Agent, the Majority Local Currency Banks (in the case of a Local Currency Borrowing) or the Banks having at least 66-2/3% of the Available Revolving Credit Commitments, in the case of a 50 Revolving Credit Borrowing, be practicable and in an aggregate principal amount equal to the Dollar Amount of the aggregate principal amount specified in the related Notice of Borrowing, or the Dollar Amount of the Advances being continued, Converted or Redenominated, as applicable, or (ii) in the reasonable opinion of any Bank, make it impracticable for the Eurocurrency Rate Advance or RFR Advance of such Bank comprising part of such Borrowing to be denominated in the Agreed Currency specified by the applicable Borrower, then the Agent shall forthwith give notice thereof to such Borrower, and the Eurocurrency Rate Advance or RFR Advance of such Bank as part of such Borrowing shall not be denominated in such currency but shall be made on the date of such Borrowing, or continued, Converted or Redenominated, as applicable, in Dollars, in an aggregate principal amount equal to the Dollar Amount of the aggregate principal amount of such Bank’s Advance, as a Base Rate Advance, unless the applicable Borrower notifies the Agent at least one (1) Business Day before such date that (x) in the case of a requested Borrowing, it elects not to borrow on such date or (y) in the case of a requested Borrowing, continuation, Conversion or Redenomination, it elects to borrow on such date in a different Agreed Currency, or continue the applicable Advances as, or Convert or Redenominate the applicable Advances to a different Agreed Currency, in which the denomination of all such Advances as part of such Borrowing would in the opinion of the Agent, the Majority Local Currency Banks (in the case of a Local Currency Borrowing) or the Banks having at least 66-2/3% of the Available Revolving Credit Commitments, in the case of a Revolving Credit Borrowing, be practicable and in an aggregate principal amount equal to the Dollar Amount of the aggregate principal amount specified in the related Notice of Borrowing or the Dollar Amount of the Advances being continued, Converted or Redenominated, as applicable.
(i) Replacing USD LIBOR. On the earlier of (A) the date that all Available Tenors of USD LIBOR have either permanently or indefinitely ceased to be provided by IBA or have been announced by the FCA pursuant to public statement or publication of information to be no longer representative and (B) the Early Opt-in Effective Date, if the then-current Benchmark is USD LIBOR, the Benchmark Replacement will replace such Benchmark for all purposes hereunder 51 and under any Loan Document in respect of any setting of such Benchmark on such day and all subsequent settings without any amendment to, or further action or consent of any other party to this Agreement or any other Loan Document. If the Benchmark Replacement is Daily Simple SOFR, all interest payments will be payable on a monthly basis.
52 Conforming Changes will become effective without any further action or consent of any other party to this Agreement.
SECTION II.16. Extensions of the Commitments.
53 the requested extension, such request shall be granted with respect to each consenting Bank; provided, however, that no such consent shall be granted in connection with (i) Local Currency Advances unless Local Currency Banks having at least 50% of the Local Currency Commitments at the time of issuance of any Extension Request shall consent in writing to the requested extension and (ii) Japan Local Currency Advances unless Japan Local Currency Banks having at least 50% of the Japan Local Currency Commitments at the time of issuance of any Extension Request shall consent in writing to the requested extension. Promptly following the opening of business on the first Business Day following the applicable Extension Confirmation Date, the Agent shall notify the Borrowers in writing as to whether the requested extension has been granted (such written notice being an “Extension Confirmation Notice”) and, if granted, such extension shall become effective upon the issuance of such Extension Confirmation Notice. The Agent shall promptly thereafter provide a copy of such Extension Confirmation Notice to each Bank. (c) Each Extension Confirmation Notice shall specify therein the date to which the Current Termination Date is to be extended in respect of each of the consenting Banks, which date shall be one year after the Current Termination Date then in effect (or if such date is not a Business Day, the immediately preceding Business Day) (such date being referred to herein as the “Extended Termination Date”). The Current Termination Date with respect to (i) any Banks which shall have denied such requested extension in writing, or which shall have failed to respond to the applicable Extension Request, and (ii) all Banks, in the event that fewer than the minimum number of Banks specified above shall consent in writing to such Extension Request, shall continue to be the then existing Current Termination Date (the “Earlier Termination Date”). The Current Termination Date with respect to those Banks which shall have consented to the applicable Extension Request, in the event that the requisite number of Banks specified above shall consent in writing to such Extension Request, shall continue to be the Earlier Termination Date until the end of the day immediately preceding the Current Termination Date then in effect at which time the Current Termination Date then in effect shall become the Extended Termination Date provided for in such Extension Confirmation Notice. (d) If fewer than all of the Banks agree to any extension of the Current Termination Date that shall have become effective in accordance with this Section 2.16, (i) no Advance made or to be made prior to the Earlier Termination Date shall have an Interest Period which ends after the Earlier Termination Date, (ii) all Advances, Local Currency Advances, if applicable, Japan Local Currency Advances, if applicable, and all other obligations, of the Borrower to the Banks hereunder shall be repaid in full on the Earlier Termination Date (whether from proceeds of Borrowings made on the Earlier Termination Date from the Banks having agreed to such extension or from other sources) and (iii) the Commitment, Local Currency Commitment or Japan Local Currency Commitment, as applicable, of each Bank that shall not have consented to such extension shall terminate on the Earlier Termination Date, and such Bank shall have no further obligation hereunder other than in respect of obligations expressly contemplated herein to survive the termination of this Agreement. Such Bank shall also receive from the applicable Borrower all other amounts owing to it hereunder or in connection herewith on the Earlier Termination Date. SECTION II.17. Defaulting Banks. Notwithstanding any provision of this Agreement to the contrary, if any Bank becomes a Defaulting Bank, then the following provisions shall apply for so long as such Bank is a Defaulting Bank: 54
55 Defaulting Bank to Non-Defaulting Bank will constitute a waiver or release of any claim of any party hereunder arising from such Bank’s having been a Defaulting Bank. SECTION II.18. Funding Vehicle. Each Bank may, at its option, make any Borrowing available to either CFKK or CIF by causing any foreign or domestic branch or Affiliate of such Bank to make such Borrowing available; provided that any exercise of such option shall not affect the obligation of such Borrower to repay such Borrowing in accordance with the terms of this Agreement, the Local Currency Addendum and the Japan Local Currency Addendum, as applicable. ARTICLE III CONDITIONS OF LENDING SECTION III.01. Conditions Precedent to Initial Advances. The obligation of each Bank to make its initial Advance on or after the Closing Date is subject to the conditions precedent that (i) all principal, accrued interest, fees, expenses, costs and other amounts outstanding under the terms of the Prior 364-Day Agreement, accrued to the Closing Date, shall have been paid, and the commitments of the lenders thereunder to extend credit shall have terminated, (ii) the Prior Five-Year Agreement shall have been refinanced pursuant to the Five-Year Agreement, (iii) the Agent shall have received, for the benefit of the Banks, the one-time upfront fees due and payable on the Closing Date, (iv) each Departing Bank shall have received payment in full of all of the principal, accrued interest, fees, expenses, costs and other amounts owing to it under the Existing Credit Agreement (other than obligations to pay fees and expenses with respect to which the Borrowers have not received an invoice, contingent indemnity obligations and other contingent obligations owing to it under the Existing Credit Agreement) and (v) the Agent shall have received on or before the day of the initial Borrowing the following, each dated the Closing Date, in form and substance satisfactory to the Agent and in sufficient copies for each Bank:
56
In addition, (i) the obligation of each Bank requesting Notes to make its initial Advance is subject to the further condition precedent that the Agent shall have received, on or before the day of the initial Borrowing, the Notes dated the Closing Date and payable to the order of such Bank, (ii) the obligation of the Local Currency Banks to make the initial Advances under the Local Currency Addendum shall be subject to any further conditions set forth in the Local Currency Addendum and (iii) the obligation of the Japan Local Currency Banks to make the initial Advances under the Japan Local Currency Addendum shall be subject to any further conditions set forth in the Japan Local Currency Addendum. SECTION III.02. Conditions Precedent to Each Borrowing. The obligation of each Bank to make an Advance on the occasion of each Borrowing to any Borrower (including the initial Borrowing) shall be subject to the further conditions precedent that on the date of such Borrowing: (a) the following statements shall be true (and each of the giving of the applicable Notice of Borrowing and the acceptance by a Borrower of the proceeds of such Borrowing shall constitute a representation and warranty by such Borrower that on the date of such Borrowing such statements are true):
(b) the Agent shall have received such other approvals, opinions or documents as any Bank through the Agent may reasonably request. SECTION III.03. Conditions Precedent to Certain Borrowings. The obligation of each Bank to make an Advance on the occasion of any Borrowing to any Borrower which would increase the aggregate outstanding amount of Advances owing to such Bank over the aggregate amount of such Advances outstanding immediately prior to the making of such Advance shall be subject to the further conditions precedent that on the date of such Borrowing the following statements shall be true (and each of the giving of the applicable Notice of Borrowing and the acceptance by a Borrower of the proceeds of such Borrowing shall constitute a representation and warranty by such Borrower that on the date of such Borrowing such statements are true): (i) the representations and warranties contained in subsection (f) of Section 57 4.01 are correct on and as of the date of such Borrowing, before and after giving effect to such Borrowing and to the application of the proceeds therefrom, as though made on and as of such date, and (ii) no event has occurred and is continuing, or would result from such Borrowing or from the application of the proceeds therefrom, which would constitute an Event of Default with respect to any Borrower but for the requirement that notice be given or time elapse or both. ARTICLE IV REPRESENTATIONS AND WARRANTIES SECTION IV.01. Representations and Warranties of the Borrowers. Each Borrower represents and warrants as of the Closing Date and on each date specified in Article III, as follows:
(i) This Agreement has been duly executed and delivered by a duly authorized officer of such Borrower. Upon execution of this Agreement by the Agent and when the Agent shall have been notified by each Bank that such Bank has executed this Agreement, this Agreement will be, and such Borrower’s Notes when executed and delivered hereunder will be, legal, valid and binding obligations of such Borrower enforceable against such Borrower in accordance with their respective terms, except as enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors’ rights generally and by the effect of general principles of equity. 58
59 of each Advance, no more than 25% of the value of the assets of such Borrower will consist of, or be represented by, Margin Stock.
60 activities undertaken by all Borrowers’ and Subsidiaries’ employees around the world. Among the commitments in the Worldwide Code of Conduct is the commitment that each of the Borrowers and Subsidiaries, and their respective employees, follow applicable import and export control laws when conducting business around the world, including any Anti-Corruption Laws and Sanctions Laws and Regulations, and such commitment currently applies, and will apply, to all activities undertaken by each Borrower and each Subsidiary, including but not limited to, any use of the proceeds of this Agreement, the Local Currency Addendum, the Japan Local Currency Addendum or any Advance, as well as the payment of any amount due pursuant to this Agreement, the Local Currency Addendum or the Japan Local Currency Addendum. SECTION IV.02. Additional Representations and Warranties of CFSC, CIF and CFKK. Each of CFSC, CIF and CFKK represents and warrants that neither it nor any of its Subsidiaries is an “investment company” or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended. ARTICLE V COVENANTS OF THE BORROWERS SECTION V.01. Affirmative Covenants. So long as any Advance shall remain unpaid or any Bank shall have any Commitment hereunder, each Borrower (provided, that for purposes of Sections 5.01(f)(i), (ii), (iii), (v), (vi), (viii), (ix) and (x), the term Borrower refers to each of Caterpillar and CFSC, but not to CFKK or CIF) will, unless the Majority Banks shall otherwise consent in writing:
61 cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in the judgment of such Borrower may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all times; provided, however, that nothing in this Section shall prevent such Borrower from discontinuing the operation or maintenance of any of such properties if such discontinuance is, in the reasonable judgment of such Borrower, desirable in the conduct of its business or the business of any Subsidiary of such Borrower and would not reasonably be expected to have a material adverse effect on its ability to perform its obligations under this Agreement and its Notes.
(i) as soon as available and in any event within forty five (45) days after the end of each of the first three quarters of each fiscal year of Caterpillar and CFSC, a consolidated balance sheet of Caterpillar and CFSC as of the end of such quarter, and a consolidated statement of income and changes in stockholders’ equity of Caterpillar and CFSC for the period commencing at the end of the previous fiscal year and ending with the end of such quarter; 62
63 Addendum or the Japan Local Currency Addendum (without duplication of notices furnished to the Banks pursuant to clause (v) of this subsection (f));
Financial statements and other documents required to be furnished pursuant to Section 5.01(f)(i) or (ii) (to the extent any such financial statements or other documents are included in reports or other materials otherwise filed with the Securities and Exchange Commission) may be delivered electronically and if so delivered, shall be deemed to have been furnished on the date on which (i) the applicable Borrower posts such financial statements or other documents, or provides a link thereto, on such Borrower’s website on the Internet, or (ii) such financial statements or other documents are posted on behalf of the applicable Borrower on the Approved Electronic Platform or an Internet or intranet website, if any, to which each Bank and the Agent have access (whether a commercial, third-party website or whether sponsored by the Agent or the Securities and Exchange Commission’s website located at http://www.sec.gov/edgar/searchedgar/webusers.htm). SECTION V.02. Negative Covenants. So long as any Advance shall remain unpaid or any Bank shall have any Commitment hereunder, no Borrower will, without the written consent of the Majority Banks: 64
SECTION V.03. Financial Covenant of Caterpillar. So long as any Advance shall remain unpaid or any Bank shall have any Commitment hereunder, Caterpillar will, unless the Majority Banks shall otherwise consent in writing, maintain at all times during each fiscal year of Caterpillar, Consolidated Net Worth of not less than $9,000,000,000. SECTION V.04. Financial and Other Covenants of CFSC. So long as any Advance shall remain unpaid or any Bank shall have any Commitment hereunder, CFSC will, unless the Majority Banks shall otherwise consent in writing: (a) Ratio of CFSC Consolidated Debt to Consolidated Net Worth. (i) Maintain at all times a ratio (the “Leverage Ratio”) of (x) CFSC Consolidated Debt to (y) CFSC’s Consolidated Net Worth of not greater than 10.0 to 1. For purposes of this subsection (i), the Leverage Ratio at any time shall be equal to the average of the Leverage Ratios as determined on the last day of each of the six preceding calendar months. 65 (ii) Maintain a Leverage Ratio of not greater than 10.0 to 1 on each December 31, commencing December 31, 2019. For purposes of this subsection (ii), the Leverage Ratio shall be the ratio of (x) CFSC Consolidated Debt to (y) CFSC’s Consolidated Net Worth on the date for which computed.
ARTICLE VI EVENTS OF DEFAULT SECTION VI.01. Events of Default. If any of the following events (“Events of Default”) shall occur and be continuing with respect to any Borrower:
66
(e) Such Borrower or any of its Subsidiaries (other than CFSC and its Subsidiaries in the case of Caterpillar) shall generally not pay its debts as such debts become due, or an officer or other authorized representative of such Borrower or Subsidiary shall admit in writing such Borrower’s or Subsidiary’s inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by such Borrower or any of its Subsidiaries (other than CFSC and its Subsidiaries in the case of Caterpillar) seeking to adjudicate it a 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 67 entry of an order for relief or the appointment of a receiver, trustee, or other similar official for it or for any substantial part of its property; or any such proceeding shall be instituted against such Borrower or any of its Subsidiaries (other than CFSC and its Subsidiaries in the case of Caterpillar) and either an order for relief against such Borrower or Subsidiary is entered in such proceeding or such proceeding is not dismissed within forty-five (45) days; or such Borrower or any of its Subsidiaries (other than CFSC and its Subsidiaries in the case of Caterpillar) shall take any corporate action to authorize any of the actions set forth above in this subsection (e); provided, however, that the filing of one or more of the proceedings and/or the occurrence of one or more of the other events described in this Section 6.01(e) with respect to any Insignificant Subsidiary shall not constitute an Event of Default hereunder until such time as the aggregate of the asset values, as reasonably determined by Caterpillar in accordance with generally accepted accounting principles, of all Insignificant Subsidiaries subject to the proceedings and/or other events described in this Section 6.01(e) equals or exceeds $250,000,000 (with each Insignificant Subsidiary’s asset value being determined, for purposes of this clause (e), on the date on which such filing or other event commences or otherwise initially occurs with respect to such Insignificant Subsidiary and with such value remaining in effect for such Insignificant Subsidiary once determined); or
68 (i) With respect to CFSC, CIF or CFKK, the Support Agreement shall for any reason fail to be in full force and effect, or any action shall be taken by any Borrower to discontinue or to assert the invalidity or unenforceability of the Support Agreement, or CFSC or Caterpillar shall fail to comply with any of the terms or provisions of the Support Agreement; then, and in any such event, (i) the Agent (x) shall at the request, or may with the consent, of the Majority Banks, by notice to the Borrowers, declare the obligation of each Bank to make Advances to such Borrower to be terminated, whereupon the same shall forthwith terminate, and (y) shall at the request, or may with the consent, of the Majority Banks, by notice to such Borrower, declare the Advances to such Borrower, all interest thereon and all other amounts payable under this Agreement to be forthwith due and payable, whereupon such Advances, all such interest and all such amounts shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by such Borrower; (ii) in the case of a CFSC Event of Default or a CIF Event of Default, the Local Currency Agent, (x) shall at the request, or may with the consent, of the Majority Local Currency Banks, by notice to the Borrowers, declare the obligation of each Local Currency Bank to make Local Currency Advances to CIF to be terminated, whereupon the same shall forthwith terminate, and (y) shall at the request, or may with the consent, of the Majority Local Currency Banks, by notice to CIF, declare the Local Currency Advances to CIF, all interest thereon and all other amounts payable under this Agreement and the Local Currency Addendum to be forthwith due and payable, whereupon such Local Currency Advances, all such interest and all such amounts shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by CIF and (iii) in the case of a CFSC Event of Default or a CFKK Event of Default, the Japan Local Currency Agent, (x) shall at the request, or may with the consent, of the Majority Japan Local Currency Banks, by notice to the Borrowers, declare the obligation of each Japan Local Currency Bank to make Japan Local Currency Advances to CFKK to be terminated, whereupon the same shall forthwith terminate, and (y) shall at the request, or may with the consent, of the Majority Japan Local Currency Banks, by notice to CFKK, declare the Japan Local Currency Advances to CFKK, all interest thereon and all other amounts payable under this Agreement and the Japan Local Currency Addendum to be forthwith due and payable, whereupon such Japan Local Currency Advances, all such interest and all such amounts shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by CFKK; provided, however, upon the occurrence of any Event of Default with respect to any Borrower described in Section 6.01(e), (A) the obligation of each Bank to make Advances to any Borrower shall automatically be terminated and (B) the Advances to the Borrowers, all such interest and all such amounts shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by the Borrowers. Notwithstanding anything in the foregoing to the contrary, the fact that an Event of Default exists with respect to one of the Borrowers hereunder shall not of itself constitute an Event of Default with respect to any of the other Borrowers, provided, however, that in the case of CIF and CFKK, any CFSC Event of Default shall be a CIF Event of Default and a CFKK Event of Default. ARTICLE VII AGENCY 69 SECTION VII.01. Appointment and Authority. Each Bank hereby appoints Citibank to act on its behalf as the Agent hereunder and authorizes the Agent to take such actions on its behalf and to exercise such powers as are delegated to the Agent by the terms hereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article VII are solely for the benefit of the Agent and the Banks, and no Borrower shall have any rights as a third party beneficiary of any of such provisions. SECTION VII.02. Agent Individually. (a) The Person serving as the Agent hereunder shall have the same rights and powers in its capacity as a Bank as any other Bank and may exercise the same as though it were not the Agent; and the term “Bank” or “Banks” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrowers or any Subsidiary or other Affiliate thereof as if such Person were not the Agent hereunder and without any duty to account therefor to the Banks.
70 Currency Addendum and under the Japan Local Currency Addendum). Each Bank agrees that no member of the Agent’s Group is or shall be required to restrict its activities as a result of the Person serving as Agent being a member of the Agent’s Group, and that each member of the Agent’s Group may undertake any Activities without further consultation with or notification to any Bank. None of (i) this Agreement, the Notes, the Local Currency Addendum or the Japan Local Currency Addendum, (ii) the receipt by the Agent’s Group of information (including the Information Memorandum) concerning the Borrowers or their Affiliates (including information concerning the ability of the Borrowers to perform their respective obligations hereunder, under the Local Currency Addendum, if applicable, and under the Japan Local Currency Addendum, if applicable) nor (iii) any other matter shall give rise to any fiduciary, equitable or contractual duties (including without limitation any duty of trust or confidence) owing by the Agent or any member of the Agent’s Group to any Bank including any such duty that would prevent or restrict the Agent’s Group from acting on behalf of customers (including the Borrowers or their Affiliates) or for its own account. SECTION VII.03. Duties of Agent; Exculpatory Provisions. (a) The Agent’s duties hereunder, the Local Currency Agent’s duties under the Local Currency Addendum and the Japan Local Currency Agent’s duties under the Japan Local Currency Addendum are solely ministerial and administrative in nature and none of the Agent, the Local Currency Agent or the Japan Local Currency Agent shall have any duties or obligations except those expressly set forth herein, in the Local Currency Addendum or in the Japan Local Currency Addendum. Without limiting the generality of the foregoing, none of the Agent, the Local Currency Agent or the Japan Local Currency Agent shall have any duty to take any discretionary action or exercise any discretionary powers, but shall be required to act or refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the written direction of the Majority Banks, the Majority Local Currency Banks or the Majority Japan Local Currency Banks, as applicable (or such other number or percentage of the Banks as shall be expressly provided for herein, in the Local Currency Addendum or in the Japan Local Currency Addendum, as applicable), provided that none of the Agent, the Local Currency Agent or the Japan Local Currency Agent shall be required to take any action that, in its opinion or the opinion of its counsel, may expose the Agent, the Local Currency Agent, the Japan Local Currency Agent or any of their respective Affiliates to liability or that is contrary to this Agreement, the Local Currency Addendum, the Japan Local Currency Addendum or applicable law (including for the avoidance of doubt, any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Bank in violation of any Debtor Relief Law). (b) None of the Agent, the Local Currency Agent or the Japan Local Currency Agent shall be liable for any action taken or not taken by it (i) with the consent or at the request of the Majority Banks, the Majority Local Currency Banks or the Majority Japan Local Currency Banks, as applicable (or as the Agent shall believe in good faith shall be necessary, under the circumstances as provided in Section 8.01 and 6.01) or (ii) in the absence of its own gross negligence or willful misconduct. The Agent shall be deemed not to have knowledge of any Event of Default or the event or events that give or may give rise to any Event of Default unless and until the Borrowers or any Bank shall have given notice to the Agent describing such Event of Default and such event or events. 71
SECTION VII.04. Reliance by Agent. Each of the Agent, the Local Currency Agent and the Japan Local Currency Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. Each of the Agent, the Local Currency Agent and the Japan Local Currency Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of an Advance that by its terms must be fulfilled to the satisfaction of a Bank, a Local Currency Bank or the Japan Local Currency Bank, the Agent, the Local Currency Agent and the Japan Local Currency Agent may presume that such condition is satisfactory to such Bank, Local Currency Bank or the Japan Local Currency Bank, as applicable unless an officer of the Agent, the Local Currency Agent or the Japan Local Currency Agent, as applicable, responsible for the transactions contemplated hereby shall have received notice to the contrary from such Bank, Local Currency Bank or Japan Local Currency Bank, as applicable, prior to the making of such Advance, and in the case of a Borrowing, such Bank, Local Currency Bank or such Japan Local Currency Bank, as applicable, shall not have made available to the Agent, the Local Currency Agent or the Japan Local Currency Agent, as applicable, such Bank’s, Local Currency Bank’s or Japan Local Currency Bank’s, as applicable, ratable portion of such Borrowing. The Agent, the Local Currency Agent and the Japan Local Currency Agent may consult with legal counsel (who may be counsel for the Borrowers), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts. 72 SECTION VII.05. Delegation of Duties. The Agent may perform any and all of its duties and exercise its rights and powers hereunder, under the Local Currency Addendum or under the Japan Local Currency Addendum by or through any one or more sub agents appointed by the Agent. The Agent and any such sub agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. Each such sub agent and the Related Parties of the Agent and each such sub agent shall be entitled to the benefits of all provisions of this Article VII and Section 8.04 (as though such sub-agents were the “Agent” hereunder or under the Japan Local Currency Addendum) as if set forth in full herein with respect thereto. SECTION VII.06. Resignation or Removal of Agent. (a) The Agent may at any time give notice of its resignation to the Banks and the Borrowers. Upon receipt of any such notice of resignation, the Majority Banks shall have the right, in consultation with the Borrowers, to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Majority Banks and shall have accepted such appointment within 60 days after the retiring Agent gives notice of its resignation (such 60-day period, the “Bank Appointment Period”), then the retiring Agent may on behalf of the Banks, appoint a successor Agent meeting the qualifications set forth above. In addition and without any obligation on the part of the retiring Agent to appoint, on behalf of the Banks, a successor Agent, the retiring Agent may at any time upon or after the end of the Bank Appointment Period notify the Borrowers and the Banks that no qualifying Person has accepted appointment as successor Agent and the effective date of such retiring Agent’s resignation which effective date shall be no earlier than three business days after the date of such notice. Upon the resignation effective date established in such notice and regardless of whether a successor Agent has been appointed and accepted such appointment, the retiring Agent’s resignation shall nonetheless become effective and (i) the retiring Agent shall be discharged from its duties and obligations as Agent hereunder and (ii) all payments, communications and determinations provided to be made by, to or through the Agent shall instead be made by or to each Bank directly, until such time as the Majority Banks appoint a successor Agent as provided for above in this clause (a). (b) If the Person serving as Agent is a Defaulting Bank pursuant to clause (iv) of the definition thereof (such Person, a “Defaulting Agent”), the Majority Banks may, by notice in writing to the Borrowers and such Defaulting Agent, remove such Defaulting Agent as Agent and, in consultation with the Borrowers, appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. Such Defaulting Agent’s removal shall become effective upon the earlier of (x) the date that a qualifying Person shall have been so appointed by the Majority Banks and shall have accepted such appointment and (y) 30 days after the delivery of the removal notice in writing to the Borrowers and such Defaulting Agent (such date, the “Removal Effective Date”). Upon the Removal Effective Date and regardless of whether a successor Agent has been appointed and accepted such appointment, the removal of such Defaulting Agent shall become effective and (i) such Defaulting Agent shall be discharged from its duties and obligations as Agent hereunder and (ii) all payments, communications and determinations provided to be made by, to or through the Agent shall instead be made by or to each Bank directly, until such time as the Majority Banks appoint a successor Agent as provided for above in this clause (b). 73 (c) Upon the acceptance of a successor’s appointment as Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties as Agent of the retiring (or retired) or removed Agent, and the retiring or removed Agent shall be discharged from all of its duties and obligations as Agent hereunder (if not already discharged therefrom as provided above in this Section 7.06). The fees payable by the Borrowers to a successor Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrowers and such successor. After the retiring or removed Agent’s resignation or removal hereunder, or any retiring Local Currency Agent’s resignation or removal under the Local Currency Addendum, or any retiring Japan Local Currency Agent’s resignation or removal under the Japan Local Currency Addendum, the provisions of this Article VII and Section 8.04 shall continue in effect for the benefit of such retiring or removed Agent, Local Currency Agent or Japan Local Currency Agent, its sub agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring or removed Agent was acting as Agent, the retiring Local Currency Agent was acting as Local Currency Agent or the retiring Japan Local Currency Agent was acting as Japan Local Currency Agent. SECTION VII.07. Non-Reliance on Agents and Other Banks. (a) Each Bank confirms to the Agent, the Local Currency Agent, the Japan Local Currency Agent, each other Bank and each of their respective Related Parties that it (i) possesses (individually or through its Related Parties) such knowledge and experience in financial and business matters that it is capable, without reliance on the Agent, the Local Currency Agent, the Japan Local Currency Agent, any other Bank or any of their respective Related Parties, of evaluating the merits and risks (including tax, legal, regulatory, credit, accounting and other financial matters) of (x) entering into this Agreement, (y) making Advances and other extensions of credit hereunder and (z) taking or not taking actions hereunder and thereunder, (ii) is financially able to bear such risks and (iii) has determined that entering into this Agreement and making Advances and other extensions of credit hereunder is suitable and appropriate for it. (b) Each Bank acknowledges that (i) it is solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with this Agreement and, to the extent such Bank is a party thereto, the Local Currency Addendum and the Japan Local Currency Addendum, (ii) that it has, independently and without reliance upon the Agent, the Local Currency Agent, the Japan Local Currency Agent, any other Bank or any of their respective Related Parties, made its own appraisal and investigation of all risks associated with, and its own credit analysis and decision to enter into, this Agreement and, to the extent such Bank is a party thereto, the Local Currency Addendum and the Japan Local Currency Addendum, based on such documents and information, as it has deemed appropriate and (iii) it will, independently and without reliance upon the Agent, the Local Currency Agent, the Japan Local Currency Agent, any other Bank or any of their respective Related Parties, continue to be solely responsible for making its own appraisal and investigation of all risks arising under or in connection with, and its own credit analysis and decision to take or not take action under, this Agreement and, to the extent such Bank is a party thereto, the Local Currency Addendum and the Japan Local Currency Addendum, based on such documents and information as it shall from time to time deem appropriate, which may include, in each case: (A) the financial condition, status and capitalization of each Borrower; 74
SECTION VII.08. No Other Duties, etc. Anything herein to the contrary notwithstanding, none of the Persons acting as Bookrunners or Arrangers listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement, except in its capacity, as applicable, as the Agent or as a Bank hereunder. SECTION VII.09. Indemnification. To the extent not reimbursed by the Borrowers in accordance with Section 8.4 hereof, the Banks agree to indemnify the Agent, the Local Currency Agent, the Japan Local Currency Agent, the Arrangers and the Co-Syndication Agents ratably according to the respective principal amounts of the Revolving Credit Advances, Local Currency Advances or Japan Local Currency Advances, as applicable, then held by each of them (or if no Revolving Credit Advances, Local Currency Advances or Japan Local Currency Advances are at the time outstanding, ratably according to the respective amounts of their Commitments, Local Currency Commitments or Japan Local Currency Commitments, as applicable), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Agent, the Local Currency Agent, the Japan Local Currency Agent, the Arrangers or the Co-Syndication Agents in any way relating to or arising out of this Agreement, the Local Currency Addendum or the Japan Local Currency Addendum or any action taken or omitted by the Agent, the Local Currency Agent, the Japan Local Currency Agent, the Arrangers or the Co-Syndication Agents under this Agreement, the Local Currency Addendum or the Japan Local Currency Addendum; provided that no Bank shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Agent’s, the Local Currency Agent’s, the Japan Local Currency Agent’s, the Arrangers’ or the Co-Syndication Agents’ gross negligence or willful misconduct. Without limitation of the foregoing, each Bank agrees to reimburse the Agent, the Local Currency Agent, the Japan Local Currency Agent, the 75 Arrangers and the Co-Syndication Agents promptly upon demand for its ratable share (determined as specified in the first sentence of this Section 7.09) of any out-of-pocket expenses (including reasonable outside counsel fees) incurred by the Agent, the Local Currency Agent, the Japan Local Currency Agent, the Arrangers or the Co-Syndication Agents in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiation, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, the Local Currency Addendum or the Japan Local Currency Addendum, to the extent that the Agent, the Local Currency Agent, the Japan Local Currency Agent, the Arrangers or the Co-Syndication Agents are not reimbursed for such expenses by the Borrowers. SECTION VII.10. Bank ERISA Matters. (a) Each Bank (x) represents and warrants, as of the date such Person became a Bank party hereto, to, and (y) covenants, from the date such Person became a Bank party hereto to the date such Person ceases being a Bank party hereto, for the benefit of, the Agent, and each Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrowers, that at least one of the following is and will be true:
76 (b) In addition, unless either (1) sub-clause (i) in the immediately preceding clause (a) is true with respect to a Bank or (2) a Bank has provided another representation, warranty and covenant in accordance with sub-clause (iv) in the immediately preceding clause (a), such Bank further (x) represents and warrants, as of the date such Person became a Bank party hereto, to, and (y) covenants, from the date such Person became a Bank party hereto to the date such Person ceases being a Bank party hereto, for the benefit of, the Agent, and each Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrowers, that none of the Agent, or any Arranger or any of their respective Affiliates is a fiduciary with respect to the assets of such Bank involved in such Bank’s entrance into, participation in, administration of and performance of the Advances, the Commitments and this Agreement (including in connection with the reservation or exercise of any rights by the Agent under this Agreement, the Local Currency Addendum, the Japan Local Currency Addendum or any documents related to hereto or thereto). As used in this Section, the following terms shall have the following meanings: “Benefit Plan” means any of (a) an “employee benefit plan” (as defined in Section 3(3) of ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in and subject to Section 4975 of the Code or (c) any Person whose assets include (for purposes of the Plan Asset Regulations or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”. “PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time. SECTION VII.11. Erroneous Payments. (a) If the Agent (x) notifies a Bank, or any Person who has received funds on behalf of a Bank (any such Bank or other recipient (and each of their respective successors and assigns), a “Payment Recipient”) that the Agent has determined in its sole discretion (whether or not after receipt of any notice under immediately succeeding clause (b)) that any funds (as set forth in such notice from the Agent) received by such Payment Recipient from the Agent or any of its Affiliates were erroneously or mistakenly transmitted to, or otherwise erroneously or mistakenly received by, such Payment Recipient (whether or not known to such Bank or other Payment Recipient on its behalf) (any such funds, whether transmitted or received as a payment, prepayment or repayment of principal, interest, fees, distribution or otherwise, individually and collectively, an “Erroneous Payment”) and (y) demands in writing the return of such Erroneous Payment (or a portion thereof), such Erroneous Payment shall at all times remain the property of the Agent pending its return or repayment as contemplated below in this Section 7.11 and held in trust for the benefit of the Agent, and such Bank shall (or, with respect to any Payment Recipient who received such funds on its behalf, shall cause such Payment Recipient to) promptly, but in no event later than two Business Days thereafter (or such later date as the Agent may, in its sole discretion, specify in writing), return to the Agent the amount of any such Erroneous Payment (or portion thereof) as to which such a demand was made, in same day funds (in the currency so received), together with interest thereon (except to the extent waived in writing by the Agent) in respect of each day from and including the date such Erroneous Payment (or portion thereof) was received by such Payment Recipient to the date such amount is repaid to the Agent in same day funds at the greater of the Federal Funds Rate and a rate 77 determined by the Agent in accordance with banking industry rules on interbank compensation from time to time in effect. A notice of the Agent to any Payment Recipient under this clause (a) shall be conclusive, absent manifest error. (b) Without limiting immediately preceding clause (a), each Bank or any Person who has received funds on behalf of a Bank (and each of their respective successors and assigns), agrees that if it receives a payment, prepayment or repayment (whether received as a payment, prepayment or repayment of principal, interest, fees, distribution or otherwise) from the Agent (or any of its Affiliates) (x) that is in a different amount than, or on a different date from, that specified in this Agreement or in a notice of payment, prepayment or repayment sent by the Agent (or any of its Affiliates) with respect to such payment, prepayment or repayment, (y) that was not preceded or accompanied by a notice of payment, prepayment or repayment sent by the Agent (or any of its Affiliates), or (z) that such Bank, or other such recipient, otherwise becomes aware was transmitted, or received, in error or by mistake (in whole or in part), then in each such case:
For the avoidance of doubt, the failure to deliver a notice to the Agent pursuant to this Section 7.11(b) shall not have any effect on a Payment Recipient’s obligations pursuant to Section 7.11(a) or on whether or not an Erroneous Payment has been made. (c) Each Bank hereby authorizes the Agent to set off, net and apply any and all amounts at any time owing to such Bank under any Loan Document (including this Agreement), or otherwise payable or distributable by the Agent to such Bank under any such Loan Document with respect to any payment of principal, interest, fees or other amounts, against any amount that the Agent has demanded to be returned under immediately preceding clause (a). (d) (i) In the event that an Erroneous Payment (or portion thereof) is not recovered by the Agent for any reason, after demand therefor in accordance with immediately preceding clause (a), from any Bank that has received such Erroneous Payment (or portion thereof) (and/or from any Payment Recipient who received such Erroneous Payment (or portion thereof) on its respective behalf) (such unrecovered amount, an “Erroneous Payment Return Deficiency”), upon the Agent’s notice to such Bank at any time, then effective immediately (with the consideration therefor being acknowledged by the parties hereto), (A) such Bank shall be deemed to have assigned its Advances (but not its Commitments) with respect to which such Erroneous Payment was made (the “Erroneous Payment Impacted Class”) in an amount equal to 78 the Erroneous Payment Return Deficiency (or such lesser amount as the Agent may specify) (such assignment of the Advances (but not Commitments) of the Erroneous Payment Impacted Class, the “Erroneous Payment Deficiency Assignment”) (on a cashless basis and such amount calculated at par plus any accrued and unpaid interest (with the assignment fee to be waived by the Agent in such instance)), and is hereby (together with the Borrowers) deemed to execute and deliver an Assignment and Acceptance (or, to the extent applicable, an agreement incorporating an Assignment and Acceptance by reference pursuant to an Approved Electronic Platform as to which the Agent and such parties are participants) with respect to such Erroneous Payment Deficiency Assignment, and such Bank shall deliver any Notes evidencing such Advances to the Borrowers or the Agent (but the failure of such Person to deliver any such Notes shall not affect the effectiveness of the foregoing assignment), (B) the Agent as the assignee Bank shall be deemed to have acquired the Erroneous Payment Deficiency Assignment, (C) upon such deemed acquisition, the Agent as the assignee Bank shall become a Bank, as applicable, hereunder with respect to such Erroneous Payment Deficiency Assignment and the assigning Bank shall cease to be a Bank, as applicable, hereunder with respect to such Erroneous Payment Deficiency Assignment, excluding, for the avoidance of doubt, its obligations under the indemnification provisions of this Agreement and its applicable Commitments which shall survive as to such assigning Bank, (D) [RESERVED], and (E) the Agent will reflect in the Register its ownership interest in the Advances subject to the Erroneous Payment Deficiency Assignment. For the avoidance of doubt, no Erroneous Payment Deficiency Assignment will reduce the Commitments of any Bank and such Commitments shall remain available in accordance with the terms of this Agreement. (ii) Subject to Section 8.07, the Agent may, in its discretion, sell any Advances (provided that no sales of such Advances shall be made to a Defaulting Bank) acquired pursuant to an Erroneous Payment Deficiency Assignment and upon receipt of the proceeds of such sale, the Erroneous Payment Return Deficiency owing by the applicable Bank shall be reduced by the net proceeds of the sale of such Advance (or portion thereof), and the Agent shall retain all other rights, remedies and claims against such Bank (and/or against any recipient that receives funds on its respective behalf). In addition, an Erroneous Payment Return Deficiency owing by the applicable Bank (x) shall be reduced by the proceeds of prepayments or repayments of principal and interest, or other distribution in respect of principal and interest, received by the Agent on or with respect to any such Advances acquired from such Bank pursuant to an Erroneous Payment Deficiency Assignment (to the extent that any such Advances are then owned by the Agent) and (y) may, in the sole discretion of the Agent, be reduced by any amount specified by the Agent in writing to the applicable Bank from time to time. (e) The parties hereto agree that (x) irrespective of whether the Agent may be equitably subrogated, in the event that an Erroneous Payment (or portion thereof) is not recovered from any Payment Recipient that has received such Erroneous Payment (or portion thereof) for any reason, the Agent shall be subrogated to all the rights and interests of such Payment Recipient (and, in the case of any Payment Recipient who has received funds on behalf of a Bank, to the rights and interests of such Bank, as the case may be) under this Agreement and the other Loan Documents, with respect to such amount (the “Erroneous Payment Subrogation Rights”) (provided that the Borrowers’ obligations under this Agreement and the other Loan Documents in respect of the Erroneous Payment Subrogation Rights shall not be duplicative of such obligations in respect of Advances that have been assigned to the Agent under an Erroneous 79 Payment Deficiency Assignment) and (y) an Erroneous Payment shall not pay, prepay, repay, discharge or otherwise satisfy any Obligations owed by a Borrower; provided that this Section 7.11 shall not be interpreted to increase (or accelerate the due date for), or have the effect of increasing (or accelerating the due date for), the Obligations of the Borrowers relative to the amount (and/or timing for payment) of the Obligations that would have been payable had such Erroneous Payment not been made by the Agent; provided, further, that for the avoidance of doubt, immediately preceding clauses (x) and (y) shall not apply to the extent any such Erroneous Payment is, and solely with respect to the amount of such Erroneous Payment that is, comprised of funds received by the Agent from the Borrowers for the purpose of making such Erroneous Payment.
ARTICLE VIII MISCELLANEOUS SECTION VIII.01. Amendments, Etc. (a) No amendment or waiver of any provision of this Agreement, the Local Currency Addendum, the Japan Local Currency Addendum or the Notes, nor consent to any departure by any Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by the Borrowers and the Majority Banks, the Majority Local Currency Banks or the Majority Japan Local Currency Banks, as the case may be, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no amendment, waiver or consent shall, unless in writing and signed by all the Banks, do any of the following: (a) waive any of the conditions specified in Section 3.01, 3.02, or 3.03 (if and to the extent that the Borrowing which is the subject of such waiver would involve an increase in the aggregate outstanding amount of Advances over the aggregate amount of Advances outstanding immediately prior to such Borrowing), (b) increase the Commitments of the Banks (other than pursuant to Section 2.05(c)), increase the Local Currency Commitments, increase the Japan Local Currency Commitments, or subject the Banks to any additional obligations, (c) reduce or forgive the principal of, or the rate or amount of interest on, the Advances or any fees or other amounts payable hereunder, (d) postpone any date fixed for any payment of principal of, or interest on, the Advances or any fees or other amounts payable hereunder, (e) change the definition of “Majority Banks,” “Majority Local Currency Banks” or “Majority Japan Local Currency Banks,” or the percentage of the Commitments or of the aggregate unpaid principal amount of the Advances, or the number of Banks, which shall be required for the Banks, or any of them, to take any action hereunder, under the Local Currency Addendum or under the Japan Local Currency Addendum, or the percentage of the Local 80 Currency Commitments or Japan Local Currency Commitments or the aggregate unpaid Local Currency Advances or Japan Local Currency Advances, or the number of Local Currency Banks or Japan Local Currency Banks, which shall be required for the Local Currency Banks or the Japan Local Currency Banks, as applicable, or any of them, to take any action hereunder, under the Local Currency Addendum or under the Japan Local Currency Addendum, as applicable, (f) amend, modify, or otherwise release CFSC from its obligations under, Article IX hereof or (g) amend this Section 8.01; and provided, further, that no amendment, waiver or consent shall, unless in writing and signed by the Agent and the Local Currency Agent or the Japan Local Currency Agent, as applicable, in addition to the Borrower and the Banks required above to take such action, affect the rights or duties of the Agent, the Local Currency Agent or the Japan Local Currency Agent, as applicable, under this Agreement, the Local Currency Addendum, the Japan Local Currency Addendum or any Note. (b) Anything herein to the contrary notwithstanding, during such period as a Bank is a Defaulting Bank, to the fullest extent permitted by applicable law, such Bank will not be entitled to vote in respect of amendments and waivers hereunder and the Commitment and the outstanding Advances or other extensions of credit of such Bank hereunder will not be taken into account in determining whether the Majority Banks or all of the Banks, as required, have approved any such amendment or waiver (and the definition of “Majority Banks” will automatically be deemed modified accordingly for the duration of such period); provided, that any such amendment or waiver that would increase the Commitment of such Defaulting Bank or subject such Defaulting Bank to any additional obligations, postpone the date fixed for any payment of principal or interest owing to such Defaulting Bank hereunder, reduce the principal of, or interest on, the Advances or any fees or other amounts owing to such Defaulting Bank hereunder, or alter the terms of this proviso, will require the consent of such Defaulting Bank. SECTION VIII.02. Notices; Communications, Etc. (a) All notices, demands, requests, consents and other Communications provided for in this Agreement shall be given in writing, or by any telecommunication device capable of creating a written record (including electronic mail, except with respect to (x) service of process to any party or (y) communications to any Bank that has previously notified the Agent and the Borrowers that electronic mail is not an acceptable delivery method), and addressed to the party to be notified as follows: (i) if to Caterpillar Caterpillar Inc. 100 N.E. Adams Street Peoria, Illinois 61629 5370 Attention of: Director – Corporate Finance Services Telecopier No.: 309-636-2869 E-Mail Address: DeCamp_Rob@cat.com with a copy to: Caterpillar Inc. 510 Lake Cook Road, Suite 100 Deerfield, Illinois 60015-4922 Attention: Legal Services – Enterprise Governance & Finance Group 81 Telecopier No.: 309-992-6964 E-Mail Address: david.nimmons@cat.com
Caterpillar Financial Services Corporation 2120 West End Avenue Nashville, Tennessee 37203-0001 Attention of: Treasurer Telecopier No.: 615-341-8596 E-Mail Address: Rob.DeCamp@cat.com with a copy to: Caterpillar Financial Services Corporation 2120 West End Avenue Nashville, Tennessee 37203-0001 Attention: Legal Department – Securities Group Telecopier No.: 615-341-1083 E-Mail Address: David.nimmons@cat.com
Citibank, N.A. 1615 Brett Rd., Building No. 3 New Castle, Delaware 19720 Attention of: Bank Loan Syndications Telecopier No.: 646-274-5080 E-Mail Address: glagentofficeops@citi.com with a copy to: Citibank, N.A. 388 Greenwich Street New York, New York 10013 Attention of: Lisa Stevens Harary Telecopier No.: 212-816-3107 E-Mail Address: lisa.stevensharary@citi.com
or at such other address as shall be notified in writing (x) in the case of the Borrowers or the Agent, to the other parties and (y) in the case of all other parties, to the Borrowers and the Agent. (b) Except as otherwise provided in this Agreement, all notices, demands, requests, consents and other Communications described in clause (a) shall be effective (i) if delivered by hand, including any overnight courier service, upon personal delivery, (ii) if delivered by mail, when received by the intended recipient, (iii) if delivered by posting to an Approved Electronic Platform, an Internet website or a similar telecommunication device requiring that a user have prior access to such Approved Electronic Platform, website or other 82 device (to the extent permitted by this Section 8.02 to be delivered thereunder), when such notice, demand, request, consent and other communication shall have been made generally available on such Approved Electronic Platform, Internet website or similar device to the class of Person being notified (regardless of whether any such Person must accomplish, and whether or not any such Person shall have accomplished, any action prior to obtaining access to such items, including registration, disclosure of contact information, compliance with a standard user agreement or undertaking a duty of confidentiality) and such Person has been notified in respect of such posting that a communication has been posted to the Approved Electronic Platform and (iv) if delivered by electronic mail or any other telecommunications device, when received by the intended recipient; provided, however, that notices and communications to the Agent pursuant to Article II or Article VII shall not be effective until received by the Agent. If any notice, demand, request or other communication related to an Event of Default (including, without limitation, any notice of a failure to make a required payment), is delivered by the Agent or any Bank to the Borrower by electronic mail or any other telecommunications device, the Agent or such Bank, as applicable, shall promptly deliver a duplicate copy of such notice, demand, request or other communication to the Borrower by hand (including by overnight courier service) or by mail.
83
SECTION VIII.03. No Waiver; Remedies. No failure on the part of any party hereto to exercise, and no delay in exercising, any right hereunder, under the Local Currency Addendum, under the Japan Local Currency Addendum or under any Note shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. SECTION VIII.04. Costs, Expenses and Taxes. (a) Caterpillar agrees to pay on written demand all reasonable costs and expenses of the Agent, the Local Currency Agent, the Japan Local Currency Agent, each of the Arrangers and each of the Co-Syndication Agents in connection with the preparation, execution, delivery, administration, modification and amendment of this Agreement, the Local Currency Addendum, the Japan Local Currency Addendum, the Notes and the other documents to be delivered hereunder, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Agent, the Local Currency Agent, the Japan Local Currency Agent, each of the Arrangers and each of the Co-Syndication Agents with respect thereto and with respect to advising the Agent, the Local Currency Agent, the Japan Local Currency Agent, each of the Arrangers and each of the Co-Syndication Agents as to their rights and responsibilities under this Agreement, the Local Currency Addendum and the Japan Local Currency Addendum. The Borrowers further agree to pay all costs and expenses, if any (including, without limitation, reasonable counsel fees and expenses of the Banks), of the Agent, the Banks, the Local Currency Agent, the Japan Local Currency Agent, each of the Arrangers and each of the Co-Syndication Agents in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement, the Local Currency Addendum, the Japan Local Currency Addendum, the Notes and the other documents to be delivered hereunder. If any such costs or expenses are attributable to a particular Borrower, such costs or expenses shall be paid by such Borrower. In all other cases, such costs or expenses shall be paid by Caterpillar. 84
85 the Japan Local Currency Addendum, or to any actions or omissions of such Borrower, any of its Subsidiaries or Affiliates or any of its or their respective officers, members, partners, agents, directors or employees in connection therewith. If any such claims, damages, liabilities and expenses are attributable to a particular Borrower, such indemnity shall be provided by such Borrower. In all other cases, such indemnity shall be provided by Caterpillar. No Borrower shall be required to indemnify any such indemnified Person from or against any portion of such claims, damages, liabilities or expenses (x) arising out of the gross negligence or willful misconduct of such indemnified Person or (y) that result from the violation in any material respect by such indemnified Person of any law, regulation, ordinance, or judicial or governmental agency order. (d) The Borrowers’ obligations under this Section 8.04 shall survive the termination of this Agreement and repayment of all Advances. SECTION VIII.05. Right of Set-off. Upon (i) the occurrence and during the continuance of any Event of Default with respect to a Borrower and (ii) the making of the request or the granting of the consent specified by Section 6.01 to authorize the Agent to declare the Advances to such Borrower due and payable pursuant to the provisions of Section 6.01, each Bank is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Bank to or for the credit or the account of such Borrower against any and all of the obligations of such Borrower now or hereafter existing under this Agreement, the Local Currency Addendum, the Japan Local Currency Addendum, and any Note of such Borrower held by such Bank, irrespective of whether or not such Bank shall have made any demand under this Agreement, the Local Currency Addendum, the Japan Local Currency Addendum, or such Note and although such obligations may be unmatured. Each Bank agrees to immediately notify such Borrower and the Agent by facsimile or electronic mail after any such set-off and application made by such Bank, provided that the failure to give such notice shall not affect the validity of such set off and application. The rights of each Bank under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) which such Bank may have. In the event that any Defaulting Bank exercises any such right of setoff, (x) all amounts so set off will be paid over immediately to the Agent for further application in accordance with the provisions of Section 2.17 and, pending such payment, will be segregated by such Defaulting Bank from its other funds and deemed held in trust for the benefit of the Agent and the other Banks and (y) the Defaulting Bank will provide promptly to the Agent a statement describing in reasonable detail the obligations owing to such Defaulting Bank as to which it exercised such right of setoff. SECTION VIII.06. Binding Effect. This Agreement shall be deemed to have become effective as of September 5, 2019 when it shall have been executed by the Borrowers, the Local Currency Agent, the Japan Local Currency Agent, and the Agent and when the Agent shall have been notified by each Bank that such Bank has executed it and thereafter this Agreement shall be binding upon and inure to the benefit of the Borrowers, the Agent, the Local Currency Agent, the Japan Local Currency Agent, and each Bank and their respective successors and assigns, except that no Borrower shall have the right to assign its rights hereunder or any interest herein without the prior written consent of all the Banks. 86 SECTION VIII.07. Assignments and Participations.
(ii) Upon such execution, delivery and acceptance of any such Assignment and Acceptance, from and after the effective date specified in such Assignment and Acceptance, (x) the assignee thereunder shall, in addition to the rights and obligations hereunder held by it immediately prior to such effective date (if any), have the rights and obligations hereunder that have been assigned to it pursuant to such Assignment and Acceptance and (y) the Bank assignor thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under this Agreement, the Local Currency Addendum, if applicable, and the Japan Local Currency Addendum, if applicable (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Bank’s rights and obligations under this Agreement, the Local Currency Addendum, if applicable, and the Japan Local Currency Addendum, if applicable, such Bank shall cease to be a party hereto and thereto). Notwithstanding any assignment, each assigning Bank shall continue to have the benefits and obligations of a “Bank” under Section 2.12, Section 8.04 and Section 8.14 hereof to the extent of any Commitments or Advances assigned in accordance herewith.
87 other parties hereto as follows: (i) other than as provided in such Assignment and Acceptance, such assigning Bank makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement, the Local Currency Addendum or the Japan Local Currency Addendum or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement, the Local Currency Addendum, the Japan Local Currency Addendum, or any other instrument or document furnished pursuant hereto or thereto; and (ii) such assigning Bank makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Borrower or the performance or observance by any Borrower of any of its obligations under this Agreement or any other instrument or document furnished pursuant hereto.
88 modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Bank will not, without the consent of the participant, agree to any amendment, modification or waiver described in the first proviso to Section 8.01(a) that affects such participant. (f) Notwithstanding the foregoing, any Bank may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including, without limitation, rights to payments of principal of and/or interest on the Advances) to secure obligations of such Bank, including any pledge or assignment to secure obligations to a Federal Reserve Bank or any central bank having jurisdiction over such Bank, without prior notice to or consent of the Borrowers or the Agent; provided that no such pledge or assignment shall release such Bank from any of its obligations hereunder or substitute any such pledgee or assignee for such Bank as a party hereto. SECTION VIII.08. Governing Law; Submission to Jurisdiction; Service of Process.
89 United States federal court sitting in New York City (and any appellate court hearing appeals from any such court).
SECTION VIII.09. Caterpillar as Agent for the Borrowers. CFSC, CIF and CFKK hereby appoint Caterpillar as their agent for purposes of giving notice to or otherwise advising the Agent or the Banks in such instances where this Agreement calls for notice or advice from the Borrowers rather than from a specific Borrower (Caterpillar, in such capacity, being referred to herein as the “Borrower Agent”). The Banks and the Agent may assume that any advice given to them by Caterpillar in respect of the Borrowers validly represents the collective decision of the Borrowers, and the Banks and the Agent may rely upon such advice in all instances. Each of CIF and CFKK hereby irrevocably waives, to the fullest possible extent, any defense of forum non conveniens. SECTION VIII.10. Judgment Currency. If for the purposes of obtaining judgment in any court it is necessary to convert a sum due under this Agreement, under the Local Currency Addendum, under the Japan Local Currency Addendum or under any of the Notes in any currency (the “Original Currency”) into another currency (the “Other Currency”), the parties hereto agree, to the fullest extent permitted by law, that the rate of exchange used shall be that at which, in accordance with normal banking procedures, the Agent could purchase the Original Currency with the Other Currency on the Business Day preceding that on which final judgment is given. To the fullest extent permitted by applicable law, the obligation of any Borrower in respect to any sum due in the Original Currency to the Agent or any Bank shall, notwithstanding any judgment in an Other Currency, be discharged only to the extent that on the Business Day following receipt by the Agent or such Bank, as applicable, of any sum adjudged to be so due in the Other Currency, the Agent or such Bank, as applicable, may in accordance with normal banking procedures purchase the Original Currency with the Other Currency; if the amount of the Original Currency so purchased is less than the sum originally due to the Agent or such Bank, as applicable, in the Original Currency, the applicable Borrower or Borrowers agree, as a separate obligation and notwithstanding any such judgment, to indemnify the Agent or such Bank, as applicable, against such loss, and if the amount of the Original Currency so purchased exceeds the sum originally due the Agent or such Bank in the Original Currency, the Agent or such Bank, as applicable, agrees to remit to the applicable Borrower or Borrowers such excess. SECTION VIII.11. Execution in Counterparts. 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 taken 90 together shall constitute one and the same agreement. A facsimile or PDF copy of any signature hereto shall have the same effect as the original of such signature. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to any document to be signed in connection with this Agreement and the transactions contemplated hereby shall be deemed to include Electronic Signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act; provided that, in respect of documents to be signed by entities established within the European Union, the Electronic Signature qualifies as a “qualified electronic signature” within the meaning of the Regulation (EU) n°910/2014 of the European parliament and of the Council of 23 July 2014 on electronic identification and trust services for electronic transaction in the internal market as amended from time to time and provided that nothing herein shall require the Agent to accept Electronic Signatures in any form or format without its prior written consent. For purposes hereof, “Electronic Signature” means electronic symbol or process attached to, or associated with, a contract or other record and adopted by a person or entity with the intent to sign, authenticate or accept such contract or record. SECTION VIII.12. Waiver of Jury Trial. EACH BORROWER, THE AGENT, THE LOCAL CURRENCY AGENT, THE JAPAN LOCAL CURRENCY AGENT, EACH BANK, EACH LOCAL CURRENCY BANK AND EACH JAPAN LOCAL CURRENCY BANK IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, AMONG ANY OF THE PARTIES HERETO ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE LOCAL CURRENCY ADDENDUM, THE JAPAN LOCAL CURRENCY ADDENDUM, OR ANY NOTE. ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY. SECTION VIII.13. USA Patriot Act Notification. The following notification is provided to the Borrowers pursuant to Section 326 of the USA Patriot Act and is effective for the Agent, the Local Currency Agent, the Japan Local Currency Agent and each of the Banks: IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the government of the United States of America fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each Person that opens an account, including any deposit account, treasury management account, loan, other extension of credit, or other financial services product. Accordingly, when any Borrower opens an account, the Agent and the Banks will ask for the Borrower’s name, tax identification number (if applicable), business address, and other information that will allow the Agent and the Banks to identify such Borrower. The Agent and the Banks may also ask to see such Borrower’s legal organizational documents or other identifying documents. 91 SECTION VIII.14. Confidentiality. Each of the Agent, the Local Currency Agent, the Japan Local Currency Agent, each Bank, each Local Currency Bank and each Japan Local Currency Bank agrees to maintain the confidentiality of the Information (as defined below) in accordance with its customary procedures, so long as such procedures provide for a reasonable standard of care (with such standard of care being at least the same standard of care as such Person would exercise to maintain the confidentiality of its own confidential information), except that Information may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective managers, administrators, trustees, partners, directors, members, officers, employees, agents, advisors and other representatives who are involved in the transactions contemplated hereby or otherwise have a need to know (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent required, in the reasonable determination of the disclosing party, by any regulatory authority purporting to have jurisdiction over it or its Affiliates (including any self-regulatory authority, such as the National Association of Insurance Commissioners) including in connection with any pledge or assignment permitted under Section 8.07(f), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the administration of the facility and the exercise of any remedies hereunder, under the Local Currency Addendum, under the Japan Local Currency Addendum or under any other document related to or executed in connection herewith or therewith or any action or proceeding relating to this Agreement, the Local Currency Addendum, the Japan Local Currency Addendum or any other document related to or executed in connection herewith or therewith or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section (except that such agreement shall not contain the exceptions listed in (i) through (iv) of this clause (f)), to (i) any assignee of or participant in, or any prospective assignee of or participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective party (or its managers, administrators, trustees, partners, members, directors, officers, employees, agents, advisors and other representatives), surety, reinsurer, guarantor or credit liquidity enhancer (or their advisors) to or in connection with any swap, derivative or other similar transaction under which payments are to be made by reference to this Agreement, the obligations of the Borrowers hereunder or payments hereunder, (iii) to any rating agency when required by it (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), or (iv) the CUSIP Service Bureau or any similar organization (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (g) with the consent of the Borrowers or (h) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or any other breach of an obligation of confidentiality or (y) becomes available to the Agent, the Local Currency Agent, the Japan Local Currency Agent, any Bank, any Local Currency Bank, any Japan Local Currency Bank or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrowers. For purposes of this Section, “Information” means all information received from the Borrowers or any of their respective Subsidiaries relating to the Borrowers or any of their respective Subsidiaries or any of their respective businesses, other than any such information that is available to the Agent, the Local Currency Agent, the Japan Local Currency Agent, any Bank, any Local Currency Bank and any Japan Local Currency Bank on a nonconfidential basis prior to disclosure by the Borrowers or any of their respective Subsidiaries, provided that, in the case of 92 information received from the Borrowers or any of their respective Subsidiaries after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information, but in no event less than a reasonable degree of care. SECTION VIII.15. Treatment of Information.
93 Affiliates shall be responsible for any statement or other designation by a Borrower regarding whether a Communication contains or does not contain material non-public information with respect to any of the Borrowers or their securities nor shall the Agent or any of its Affiliates incur any liability to any Borrower, any Bank or any other Person for any action taken by the Agent or any of its Affiliates based upon such statement or designation, including any action as a result of which Restricting Information is provided to a Bank that may decide not to take access to Restricting Information. Nothing in this Section 8.15 shall modify or limit a Bank’s obligations under Section 8.14 with regard to Communications and the maintenance of the confidentiality of or other treatment of Information.
SECTION VIII.16. Amendment and Restatement; Departing Bank. The Borrowers, the Banks (including, without limitation, each Departing Bank), the Agent, the Japan Local Currency Agent and the Local Currency Agent each agree that, upon (i) the execution and delivery of this Agreement by each of the parties hereto and (ii) satisfaction (or waiver by the aforementioned parties) of the conditions precedent set forth in Section 3.01, the terms and provisions of the Existing Credit Agreement shall be and hereby are amended, superseded and 94 restated in their entirety by the terms and provisions of this Agreement. This Agreement is not intended to and shall not constitute a novation of the Existing Credit Agreement or the Debt created thereunder. The commitment of each Bank that is a party to the Existing Credit Agreement shall, on the Closing Date, automatically be deemed amended and the only commitments shall be those hereunder. Without limiting the foregoing, upon the effectiveness hereof: (a) all loans incurred under the Existing Credit Agreement which are outstanding on the Closing Date shall continue as Advances under (and shall be governed by the terms of) this Agreement, (b) all obligations under the Existing Credit Agreement with any Bank or any Affiliate of any Bank which are outstanding on the Closing Date shall continue as obligations under this Agreement, (c) the Agent shall have full power and authority to allocate the Commitments and Revolving Credit Commitments of the Banks as in effect immediately prior to the Closing Date such that, immediately after giving effect to such allocations on the Closing Date, each Bank (other than a Departing Bank) shall hold the “Commitment” and the “Revolving Credit Commitment” set forth next to its name on Schedule I hereto and the Banks and each Departing Bank, further agree to make all assignments and/or transfers, and hereby consent to any such assignments and transfers, which may be necessary (including, without limitation, assignments of funded obligations) to effect the allocations described in this clause (c) and (d) each Departing Bank’s Commitments and Revolving Credit Commitments under the Existing Credit Agreement immediately prior to giving effect to this Agreement shall be terminated and no Departing Bank shall be a “Bank” party to this Agreement and each Departing Bank shall no longer have any rights or obligations under this Agreement (other than rights and obligations under those provisions of the Existing Credit Agreement that expressly survive termination thereof, which shall survive). SECTION VIII.17. No Fiduciary Duty. The Agent, each Bank and their Affiliates (collectively, solely for purposes of this paragraph, the “Banks”), may have economic interests that conflict with those of the Borrowers, their stockholders and/or their affiliates. The Borrowers agree that nothing in the Agreement and the related documents or otherwise will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between any Bank, on the one hand, and the Borrowers, their stockholders or their affiliates, on the other. Each Borrower acknowledges and agrees that (i) the transactions contemplated by the Agreement and the related documents (including the exercise of rights and remedies hereunder and thereunder) are arm’s-length commercial transactions between the Banks, on the one hand, and such Borrower, on the other, and (ii) in connection therewith and with the process leading thereto, (x) no Bank has assumed an advisory or fiduciary responsibility in favor of the Borrower, its stockholders or its affiliates with respect to the transactions contemplated hereby (or the exercise of rights or remedies with respect thereto) or the process leading thereto (irrespective of whether any Bank has advised, is currently advising or will advise such Borrower, its stockholders or its affiliates on other matters) or any other obligation to such Borrower except the obligations expressly set forth in the Agreement and the related documents and (y) each Bank is acting solely as principal and not as the agent or fiduciary of such Borrower, its management, stockholders, creditors or any other Person. Each Borrower acknowledges and agrees that it has consulted its own legal and financial advisors to the extent it deemed appropriate and that it is responsible for making its own independent judgment with respect to such transactions and the process leading thereto. Each Borrower agrees that it will not claim that any Bank has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to the Bank, in connection with such transaction or the process leading thereto. 95 SECTION VIII.18. Arrangers. Any Affiliate of an Arranger may provide the services of an Arranger for the transactions contemplated hereunder. SECTION VIII.19. Acknowledgement and Consent to Bail-In of Affected Financial Institutions. Notwithstanding anything to the contrary in this Agreement, the Local Currency Addendum, the Japan Local Currency Addendum or in any other agreement, arrangement or understanding among any such parties, each party hereto and thereto acknowledges that any liability of any Affected Financial Institution arising under this Agreement, the Local Currency Addendum, or the Japan Local Currency Addendum, as applicable, may be subject to the Write-Down and Conversion Powers of an applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
ARTICLE IX CFSC GUARANTY SECTION IX.01. The Guaranty. CFSC hereby unconditionally and irrevocably guarantees to the Agent, each Bank and each other holder of any obligations owing by CIF and CFKK under this Agreement, the Local Currency Addendum and the Japan Local Currency Addendum, the due and punctual payment (whether at stated maturity, upon acceleration or otherwise) of the principal of and interest on each Advance to each of CIF and CFKK, and the due and punctual payment of all other amounts payable by CIF and CFKK under this Agreement, the Local Currency Addendum and the Japan Local Currency Addendum. Upon failure by either CIF or CFKK to pay punctually any such amount, CFSC shall forthwith on demand pay the amount not so paid at the place, in the manner and with the effect otherwise specified in Article II of this Agreement. CFSC’s obligations under this Article IX shall constitute a continuing guaranty of payment and performance and not merely of collection. 96 SECTION IX.02. Guaranty Unconditional. The obligations of CFSC under this Article IX shall be unconditional and absolute and, without limiting the generality of the foregoing, shall not be released, discharged or otherwise affected by:
SECTION IX.03. Discharge Only Upon Payment In Full; Reinstatement in Certain Circumstances. CFSC’s obligations under this Article IX shall remain in full force and effect until the Commitments are terminated and the principal of and interest on the Advances to CIF and CFKK and all other amounts payable by CFSC, CIF and CFKK under this Agreement, the Local Currency Addendum and the Japan Local Currency Addendum shall have been paid in full and shall survive the Current Termination Date and the Extended Termination Date, as applicable. If at any time any payment of the principal of or interest on any Advance to CIF or CFKK or any other amount payable by CIF or CFKK under this Agreement, the Local Currency Addendum or the Japan Local Currency Addendum (including a payment exercised through a right of setoff) is rescinded or is or must be otherwise restored or returned upon the insolvency, 97 bankruptcy or reorganization of CIF or CFKK or otherwise (including pursuant to any settlement entered into by the Agent, the Local Currency Agent, the Japan Local Currency Agent or any Bank, in each case in its discretion), CFSC’s obligations hereunder with respect to such payment shall be reinstated at such time as though such payment had been due but not made at such time. SECTION IX.04. Waiver by CFSC. CFSC irrevocably waives acceptance hereof, presentment, demand, protest and any notice not provided for herein, as well as any requirement that at any time any right be exhausted or any action be taken by the Agent, the Local Currency Agent, the Japan Local Currency Agent, any Bank or any other Person against CIF or CFKK or any other Person or any collateral security. CFSC waives any benefit of the collateral, if any, which may from time to time secure the Advances to CIF or CFKK or any of CIF’s or CFKK’s other obligations under this Agreement, the Local Currency Addendum or the Japan Local Currency Addendum, and authorizes the Agent, the Local Currency Agent, the Japan Local Currency Agent, or the Banks to take any action or exercise any remedy with respect thereto which the Agent, the Local Currency Agent, the Japan Local Currency Agent, or the Banks in its or their discretion shall determine, without notice to CFSC. In the event the Agent, the Local Currency Agent, the Japan Local Currency Agent, or the Banks elect to give notice of any action with respect to any such collateral, ten (10) days’ written notice mailed to CFSC by certified mail at its address set forth in Section 8.02 shall be deemed reasonable notice of any matters contained in such notice. SECTION IX.05. Subrogation. Upon making any payment hereunder, CFSC shall be subrogated to the rights of the Banks against CIF or CFKK, as applicable, with respect to such payment; provided that CFSC shall not enforce any right or demand or receive any payment by way of subrogation until all amounts of principal of and interest on the Advances to CIF and CFKK and all other amounts payable by CIF and CFKK under this Agreement, the Local Currency Addendum and the Japan Local Currency Addendum have been paid in full. SECTION IX.06. Stay of Acceleration. In the event that acceleration of the time for payment of any amount payable by CIF or CFKK under this Agreement, the Local Currency Addendum or the Japan Local Currency Addendum is stayed upon the insolvency, bankruptcy or reorganization of CIF or CFKK, as applicable, all such amounts otherwise subject to acceleration under the terms of this Agreement shall nonetheless be payable by CFSC hereunder forthwith on demand by the Agent for the account of the Banks. The remainder of this page is intentionally blank; signature pages follow. 98 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers or representatives thereunto duly authorized, as of the date first above written. [SIGNATURE PAGES ON FILE WITH AGENT] 1 SCHEDULE I COMMITMENTS2
2 As in effect as of the Amendment No. 1 Effective Date.
Caterpillar: Confidential Green SCHEDULE II COMMITMENT FEE AND APPLICABLE MARGIN TABLE3 3 As in effect as of the Amendment No. 1 Effective Date. Caterpillar: Confidential Green
Caterpillar: Confidential Green Caterpillar: Confidential Green SCHEDULE III DEPARTING BANK SCHEDULE ROYAL BANK OF CANADA Caterpillar: Confidential Green EXHIBIT A FORM OF NOTE Dated: ________, 20__ FOR VALUE RECEIVED, the undersigned, [Caterpillar Inc./Caterpillar Financial Services Corporation] (the “Borrower”), HEREBY PROMISES TO PAY to the order of ___________________________ (the “Bank”) for the account of its Applicable Lending Office (as defined in the Credit Agreement referred to below) the principal amount of each Advance (as defined below) made by the Bank to the Borrower pursuant to the Credit Agreement (as defined below) on the last day of the Interest Period (as defined in the Credit Agreement) for such Advance. The Borrower promises to pay interest on the unpaid principal amount of each Advance from the date of such Advance until such principal amount is paid in full, at such interest rates, and payable at such times, as are specified in the Credit Agreement. Both principal and interest are payable in the currency and to the office of the Agent specified pursuant to the Credit Agreement, in same day funds. Each Advance made by the Bank to the Borrower and the maturity thereof, and all payments made on account of principal thereof, shall be recorded by the Bank and, prior to any transfer hereof, endorsed on the grid attached hereto which is part of this Promissory Note. This Promissory Note is one of the Notes referred to in, and is entitled to the benefits of, the Second Amended and Restated Credit Agreement (Three-Year Facility), dated as of September 5, 2019, as the same may be amended, restated, supplemented or otherwise modified from time to time (the “Credit Agreement”) among the Borrower, [names of the other Borrowers under the Credit Agreement] (together with the Borrower, the “Borrowers”), the Bank and certain other banks parties thereto, Citibank Europe plc, UK Branch, as Local Currency Agent, MUFG Bank, Ltd., as Japan Local Currency Agent, and Citibank, N.A., as Agent for the Bank and such other banks. The Credit Agreement, among other things, (i) provides for the making of advances (the “Advances”) by the Bank to the Borrowers from time to time in an aggregate amount not to exceed at any time such Bank’s Commitment (as defined in the Credit Agreement) at such time (the indebtedness of the Borrower resulting from each such Advance to the Borrower being evidenced by this Promissory Note), and (ii) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified. The Borrower hereby waives presentment, demand, protest and notice of any kind. No failure to exercise, and no delay in exercising, any rights hereunder on the part of the holder hereof shall operate as a waiver of such rights. Caterpillar: Confidential Green 1 This Promissory Note shall be governed by, and construed in accordance with, the laws of the State of New York, United States (without regard for conflict of law principles that would result in the application of any law other than the internal law of the State of New York). [CATERPILLAR INC./CATERPILLAR FINANCIAL SERVICES CORPORATION] By Title: Caterpillar: Confidential Green ADVANCES, MATURITIES, AND PAYMENTS OF PRINCIPAL Amount of Currency and Principal Unpaid Type of Amount of Maturity of Paid Principal Notation Date Advance Advance Advance or Prepaid Balance Made By Caterpillar: Confidential Green 3 EXHIBIT B-1 FORM OF NOTICE OF REVOLVING CREDIT BORROWING Citibank, N.A., as Agent for the Banks parties to the Credit Agreement referred to below 1615 Brett Rd., Building No. 3 New Castle, Delaware 19720 Attention: Bank Loan Syndications Citibank, N.A. 388 Greenwich Street New York, New York 10013 Attention: Lisa Stevens Harary Ladies and Gentlemen: The undersigned, [Caterpillar Inc./Caterpillar Financial Services Corporation], refers to the Second Amended and Restated Credit Agreement (Three-Year Facility), dated as of September 5, 2019, as the same may be amended, restated, supplemented or otherwise modified from time to time (the “Credit Agreement,” the terms defined therein being used herein as therein defined), among the undersigned, [names of the other Borrowers under the Credit Agreement], certain Banks parties thereto, Citibank Europe plc, UK Branch, as Local Currency Agent, MUFG Bank, Ltd., as Japan Local Currency Agent, and Citibank, N.A., as Agent for said Banks, and hereby gives you notice, irrevocably, pursuant to Section 2.02 of the Credit Agreement that the undersigned hereby requests a Revolving Credit Borrowing under the Credit Agreement, and in that connection sets forth below the information relating to such Revolving Credit Borrowing (the “Proposed Revolving Credit Borrowing”) as required by Section 2.02(a) of the Credit Agreement:
___, 20__.
$ . Caterpillar: Confidential Green 1
the Proposed Revolving Credit Borrowing is [30 days] [ month[s]].4
remitted in same day funds to [Account Number, Bank Name, Account Name, ]. The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the date of the Proposed Revolving Credit Borrowing:
Very truly yours, [CATERPILLAR INC./CATERPILLAR FINANCIAL SERVICES CORPORATION] By 4 The RFR Interest Payment Date for a requested RFR Advance generally shall be thirty days after the date such RFR Advance is made (subject to the terms set forth in the definition of RFR Interest Payment Date and otherwise set forth in this Agreement). 5 To be included in Notices of Revolving Credit Borrowing pursuant to Section 3.02, unless Section 3.03 shall apply. 6 To be included in Notices of Revolving Credit Borrowing pursuant to Section 3.03. 7 To be included in Notices of Revolving Credit Borrowing from CFSC. 8 To be included in Notices of Revolving Credit Borrowing pursuant to Section 3.03. Caterpillar: Confidential Green 2 EXHIBIT B-2 FORM OF NOTICE OF LOCAL CURRENCY BORROWING Citibank Europe plc, UK Branch, as Local Currency Agent Citigroup Centre 5th Floor Canary Wharf London, United Kingdom E14 5LB Attention: Karen Hall, Andrew Guthrie, Claire Crawford Email Addresses: Karen.hall@citi.com, andrew.guthrie@citi.com, Claire.crawford@citi.com Facsimile No. 44 20 7492 3980 Citibank, N.A., as Agent for the Banks parties to the Credit Agreement referred to below 1615 Brett Road, OPS III New Castle, Delaware 19720 Attention: Bank Loan Syndications Citibank, N.A. 388 Greenwich Street New York, New York 10013 Attention: Lisa Stevens Harary Ladies and Gentlemen: The undersigned, Caterpillar International Finance Designated Activity Company, refers to (1) the Second Amended and Restated Credit Agreement (Three-Year Facility), dated as of September 5, 2019, as the same may be amended, restated, supplemented or otherwise modified from time to time (the “Credit Agreement,” the terms defined therein being used herein as therein defined), among the undersigned, Caterpillar Inc., Caterpillar Financial Services Corporation (“CFSC”), Caterpillar Finance Kabushiki Kaisha, certain Banks parties thereto, Citibank Europe plc, UK Branch, as Local Currency Agent, MUFG Bank, Ltd., as Japan Local Currency Agent, and Citibank, N.A., as Agent for said Banks, and (2) the Local Currency Addendum dated as of September 5, 2019, among the undersigned, CFSC, the Local Currency Banks party thereto, and Citibank Europe plc, UK Branch as the Local Currency Agent (the “Addendum”). The undersigned hereby gives you notice, irrevocably, pursuant to Section 2.03B of the Credit Agreement and the Addendum that the undersigned hereby requests a Local Currency Borrowing under the Credit Agreement and the Addendum, and in that connection sets forth below the information relating to such Local Currency Borrowing (the “Proposed Borrowing”) as required by Section 2.03B of the Credit Agreement: (i) The Business Day of the Proposed Borrowing is________, 20__. Caterpillar: Confidential Green 1
The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the date of the Proposed Borrowing:
Very truly yours, CATERPILLAR INTERNATIONAL FINANCE DESIGNATED ACTIVITY COMPANY By Title: 9 The RFR Interest Payment Date for a requested RFR Advance generally shall be thirty days after the date such RFR Advance is made (subject to the terms set forth in the definition of RFR Interest Payment Date and otherwise set forth in this Agreement). 10 To be included in Notices of Borrowing pursuant to Section 3.02, unless Section 3.03 shall apply. 11 To be included in Notices of Borrowing pursuant to Section 3.03. 12 To be included in Notices of Borrowing pursuant to Section 3.03. Caterpillar: Confidential Green 2 EXHIBIT B-3 FORM OF NOTICE OF JAPAN LOCAL CURRENCY BORROWING MUFG Bank, Ltd., as Japan Local Currency Agent Osaka Corporate Banking Group Osaka Corporate Banking Division No. 3, Corporate Banking Department No. 3 3-5-6, Fushimimachi, Chuo-ku, Osaka-shi, Osaka 541-8530, Japan Attention: Mr. Kazuki Takehara Citibank, N.A., as Agent for the Banks parties to the Credit Agreement referred to below 1615 Brett Rd., Building No. 3 New Castle, Delaware 19720 Attention: Bank Loan Syndications Citibank, N.A. 388 Greenwich Street New York, New York 10013 Attention: Lisa Stevens Harary Ladies and Gentlemen: The undersigned, Caterpillar Finance Kabushiki Kaisha, refers to (1) the Second Amended and Restated Credit Agreement (Three-Year Facility), dated as of September 5, 2019, as the same may be amended, restated, supplemented or otherwise modified from time to time (the “Credit Agreement,” the terms defined therein being used herein as therein defined), among the undersigned, Caterpillar Inc., Caterpillar Financial Services Corporation (“CFSC”), Caterpillar International Finance Designated Activity Company, certain Banks parties thereto, Citibank Europe plc, UK Branch, as Local Currency Agent, MUFG Bank, Ltd., as Japan Local Currency Agent, and Citibank, N.A., as Agent for said Banks, and (2) the Japan Local Currency Addendum dated as of September 5, 2019, among the undersigned, CFSC, the Japan Local Currency Banks party thereto, and MUFG Bank, Ltd., as Japan Local Currency Agent (the “Addendum”). The undersigned hereby gives you notice, irrevocably, pursuant to Section 2.03D of the Credit Agreement and the Addendum that the undersigned hereby requests a Japan Local Currency Borrowing under the Credit Agreement and the Addendum, and in that connection sets forth below the information relating to such Japan Local Currency Borrowing (the “Proposed Borrowing”) as required by Section 2.03D of the Credit Agreement: (i) The Business Day of the Proposed Borrowing is_________, 20__. This [is] [is not] a same-day Borrowing request.13 13 The RFR Interest Payment Date for a requested RFR Advance generally shall be thirty days after the date such RFR Advance is made (subject to the terms set forth in the definition of RFR Interest Payment Date and otherwise set forth in this Agreement). 1
The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the date of the Proposed Borrowing:
Very truly yours, CATERPILLAR FINANCE KABUSHIKI KAISHA By Title: 14 To be included in Notices of Borrowing pursuant to Section 3.02, unless Section 3.03 shall apply. 15 To be included in Notices of Borrowing pursuant to Section 3.03. 16 To be included in Notices of Borrowing pursuant to Section 3.03. Caterpillar: Confidential Green 2 EXHIBIT B-4 FORM OF NOTICE OF ALLOCATION Citibank, N.A., as Agent for the Banks parties to the Credit Agreement referred to below 1615 Brett Rd., Building No. 3 New Castle, Delaware 19720 Attention: Bank Loan Syndications Citibank, N.A. 388 Greenwich Street New York, New York 10013 Attention: Lisa Stevens Harary Ladies and Gentlemen: The undersigned, Caterpillar Inc., as Borrower Agent on behalf of itself, Caterpillar Financial Services Corporation, Caterpillar International Finance Designated Activity Company and Caterpillar Finance Kabushiki Kaisha (the “Borrowers”), refers to the Second Amended and Restated Credit Agreement (Three-Year Facility), dated as of September 5, 2019, as the same may be amended, restated, supplemented or otherwise modified from time to time (the “Credit Agreement,” the terms defined therein being used herein as therein defined), among the Borrowers, certain Banks parties thereto, Citibank Europe plc, UK Branch, as Local Currency Agent, MUFG Bank, Ltd., as Japan Local Currency Bank, and Citibank, N.A., as Agent for said Banks, and hereby gives you notice, pursuant to Section 2.01(b) of the Credit Agreement that the Borrowers request a re-allocation of the Total Commitment, and in that connection sets forth below the information relating to such re allocation as required by Section 2.01(b) of the Credit Agreement:
Caterpillar: Confidential Green Borrower Allocation Caterpillar Inc._____________________________$ Caterpillar Financial Services Corporation $ Very truly yours, CATERPILLAR INC. By: Title: Caterpillar: Confidential Green EXHIBIT B-5 FORM OF NOTICE OF BANK ADDITION Citibank, N.A., as Agent for the Banks parties to the Credit Agreement referred to below 1615 Brett Rd., Building No. 3 New Castle, Delaware 19720 Attention: Bank Loan Syndications Citibank, N.A. 388 Greenwich Street New York, New York 10013 Attention: Lisa Stevens Harary Ladies and Gentlemen: The undersigned, Caterpillar Inc., Caterpillar Financial Services Corporation, Caterpillar International Finance Designated Activity Company and Caterpillar Finance Kabushiki Kaisha (the “Borrowers”), refer to the Second Amended and Restated Credit Agreement (Three-Year Facility), dated as of September 5, 2019, as the same may be amended, restated, supplemented or otherwise modified from time to time (the “Credit Agreement,” the terms defined therein being used herein as therein defined), among the Borrowers, certain Banks parties thereto, Citibank Europe plc, UK Branch, as Local Currency Agent, MUFG Bank, Ltd., as Japan Local Currency Agent, and Citibank, N.A., as Agent for said Banks, and hereby give you notice, pursuant to Section 2.05(c) of the Credit Agreement that the Borrowers request a Bank Addition, and in that connection set forth below the information relating to such proposed Bank Addition (the “Proposed Bank Addition”) as required by Section 2.05(c) of the Credit Agreement:
Caterpillar: Confidential Green (iv) The amount of the Commitment of the proposed Added Bank, after giving effect to the Proposed Bank Addition, would be $________. Very truly yours, CATERPILLAR INC. By:___ Title: CATERPILLAR FINANCIAL SERVICES CORPORATION By:___ Title: CATERPILLAR INTERNATIONAL FINANCE DESIGNATED ACTIVITY COMPANY By:___ Title: CATERPILLAR FINANCE KABUSHIKI KAISHA By:___ Title: Caterpillar: Confidential Green EXHIBIT C-1 FORM OF ASSIGNMENT AND ACCEPTANCE Dated____________, 20__ Reference is made to the Second Amended and Restated Credit Agreement (Three-Year Facility), dated as of September 5, 2019, as the same may be amended, restated, supplemented or otherwise modified from time to time (the “Credit Agreement”) among Caterpillar Inc., Caterpillar Financial Services Corporation, Caterpillar International Finance Designated Activity Company, and Caterpillar Finance Kabushiki Kaisha (the “Borrowers”), the Banks (as defined in the Credit Agreement), Citibank Europe plc, UK Branch, as Local Currency Agent, MUFG Bank, Ltd., as Japan Local Currency Agent, and Citibank, N.A., as Agent for the Banks (the “Agent”). Unless otherwise defined herein, terms defined in the Credit Agreement are used herein with the same meaning. (the “Assignor”) and _________________ (the “Assignee”) agree as follows: 1. The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, the percentage interest specified on Schedule 1 hereto in and to all of the Assignor’s rights and obligations under the Credit Agreement as of the date hereof (after giving effect to any other assignments thereof made prior to the date hereof, whether or not such assignments have become effective, but without giving effect to any other assignments thereof also made on the date hereof), including, without limitation, such percentage interest in (i) the Assignor’s Commitment and Revolving Credit Commitment, which on the date hereof (after giving effect to any other assignments thereof made prior to the date hereof, whether or not such assignments have become effective, but without giving effect to any other assignments thereof also made on the date hereof) are in the dollar amounts specified as the Assignor’s Commitment and Revolving Credit Commitment on Schedule 1 hereto, which Commitment is allocated between Caterpillar and CFSC, the Assignor’s Allocated Commitment for each such Borrower as of the date hereof being set forth on Schedule 1 hereto; [(ii) the Assignor’s [Local Currency Commitment] [Japan Local Currency Commitment], which on the date hereof (after giving effect to any other assignments thereof made prior to the date hereof, whether or not such assignments have become effective, but without giving effect to any other assignments thereof also made on the date hereof) is in the dollar amount specified as the Assignor’s [Local Currency Commitment] [Japan Local Currency Commitment] on Schedule 1 hereto;]17 [(ii)/(iii)] the aggregate outstanding principal amount of Advances owing to the Assignor by each Borrower, which on the date hereof (after giving effect to any other assignments thereof made prior to the date hereof, whether or not such assignments have become effective, but without giving effect to any other assignments thereof also made on the date hereof) is in the dollar amount specified as the aggregate outstanding principal amount of Advances owing to the Assignor from such Borrower on Schedule 1 hereto; and [(iii)/(iv)] the Notes, if any, held by the Assignor. 17 Applicable if Assignor is a Local Currency Bank or a Japan Local Currency Bank. Caterpillar: Confidential Green 1
18 Applicable if Assignor is a Local Currency Bank or a Japan Local Currency Bank. 19 Applicable if Assignor is a Local Currency Bank or a Japan Local Currency Bank. 20 Applicable if Assignor is a Local Currency Bank or a Japan Local Currency Bank. 21 Applicable if Assignor is a Local Currency Bank or a Japan Local Currency Bank. 22 Applicable if Assignor is a Local Currency Bank or a Japan Local Currency Bank. 23 Applicable if Assignor is a Local Currency Bank or a Japan Local Currency Bank. Caterpillar: Confidential Green 2 6. This Assignment and Acceptance shall be governed by, and construed in accordance with, the law of the State of New York (without regard for conflict of law principles that would result in the application of any law other than the internal law of the State of New York). IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Acceptance to be executed by their respective officers thereunto duly authorized, as of the date first above written, such execution being made on Schedule 1 hereto. Caterpillar: Confidential Green Schedule 1 to Assignment and Acceptance
Section 2. Notes, if any, payable to the order
Dated: ___________, 20__
Dated: ___________, 20__ Notes, if any, payable to the order of the Assignor Caterpillar: Confidential Green 1
Dated: ___________, 20__
Dated: ___________, 20__
[NAME OF ASSIGNOR] By: Title: [NAME OF ASSIGNEE] By:______________ Title: 24 This date should be no earlier than the date of acceptance by the Agent. Caterpillar: Confidential Green 2 Consented to and Accepted this _____ day of______________, 20__ [NAME OF AGENT], as Agent By: [NAME OF LOCAL CURRENCY AGENT], as Local Currency Agent By:_____________________ [NAME OF JAPAN LOCAL CURRENCY AGENT], as Japan Local Currency Agent By:_____________________ Caterpillar: Confidential Green Agreed to this _____ day of___________, 20__ 25 CATERPILLAR INC. By:___ Title: CATERPILLAR FINANCIAL SERVICES CORPORATION By:___ 25 To be included when consent of the Borrowers is required pursuant to Section 8.07(a)(i). Caterpillar: Confidential Green 4 EXHIBIT C-2 FORM OF ASSUMPTION AND ACCEPTANCE Dated____________, 20 Reference is made to the Second Amended and Restated Credit Agreement (Three-Year Facility), dated as of September 5, 2019, as the same may be amended, restated, supplemented or otherwise modified from time to time (the “Credit Agreement”) among Caterpillar Inc., Caterpillar Financial Services Corporation, Caterpillar International Finance Designated Activity Company and Caterpillar Finance Kabushiki Kaisha (the “Borrowers”), the Banks (as defined in the Credit Agreement), Citibank Europe plc, UK Branch, as Local Currency Agent, MUFG Bank, Ltd., as Japan Local Currency Bank and Citibank, N.A., as Agent for the Banks (the “Agent”). Unless otherwise defined herein, terms defined in the Credit Agreement are used herein with the same meaning. The Borrowers and________________(the “Added Bank”) agree as follows:
26 To be used if the Added Bank is not already a Bank under the Credit Agreement. 27 To be used if the Added Bank is already a Bank under the Credit Agreement. 28 To be used if the Added Bank is not already a Bank under the Credit Agreement. 29 To be used if the Added Bank is already a Bank under the Credit Agreement. Caterpillar: Confidential Green 1 Agreement, the Local Currency Addendum, the Japan Local Currency Addendum or any other instrument or document furnished pursuant thereto.
IN WITNESS WHEREOF, the Added Bank and the Borrowers have caused this Assumption and Acceptance to be executed by their respective officers thereunto duly authorized, as of the date first above written, such execution being made on Schedule 1 hereto. Caterpillar: Confidential Green Schedule 1 to Assumption and Acceptance Dated________, 20__ Section 1. Added Bank’s Commitment after and Acceptance: $ Added Bank’s Revolving Credit Commitment after giving effect to this Assumption and Acceptance: $ [Added Bank’s Local Currency Commitment after giving effect to this Assumption and Acceptance: $_________] [Added Bank’s Japan Local Currency Commitment after giving effect to this Assumption and Acceptance: $_________] Section 2. Effective Date 30: __________________________________, 20__ Section 3. Domestic Lending Office Eurocurrency Lending Office RFR Lending Office [Local Currency Lending Office ______________] [Japan Local Currency Lending Office ______________] CATERPILLAR INC. By:___ Title: CATERPILLAR FINANCIAL SERVICES CORPORATION By: Caterpillar: Confidential Green 30 This date should be no earlier than the date of acceptance by the Agent. 1 Title: CATERPILLAR INTERNATIONAL FINANCE DESIGNATED ACTIVITY COMPANY By:___ Title: CATERPILLAR FINANCE KABUSHIKI KAISHA By:___ Title: Caterpillar: Confidential Green [NAME OF ADDED BANK] By:___ Title: Accepted this _____ day of______________, 20__ [NAME OF AGENT] By:__________________ Title: Caterpillar: Confidential Green EXHIBIT D FORM OF OPINION OF COUNSEL FOR EACH OF CATERPILLAR AND CFSC [Closing Date] To the Banks listed on Schedule I hereto and to Citibank, N.A., as Agent[, Citibank Europe plc, UK Branch, as Local Currency Agent, and MUFG Bank, Ltd., as Japan Local Currency Agent] Re: [Name of Applicable Borrower] Ladies and Gentlemen: I am in-house counsel for [Name of Applicable Borrower], a Delaware corporation (the “Borrower”), and give this opinion pursuant to Section 3.01(d) of the Second Amended and Restated Credit Agreement (Three-Year Facility), dated as of September 5, 2019 (the “Credit Agreement”), among the Borrower, [Caterpillar Inc./Caterpillar Financial Services Corporation], Caterpillar International Finance Designated Activity Company, Caterpillar Finance Kabushiki Kaisha, the Banks parties thereto, Citibank Europe plc, UK Branch, as Local Currency Agent, MUFG Bank, Ltd., as Japan Local Currency Agent, and Citibank, N.A., as Agent for said Banks. Terms defined in the Credit Agreement are used herein as therein defined. I have examined the Credit Agreement; [the Local Currency Addendum; the Japan Local Currency Addendum;] the documents furnished by the Borrower pursuant to Article III of the Credit Agreement; the [[Restated] Certificate of Incorporation] of the Borrower and any amendments thereto, as currently in effect (the “Charter”); and the [bylaws] of the Borrower and any amendments thereto, as currently in effect (the “Bylaws”). In addition, I have examined the originals, or copies certified to my satisfaction, of such other corporate records of the Borrower, certificates of public officials, and agreements, instruments and other documents, and have conducted such other investigations of fact and law, as I have deemed necessary or advisable for purposes of this opinion letter. In rendering my opinion, I have assumed the due authorization, execution and delivery of each document referred to herein by all parties to such document other than the Borrower. Based upon the foregoing, and subject to the comments and qualifications set forth below, it is my opinion that: Caterpillar: Confidential Green 1
(i) the Charter or the Bylaws or (ii) in any material respect, the General Corporation Law of the State of Delaware or any United States Federal or [New York State][Tennessee] law, rule or regulation applicable to the Borrower (I express no opinion relating to the United States federal securities laws or any state securities or Blue Sky laws), (iii) any agreement filed as an exhibit to the Borrower’s annual report on Form 10-K, filed with the U.S. Securities and Exchange Commission (the “Commission”) on February 14, 2019, or any agreement filed or incorporated by reference as an exhibit to a filing of the Borrower under Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended, with the Commission from February 14, 2019 up to and including the date hereof, or (iv) any material judgment, injunction order or decree binding upon the Borrower.
31 For CFSC opinion. 32 For CFSC opinion. 33 For CFSC opinion. 2 or prior to the date hereof are, and any other Notes when executed and delivered by the Borrower pursuant to the terms of the Credit Agreement will be, the valid and binding obligations of the Borrower enforceable against the Borrower in accordance with their respective terms. 5. There is no pending or, to my actual knowledge, threatened action or proceeding affecting the Borrower or any of its Subsidiaries before any court, governmental agency or arbitrator, which purports to affect the legality, validity or enforceability of the Credit Agreement [, the Local Currency Addendum, the Japan Local Currency Addendum,] or any Note or which is reasonably likely to materially adversely affect (i) the financial condition or operations of the Borrower and its consolidated Subsidiaries taken as a whole or (ii) the ability of the Borrower to perform its obligations under the Credit Agreement [, the Local Currency Addendum, the Japan Local Currency Addendum] and the Notes to be executed by it. Insofar as the foregoing opinions relate to the valid existence and good standing of the Borrower, they are based solely on the certificates from public officials attached hereto as Exhibit A. Insofar as the foregoing opinions relate to the validity, binding effect or enforceability of any agreement or obligation of the Borrower, such opinions are subject to (i) applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and to general principles of equity and (ii) limitations under applicable law or public policy on waivers of rights or defenses. I express no opinion as to (i) Sections 2.13 and 8.05 of the Credit Agreement, insofar as they provide that any Bank purchasing a participation from another Bank pursuant thereto may exercise set-off or similar rights with respect to such participation or that any Affiliate of a Bank may exercise set-off or similar rights with respect to such Bank’s claims under the Credit Agreement or the Notes; (ii) Section 2.12(c), 7.09 or 8.04(c), to the extent that any such section may be construed as requiring indemnification with respect to a claim, damage, liability or expense incurred as a result of any violation of law by a Bank[,][or] the Agent [the Local Currency Agent or the Japan Local Currency Agent]; (iii) Section 8.08(c) of the Credit Agreement [or any comparable provisions of the Japan Local Currency Addendum or the Local Currency Addendum], insofar as [any] such provision relates to the subject matter jurisdiction of the United States District Court to adjudicate any controversy related to the Credit Agreement; or (iv) Sections 8.10 or 8.12, [or ]the last sentence of Section 8.08(b) of the Credit Agreement[or any comparable provisions of the Japan Local Currency Addendum or the Local Currency Addendum] or (v) clauses (B) and (C) of Section 8.08(c) of the Credit Agreement, insofar as either such clause relates to the submission to jurisdiction in any Illinois State or United States federal court sitting in Chicago, Illinois (and any appellate court hearing appeals from any such court) or any United States federal court sitting in Nashville, Tennessee (and any appellate court hearing appeals from any such court), as applicable. For the purposes of my opinion above as it pertains to the enforceability of the provisions contained in Section 8.08 of the Credit Agreement (and any similar provisions contained in the Local Currency Addendum or the Japanese Local Currency Addendum) pursuant to which the parties thereto agree that the laws of the State of New York shall govern such documents, I have assumed that the parties did not enter into any of the agreements described herein with knowledge or deliberate ignorance of the illegality of such document in its place of performance. Caterpillar: Confidential Green 3 [For Cat Financial:][I am qualified to practice law in the State of Tennessee and do not purport to be an expert on, or to express any opinion concerning, any laws other than the law of the State of Tennessee, the General Corporation Law of the State of Delaware and the federal law of the United States. Insofar as the opinions expressed in paragraphs 2, 3 and 4 above relate to matters which are governed by the laws of the State of New York, I have assumed for purposes of rendering such opinions that the applicable laws of the State of New York are substantially identical to the laws of the State of Tennessee.] [For Caterpillar Inc.:] [In rendering the opinion in numbered paragraph 2, I have assumed that to the extent any document referred to in clause (iii) of numbered paragraph 2 is governed by the law of a jurisdiction other than those referred to in the following paragraph, such document would be interpreted in accordance with its plain meaning.] [The foregoing opinions are limited to the federal law of the United States of America, the law of the State of [New York][Tennessee] and the General Corporation Law of the State of Delaware.] This opinion letter is limited to the matters expressly set forth herein, and no opinion is implied or may be inferred beyond the matters expressly set forth herein. The opinions expressed herein are being delivered to you as of the date hereof in connection with the transactions described hereinabove and are solely for your benefit in connection with the transactions described hereinabove and may not be relied on, used, circulated, quoted or otherwise referred to in any manner or for any purpose by any other Person, nor any copies published, communicated or otherwise made available in whole or in part to any other Person without my specific prior written consent, except that (A) you may furnish copies hereof, (i) to your independent auditors and attorneys, (ii) upon the request of any state or federal authority or official having regulatory jurisdiction over you, (iii) pursuant to order or legal process of any court or governmental agency and (iv) to any of your permitted or prospective assigns and/or participants in respect of the Credit Agreement, the Japan Local Currency Addendum and the Local Currency Addendum and (B) assignees that become Banks party to the Credit Agreement pursuant to Section 8.07 thereof may rely on this opinion as if addressed to them on the date hereof, on the condition and understanding that (i) this opinion letter speaks only as of the date hereof as described below and (ii) any such reliance by a future assignee must be actual and reasonable under the circumstances existing at the time such person becomes an assignee, including any changes in law, facts or any other developments known to or reasonably knowable by such person at such time. I assume no obligation to advise you or any other person, or to make any investigations, as to any legal developments or factual matters arising subsequent to the date hereof that might affect the opinions expressed herein. Very truly yours, Caterpillar: Confidential Green 4 Schedule I Caterpillar: Confidential Green Schedule II [Caterpillar Inc. Alabama Arizona California Georgia Illinois Indiana Kentucky Minnesota Mississippi Nebraska North Carolina South Carolina Tennessee Texas Virginia [Cat Financial Tennessee] Caterpillar: Confidential Green Exhibit A Good Standing Certificates See attached. Caterpillar: Confidential Green EXHIBIT E [RESERVED] Caterpillar: Confidential Green 3 EXHIBIT F-1 FORM OF COMPLIANCE CERTIFICATE To: The Banks which are parties to the This Compliance Certificate is furnished pursuant to that certain Second Amended and Restated Credit Agreement (Three-Year Facility), dated as of September 5, 2019, as the same may be amended, restated, supplemented or otherwise modified from time to time (the “Agreement”) among Caterpillar Inc., Caterpillar Financial Services Corporation, Caterpillar International Finance Designated Activity Company and Caterpillar Finance Kabushiki Kaisha (collectively, the “Borrowers”), the Banks party thereto, Citibank Europe plc, UK Branch, as Local Currency Agent, MUFG Bank, Ltd., as Japan Local Currency Agent and Citibank, N.A., as agent for the Banks. Capitalized terms used and not otherwise defined herein shall have the meanings attributed to such terms in the Agreement. THE UNDERSIGNED HEREBY CERTIFIES THAT:
a. Consolidated Net Worth $
Comprehensive Income $
Accumulated Other Comprehensive Income $ Caterpillar: Confidential Green The foregoing certifications and the financial statements delivered with this Certificate in support hereof, are made and delivered this _____ day of________, 20__. CATERPILLAR INC. By: Caterpillar: Confidential Green 2 EXHIBIT F-2 FORM OF COMPLIANCE CERTIFICATE To: The Banks which are parties to the This Compliance Certificate is furnished pursuant to that certain Second Amended and Restated Credit Agreement (Three-Year Facility) dated as of September 5, 2019, as the same may be amended, restated, supplemented or otherwise modified from time to time (the “Agreement”) among Caterpillar Inc., Caterpillar Financial Services Corporation, Caterpillar International Finance Designated Activity Company and Caterpillar Finance Kabushiki Kaisha (collectively, the “Borrowers”), the Banks party thereto, Citibank Europe plc, UK Branch, as Local Currency Agent, MUFG Bank, Ltd., as Japan Local Currency Agent, Citibank, N.A., as agent for the Banks. Capitalized terms used and not otherwise defined herein shall have the meanings attributed to such terms in the Agreement. THE UNDERSIGNED HEREBY CERTIFIES THAT:
Net Worth* $
34 It being understood that rounding may cause minor discrepancies with the previous three Compliance Certificates delivered. Caterpillar: Confidential Green d. Leverage Ratio (at December 31, 20_) * At end of current accounting period 5. As required pursuant to Section 5.04(b) of the Agreement, the ratio of (1) the Borrower’s profit excluding income taxes, Interest Expense and Net Gain/(Loss) From Interest Rate Derivatives to (2) Interest Expense, computed as of the end of the calendar quarter covered by the attached financial statements for the rolling four-quarter period then most recently ended, is not less than 1.15 to 1, as shown below.35
From Interest Rate Derivatives $
The foregoing certifications and the financial statements delivered with this Certificate in support hereof, are made and delivered this _____ day of________, 20__. CATERPILLAR FINANCIAL SERVICES CORPORATION By: 35 It being understood that rounding may cause minor discrepancies with the previous three Compliance Certificates delivered. Caterpillar: Confidential Green EXHIBIT G-1 FORM OF LOCAL CURRENCY ADDENDUM (THREE-YEAR FACILITY) LOCAL CURRENCY ADDENDUM, dated as of September 5, 2019, to the Credit Agreement (as defined below), among Caterpillar Financial Services Corporation, Caterpillar International Finance Designated Activity Company, the Local Currency Banks (as defined below), Citibank, N.A., as Agent, and Citibank Europe plc, UK Branch, as Local Currency Agent. ARTICLE I SECTION 1.01. Defined Terms. As used in this Addendum, the following terms shall have the meanings specified below: “Credit Agreement” means the Second Amended and Restated Credit Agreement (Three-Year Facility) dated as of September 5, 2019, among Caterpillar Inc., Caterpillar Financial Services Corporation, Caterpillar International Finance Designated Activity Company, Caterpillar Finance Kabushiki Kaisha, the financial institutions from time to time party thereto as Banks, Citibank, N.A., as Agent, MUFG Bank, Ltd., as Japan Local Currency Agent, and Citibank Europe plc, UK Branch, as Local Currency Agent, as the same may be amended, waived, modified or restated from time to time. “Local Currency Advance” means any Advance, denominated in Pounds Sterling, Euro, or any other Agreed Currency which CIF requests the Local Currency Banks to include as a Local Currency and which is reasonably acceptable to the Local Currency Banks, made to CIF pursuant to Sections 2.03A and 2.03B of the Credit Agreement and this Addendum. A Local Currency Advance shall bear interest at the rate specified in Schedule II. “Local Currency Bank” means each Bank listed on the signature pages of this Addendum or which becomes a party hereto pursuant to an Assignment and Acceptance or an Assumption and Acceptance. SECTION 1.02. Terms Generally. Unless otherwise defined herein, terms defined in the Credit Agreement shall have the same meanings in this Addendum. Wherever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. All references herein to Sections and Schedules shall be deemed references to Sections of and Schedules to this Addendum unless the context shall otherwise require. ARTICLE II SECTION 2.01. Local Currency Advances. (a) This Addendum (as the same may be amended, waived, modified or restated from time to time) is the “Local Currency Addendum” as defined in the Credit Agreement and is, together with the borrowings made hereunder, subject in all respects to the terms and provisions of the Credit Agreement except to the extent that the terms and provisions of the Credit Agreement are modified by or are inconsistent with this Addendum, in which case this Addendum shall control.
SECTION 2.02. Maximum Borrowing Amounts. (a) The Total Local Currency Commitment, and the Local Currency Commitment and the Same Day Local Currency Commitment for each Local Currency Bank party to this Addendum as of the date hereof, are set forth on Schedule I. (b) Upon at least five (5) Business Days prior irrevocable written notice to the Agent, the Local Currency Agent and the Local Currency Banks, CIF may from time to time permanently reduce the Total Local Currency Commitment under this Addendum in whole, or in part ratably among the Local Currency Banks, in an aggregate minimum Dollar Amount of $10,000,000, and integral multiples of $1,000,000 in excess thereof; provided, however, that the amount of the Total Local Currency Commitment may not be reduced below the aggregate principal amount of the outstanding Local Currency Advances with respect thereto. Any such reduction shall be allocated pro rata among all the Local Currency Banks party to this Addendum by reference to their Local Currency Commitments. ARTICLE III Representations and Warranties Each of CFSC and CIF makes and confirms each representation and warranty applicable to it or any of its Subsidiaries contained in Article IV of the Credit Agreement. Each 2 of CFSC and CIF represents and warrants to each of the Local Currency Banks party to this Addendum that no Event of Default, or event which would constitute an Event of Default but for the requirement that notice be given or time elapse or both, has occurred and is continuing, and no Event of Default, or event which would constitute an Event of Default but for the requirement that notice be given or time elapse or both, shall arise as a result of the making of Local Currency Advances hereunder or any other transaction contemplated hereby. ARTICLE IV Miscellaneous Provisions SECTION 4.01. Amendment; Termination. (a) This Addendum (including the Schedules hereto) may not be amended without the prior written consent of the Majority Local Currency Banks hereunder and subject to the provisions of Section 8.01 of the Credit Agreement. (b) This Addendum may not be terminated without the prior written consent of each Local Currency Bank party hereto, CFSC and CIF unless there are no Local Currency Advances or any other amounts outstanding hereunder, in which case no such consent of any Local Currency Bank shall be required; provided, however, that this Addendum shall terminate on the date that the Credit Agreement terminates in accordance with its terms. SECTION 4.02. Assignments. Section 8.07 of the Credit Agreement shall apply to assignments by Local Currency Banks of obligations, Local Currency Commitments and Advances hereunder; provided, however, that a Local Currency Bank may not assign any obligations, Local Currency Commitments or rights hereunder to any Person which is not (or does not simultaneously become) a Bank under the Credit Agreement. SECTION 4.03. Notices, Etc. Except as otherwise provided herein, all notices, demands, requests, consents and other communications provided for hereunder shall be given in writing or by any telecommunication device capable of creating a written record (including electronic mail), and addressed to the party to be notified as follows:
3 Assumption and Acceptance pursuant to which such Local Currency Bank became a party hereto; and (e) if to the Agent, at its address at Bank Loan Syndications, 1615 Brett Rd., Building No. 3, New Castle, Delaware 19720, Attention: Bank Loan Syndications, Telecopier No. 646-274-5080 (glagentofficeops@citi.com), with a copy to Citibank, N.A., 388 Greenwich Street, New York, New York 10013, Attention: Lisa Stevens Harary (E-Mail Address: lisa.stevensharary@citi.com); or as to each party, at such other address as shall be designated by such party in a written notice to the other parties. All notices, demands, requests, consents and other communications described in this Section 4.03 shall be effective (i) if delivered by hand, including any overnight courier service, upon personal delivery, (ii) if delivered by mail, when deposited in the mails and (iii) if delivered by electronic mail or any other telecommunications device, when transmitted to an electronic mail address (or by another means of electronic delivery) as provided in this Section 4.03; provided, however, that notices and communications to the Local Currency Agent pursuant to Article II or V hereof or Article II of the Credit Agreement shall not be effective until received by the Local Currency Agent. SECTION 4.04. Ratification of Guaranty. By its execution of this Addendum, CFSC ratifies and confirms its guaranty contained in Article IX of the Credit Agreement with respect to the Local Currency Advances made pursuant to this Addendum which Guaranty remains in full force and effect. SECTION 4.05. Sharing of Payments, Etc. If any Local Currency Bank shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of the Local Currency Advances made by it (other than pursuant to Section 2.02(c), 2.05(d), 2.10, 2.12 or 8.04 of the Credit Agreement) in excess of its ratable share of payments on account of the Local Currency Advances obtained by all the Local Currency Banks, such Local Currency Bank shall forthwith purchase from the other Local Currency Banks such participations in the Local Currency Advances made by them as shall be necessary to cause such purchasing Local Currency Bank to share the excess payment ratably with each of them, provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Local Currency Bank, such purchase from each other Local Currency Bank shall be rescinded and each such other Local Currency Bank shall repay to the purchasing Local Currency Bank the purchase price to the extent of such recovery together with an amount equal to such other Local Currency Bank’s ratable share (according to the proportion of (i) the amount of such other Local Currency Bank’s required repayment to (ii) the total amount so recovered from the purchasing Local Currency Bank) of any interest or other amount paid or payable by the purchasing Local Currency Bank in respect of the total amount so recovered. CIF agrees that any Local Currency Bank so purchasing a participation from another Local Currency Bank pursuant to this Section 4.05 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Local Currency Bank were the direct creditor of CIF in the amount of such participation. SECTION 4.06. Applicable Law. THIS ADDENDUM SHALL BE GOVERNED BY AND INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE 4 LAW OF THE STATE OF NEW YORK (WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE INTERNAL LAW OF THE STATE OF NEW YORK). SECTION 4.07 Execution in Counterparts. This Addendum 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 one and the same agreement. ARTICLE V The Local Currency Agent SECTION 5.01 Appointment; Nature of Relationship. Citibank Europe plc, UK Branch is appointed by the Local Currency Banks as the Local Currency Agent hereunder and under the Credit Agreement, and each of the Local Currency Banks irrevocably authorizes the Local Currency Agent to act as the contractual representative of such Local Currency Bank with the rights and duties expressly set forth herein and in the Credit Agreement applicable to the Local Currency Agent. The Local Currency Agent agrees to act as such contractual representative upon the express conditions contained in this Article V. Notwithstanding the use of the defined term “Local Currency Agent,” it is expressly understood and agreed that the Local Currency Agent shall not have any fiduciary responsibilities to any Local Currency Bank or other Bank by reason of this Addendum and that the Local Currency Agent is merely acting as the representative of the Local Currency Banks with only those duties as are expressly set forth in this Addendum and the Credit Agreement. In its capacity as the Local Currency Banks’ contractual representative, the Local Currency Agent (i) does not assume any fiduciary duties to any of the Banks, (ii) is a “representative” of the Local Currency Banks within the meaning of Section 9-102 of the Uniform Commercial Code and (iii) is acting as an independent contractor, the rights and duties of which are limited to those expressly set forth in this Addendum and the Credit Agreement. Each of the Local Currency Banks agrees to assert no claim against the Local Currency Agent on any agency theory or any other theory of liability for breach of fiduciary duty, all of which claims each Bank waives. SECTION 5.02 Powers. The Local Currency Agent shall have and may exercise such powers under this Addendum and the Credit Agreement as are specifically delegated to the Local Currency Agent by the terms of each thereof, together with such powers as are reasonably incidental thereto. The Local Currency Agent shall have neither any implied duties or fiduciary duties to the Local Currency Banks or the Banks, nor any obligation to the Local Currency Banks or the Banks to take any action hereunder or under the Credit Agreement except any action specifically provided by this Addendum or the Credit Agreement required to be taken by the Local Currency Agent. SECTION 5.03 General Immunity. Neither the Local Currency Agent nor any of its respective directors, officers, agents or employees shall be liable to any of the Borrowers or any Bank for any action taken or omitted to be taken by it or them hereunder or under the Credit Agreement or in connection herewith or therewith except to the extent such action or inaction is 5 found in a final non-appealable judgment by a court of competent jurisdiction to have arisen from the gross negligence or willful misconduct of such Person. SECTION 5.04 No Responsibility for Advances, Creditworthiness, Collateral, Recitals, Etc. [Intentionally Omitted. See Sections 7.03 and 7.04 of the Credit Agreement for these provisions.] SECTION 5.05 Action on Instructions of Local Currency Banks. The Local Currency Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and under the Credit Agreement in accordance with written instructions signed by Majority Local Currency Banks (except with respect to actions that require the consent of all of the Banks as provided in the Credit Agreement, including, without limitation, Section 8.01 thereof), and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of the Local Currency Banks. The Local Currency Agent shall be fully justified in failing or refusing to take any action hereunder and under the Credit Agreement unless it shall first be indemnified to its satisfaction by the Local Currency Banks pro rata against any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action. SECTION 5.06 Employment of Agents and Counsel. The Local Currency Agent may execute any of its duties hereunder and under the Credit Agreement by or through employees, agents, and attorneys-in-fact, and shall not be answerable to the Banks or the Local Currency Banks, except as to money or securities received by it or its authorized agents, for the default or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care. The Local Currency Agent shall be entitled to advice of counsel concerning the contractual arrangement among the Local Currency Agent and the Local Currency Banks, as the case may be, and all matters pertaining to its duties hereunder and under the Credit Agreement. SECTION 5.07 Reliance on Documents; Counsel. [Intentionally Omitted. See Section 7.03 of the Credit Agreement for these provisions.] SECTION 5.08 Other Transactions. The Local Currency Agent may accept deposits from, lend money to, and generally engage in any kind of trust, debt, equity or other transaction, in addition to those contemplated by this Addendum or the Credit Agreement, with CFSC, CIF or any of their respective Subsidiaries in which the Local Currency Agent is not prohibited hereby from engaging with any other Person. SECTION 5.09 Bank Credit Decision. [Intentionally Omitted. See Section 7.07 of the Credit Agreement for these provisions.] SECTION 5.10 Successor Local Currency Agent. The Local Currency Agent (i) may resign at any time by giving written notice thereof to the Agent, the Local Currency Banks and the Borrowers, and may appoint one of its affiliates as successor Local Currency Agent and (ii) may be removed at any time with or without cause by the Majority Local Currency Banks. Upon any such resignation or removal, the Majority Local Currency Banks, with the consent of the Agent, shall have the right to appoint (unless, in the case of the resignation of the Local Currency Agent, the resigning Local Currency Agent has appointed one of its affiliates as successor Local Currency Agent), on behalf of the Borrowers and the Local Currency Banks, a 6 successor Local Currency Agent. If no successor Local Currency Agent shall have been so appointed and shall have accepted such appointment within thirty days after the retiring Local Currency Agent’s giving notice of resignation or the Majority Local Currency Banks’ removal of the retiring Local Currency Agent, then the retiring Local Currency Agent may appoint, on behalf of the Borrowers and the Local Currency Banks, a successor Local Currency Agent, which need not be one of its affiliates. Notwithstanding anything herein to the contrary, so long as no Event of Default, or event which would constitute an Event of Default but for the requirement that notice be given, time elapse or both, has occurred and is continuing, each such successor Local Currency Agent shall be subject to written approval by CFSC and CIF, which approval shall not be unreasonably withheld. Such successor Local Currency Agent shall be a commercial bank having capital and retained earnings of at least $500,000,000. Upon the acceptance of any appointment as the Local Currency Agent hereunder by a successor Local Currency Agent, such successor Local Currency Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Local Currency Agent, and the retiring Local Currency Agent shall be discharged from its duties and obligations hereunder and under the Credit Agreement. After any retiring Local Currency Agent’s resignation hereunder as Local Currency Agent, the provisions of this Article V shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Local Currency Agent hereunder and under the Credit Agreement. 7 IN WITNESS WHEREOF, the parties hereto have caused this Addendum to be duly executed as a deed by their duly authorized officers, all as of the date and year first above written. [SIGNATURE PAGES ON FILE WITH AGENT] Signature Page to Local Currency Addendum SCHEDULE I to Local Currency Addendum Local Currency Banks Local Currency Commitments
Total Local Currency Total Same Commitment: US $1,000,000,000 Day Local US $150,000,000 Currency Sub- Facility: Local Currency Bank Name Applicable Local Currency Lending Office Citibank, N.A. Citibank, N.A. 1615 Brett Rd., Building No. 3 New Castle, Delaware 19720 Attention of: Bank Loan Syndications Telecopier No.: 212-994-0961 36 Local Currency and Same Day Local Currency Commitments as of the Amendment No. 1 Effective Date. 1 JPMorgan Chase Bank, N.A. JPMorgan Chase Bank, N.A. Platina Block 3 Floor 4 Bengaluru, India 560103 Attention: Vithal Giri (+91-80) 67905186 ext.75186 Bank of America, N.A., London Branch, (formerly Bank of America, N.A., London Branch Merrill Lynch International Designated Activity (formerly Bank of America Merrill Lynch Company) International Designated Activity Company) 26 Elmfield Road, Bromley, Kent, BR1 1LR, United Kingdom +44-208-313-2655 / 44 208 695 3389 +44 208 313 2140 Barclays Bank PLC Barclays Bank PLC 745 7th Avenue New York, NY 10019 Société Générale Société Générale 29 Boulevard Haussmann 75009 Paris France BNP Paribas London Branch BNP Paribas London Branch 10 Harewood Avenue London NW1 6AA Attention: Gary Mobley Tel: +44 (0)20 7595 6422 Attention: Loans and Agency Desk Tel: +44 (0)20 7595 6887 Commerzbank AG, New York Branch Commerzbank AG, New York Branch 225 Liberty Street New York, NY 10281-1050 Attention: Patrick Hartweger 2 Lloyds Bank plc Lloyds Bank plc Wholesale Loans Servicing, Bank House, Wine Street, Bristol BS1 2AN Attention: Mike Wilson KBC Bank N.V. KBC Bank N.V. 1177 Avenue of the Americas New York, NY 10036 Attention: Joanne Gatto Phone: (212) 541-0720 Fax: (212) 956-5581 3 SCHEDULE II to Local Currency Addendum MODIFICATIONS
“Business Day”: Same as Credit Agreement.
Each Local Currency Advance (other than those also constituting RFR Advances) shall bear interest from and including the first day of the Interest Period applicable thereto to (but not including) the last day of such Interest Period at a rate per annum equal to the sum of the Eurocurrency Rate for such Interest Period plus the Applicable Margin as in effect from time to time during such Interest Period; provided, however, after the occurrence and during the continuance of an Event of Default or an event that would constitute an Event of Default but for the requirement that notice be given or time elapse or both, the provisions of Section 2.07(d) of the Credit Agreement shall be applicable. Local Currency Advances constituting RFR Advances shall be governed by the provisions set forth in the Credit Agreement that govern RFR Advances.
Additional Conditions Precedent: None Current Termination Date for Addendum: The “Current Termination Date” under the Credit Agreement. Extended Termination Date for Addendum: The “Extended Termination Date” under the Credit Agreement. Prepayment Notices: CIF shall be permitted to prepay a Local Currency Advance subject to the provisions of Section 8.04(b) of the Credit Agreement, on any Business Day, provided, in the case of any prepayment, notice thereof is given to the Local Currency Agent not later than 10:00 a.m. (London time) at least three (3) Business Days prior to the date of such prepayment. 1 SCHEDULE III to Local Currency Addendum OTHER PROVISIONS 1. Borrowing Procedures:
2. Funding Arrangements: Minimum amounts/increments for Local Currency Borrowings, repayments and prepayments: Same as Credit Agreement. 3. Promissory Notes: None required. 1 EXHIBIT G-2 FORM OF JAPAN LOCAL CURRENCY ADDENDUM (THREE-YEAR FACILITY) JAPAN LOCAL CURRENCY ADDENDUM, dated as of September 5, 2019, to the Credit Agreement (as defined below), among Caterpillar Financial Services Corporation, Caterpillar Finance Kabushiki Kaisha, the Japan Local Currency Banks (as defined below), Citibank, N.A., as Agent, and MUFG Bank, Ltd., as Japan Local Currency Agent. ARTICLE I SECTION 1.01. Defined Terms. As used in this Addendum, the following terms shall have the meanings specified below: “Credit Agreement” means the Second Amended and Restated Credit Agreement (Three-Year Facility), dated as of September 5, 2019, among Caterpillar Inc., Caterpillar Financial Services Corporation, Caterpillar International Finance Designated Activity Company, Caterpillar Finance Kabushiki Kaisha, the financial institutions from time to time party thereto as Banks, Citibank, N.A., as Agent, Citibank Europe plc, UK Branch, as Local Currency Agent, and MUFG Bank, Ltd., as Japan Local Currency Agent, as the same may be amended, waived, modified or restated from time to time. “Japan Local Currency Advance” means any Advance, denominated in Japanese Yen, made to CFKK pursuant to Sections 2.03C and 2.03D of the Credit Agreement and this Addendum. A Japan Local Currency Advance shall bear interest at the rate specified in Schedule II. “Japan Local Currency Bank” means each Bank listed on the signature pages of this Addendum or which becomes a party hereto pursuant to an Assignment and Acceptance or an Assumption and Acceptance. SECTION 1.02. Terms Generally. Unless otherwise defined herein, terms defined in the Credit Agreement shall have the same meanings in this Addendum. Wherever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. All references herein to Sections and Schedules shall be deemed references to Sections of and Schedules to this Addendum unless the context shall otherwise require. ARTICLE II SECTION 2.01. Japan Local Currency Advances. (a) This Addendum (as the same may be amended, waived, modified or restated from time to time) is the “Japan Local Currency Addendum” as defined in the Credit Agreement and is, together with the borrowings made hereunder, subject in all respects to the terms and provisions of the Credit Agreement except to the extent that the terms and provisions of the Credit Agreement are modified by or are inconsistent with this Addendum, in which case this Addendum shall control.
SECTION 2.02. Maximum Borrowing Amounts. (a) The Total Japan Local Currency Commitment, and the Japan Local Currency Commitment for each Japan Local Currency Bank party to this Addendum as of the date hereof, are set forth on Schedule I. (b) Upon at least five (5) Business Days prior irrevocable written notice to the Agent, the Japan Local Currency Agent and the Japan Local Currency Banks, CFKK may from time to time permanently reduce the Total Japan Local Currency Commitment under this Addendum in whole, or in part ratably among the Japan Local Currency Banks, in an aggregate minimum Dollar Amount of $10,000,000, and integral multiples of $1,000,000 in excess thereof; provided, however, that the amount of the Total Japan Local Currency Commitment may not be reduced below the aggregate principal amount of the outstanding Japan Local Currency Advances with respect thereto. Any such reduction shall be allocated pro rata among all the Japan Local Currency Banks party to this Addendum by reference to their Japan Local Currency Commitments. ARTICLE III Representations and Warranties Each of CFSC and CFKK makes and confirms each representation and warranty applicable to it or any of its Subsidiaries contained in Article IV of the Credit Agreement. Each 2 of CFSC and CFKK represents and warrants to each of the Japan Local Currency Banks party to this Addendum that no Event of Default, or event which would constitute an Event of Default but for the requirement that notice be given or time elapse or both, has occurred and is continuing, and no Event of Default, or event which would constitute an Event of Default but for the requirement that notice be given or time elapse or both, shall arise as a result of the making of Japan Local Currency Advances hereunder or any other transaction contemplated hereby. ARTICLE IV Miscellaneous Provisions SECTION 4.01. Amendment; Termination. (a) This Addendum (including the Schedules hereto) may not be amended without the prior written consent of the Majority Japan Local Currency Banks hereunder and subject to the provisions of Section 8.01 of the Credit Agreement. (b) This Addendum may not be terminated without the prior written consent of each Japan Local Currency Bank party hereto, CFSC and CFKK unless there are no Japan Local Currency Advances or any other amounts outstanding hereunder, in which case no such consent of any Japan Local Currency Bank shall be required; provided, however, that this Addendum shall terminate on the date that the Credit Agreement terminates in accordance with its terms. SECTION 4.02. Assignments. Section 8.07 of the Credit Agreement shall apply to assignments by Japan Local Currency Banks of obligations, Japan Local Currency Commitments and Japan Local Currency Advances hereunder; provided, however, that a Japan Local Currency Bank may not assign any obligations, Japan Local Currency Commitments or rights hereunder to any Person which is not (or does not simultaneously become) a Bank under the Credit Agreement. SECTION 4.03. Notices, Etc. Except as otherwise provided herein, all notices, demands, requests, consents and other communications provided for hereunder shall be given in writing or by any telecommunication device capable of creating a written record (including electronic mail), and addressed to the party to be notified as follows: (a) if to CFKK, at Caterpillar Finance Kabushiki Kaisha, SBS Tower 14F, 4-10-1 Yoga, Setagaya-ku, Tokyo 158-0097, Japan, Attention: Managing Director (Facsimile No. 813-5797-4522), with a copy to CFSC at its address and facsimile number or electronic mail address referenced in Section 8.02 of the Credit Agreement;
3 address and facsimile number or electronic mail address referenced in Section 8.02 of the Credit Agreement;
or as to each party, at such other address as shall be designated by such party in a written notice to the other parties. All notices, demands, requests, consents and other communications described in this Section 4.03 shall be effective (i) if delivered by hand, including any overnight courier service, upon personal delivery, (ii) if delivered by mail, when deposited in the mails and (iii) if delivered by electronic mail or any other telecommunications device, when transmitted to an electronic mail address (or by another means of electronic delivery) as provided in this Section 4.03; provided, however, that notices and communications to the Japan Local Currency Agent pursuant to Article II or V hereof or Article II of the Credit Agreement shall not be effective until received by the Japan Local Currency Agent. SECTION 4.04. Ratification of Guaranty. By its execution of this Addendum, CFSC ratifies and confirms its guaranty contained in Article IX of the Credit Agreement with respect to the Japan Local Currency Advances made pursuant to this Addendum which Guaranty remains in full force and effect. SECTION 4.05. Sharing of Payments, Etc. If any Japan Local Currency Bank shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of the Japan Local Currency Advances made by it (other than pursuant to Section 2.02(c), 2.05(d), 2.10, 2.12 or 8.04 of the Credit Agreement) in excess of its ratable share of payments on account of the Japan Local Currency Advances obtained by all the Japan Local Currency Banks, such Japan Local Currency Bank shall forthwith purchase from the other Japan Local Currency Banks such participations in the Japan Local Currency Advances made by them as shall be necessary to cause such purchasing Japan Local Currency Bank to share the excess payment ratably with each of them, provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Japan Local Currency Bank, such purchase from each other Japan Local Currency Bank shall be rescinded and each such other Japan Local Currency Bank shall repay to the purchasing Japan Local Currency Bank the purchase price to the extent of such recovery together with an amount equal to such other Japan Local Currency Bank’s ratable share (according to the proportion of (i) the amount of such other Japan Local Currency Bank’s required repayment to (ii) the total amount so recovered from the purchasing Japan Local Currency Bank) of any interest or other amount paid or payable by 4 the purchasing Japan Local Currency Bank in respect of the total amount so recovered. CFKK agrees that any Japan Local Currency Bank so purchasing a participation from another Japan Local Currency Bank pursuant to this Section 4.05 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Japan Local Currency Bank were the direct creditor of CFKK in the amount of such participation. SECTION 4.06. Applicable Law. THIS ADDENDUM SHALL BE GOVERNED BY AND INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK (WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE INTERNAL LAW OF THE STATE OF NEW YORK). SECTION 4.07 Execution in Counterparts. This Addendum 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 one and the same agreement. ARTICLE V The Japan Local Currency Agent SECTION 5.01 Appointment; Nature of Relationship. MUFG Bank, Ltd. is appointed by the Japan Local Currency Banks as the Japan Local Currency Agent hereunder and under the Credit Agreement, and each of the Japan Local Currency Banks irrevocably authorizes the Japan Local Currency Agent to act as the contractual representative of such Japan Local Currency Bank with the rights and duties expressly set forth herein and in the Credit Agreement applicable to the Japan Local Currency Agent. The Japan Local Currency Agent agrees to act as such contractual representative upon the express conditions contained in this Article V. Notwithstanding the use of the defined term “Japan Local Currency Agent,” it is expressly understood and agreed that the Japan Local Currency Agent shall not have any fiduciary responsibilities to any Japan Local Currency Bank or other Bank by reason of this Addendum and that the Japan Local Currency Agent is merely acting as the representative of the Japan Local Currency Banks with only those duties as are expressly set forth in this Addendum and the Credit Agreement. In its capacity as the Japan Local Currency Banks’ contractual representative, the Japan Local Currency Agent (i) does not assume any fiduciary duties to any of the Banks, (ii) is a “representative” of the Japan Local Currency Banks within the meaning of Section 9-102 of the Uniform Commercial Code and (iii) is acting as an independent contractor, the rights and duties of which are limited to those expressly set forth in this Addendum and the Credit Agreement. Each of the Japan Local Currency Banks agrees to assert no claim against the Japan Local Currency Agent on any agency theory or any other theory of liability for breach of fiduciary duty, all of which claims each Bank waives. SECTION 5.02 Powers. The Japan Local Currency Agent shall have and may exercise such powers under this Addendum and the Credit Agreement as are specifically delegated to the Japan Local Currency Agent by the terms of each thereof, together with such powers as are reasonably incidental thereto. The Japan Local Currency Agent shall have neither 5 any implied duties or fiduciary duties to the Japan Local Currency Banks or the Banks, nor any obligation to the Japan Local Currency Banks or the Banks to take any action hereunder or under the Credit Agreement except any action specifically provided by this Addendum or the Credit Agreement required to be taken by the Japan Local Currency Agent. SECTION 5.03 General Immunity. Neither the Japan Local Currency Agent nor any of its respective directors, officers, agents or employees shall be liable to any of the Borrowers or any Bank for any action taken or omitted to be taken by it or them hereunder or under the Credit Agreement or in connection herewith or therewith except to the extent such action or inaction is found in a final non-appealable judgment by a court of competent jurisdiction to have arisen from the gross negligence or willful misconduct of such Person. SECTION 5.04 No Responsibility for Advances, Creditworthiness, Collateral, Recitals, Etc. [Intentionally Omitted. See Sections 7.03 and 7.04 of the Credit Agreement for these provisions.] SECTION 5.05 Action on Instructions of Japan Local Currency Banks. The Japan Local Currency Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and under the Credit Agreement in accordance with written instructions signed by Majority Japan Local Currency Banks (except with respect to actions that require the consent of all of the Banks as provided in the Credit Agreement, including, without limitation, Section 8.01 thereof), and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of the Japan Local Currency Banks. The Japan Local Currency Agent shall be fully justified in failing or refusing to take any action hereunder and under the Credit Agreement unless it shall first be indemnified to its satisfaction by the Japan Local Currency Banks pro rata against any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action. SECTION 5.06 Employment of Agents and Counsel. The Japan Local Currency Agent may execute any of its duties hereunder and under the Credit Agreement by or through employees, agents, and attorneys-in-fact, and shall not be answerable to the Banks or the Japan Local Currency Banks, except as to money or securities received by it or its authorized agents, for the default or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care. The Japan Local Currency Agent shall be entitled to advice of counsel concerning the contractual arrangement among the Japan Local Currency Agent and the Japan Local Currency Banks, as the case may be, and all matters pertaining to its duties hereunder and under the Credit Agreement. SECTION 5.07 Reliance on Documents; Counsel. [Intentionally Omitted. See Section 7.03 of the Credit Agreement for these provisions.] SECTION 5.08 Other Transactions. The Japan Local Currency Agent may accept deposits from, lend money to, and generally engage in any kind of trust, debt, equity or other transaction, in addition to those contemplated by this Addendum or the Credit Agreement, with CFSC, CFKK or any of their respective Subsidiaries in which the Japan Local Currency Agent is not prohibited hereby from engaging with any other Person. 6 SECTION 5.09 Bank Credit Decision. [Intentionally Omitted. See Section 7.07 of the Credit Agreement for these provisions.] SECTION 5.10 Successor Japan Local Currency Agent. The Japan Local Currency Agent (i) may resign at any time by giving written notice thereof to the Agent, the Japan Local Currency Banks and the Borrowers, and may appoint one of its Affiliates as successor Japan Local Currency Agent and (ii) may be removed at any time with or without cause by the Majority Japan Local Currency Banks. Upon any such resignation or removal, the Majority Japan Local Currency Banks, with the consent of the Agent, shall have the right to appoint (unless, in the case of the resignation of the Japan Local Currency Agent, the resigning Japan Local Currency Agent has appointed one of its Affiliates as successor Japan Local Currency Agent), on behalf of the Borrowers and the Japan Local Currency Banks, a successor Japan Local Currency Agent. If no successor Japan Local Currency Agent shall have been so appointed and shall have accepted such appointment within thirty days after the retiring Japan Local Currency Agent’s giving notice of resignation or the Majority Japan Local Currency Banks’ removal of the retiring Japan Local Currency Agent, then the retiring Japan Local Currency Agent may appoint, on behalf of the Borrowers and the Japan Local Currency Banks, a successor Japan Local Currency Agent, which need not be one of its Affiliates. Notwithstanding anything herein to the contrary, so long as no Event of Default, or event which would constitute an Event of Default but for the requirement that notice be given, time elapse or both, has occurred and is continuing, each such successor Japan Local Currency Agent shall be subject to written approval by CFSC and CFKK, which approval shall not be unreasonably withheld. Such successor Japan Local Currency Agent shall be a commercial bank having capital and retained earnings of at least $500,000,000. Upon the acceptance of any appointment as the Japan Local Currency Agent hereunder by a successor Japan Local Currency Agent, such successor Japan Local Currency Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Japan Local Currency Agent, and the retiring Japan Local Currency Agent shall be discharged from its duties and obligations hereunder and under the Credit Agreement. After any retiring Japan Local Currency Agent’s resignation hereunder as Japan Local Currency Agent, the provisions of this Article V shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Japan Local Currency Agent hereunder and under the Credit Agreement. 7 IN WITNESS WHEREOF, the parties hereto have caused this Addendum to be duly executed as a deed by their duly authorized officers, all as of the date and year first above written. [SIGNATURE PAGES ON FILE WITH AGENT] Signature Page to Japan Local Currency Addendum (Three-Year Facility) SCHEDULE I to Japan Local Currency Addendum Japan Local Currency Banks Japan Local Currency Bank Name Japan Local Currency Commitment MUFG Bank, Ltd. US $75,000,000 Total Japan Local Currency Commitment: US $75,000,000 Japan Local Currency Bank Name Applicable Japan Local Currency Lending Office MUFG Bank, Ltd. MUFG Bank, Ltd., Osaka Corporate Banking Group Osaka Corporate Banking Division No. 3 Corporate Banking Department No. 3 3-5-6, Fushimimachi, Chuo-ku, Osaka-shi, Osaka 541-8530, Japan Attention: Mr. Kazuki Takehara (Telephone No.: 06-6206-9036 / 81-06-6206-9036) (Facsimile No.: 06-6206-9039 / 81-06-6206-9039) 1 SCHEDULE II to Japan Local Currency Addendum MODIFICATIONS
“Business Day”: Same as Credit Agreement.
Each Japan Local Currency Advance that is a TONAR Advance shall bear interest at a rate per annum equal to the sum of (i) TONAR for such Japan Local Currency Advance plus (ii) the Applicable Margin as in effect from time to time during such Interest Period; provided, however, after the occurrence and during the continuance of an Event of Default or an event that would constitute an Event of Default but for the requirement that notice be given or time elapse or both, the provisions of Section 2.07(d) of the Credit Agreement shall be applicable. Each Japan Local Currency Advance that is a Japan Base Rate Advance shall bear interest during any Interest Period at a per annum rate equal to the sum of (i) the Japan Base Rate plus (ii) the Applicable Margin in effect from time to time during such Interest Period. The terms of Section 2.07 and the other provisions of the Credit Agreement shall otherwise govern the accrual and payment of interest on Japan Local Currency Advances.
Additional Conditions Precedent: None Current Termination Date for Addendum: The “Current Termination Date” under the Credit Agreement. Extended Termination Date for Addendum: The “Extended Termination Date” under the Credit Agreement. Prepayment Notices: CFKK shall be permitted to prepay a Japan Local Currency Advance subject to the provisions of Section 8.04(b) of the Credit Agreement, on any Business Day, provided, in the case of any prepayment, notice thereof is given to the Japan Local Currency Agent (with a copy to the Agent) not later than 10:00 a.m. (Tokyo time) at least three (3) Business Days prior to the date of such prepayment. 1 SCHEDULE III to Japan Local Currency Addendum OTHER PROVISIONS 1. Borrowing Procedures:
2. Funding Arrangements: Minimum amounts/increments for Japan Local Currency Borrowings, repayments and prepayments: Same as Credit Agreement. 3. Promissory Notes: None required. 1 Annex II Existing Local Currency Addendum, as modified Attached LOCAL CURRENCY ADDENDUM (THREE-YEAR FACILITY) LOCAL CURRENCY ADDENDUM, dated as of September 5, 2019, to the Credit Agreement (as defined below), among Caterpillar Financial Services Corporation, Caterpillar International Finance Designated Activity Company, the Local Currency Banks (as defined below), Citibank, N.A., as Agent, and Citibank Europe plc, UK Branch, as Local Currency Agent. ARTICLE I SECTION 1.01. Defined Terms. As used in this Addendum, the following terms shall have the meanings specified below: “Credit Agreement” means the Second Amended and Restated Credit Agreement (Three-Year Facility) dated as of September 5, 2019, among Caterpillar Inc., Caterpillar Financial Services Corporation, Caterpillar International Finance Designated Activity Company, Caterpillar Finance Kabushiki Kaisha, the financial institutions from time to time party thereto as Banks, Citibank, N.A., as Agent, MUFG Bank, Ltd., as Japan Local Currency Agent, and Citibank Europe plc, UK Branch, as Local Currency Agent, as the same may be amended, waived, modified or restated from time to time. “Local Currency Advance” means any Advance, denominated in Pounds Sterling, Euro, or any other Agreed Currency which CIF requests the Local Currency Banks to include as a Local Currency and which is reasonably acceptable to the Local Currency Banks, made to CIF pursuant to Sections 2.03A and 2.03B of the Credit Agreement and this Addendum. A Local Currency Advance shall bear interest at the rate specified in Schedule II. “Local Currency Bank” means each Bank listed on the signature pages of this Addendum or which becomes a party hereto pursuant to an Assignment and Acceptance or an Assumption and Acceptance. SECTION 1.02. Terms Generally. Unless otherwise defined herein, terms defined in the Credit Agreement shall have the same meanings in this Addendum. Wherever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. All references herein to Sections and Schedules shall be deemed references to Sections of and Schedules to this Addendum unless the context shall otherwise require. ARTICLE II SECTION 2.01. Local Currency Advances. (a) This Addendum (as the same may be amended, waived, modified or restated from time to time) is the “Local Currency Addendum” as defined in the Credit Agreement and is, together with the borrowings made DB1/ 124037875.2 hereunder, subject in all respects to the terms and provisions of the Credit Agreement except to the extent that the terms and provisions of the Credit Agreement are modified by or are inconsistent with this Addendum, in which case this Addendum shall control.
SECTION 2.02. Maximum Borrowing Amounts. (a) The Total Local Currency Commitment, and the Local Currency Commitment and the Same Day Local Currency Commitment for each Local Currency Bank party to this Addendum as of the date hereof, are set forth on Schedule I. (b) Upon at least five (5) Business Days prior irrevocable written notice to the Agent, the Local Currency Agent and the Local Currency Banks, CIF may from time to time permanently reduce the Total Local Currency Commitment under this Addendum in whole, or in part ratably among the Local Currency Banks, in an aggregate minimum Dollar Amount of $10,000,000, and integral multiples of $1,000,000 in excess thereof; provided, however, that the amount of the Total Local Currency Commitment may not be reduced below the aggregate principal amount of the outstanding Local Currency Advances with respect thereto. Any such reduction shall be allocated pro rata among all the Local Currency Banks party to this Addendum by reference to their Local Currency Commitments. ARTICLE III Representations and Warranties Each of CFSC and CIF makes and confirms each representation and warranty applicable to it or any of its Subsidiaries contained in Article IV of the Credit Agreement. Each of CFSC and CIF represents and warrants to each of the Local Currency Banks party to this Addendum that no Event of Default, or event which would constitute an Event of Default but for the requirement that notice be given or time elapse or both, has occurred and is continuing, and no Event of Default, or event which would constitute an Event of Default but for the requirement that notice be given or time elapse or both, shall arise as a result of the making of Local Currency Advances hereunder or any other transaction contemplated hereby. 2 ARTICLE IV Miscellaneous Provisions SECTION 4.01. Amendment; Termination. (a) This Addendum (including the Schedules hereto) may not be amended without the prior written consent of the Majority Local Currency Banks hereunder and subject to the provisions of Section 8.01 of the Credit Agreement. (b) This Addendum may not be terminated without the prior written consent of each Local Currency Bank party hereto, CFSC and CIF unless there are no Local Currency Advances or any other amounts outstanding hereunder, in which case no such consent of any Local Currency Bank shall be required; provided, however, that this Addendum shall terminate on the date that the Credit Agreement terminates in accordance with its terms. SECTION 4.02. Assignments. Section 8.07 of the Credit Agreement shall apply to assignments by Local Currency Banks of obligations, Local Currency Commitments and Advances hereunder; provided, however, that a Local Currency Bank may not assign any obligations, Local Currency Commitments or rights hereunder to any Person which is not (or does not simultaneously become) a Bank under the Credit Agreement. SECTION 4.03. Notices, Etc. Except as otherwise provided herein, all notices, demands, requests, consents and other communications provided for hereunder shall be given in writing or by any telecommunication device capable of creating a written record (including electronic mail), and addressed to the party to be notified as follows:
3 N.A., 388 Greenwich Street, New York, New York 10013, Attention: Lisa Stevens Harary (E-Mail Address: lisa.stevensharary@citi.com); or as to each party, at such other address as shall be designated by such party in a written notice to the other parties. All notices, demands, requests, consents and other communications described in this Section 4.03 shall be effective (i) if delivered by hand, including any overnight courier service, upon personal delivery, (ii) if delivered by mail, when deposited in the mails and (iii) if delivered by electronic mail or any other telecommunications device, when transmitted to an electronic mail address (or by another means of electronic delivery) as provided in this Section 4.03; provided, however, that notices and communications to the Local Currency Agent pursuant to Article II or V hereof or Article II of the Credit Agreement shall not be effective until received by the Local Currency Agent. SECTION 4.04. Ratification of Guaranty. By its execution of this Addendum, CFSC ratifies and confirms its guaranty contained in Article IX of the Credit Agreement with respect to the Local Currency Advances made pursuant to this Addendum which Guaranty remains in full force and effect. SECTION 4.05. Sharing of Payments, Etc. If any Local Currency Bank shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of the Local Currency Advances made by it (other than pursuant to Section 2.02(c), 2.05(d), 2.10, 2.12 or 8.04 of the Credit Agreement) in excess of its ratable share of payments on account of the Local Currency Advances obtained by all the Local Currency Banks, such Local Currency Bank shall forthwith purchase from the other Local Currency Banks such participations in the Local Currency Advances made by them as shall be necessary to cause such purchasing Local Currency Bank to share the excess payment ratably with each of them, provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Local Currency Bank, such purchase from each other Local Currency Bank shall be rescinded and each such other Local Currency Bank shall repay to the purchasing Local Currency Bank the purchase price to the extent of such recovery together with an amount equal to such other Local Currency Bank’s ratable share (according to the proportion of (i) the amount of such other Local Currency Bank’s required repayment to (ii) the total amount so recovered from the purchasing Local Currency Bank) of any interest or other amount paid or payable by the purchasing Local Currency Bank in respect of the total amount so recovered. CIF agrees that any Local Currency Bank so purchasing a participation from another Local Currency Bank pursuant to this Section 4.05 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Local Currency Bank were the direct creditor of CIF in the amount of such participation. SECTION 4.06. Applicable Law. THIS ADDENDUM SHALL BE GOVERNED BY AND INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK (WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE INTERNAL LAW OF THE STATE OF NEW YORK). SECTION 4.07 Execution in Counterparts. This Addendum may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of 4 which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. ARTICLE V The Local Currency Agent SECTION 5.01 Appointment; Nature of Relationship. Citibank Europe plc, UK Branch is appointed by the Local Currency Banks as the Local Currency Agent hereunder and under the Credit Agreement, and each of the Local Currency Banks irrevocably authorizes the Local Currency Agent to act as the contractual representative of such Local Currency Bank with the rights and duties expressly set forth herein and in the Credit Agreement applicable to the Local Currency Agent. The Local Currency Agent agrees to act as such contractual representative upon the express conditions contained in this Article V. Notwithstanding the use of the defined term “Local Currency Agent,” it is expressly understood and agreed that the Local Currency Agent shall not have any fiduciary responsibilities to any Local Currency Bank or other Bank by reason of this Addendum and that the Local Currency Agent is merely acting as the representative of the Local Currency Banks with only those duties as are expressly set forth in this Addendum and the Credit Agreement. In its capacity as the Local Currency Banks’ contractual representative, the Local Currency Agent (i) does not assume any fiduciary duties to any of the Banks, (ii) is a “representative” of the Local Currency Banks within the meaning of Section 9-102 of the Uniform Commercial Code and (iii) is acting as an independent contractor, the rights and duties of which are limited to those expressly set forth in this Addendum and the Credit Agreement. Each of the Local Currency Banks agrees to assert no claim against the Local Currency Agent on any agency theory or any other theory of liability for breach of fiduciary duty, all of which claims each Bank waives. SECTION 5.02 Powers. The Local Currency Agent shall have and may exercise such powers under this Addendum and the Credit Agreement as are specifically delegated to the Local Currency Agent by the terms of each thereof, together with such powers as are reasonably incidental thereto. The Local Currency Agent shall have neither any implied duties or fiduciary duties to the Local Currency Banks or the Banks, nor any obligation to the Local Currency Banks or the Banks to take any action hereunder or under the Credit Agreement except any action specifically provided by this Addendum or the Credit Agreement required to be taken by the Local Currency Agent. SECTION 5.03 General Immunity. Neither the Local Currency Agent nor any of its respective directors, officers, agents or employees shall be liable to any of the Borrowers or any Bank for any action taken or omitted to be taken by it or them hereunder or under the Credit Agreement or in connection herewith or therewith except to the extent such action or inaction is found in a final non-appealable judgment by a court of competent jurisdiction to have arisen from the gross negligence or willful misconduct of such Person. SECTION 5.04 No Responsibility for Advances, Creditworthiness, Collateral, Recitals, Etc. [Intentionally Omitted. See Sections 7.03 and 7.04 of the Credit Agreement for these provisions.] 5 SECTION 5.05 Action on Instructions of Local Currency Banks. The Local Currency Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and under the Credit Agreement in accordance with written instructions signed by Majority Local Currency Banks (except with respect to actions that require the consent of all of the Banks as provided in the Credit Agreement, including, without limitation, Section 8.01 thereof), and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of the Local Currency Banks. The Local Currency Agent shall be fully justified in failing or refusing to take any action hereunder and under the Credit Agreement unless it shall first be indemnified to its satisfaction by the Local Currency Banks pro rata against any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action. SECTION 5.06 Employment of Agents and Counsel. The Local Currency Agent may execute any of its duties hereunder and under the Credit Agreement by or through employees, agents, and attorneys-in-fact, and shall not be answerable to the Banks or the Local Currency Banks, except as to money or securities received by it or its authorized agents, for the default or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care. The Local Currency Agent shall be entitled to advice of counsel concerning the contractual arrangement among the Local Currency Agent and the Local Currency Banks, as the case may be, and all matters pertaining to its duties hereunder and under the Credit Agreement. SECTION 5.07 Reliance on Documents; Counsel. [Intentionally Omitted. See Section 7.03 of the Credit Agreement for these provisions.] SECTION 5.08 Other Transactions. The Local Currency Agent may accept deposits from, lend money to, and generally engage in any kind of trust, debt, equity or other transaction, in addition to those contemplated by this Addendum or the Credit Agreement, with CFSC, CIF or any of their respective Subsidiaries in which the Local Currency Agent is not prohibited hereby from engaging with any other Person. SECTION 5.09 Bank Credit Decision. [Intentionally Omitted. See Section 7.07 of the Credit Agreement for these provisions.] SECTION 5.10 Successor Local Currency Agent. The Local Currency Agent (i) may resign at any time by giving written notice thereof to the Agent, the Local Currency Banks and the Borrowers, and may appoint one of its affiliates as successor Local Currency Agent and (ii) may be removed at any time with or without cause by the Majority Local Currency Banks. Upon any such resignation or removal, the Majority Local Currency Banks, with the consent of the Agent, shall have the right to appoint (unless, in the case of the resignation of the Local Currency Agent, the resigning Local Currency Agent has appointed one of its affiliates as successor Local Currency Agent), on behalf of the Borrowers and the Local Currency Banks, a successor Local Currency Agent. If no successor Local Currency Agent shall have been so appointed and shall have accepted such appointment within thirty days after the retiring Local Currency Agent’s giving notice of resignation or the Majority Local Currency Banks’ removal of the retiring Local Currency Agent, then the retiring Local Currency Agent may appoint, on behalf of the Borrowers and the Local Currency Banks, a successor Local Currency Agent, which need not be one of its affiliates. Notwithstanding anything herein to the contrary, so long 6 as no Event of Default, or event which would constitute an Event of Default but for the requirement that notice be given, time elapse or both, has occurred and is continuing, each such successor Local Currency Agent shall be subject to written approval by CFSC and CIF, which approval shall not be unreasonably withheld. Such successor Local Currency Agent shall be a commercial bank having capital and retained earnings of at least $500,000,000. Upon the acceptance of any appointment as the Local Currency Agent hereunder by a successor Local Currency Agent, such successor Local Currency Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Local Currency Agent, and the retiring Local Currency Agent shall be discharged from its duties and obligations hereunder and under the Credit Agreement. After any retiring Local Currency Agent’s resignation hereunder as Local Currency Agent, the provisions of this Article V shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Local Currency Agent hereunder and under the Credit Agreement. 7 IN WITNESS WHEREOF, the parties hereto have caused this Addendum to be duly executed as a deed by their duly authorized officers, all as of the date and year first above written. [SIGNATURE PAGES ON FILE WITH AGENT] Signature Page to Local Currency Addendum SCHEDULE I to Local Currency Addendum Local Currency Banks Local Currency Commitments
Total Local Currency Total Same Commitment: US $1,000,000,000 Day Local US $150,000,000 Currency Sub- Facility: Local Currency Bank Name Applicable Local Currency Lending Office Citibank, N.A. Citibank, N.A. 1615 Brett Rd., Building No. 3 New Castle, Delaware 19720 Attention of: Bank Loan Syndications Telecopier No.: 212-994-0961 37 Local Currency and Same Day Local Currency Commitments as of the Amendment No. 1 Effective Date. 1 JPMorgan Chase Bank, N.A. JPMorgan Chase Bank, N.A. Platina Block 3 Floor 4 Bengaluru, India 560103 Attention: Vithal Giri (+91-80) 67905186 ext.75186 Bank of America, N.A., London Branch, (formerly Bank of America, N.A., London Branch Merrill Lynch International Designated Activity (formerly Bank of America Merrill Lynch Company) International Designated Activity Company) 26 Elmfield Road, Bromley, Kent, BR1 1LR, United Kingdom +44-208-313-2655 / 44 208 695 3389 +44 208 313 2140 Barclays Bank PLC Barclays Bank PLC 745 7th Avenue New York, NY 10019 Société Générale Société Générale 29 Boulevard Haussmann 75009 Paris France BNP Paribas London Branch BNP Paribas London Branch 10 Harewood Avenue London NW1 6AA Attention: Gary Mobley Tel: +44 (0)20 7595 6422 Attention: Loans and Agency Desk Tel: +44 (0)20 7595 6887 Commerzbank AG, New York Branch Commerzbank AG, New York Branch 225 Liberty Street New York, NY 10281-1050 Attention: Patrick Hartweger 2 Lloyds Bank plc Lloyds Bank plc Wholesale Loans Servicing, Bank House, Wine Street, Bristol BS1 2AN Attention: Mike Wilson KBC Bank N.V. KBC Bank N.V. 1177 Avenue of the Americas New York, NY 10036 Attention: Joanne Gatto Phone: (212) 541-0720 Fax: (212) 956-5581 3 SCHEDULE II to Local Currency Addendum MODIFICATIONS
“Business Day”: Same as Credit Agreement.
Each Local Currency Advance (other than those also constituting RFR Advances) shall bear interest from and including the first day of the Interest Period applicable thereto to (but not including) the last day of such Interest Period at a rate per annum equal to the sum of the Eurocurrency Rate for such Interest Period plus the Applicable Margin as in effect from time to time during such Interest Period; provided, however, after the occurrence and during the continuance of an Event of Default or an event that would constitute an Event of Default but for the requirement that notice be given or time elapse or both, the provisions of Section 2.07(d) of the Credit Agreement shall be applicable. Local Currency Advances constituting RFR Advances shall be governed by the provisions set forth in the Credit Agreement that govern RFR Advances.
Additional Conditions Precedent: None Current Termination Date for Addendum: The “Current Termination Date” under the Credit Agreement. Extended Termination Date for Addendum: The “Extended Termination Date” under the Credit Agreement. Prepayment Notices: CIF shall be permitted to prepay a Local Currency Advance subject to the provisions of Section 8.04(b) of the Credit Agreement, on any Business Day, provided, in the case of any prepayment, notice thereof is given to the Local Currency Agent not later than 10:00 a.m. (London time) at least three (3) Business Days prior to the date of such prepayment. 1 SCHEDULE III to Local Currency Addendum OTHER PROVISIONS 1. Borrowing Procedures:
2. Funding Arrangements: Minimum amounts/increments for Local Currency Borrowings, repayments and prepayments: Same as Credit Agreement. 3. Promissory Notes: None required. 1 Annex III Existing Japan Local Currency Addendum, as modified Attached JAPAN LOCAL CURRENCY ADDENDUM (THREE-YEAR FACILITY) JAPAN LOCAL CURRENCY ADDENDUM, dated as of September 5, 2019, to the Credit Agreement (as defined below), among Caterpillar Financial Services Corporation, Caterpillar Finance Kabushiki Kaisha, the Japan Local Currency Banks (as defined below), Citibank, N.A., as Agent, and MUFG Bank, Ltd., as Japan Local Currency Agent. ARTICLE I SECTION 1.01. Defined Terms. As used in this Addendum, the following terms shall have the meanings specified below: “Credit Agreement” means the Second Amended and Restated Credit Agreement (Three-Year Facility), dated as of September 5, 2019, among Caterpillar Inc., Caterpillar Financial Services Corporation, Caterpillar International Finance Designated Activity Company, Caterpillar Finance Kabushiki Kaisha, the financial institutions from time to time party thereto as Banks, Citibank, N.A., as Agent, Citibank Europe plc, UK Branch, as Local Currency Agent, and MUFG Bank, Ltd., as Japan Local Currency Agent, as the same may be amended, waived, modified or restated from time to time. “Japan Local Currency Advance” means any Advance, denominated in Japanese Yen, made to CFKK pursuant to Sections 2.03C and 2.03D of the Credit Agreement and this Addendum. A Japan Local Currency Advance shall bear interest at the rate specified in Schedule II. “Japan Local Currency Bank” means each Bank listed on the signature pages of this Addendum or which becomes a party hereto pursuant to an Assignment and Acceptance or an Assumption and Acceptance. SECTION 1.02. Terms Generally. Unless otherwise defined herein, terms defined in the Credit Agreement shall have the same meanings in this Addendum. Wherever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. All references herein to Sections and Schedules shall be deemed references to Sections of and Schedules to this Addendum unless the context shall otherwise require. DB1/ 124037895.1 ARTICLE II SECTION 2.01. Japan Local Currency Advances. (a) This Addendum (as the same may be amended, waived, modified or restated from time to time) is the “Japan Local Currency Addendum” as defined in the Credit Agreement and is, together with the borrowings made hereunder, subject in all respects to the terms and provisions of the Credit Agreement except to the extent that the terms and provisions of the Credit Agreement are modified by or are inconsistent with this Addendum, in which case this Addendum shall control.
SECTION 2.02. Maximum Borrowing Amounts. (a) The Total Japan Local Currency Commitment, and the Japan Local Currency Commitment for each Japan Local Currency Bank party to this Addendum as of the date hereof, are set forth on Schedule I. (b) Upon at least five (5) Business Days prior irrevocable written notice to the Agent, the Japan Local Currency Agent and the Japan Local Currency Banks, CFKK may from time to time permanently reduce the Total Japan Local Currency Commitment under this Addendum in whole, or in part ratably among the Japan Local Currency Banks, in an aggregate minimum Dollar Amount of $10,000,000, and integral multiples of $1,000,000 in excess thereof; provided, however, that the amount of the Total Japan Local Currency Commitment may not be reduced below the aggregate principal amount of the outstanding Japan Local Currency Advances with respect thereto. Any such reduction shall be allocated pro rata among all the Japan Local Currency Banks party to this Addendum by reference to their Japan Local Currency Commitments. ARTICLE III Representations and Warranties Each of CFSC and CFKK makes and confirms each representation and warranty applicable to it or any of its Subsidiaries contained in Article IV of the Credit Agreement. Each 2 of CFSC and CFKK represents and warrants to each of the Japan Local Currency Banks party to this Addendum that no Event of Default, or event which would constitute an Event of Default but for the requirement that notice be given or time elapse or both, has occurred and is continuing, and no Event of Default, or event which would constitute an Event of Default but for the requirement that notice be given or time elapse or both, shall arise as a result of the making of Japan Local Currency Advances hereunder or any other transaction contemplated hereby. ARTICLE IV Miscellaneous Provisions SECTION 4.01. Amendment; Termination. (a) This Addendum (including the Schedules hereto) may not be amended without the prior written consent of the Majority Japan Local Currency Banks hereunder and subject to the provisions of Section 8.01 of the Credit Agreement. (b) This Addendum may not be terminated without the prior written consent of each Japan Local Currency Bank party hereto, CFSC and CFKK unless there are no Japan Local Currency Advances or any other amounts outstanding hereunder, in which case no such consent of any Japan Local Currency Bank shall be required; provided, however, that this Addendum shall terminate on the date that the Credit Agreement terminates in accordance with its terms. SECTION 4.02. Assignments. Section 8.07 of the Credit Agreement shall apply to assignments by Japan Local Currency Banks of obligations, Japan Local Currency Commitments and Japan Local Currency Advances hereunder; provided, however, that a Japan Local Currency Bank may not assign any obligations, Japan Local Currency Commitments or rights hereunder to any Person which is not (or does not simultaneously become) a Bank under the Credit Agreement. SECTION 4.03. Notices, Etc. Except as otherwise provided herein, all notices, demands, requests, consents and other communications provided for hereunder shall be given in writing or by any telecommunication device capable of creating a written record (including electronic mail), and addressed to the party to be notified as follows: (a) if to CFKK, at Caterpillar Finance Kabushiki Kaisha, SBS Tower 14F, 4-10-1 Yoga, Setagaya-ku, Tokyo 158-0097, Japan, Attention: Managing Director (Facsimile No. 813-5797-4522), with a copy to CFSC at its address and facsimile number or electronic mail address referenced in Section 8.02 of the Credit Agreement;
3 address and facsimile number or electronic mail address referenced in Section 8.02 of the Credit Agreement;
or as to each party, at such other address as shall be designated by such party in a written notice to the other parties. All notices, demands, requests, consents and other communications described in this Section 4.03 shall be effective (i) if delivered by hand, including any overnight courier service, upon personal delivery, (ii) if delivered by mail, when deposited in the mails and (iii) if delivered by electronic mail or any other telecommunications device, when transmitted to an electronic mail address (or by another means of electronic delivery) as provided in this Section 4.03; provided, however, that notices and communications to the Japan Local Currency Agent pursuant to Article II or V hereof or Article II of the Credit Agreement shall not be effective until received by the Japan Local Currency Agent. SECTION 4.04. Ratification of Guaranty. By its execution of this Addendum, CFSC ratifies and confirms its guaranty contained in Article IX of the Credit Agreement with respect to the Japan Local Currency Advances made pursuant to this Addendum which Guaranty remains in full force and effect. SECTION 4.05. Sharing of Payments, Etc. If any Japan Local Currency Bank shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of the Japan Local Currency Advances made by it (other than pursuant to Section 2.02(c), 2.05(d), 2.10, 2.12 or 8.04 of the Credit Agreement) in excess of its ratable share of payments on account of the Japan Local Currency Advances obtained by all the Japan Local Currency Banks, such Japan Local Currency Bank shall forthwith purchase from the other Japan Local Currency Banks such participations in the Japan Local Currency Advances made by them as shall be necessary to cause such purchasing Japan Local Currency Bank to share the excess payment ratably with each of them, provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Japan Local Currency Bank, such purchase from each other Japan Local Currency Bank shall be rescinded and each such other Japan Local Currency Bank shall repay to the purchasing Japan Local Currency Bank the purchase price to the extent of such recovery together with an amount equal to such other Japan Local Currency Bank’s ratable share (according to the proportion of (i) the amount of such other Japan Local Currency Bank’s required repayment to (ii) the total amount so recovered from the purchasing Japan Local Currency Bank) of any interest or other amount paid or payable by 4 the purchasing Japan Local Currency Bank in respect of the total amount so recovered. CFKK agrees that any Japan Local Currency Bank so purchasing a participation from another Japan Local Currency Bank pursuant to this Section 4.05 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Japan Local Currency Bank were the direct creditor of CFKK in the amount of such participation. SECTION 4.06. Applicable Law. THIS ADDENDUM SHALL BE GOVERNED BY AND INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK (WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE INTERNAL LAW OF THE STATE OF NEW YORK). SECTION 4.07 Execution in Counterparts. This Addendum 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 one and the same agreement. ARTICLE V The Japan Local Currency Agent SECTION 5.01 Appointment; Nature of Relationship. MUFG Bank, Ltd. is appointed by the Japan Local Currency Banks as the Japan Local Currency Agent hereunder and under the Credit Agreement, and each of the Japan Local Currency Banks irrevocably authorizes the Japan Local Currency Agent to act as the contractual representative of such Japan Local Currency Bank with the rights and duties expressly set forth herein and in the Credit Agreement applicable to the Japan Local Currency Agent. The Japan Local Currency Agent agrees to act as such contractual representative upon the express conditions contained in this Article V. Notwithstanding the use of the defined term “Japan Local Currency Agent,” it is expressly understood and agreed that the Japan Local Currency Agent shall not have any fiduciary responsibilities to any Japan Local Currency Bank or other Bank by reason of this Addendum and that the Japan Local Currency Agent is merely acting as the representative of the Japan Local Currency Banks with only those duties as are expressly set forth in this Addendum and the Credit Agreement. In its capacity as the Japan Local Currency Banks’ contractual representative, the Japan Local Currency Agent (i) does not assume any fiduciary duties to any of the Banks, (ii) is a “representative” of the Japan Local Currency Banks within the meaning of Section 9-102 of the Uniform Commercial Code and (iii) is acting as an independent contractor, the rights and duties of which are limited to those expressly set forth in this Addendum and the Credit Agreement. Each of the Japan Local Currency Banks agrees to assert no claim against the Japan Local Currency Agent on any agency theory or any other theory of liability for breach of fiduciary duty, all of which claims each Bank waives. SECTION 5.02 Powers. The Japan Local Currency Agent shall have and may exercise such powers under this Addendum and the Credit Agreement as are specifically delegated to the Japan Local Currency Agent by the terms of each thereof, together with such powers as are reasonably incidental thereto. The Japan Local Currency Agent shall have neither 5 any implied duties or fiduciary duties to the Japan Local Currency Banks or the Banks, nor any obligation to the Japan Local Currency Banks or the Banks to take any action hereunder or under the Credit Agreement except any action specifically provided by this Addendum or the Credit Agreement required to be taken by the Japan Local Currency Agent. SECTION 5.03 General Immunity. Neither the Japan Local Currency Agent nor any of its respective directors, officers, agents or employees shall be liable to any of the Borrowers or any Bank for any action taken or omitted to be taken by it or them hereunder or under the Credit Agreement or in connection herewith or therewith except to the extent such action or inaction is found in a final non-appealable judgment by a court of competent jurisdiction to have arisen from the gross negligence or willful misconduct of such Person. SECTION 5.04 No Responsibility for Advances, Creditworthiness, Collateral, Recitals, Etc. [Intentionally Omitted. See Sections 7.03 and 7.04 of the Credit Agreement for these provisions.] SECTION 5.05 Action on Instructions of Japan Local Currency Banks. The Japan Local Currency Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and under the Credit Agreement in accordance with written instructions signed by Majority Japan Local Currency Banks (except with respect to actions that require the consent of all of the Banks as provided in the Credit Agreement, including, without limitation, Section 8.01 thereof), and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of the Japan Local Currency Banks. The Japan Local Currency Agent shall be fully justified in failing or refusing to take any action hereunder and under the Credit Agreement unless it shall first be indemnified to its satisfaction by the Japan Local Currency Banks pro rata against any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action. SECTION 5.06 Employment of Agents and Counsel. The Japan Local Currency Agent may execute any of its duties hereunder and under the Credit Agreement by or through employees, agents, and attorneys-in-fact, and shall not be answerable to the Banks or the Japan Local Currency Banks, except as to money or securities received by it or its authorized agents, for the default or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care. The Japan Local Currency Agent shall be entitled to advice of counsel concerning the contractual arrangement among the Japan Local Currency Agent and the Japan Local Currency Banks, as the case may be, and all matters pertaining to its duties hereunder and under the Credit Agreement. SECTION 5.07 Reliance on Documents; Counsel. [Intentionally Omitted. See Section 7.03 of the Credit Agreement for these provisions.] SECTION 5.08 Other Transactions. The Japan Local Currency Agent may accept deposits from, lend money to, and generally engage in any kind of trust, debt, equity or other transaction, in addition to those contemplated by this Addendum or the Credit Agreement, with CFSC, CFKK or any of their respective Subsidiaries in which the Japan Local Currency Agent is not prohibited hereby from engaging with any other Person. 6 SECTION 5.09 Bank Credit Decision. [Intentionally Omitted. See Section 7.07 of the Credit Agreement for these provisions.] SECTION 5.10 Successor Japan Local Currency Agent. The Japan Local Currency Agent (i) may resign at any time by giving written notice thereof to the Agent, the Japan Local Currency Banks and the Borrowers, and may appoint one of its Affiliates as successor Japan Local Currency Agent and (ii) may be removed at any time with or without cause by the Majority Japan Local Currency Banks. Upon any such resignation or removal, the Majority Japan Local Currency Banks, with the consent of the Agent, shall have the right to appoint (unless, in the case of the resignation of the Japan Local Currency Agent, the resigning Japan Local Currency Agent has appointed one of its Affiliates as successor Japan Local Currency Agent), on behalf of the Borrowers and the Japan Local Currency Banks, a successor Japan Local Currency Agent. If no successor Japan Local Currency Agent shall have been so appointed and shall have accepted such appointment within thirty days after the retiring Japan Local Currency Agent’s giving notice of resignation or the Majority Japan Local Currency Banks’ removal of the retiring Japan Local Currency Agent, then the retiring Japan Local Currency Agent may appoint, on behalf of the Borrowers and the Japan Local Currency Banks, a successor Japan Local Currency Agent, which need not be one of its Affiliates. Notwithstanding anything herein to the contrary, so long as no Event of Default, or event which would constitute an Event of Default but for the requirement that notice be given, time elapse or both, has occurred and is continuing, each such successor Japan Local Currency Agent shall be subject to written approval by CFSC and CFKK, which approval shall not be unreasonably withheld. Such successor Japan Local Currency Agent shall be a commercial bank having capital and retained earnings of at least $500,000,000. Upon the acceptance of any appointment as the Japan Local Currency Agent hereunder by a successor Japan Local Currency Agent, such successor Japan Local Currency Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Japan Local Currency Agent, and the retiring Japan Local Currency Agent shall be discharged from its duties and obligations hereunder and under the Credit Agreement. After any retiring Japan Local Currency Agent’s resignation hereunder as Japan Local Currency Agent, the provisions of this Article V shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Japan Local Currency Agent hereunder and under the Credit Agreement. 7 IN WITNESS WHEREOF, the parties hereto have caused this Addendum to be duly executed as a deed by their duly authorized officers, all as of the date and year first above written. [SIGNATURE PAGES ON FILE WITH AGENT] Signature Page to Japan Local Currency Addendum (Three-Year Facility) SCHEDULE I to Japan Local Currency Addendum Japan Local Currency Banks Japan Local Currency Bank Name Japan Local Currency Commitment MUFG Bank, Ltd. US $75,000,000 Total Japan Local Currency Commitment: US $75,000,000 Japan Local Currency Bank Name Applicable Japan Local Currency Lending Office MUFG Bank, Ltd. MUFG Bank, Ltd., Osaka Corporate Banking Group Osaka Corporate Banking Division No. 3 Corporate Banking Department No. 3 3-5-6, Fushimimachi, Chuo-ku, Osaka-shi, Osaka 541-8530, Japan Attention: Mr. Kazuki Takehara (Telephone No.: 06-6206-9036 / 81-06-6206-9036) (Facsimile No.: 06-6206-9039 / 81-06-6206-9039) 1 SCHEDULE II to Japan Local Currency Addendum MODIFICATIONS
“Business Day”: Same as Credit Agreement.
Each Japan Local Currency Advance that is a TONAR Advance shall bear interest at a rate per annum equal to the sum of (i) TONAR for such Japan Local Currency Advance plus (ii) the Applicable Margin as in effect from time to time during such Interest Period; provided, however, after the occurrence and during the continuance of an Event of Default or an event that would constitute an Event of Default but for the requirement that notice be given or time elapse or both, the provisions of Section 2.07(d) of the Credit Agreement shall be applicable. Each Japan Local Currency Advance that is a Japan Base Rate Advance shall bear interest during any Interest Period at a per annum rate equal to the sum of (i) the Japan Base Rate plus (ii) the Applicable Margin in effect from time to time during such Interest Period. The terms of Section 2.07 and the other provisions of the Credit Agreement shall otherwise govern the accrual and payment of interest on Japan Local Currency Advances.
Additional Conditions Precedent: None Current Termination Date for Addendum: The “Current Termination Date” under the Credit Agreement. Extended Termination Date for Addendum: The “Extended Termination Date” under the Credit Agreement. Prepayment Notices: CFKK shall be permitted to prepay a Japan Local Currency Advance subject to the provisions of Section 8.04(b) of the Credit Agreement, on any Business Day, provided, in the case of any prepayment, notice thereof is given to the Japan Local Currency Agent (with a copy to the Agent) not later than 10:00 a.m. (Tokyo time) at least three (3) Business Days prior to the date of such prepayment. 1 SCHEDULE III to Japan Local Currency Addendum OTHER PROVISIONS 1. Borrowing Procedures:
2. Funding Arrangements: Minimum amounts/increments for Japan Local Currency Borrowings, repayments and prepayments: Same as Credit Agreement. 3. Promissory Notes: None required. 1 EXHIBIT 31.1 SECTION 302 CERTIFICATION I, D. James Umpleby III, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Caterpillar Inc.; 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:
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 the registrant’s board of directors (or persons performing the equivalent function):
November 3, 2021 /s/ D. James Umpley III Chief Executive Officer D. James Umpleby III EXHIBIT 31.2 SECTION 302 CERTIFICATION I, Andrew R.J. Bonfield, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Caterpillar Inc.; 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:
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 the registrant’s board of directors (or persons performing the equivalent function):
November 3, 2021 /s/ Andrew R.J. Bonfield Chief Financial Officer Andrew R.J. Bonfield EXHIBIT 32 CERTIFICATION PURSUANT TO In connection with the quarterly report of Caterpillar Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of our knowledge:
November 3, 2021 /s/ D. James Umpleby III Chief Executive Officer D. James Umpleby III November 3, 2021 /s/ Andrew R.J. Bonfield Chief Financial Officer Andrew R.J. Bonfield A signed original of this written statement required by Section 906 has been provided to Caterpillar Inc. and will be retained by Caterpillar Inc. and furnished to the Securities and Exchange Commission or its staff upon request. Fichier PDF dépôt réglementaire Document : Caterpillar Inc. Files Form 10-Q FQE 30 September 2021 |
Langue : | Français |
Entreprise : | Caterpillar Inc. |
510 Lake Cook Road, Suite 100 | |
60015 Deerfield, Illinois | |
États-Unis | |
Téléphone : | 224-551-4000 |
Internet : | www.caterpillar.com |
ISIN : | US1491231015 |
Ticker Euronext : | CATR |
Catégorie AMF : | Informations réglementées supplémentaires devant être rendues publiques en vertu de la législation d’un état membre / Information financière du troisième trimestre |
EQS News ID : | 1246055 |
Fin du communiqué | EQS News-Service |