Approval Letter – A letter from CFSC to DCAT and a borrower agreeing to purchase any loan(s) to the borrower which is in default, up to the Approved Amount.

Approved Amount – The maximum amount of loans to a borrower which CFSC is obligated to purchase under the Dealer Loan Purchase Agreement. The sum of the Face Amounts of all outstanding DCAT loans to a borrower cannot exceed the Approved Amount.

Basis Point(s) - A basis point (“bps”) is 0.01 percentage point.

Caterpillar Financial Services Corporation (“CFSC” or “CAT Finance”) – A Delaware corporation which is a subsidiary of Caterpillar Inc. and is headquartered in Nashville, Tennessee. CFSC provides Credit Enhancement and liquidity support for the DCAT CP program.

Credit Enhancement - When repayment of a debt (or recovery of the lender’s principal and interest) has been assured by a third party.

Commercial Paper ("CP") - a short-term unsecured debt of a borrower with a maximum maturity of 270 days.

Dealer Loan Purchase Agreement – The agreement between DCAT and CFSC pursuant to which CFSC is obligated to purchase any defaulted loan from DCAT, subject to the Approved Amount set forth in the Approval Letter.

Face Amount– The total dollar amount of principal and interest due at the maturity date of CP or a loan. CP and loans are funded on a discount basis, with a single payment of the Face Amount due on the maturity date.

Patronage Dividends – Annual distribution to CATD borrowers of the net earnings of CATD from any credit facility fees paid by CATD members and loans made by CATD. The distribution is based on the borrowers’ relative CATD loan patronage and Ambac bonded amounts during the fiscal year. DCAT is not a cooperative and does not pay patronage dividends.

Rolling – The process of issuing new CP to repay maturing CP.