Exhibit 10.2

 

TANK CAR LEASE AGREEMENT

 

This agreement is made this 29th day of December, 2010 and effective as of
January 1, 2011 (the “Effective Date”), between TERRA NITROGEN COMPANY, L.P., a
Delaware limited partnership with an address at 4 Parkway North, Suite 400,
Deerfield, Illinois 60015 (“Lessor”), and CF INDUSTRIES, INC., a Delaware
corporation with an address at CF Industries Holdings, Inc., 4 Parkway North,
Suite 400, Deerfield, Illinois 60015 (“Lessee”).

 

1.                                       Lease Agreement.  Subject to the terms
hereof, Lessor agrees to lease to Lessee, and Lessee agrees to lease from
Lessor, the cars shown Schedule A (all such cars, the “cars,” and such schedule
together with this agreement, the “Lease”). Schedule A shall set forth a brief
description of the car or cars covered thereby, including the number of cars and
the AAR or DOT specifications.

 

2.                                       Delivery.  On the Effective Date,
Lessor agrees to deliver each car to Lessee, freight charges collect, in the
yard of the delivering line at the point specified by the Lessee, and Lessee
agrees to accept such delivery.

 

3.                                       Condition of Cars — Acceptance.  All
cars delivered under this Lease shall be in satisfactory condition for movement
in the normal interchange of rail traffic and shall otherwise comply with the
description and specifications in Schedule A.

 

4.                                       Rentals.  During the term of this
Lease, Lessee agrees to pay to Lessor for the use of each car quarterly rental
of $3,600.

 

5.                                       Mileage Allowance.  Lessee shall be
entitled to all mileage allowances earned by the cars while in the service of
Lessee as and when received from the railroads according to, and subject to, all
rules of the tariffs of the railroads.

 

6.                                       Term.  Subject to the terms hereof, the
term of this Lease shall be from the Effective Date and extending for a period
of one (1) year.  Thereafter, the term shall be automatically extended for
successive periods of one (1) year each, unless terminated by any party hereto
at the end of such one (1) year period upon at least ninety (90) days’ prior
written notice to the other.

 

7.                                       Use and Possession.  During the term of
this Lease, Lessee shall be entitled to possession of each car, and shall use
such car only in the manner for which it was designed and intended on its own
property or lines in the usual interchange of traffic.  Lessee will preserve the
cars in good condition at all times during the term of this lease and will not
alter the structure of the cars without Lessor’s prior written approval. Lessee
will promptly return the cars to Lessor upon termination of the lease in the
same condition (or better) than when received, ordinary wear and tear accepted.

 

8.                                       Empty Mileage Indemnification.  Lessee
agrees that it will use its best efforts to so use the cars that their total
mileage under load will equal or exceed their mileage empty on each railroad
over which the cars move.

 

9.                                       Additional Charges by Railroads. 
Lessee agrees to use the cars, upon each railroad over which cars shall move, in
accordance with the then prevailing tariffs to which each railroad shall be a
party; and if the operation or movements of any of the cars during the term
hereof shall result in any charges being made against Lessor by any such
railroad, Lessee shall pay to Lessor the amount of such charges within the
period prescribed by and at the rate and under the conditions of the then
prevailing tariffs. Lessee agrees to indemnify Lessor against any such charges,
and shall be liable for any

 

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switching, demurrage, track storage, detention or special handling charges
imposed on any car during the term hereof.

 

10.                                 Lessee’s Right to Transfer or Sublease. 
Lessee shall not transfer, sublease or assign any car or its interests and
obligations pursuant to the Lease without Lessor’s prior written consent. 
Notwithstanding the foregoing, Lessee shall have the right to sublease any of
the cars for single trips to its customers or suppliers, and to cause each car
so subleased to be boarded or placarded with the name of the sublessee in
accordance with the provisions of the demurrage tariffs lawfully in effect,
where the sole purpose of such subleasing is to obtain an exemption from
demurrage for said cars so subleased; provided, however, that notwithstanding
any such sublease, Lessee shall continue to remain liable to Lessor for the
fulfillment of Lessee’s obligations under this Lease.

 

11.                                 Maintenance Responsibility.  During the term
of this Lease, Lessee assumes the entire responsibility for the cars and shall
be responsible and liable to the Lessor for any and all damage to or destruction
of same, except for damage (i) caused by normal wear and tear, or (ii) while
cars are in the possession of any railroad in regular course of transportation,
which railroad is subject to Interchange Rules of the Association of American
Railroads (“Interchange Rules”).  Lessor agrees to maintain the cars in good
condition and repair according to the now existing Interchange Rules and to
conduct necessary repairs during the term of this lease. Lessee agrees to notify
Lessor promptly of car damage, defect, or any condition requiring repair during
the term of this agreement and to forward the cars to any shop location as may
be directed by the Lessor. Lessee agrees to arrange for cleaning, at Lessee’s
expense, of any cars requiring shopping.  For any car or cars placed in a shop
for normal wear and tear maintenance and/or repair at the direction of Lessor,
Lessee shall be allowed rental abatement commencing on the day of arrival at
such shop, and rental will be reinstated on the date such car is ready to
forward from the shop to Lessee’s specified point. Lessee shall, at its expense,
replace any removable parts if lost or broken with parts of like kind and
quality.  Except for instances of negligence by the Lessee and/or parties
allowed access to the cars by Lessee, Lessee shall not be responsible for any
lining repair or replacement of the lining of the cars. During the term of this
lease, Lessee agrees to assume responsibility for the inspection and maintenance
of all valves, gaskets, and fittings on the cars.

 

12.                                 Loss or Destruction.  If any of the cars
shall be completely destroyed, or if the physical condition of any car shall
become such that the car cannot be operated in railroad service, as determined
by the parties, then this Lease shall terminate with respect to such car. Lessee
shall notify Lessor of the occurrence of any such event promptly. Lessee agrees
that if a car is lost or destroyed or is in such physical condition that it
cannot be operated in railroad service by reason of misuse or negligence of
Lessee or its consignee, agent or sublessee or while on a railroad that does not
subscribe to the Interchange Rules or while on any private siding or track or
any private or industrial railroad, Lessee will pay Lessor, in cash, the
settlement value of such car as determined by Rule #107 of the Interchange
Rules promptly following a request by Lessor for such payment. Lessor and Lessee
shall cooperate with and assist each other in any reasonable manner requested to
establish proper claims against parties responsible for the loss, destruction of
or damage to, the cars.

 

13.                                 Loss of Commodity.  Lessor shall not be
liable for any loss of, or damage to, commodities, or any part thereof, loaded
or shipped in the cars however such loss or damage shall be caused or shall
result. Lessee agrees to assume responsibility for, to indemnify Lessor against,
and to save it harmless from any such loss or damage or claim therefor.

 

14.                                 Damage to Car by Commodity.  Lessee shall be
liable for damage to any car covered by this Lease, whether or not due to
Lessee’s negligence, if caused by or as a result of the commodity loaded
therein. Lessee assumes responsibility for such damage to any car, including
without limitation, as applicable, to the tank, fittings or appurtenances
thereto, including the interior lining for

 

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tanks so equipped. Lessee will use said cars for the transportation and handling
of commodities which will not injure the cars.

 

15.                                 Lettering.  Lessee shall place no lettering
or marking of any kind upon the cars without Lessor’s prior written consent,
provided however, that Lessee may cause said cars to be stenciled, boarded, or
placarded with letters not to exceed two inches (2”) in height to indicate to
whom the cars are leased and with commodity stencils per AAR or DOT
specifications.

 

16.                                 Linings and Coatings.  The application,
maintenance and removal of interior protective linings and coatings in cars so
equipped is to be at the expense of the Lessee. Commodity or mechanical damage
to such linings or coatings shall be for the account of the Lessee.

 

17.                                 Return of Cars — Cleaning.  At the
expiration of the lease term, Lessee shall, at its expense, return the cars to
Lessor at the location and to the agent selected by the Lessor empty, clean and
free from residue, and in the same good condition as the cars were in when
delivered, except for normal wear and tear. At the expiration, should car
cleaning be required, the Lessee shall bear the full cost of cleaning.

 

18.                                 Modifications.  Lessor and Lessee agree that
if, at any time after the effective date changes in car design or equipment are
required by the AAR, DOT, FRA or any other governmental authority, Lessor may,
at its option, perform all modifications so ordered and that the cost of those
modifications shall be reflected in an appropriate increase in the quarterly
rental rate.

 

19.                                 Use of Cars on Certain Roads Under AAR
Circulator OT-5. Lessee is responsible for obtaining all consents or authority
to use the cars on any railroad. Upon, the written request of Lessee, Lessor
shall use reasonable efforts to obtain from each named railroad consents or
authority to place the cars in service under provisions issued by such railroad
or the AAR, including, without limitation, the provisions of AAR Circular OT-5
as promulgated by the Association of American Railroads and all supplements
thereto and reissues thereof. Lessee shall furnish to Lessor such information as
is necessary to apply for and obtain such consents or authority.

 

20.                                 Indemnifications.  Lessee shall protect,
indemnify, save harmless and, at Lessor’s option, defend Lessor from and against
all liabilities, obligations, claims, damages, penalties, causes of action,
judgments, costs and expenses (including, but not limited to, reasonable
attorneys’ fees and expenses)in any way arising out of, or resulting from, the
condition, storage, use, operation of the cars or other cause by Lessee except
to the extent resulting from Lessor’s the willful act or gross negligence or
except to the extent a railroad has assumed full responsibility and satisfies
such responsibility.

 

21.                                 Taxes and Liens.  Lessor shall be liable for
and pay all Federal, State or other governmental property taxes assessed or
levied against the cars, except that (i) Lessee shall be liable for and pay such
taxes when cars bear reporting marks and numbers other than Lessor’s,
(ii) Lessee shall be liable at all times for and shall pay or reimburse Lessor
for the payment of any sales, use, leasing, operation, excise, gross receipts
and other taxes with respect to the cars, together with (but only to the extent
caused by Lessee) any penalties, fines or interest thereon and (iii) Lessee
shall be liable for all duties, imposts, taxes and similar charges arising out
of the use of cars outside the continental United States.

 

22.                                 Defaults; Remedies.  Lessee shall be in
default under this Lease if Lessee fails to observe or perform any of the
covenants, conditions or provisions of this Lease to be observed or performed by
Lessee, where such failure shall continue for a period of ten (10) days after
written notice thereof from Lessor to Lessee; provided, however, that if the
nature of Lessee’s default is such that more

 

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than ten (10) days are reasonably required for its cure, then Lessee shall not
be deemed to be in default if Lessee commenced such cure within said ten
(10) day period and thereafter diligently prosecutes such cure to completion. 
In the event of a default by Lessee under this Lease which remains uncured after
the expiration of any applicable cure period, Lessor may, in addition to any and
all other remedies available at law and equity, terminate this Lease by
delivering written notice thereof to Lessee whereupon this Lease shall be deemed
null and void upon the fifth (5th) day following Lessee’s receipt of such
notice.

 

23.                                 Disclaimer of Warranties.  LESSOR MAKES NO
WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED, AS TO THE CONDITION, FITNESS
FOR PARTICULAR PURPOSE OR ANY OTHER MATTER CONCERNING THE CARS. During the term
of this Lease, Lessor hereby assigns to Lessee any factory or dealer warranty,
whether express or implied, or other legal right Lessor may have against the
manufacturer in connection with defects in the cars covered by this Lease.

 

24.                                 Successors and Assigns.  The agreements,
terms, covenants and conditions contained in this Agreement to be made or to be
performed by the parties hereunder shall be binding on and inure to the benefit
of their respective successors and permitted assigns.

 

25.                                 Severability.  The invalidity of any
provision of this Agreement as determined by a court of competent jurisdiction,
shall in no way affect the validity of any other provision hereof.

 

26.                                 Incorporation of Prior Agreements;
Amendments.  This Agreement contains all agreements of the parties with respect
to the subject matter of this Agreement.  No prior agreement or understanding
pertaining to any such matter shall be effective.  This Agreement may only be
modified by a written instrument executed by each of the parties hereto.

 

27.                                 Notices.  All notices, claims, demands, and
other communications hereunder shall be in writing and shall be delivered to the
parties at the addresses set forth above.

 

28.                                 No Oral Waiver, No Continuing Waiver.  No
waiver of any provision or condition of this Agreement by any party shall be
valid unless in writing signed by such party. No delay or omission of either
party in exercising any right accruing upon any default of the other party shall
impair any such right or be construed to be a waiver thereof, and every such
right may be exercised at any time during the continuance of such default. A
waiver by either of the parties of a breach or a default under any of the terms
and conditions of this Agreement by the other party shall not be construed to be
a waiver of any subsequent breach or default, or of any other term or condition
of this Agreement.

 

29.                                 Choice of Law; Jurisdiction.  This Agreement
shall be governed by the laws of the State of Illinois.

 

30.                                 Relationship of Parties.  This Agreement is
not intended to and does not constitute or result in a partnership or joint
venture of any kind between Lessor and Lessee.

 

31.                                 Multiple Counterparts.  This Agreement may
be executed in multiple counterparts and by facsimile signature, each of which
shall be an original and together shall constitute one and the same document.

 

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IN WITNESS WHEREOF, the parties have executed this Lease as of the date set
forth above.

 

 

LESSEE:

 

LESSOR:

 

 

 

CF INDUSTRIES, INC.

 

TERRA NITROGEN COMPANY, L.P.

 

 

By:

TERRA NITROGEN GP INC., its

 

 

 

general partner

 

 

 

 

 

 

By:

/s/ Stephen R. Wilson

 

By:

/s/ Douglas C. Barnard

Name:

Stephen R. Wilson

 

Name:

Douglas C. Barnard

Title:

President and Chief Executive Officer

 

Title:

Vice President, General Counsel, and Corporate Secretary

 

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SCHEDULE A

 

10 Cars DOT111A100W6 numbered AGMX009401 - 009410

 

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