Exhibit 10.1


 


AMENDMENT TO THE GENERAL AND ADMINISTRATIVE


SERVICES AND PRODUCT OFFTAKE AGREEMENT


 


THIS AMENDMENT TO THE GENERAL AND ADMINISTRATIVE SERVICES AND PRODUCT
OFFTAKE AGREEMENT (the “Agreement”) is entered into on September 28, 2010
by and between CF INDUSTRIES, INC., a Delaware corporation (“CF Industries”),
TERRA INDUSTRIES INC., a Maryland corporation (“Terra”), TERRA NITROGEN GP
INC., a Delaware corporation (the “General Partner”) and TERRA NITROGEN
COMPANY, L.P., a Delaware limited partnership (the “Partnership”).


 


R E C I T A L S


 


WHEREAS, Terra and the General Partner are parties to that certain Amended
and Restated General and Administrative Services Agreement Regarding Services
By Terra Industries Inc., dated as of October 23, 2007 (the “Terra
Services Agreement”).


 


WHEREAS, following CF Industries’ acquisition of Terra in April 2010,
CF Industries and other entities that directly or indirectly control, are
controlled by or are under common control with CF Industries (“Affiliates”) own
approximately 75.3% of the Partnership’s outstanding units.


 


WHEREAS, the Partnership is engaged in producing nitrogen fertilizer
products at its Verdigris, Oklahoma facility (“Verdigris”).


 


WHEREAS, the business of the Partnership is similar to that of CF Industries,
and CF Industries and the General Partner desire that CF Industries (or an
Affiliate of CF Industries) provide certain general and administrative services
to the General Partner and the Partnership.


 


WHEREAS, CF Industries and/or one of its Affiliates is able to provide such
services to the General Partner and the Partnership.


 


WHEREAS, in order to facilitate the efficient sale and distribution of the (i) nitrogen
fertilizer products and (ii) byproducts that CF Industries agrees in
writing to purchase from time to time, in each case, produced at Verdigris (the
“Product”), CF Industries desires to purchase from the Partnership, and the
Partnership desires to sell to CF Industries, all of the Product.


 


WHEREAS, the parties desire by their execution of this Agreement to
evidence their understanding concerning the provision of certain such services
and the purchase and sale of such Product.


 


WHEREAS, this Agreement amends and, effective as of the Effective Date,
annuls and supersedes the Terra Services Agreement.


 


THEREFORE, in consideration of the premises and covenants, conditions, and
agreement contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:


 

















 


1.                                       Term.  Subject to
the terms hereof, the term of this Agreement 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.


 


2.                                       Services.  During the
term hereof, in exchange for the payment described in Section 4, CF
Industries agrees to provide, or cause one of its Affiliates to provide, to the
General Partner and, as directed by the General Partner, to the Partnership
certain general and administrative services (the “Services”) in accordance with
the terms of this Agreement.  At its election,
CF Industries may cause one or more of its Affiliates or third-party
contractors (foreign or domestic) to provide the Services called for by this
Agreement; provided, however, that CF Industries shall remain
responsible for the provision of the Services in accordance with this
Agreement.  The Services provided
hereunder shall be those described on Exhibit A attached hereto, which is
incorporated herein by reference.


 


3.                                       Quality of Service.  The
parties agree that the Services to be provided hereunder shall be of the same
general quality as services provided by Terra under the Terra Services
Agreement.  If the General Partner
decides to use a Service described on Exhibit A that has been caused by CF
Industries to be provided by a third-party provider (“Outsourced”) which is not
an Affiliate of CF Industries, the parties hereto agree that such Service will
be of a quality provided for in the agreement between CF Industries and the
third-party provider.  CF Industries
alone may determine whether or not to Outsource a Service.  In general, CF Industries will use the same
standards it would use for itself or its other Affiliates in determining
whether or not to Outsource a Service.


 


4.                                       Payment for Services.  In
consideration for the performance of the Services by CF Industries, the General
Partner or the Partnership, in accordance with the following provisions, shall (i) reimburse
CF Industries for all direct expenses actually incurred by CF Industries or its
Affiliates relating to the Services provided hereunder to the General Partner
or the Partnership (“Direct Charges”) and (ii) pay CF Industries a
$3,500,000 quarterly fee (the “Quarterly Fee” and together with Direct Charges,
“Charges”).  The Quarterly Fee shall be
subject to change on each anniversary of the Effective Date based on the total
percentage change, if any, in the Producer Price Index over the immediately
preceding twelve month period.  For
purposes of this Section 4, Producer Price Index means the Producer Price
Index for Finished Goods published by the Bureau of Labor Statistics of the
United States Department of Labor, or any successor index thereto,
appropriately adjusted.  If the Producer
Price Index ceases to be published, and there is no successor thereto, such
other index as CF Industries may reasonably select shall be substituted for the
Producer Price Index.


 


5.                                       Invoicing for Services.  The
General Partner, on behalf of the Partnership, shall be charged periodically
for Direct Charges and the Quarterly Fee. 
The General Partner shall pay, or cause the Partnership to pay, to CF
Industries the Charges no later that fifteen (15) business days after the date
of such Charge.  Supporting documentation
for Direct Charges, prepared by CF Industries, shall be available for review by
the General Partner upon request.


 


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6.                                       Role of General Partner relating to Services.  The
General Partner shall not request performance of any Services for the benefit
of any entity other than for itself or for the Partnership.  The General Partner represents and agrees
that it will use the Services only in accordance with all applicable federal,
state and local laws and regulations, and in accordance with the reasonable
conditions, rules, regulations and specifications which may be set forth in any
manuals, materials, documents or instructions furnished from time to time by CF
Industries.  CF Industries and its
Affiliates reserve the right to take all actions, including termination of any
particular Services, that they may reasonably believe to be necessary to assure
compliance with applicable laws and regulations.  CF Industries will notify the General Partner
of the reasons for any such termination of Services.


 


7.                                       Termination of Terra Services Agreement.  The
parties hereby agree that the Terra Services Agreement is terminated.


 


8.                                       Product Offtake. 
During the term hereof, at the purchase prices described in Section 9,
CF Industries shall purchase, or cause one or more of its Affiliates to
purchase, from the Partnership, and the Partnership shall sell to CF
Industries, or one or more of its Affiliates, as designated by CF Industries,
one hundred percent (100%) of the Product in accordance with the terms of this
Agreement.  CF Industries and the
Partnership shall cooperate as to the scheduling of all purchases of Product
hereunder.  Title to all Product and risk
of loss shall pass to CF Industries or one or more of its Affiliates, as
applicable, at the time the Product is loaded onto the railcar, barge or other
applicable transport for such Product (or, in the case of Product shipped by
pipeline, at the time the Product passes the flange at Partnership’s connection
to such pipeline at Verdigris).


 


9.                                       Product Pricing.  The
purchase price for each type of Product (the “Purchase Price”) shall be
determined on a monthly basis and shall be equal to the volume weighted average
net invoice price (less any shipping, railcar, barge or other transportation
costs, and after any discounts, rebates and other incentives) for Third Party
Sales of such type of Product during such month.  A “Third Party Sale” shall be any sale of
Product by CF Industries to a customer (other than CF Industries or an
Affiliate of CF Industries) directly from Verdigris and not from another
warehouse, storage or terminal facility. 
CF Industries shall calculate the Purchase Price not later than fifteen
(15) business days after the end of each calendar month based on the relevant
sales information for such month.  If
there are no Third Party Sales of a type of Product during a calendar month,
then the Purchase Price for such type of Product for such month shall be equal
to the immediately preceding month’s Purchase Price.


 


10.                                 Payments for Product.  CF
Industries shall pay, or cause one or more of its Affiliates to pay, to the
Partnership an amount equal to the Partnership’s estimated cost of the Product,
excluding the impact of hedging gains or losses (the “Initial Payment”), not
later than fifteen (15) business days after title and risk of loss for such
Product passed to CF Industries, or one or more of its Affiliates, as
applicable, in accordance with Section 8. 
Not later than sixteen (16) business days after the end of each calendar
month, CF Industries shall pay, or cause one or more of its Affiliates to pay,
to the Partnership or the Partnership shall reimburse CF Industries, as the
case may be, the difference, if any, between (i) the aggregate Purchase
Price for Product sold during such month and (ii) the sum of all Initial
Payments made with respect to such Product. 
The General Partner shall have the right, at its expense and from time
to time upon 


 


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reasonable prior notice to CF Industries, but no more frequently than
once during each calendar year, to retain an independent certified public
accountant to examine the relevant section of the sales records of CF
Industries and any of its Affiliates that purchased the Product covering the
then current calendar year to verify compliance with obligations of CF
Industries as set forth in Section 9 and Section 10 of this
Agreement.


 


11.                                 Limited Warranty; Limitation of Liability.


 


(a)                                  For Services.  CF
INDUSTRIES REPRESENTS THAT THE SERVICES PROVIDED HEREUNDER SHALL BE PROVIDED
WITH REASONABLE DILIGENCE.  EXCEPT AS SET
FORTH IN THE IMMEDIATELY PRECEDING SENTENCE, CF INDUSTRIES MAKES NO (AND HEREBY
DISCLAIMS AND NEGATES ANY AND ALL) REPRESENTIONS AND WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING THE WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE WITH RESPECT TO THE SERVICES RENDERED HEREUNDER.  FURTHERMORE, NO PARTY HERETO MAY RELY
UPON ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, INCLUDING THE
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE MADE TO CF
INDUSTRIES BY ANY PARTY PERFORMING SERVICES ON BEHALF OF CF INDUSTRIES OR ITS
AFFILIATES HEREUNDER, UNLESS SUCH PARTY MAKES AN EXPRESS WRITTEN WARRANTY TO
THE GENERAL PARTNER.  THE GENERAL PARTNER
AGREES THAT THE REMUNERATION TO BE PAID TO CF INDUSTRIES AND ITS AFFILIATES
HEREUNDER FOR THE SERVICES TO BE PERFORMED REFLECT THIS DISCLAIMER OF
WARRANTIES AND THE LIMITATION OF LIABILITY SET FORTH BELOW.


 


(b)                                 For Products.  THE
PARTNERSHIP REPRESENTS THAT THE PRODUCT PROVIDED HEREUNDER SHALL (I) CONFORM TO
SUPPLIER’S PRODUCT SPECIFICATION SHEETS IN EFFECT AT THE TIME OF SALE, (II) BE
DELIVERED FREE AND CLEAR OF ALL LIENS, CLAIMS, SECURITY INTERESTS, ENCUMBRANCES
OR OTHER AGREEMENTS THAT CREATE AN INTEREST IN OR ENCUMBRANCE ON THE PRODUCT BY
ANY THIRD PARTY AND (III) COMPLY WITH ALL APPLICABLE FEDERAL, STATE AND
LOCAL LAWS AND ORDINANCES APPLICABLE TO THE MANUFACTURE, SALE AND
TRANSPORTATION OF PRODUCT.  EXCEPT AS SET
FORTH IN THE IMMEDIATELY PRECEDING SENTENCE, THE PARTNERHIP MAKES NO (AND
HEREBY DISCLAIMS AND NEGATES ANY AND ALL) REPRESENTIONS AND WARRANTIES, EXPRESS
OR IMPLIED, INCLUDING THE WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE WITH RESPECT TO THE PRODUCTS SOLD HEREUNDER.


 


(c)                                  General.  IN NO
EVENT SHALL ANY PARTY HERETO, THEIR RESPECTIVE AFFILIATES, OR ANY OTHER PERSON
OR ENTITY BE 


 


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LIABLE FOR ANY PUNITIVE, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES
RESULTING FROM ANY ERROR IN THE PERFORMANCE OF SERVICES OR FROM ANY BREACH OF
THIS AGREEMENT, REGARDLESS OF THE FAULT OF SUCH PARTY OR ITS AFFILIATE OR OTHER
PERSON, OR WHETHER SUCH PARTY OR ITS AFFILIATE OR OTHER PERSON IS WHOLLY,
CONCURRENTLY, PARTIALLY, OR SOLELY NEGLIGENT.


 


12.                                 Force Majeure.  No party
shall be liable for any failure or delay in performance of any provision of
this Agreement (other than to make payment due hereunder) if such failure is
due to circumstances beyond its control (an “Event of Force Majeure”),
including, but not limited to, any requisition by any government authority, act
of war, terrorism, strike, boycott, lockout, picketing, riot, sabotage, civil
commotion, insurrection, epidemic, pandemic, disease, act of God, fire, flood,
accident, explosion, earthquake, storm, failure of public utilities or common
carriers, mechanical failure, embargo, or prohibition imposed by any
governmental body or agency having authority over the party, provided that such
time as an Event of Force Majeure no longer exists, the respective obligations
of the parties hereto shall be reinstated and this Agreement shall continue in
full force and effect.  The party
affected by an Event of Force Majeure shall give prompt notice thereof to the
other parties hereto and each party shall use good faith efforts to minimize
the duration and consequences of, and to eliminate, any such Event of Force
Majeure.


 


13.                                 Severability.  In the
event any portion of this Agreement shall be found by a court of competent
jurisdiction to be unenforceable, that portion of the Agreement will be null
and void and the remainder of the Agreement will be binding on the parties as
if the unenforceable provisions had never been contained herein.


 


14.                                 Relationship of the Parties.  In
all matters relating to this Agreement, each party hereto shall be solely
responsible for the acts of its employees, and employees of one party shall not
be considered employees of the other party. 
Except as otherwise provided herein, no party shall have any right,
power or authority to create any obligation, express or implied, on behalf of
any other party as a result of this Agreement. 
Nothing in this Agreement is intended to create or constitute a joint
venture or partnership between the parties hereto or persons referred to
herein.


 


15.                                 Assignment.  No party
shall have the right to assign its rights or obligations under this Agreement
without the consent of the other parties.


 


16.                                 Confidentiality.  The
General Partner and the Partnership shall keep and hold, and shall cause their
officers, employees and other agents (including those of the Partnership) to
keep and hold, in strictest confidence, all confidential and/or proprietary
information respecting, or in any way related to CF Industries and its
Affiliates, and/or the business, operations, financial results and affairs of
CF Industries and its Affiliates, whenever and however learned unless such
confidential and/or proprietary information (i) becomes generally
available to the public, provided this occurs by means other than the breach of
this Section 16, (ii) was available on a non-confidential basis to
the General Partner or the Partnership prior to its disclosure by CF
Industries, (iii) becomes available to the General Partner or the
Partnership on a non-confidential basis from a source other than CF Industries,
provided that such source is not a party to a 


 


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confidentiality agreement concerning such information, or (iv) is
required to be disclosed pursuant to law or regulation.  The provisions of this Section 16 shall
survive for one (1) year any expiration or earlier termination of this
Agreement.


 


17.                                 Entire Agreement. 
This Agreement constitutes the entire agreement of the parties relating
to the performance of the Services and offtake of the Product.  All prior or contemporaneous written or oral
agreements are merged herein.


 


18.                                 Choice of Law.  This
Agreement shall be subject to and governed by the laws of the State of
Delaware, excluding any conflicts-of-law rule or principle that might
refer the construction or interpretation of this Agreement to the laws of
another state.


 


19.                                 Amendment or Modification. 
This Agreement may be amended or modified from time to time only by a
written amendment signed by the parties hereto.


 


20.                                 Notices.  Any
notice, request, instruction, correspondence or other document to be given
hereunder by either party to the other (herein collectively called “Notice”)
shall be in writing and delivered personally or mailed, postage prepaid, or by
overnight courier or telecopier, as follows:


 


	
  If to CF Industries or Terra:

  	
  CF Industries Holdings, Inc.

  
	
   

  	
  4 Parkway North, Suite 400

  
	
   

  	
  Deerfield, Illinois 60015

  
	
   

  	
  Attention: General Counsel

  
	
   

  	
  Telecopier: (847) 267-1004

  
	
   

  	
   

  
	
  If to the General Partner

  	
  Terra Nitrogen GP Inc.

  
	
  or the Partnership:

  	
  c/o CF Industries Holdings, Inc.

  
	
   

  	
  4 Parkway North, Suite 400

  
	
   

  	
  Deerfield, Illinois 60015

  
	
   

  	
  Attention: General Counsel

  
	
   

  	
  Telecopier: (847) 267-1004

  



 


Notice given by personal delivery, mail or overnight courier shall be
effective upon actual receipt by the person to whom addressed.  Notice given by telecopier shall be effective
upon actual receipt if received during the recipient’s normal business hours,
or at the beginning or the recipient’s next business day after receipt if not
received during normal business hours. 
Any party may change any address to which Notice is to be given to it by
giving Notice as provided above of such change of address.


 


21.                                 Further Assurances.  In
connection with this Agreement and all transactions contemplated by this
Agreement, each party signatory hereto agrees to execute and deliver such
additional documents and instruments and to perform such other additional acts
as may be necessary or appropriate to effectuate, carry out and perform all of
the terms, provisions, and conditions of this Agreement.


 


22.                                 No Third-Party Beneficiary.  The
provisions of this Agreement are enforceable solely by the parties to this
Agreement, and no Person shall have the right, separate and apart 


 


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from the parties hereto, to enforce any provisions of this Agreement or
to compel any party to this Agreement to comply with the terms of this
Agreement.


 


23.                                 Mediation.  The
parties agree to negotiate in good faith in an effort to resolve any dispute
related to this Agreement that may arise between the parties.  If the dispute cannot be resolved promptly by
negotiation, then any party may give the applicable other party or parties
written notice that the dispute should be submitted to mediation.  Promptly thereafter, a mutually acceptable
mediator shall be chosen by the parties, who shall share the cost of mediation
services equally as between CF Industries on the one hand and the General
Partner and the Partnership on the other hand. 
If the dispute has not been resolved by mediation within ninety (90)
days after the date of written notice requesting mediation, then any party may
initiate litigation and pursue any and all remedies at law or at equity to
which such party is entitled.


 


24.                                 Effective Date. 
Except as set forth in this Section 24, this Agreement shall not be
effective until such later date as the parties specify in writing to be the
effective date (the “Effective Date”). 
Prior to the Effective Date, the Terra Services Agreement shall remain
in full force and effect with the following amendments and modifications, each
of which shall be effective as of July 1, 2010: (i) all rights and
obligations under the Terra Services Agreement are hereby assigned to CF
Industries and CF Industries hereby assumes all such rights and obligations and
(ii) Sections 4 and 5 of the Terra Services Agreement are hereby amended
and restated in their entirety by Sections 4 and 5 of this Agreement.


 


THE BALANCE OF THIS PAGE
INTENTIONALLY LEFT BLANK.


 


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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed on their behalf by their duly authorized officers.


 


	
   

  	
  CF INDUSTRIES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen R. Wilson

  
	
   

  	
   

  	
  Name: Stephen R. Wilson

  
	
   

  	
   

  	
  Title: President & Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TERRA NITROGEN GP INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Douglas C. Barnard

  
	
   

  	
   

  	
  Name: Douglas C. Barnard

  
	
   

  	
   

  	
  Title: Vice President, General Counsel, and Corporate Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TERRA NITROGEN COMPANY, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: TERRA NITROGEN GP INC.

  
	
   

  	
   

  	
  (its General Partner)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Douglas C. Barnard

  
	
   

  	
   

  	
  Name: Douglas C. Barnard

  
	
   

  	
   

  	
  Title: Vice President, General Counsel, and Corporate Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TERRA INDUSTRIES INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Douglas C. Barnard

  
	
   

  	
   

  	
  Name: Douglas C. Barnard

  
	
   

  	
   

  	
  Title: Vice President, General Counsel, and Corporate Secretary

  



 

















 


Exhibit A


 


The Services shall consist of Supply, Logistics, Distribution, Operations
Planning, Sales and Marketing, Corporate Administration, Corporate Development,
Legal, Human Resources, Payroll, Finance, Accounting, Tax, Internal Audit, Investor
Relations, Risk Management, Treasury, Information Technology and Office
Operations. These functions represent general services and may be known by
different department names or by names that change from time to time.


 


In addition to the Services, for which the General Partner and the
Partnership shall pay CF Industries in accordance with Section 4, the
Partnership shall also pay directly (or at CF Industries’ election, reimburse
CF Industries as Direct Charges for) all costs and expenses related to the
ownership and operation of the business of the Partnership and General Partner,
including, without limitation, all costs associated with (A) the board of
directors and corporate governance matters of the General Partner or the Partnership,
(B) the United States Internal Revenue Service Schedule K-1 and other tax
matters of the General Partner or the Partnership, (C) the audit services
of the General Partner or the Partnership, (D) securities and other
financial filings made on behalf of the General Partner or the Partnership, (E) professional
services of outside third-parties that are performed solely for the benefit of
the General Partner or the Partnership and (F) the financing arrangements
of the General Partner or the Partnership.