Document:

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Exhibit
4.4

FORM OF
WARRANT AGREEMENT

Agreement made as of                     , 2006 between
Bank Street Telecom Funding Corp., a Delaware corporation, with offices
at One Landmark Square, 18th Floor, Stamford, Connecticut 06901,
(‘‘Company’’), and Continental Stock Transfer
& Trust Company, a New York corporation, with offices at 17 Battery
Place, New York, NY 10004 (‘‘Warrant
Agent’’).

WHEREAS, the Company is
engaged in a public offering (‘‘Public
Offering’’) of Units (‘‘Units’’)
and, in connection therewith, has determined to issue and deliver up to
12,650,000 Warrants (‘‘Warrants’’) to the
public investors, each Warrant evidencing the right of the holder
thereof to purchase one share of common stock, par value $.0001 per
share, of the Company's Common Stock (‘‘Common
Stock’’) for $6.00, subject to adjustment as described
herein; and Whereas, the Company has filed with the Securities and
Exchange Commission a Registration Statement, No. 333-127238 on Form
S-1 (‘‘Registration Statement’’) for the
registration, under the Securities Act of 1933, as amended
(‘‘Act’’), of, among other securities, the
Warrants and the Common Stock issuable upon exercise of the Warrants;
and

WHEREAS, Citigroup Global Markets Inc. is acting as the
representative of the underwriters in the IPO (the
‘‘Underwriters’’);
and

WHEREAS, the Company desires the Warrant Agent
to act on behalf of the Company, and the Warrant Agent is willing to so
act, in connection with the issuance, registration, transfer, exchange,
redemption, exercise and cancellation of the Warrants; and

WHEREAS, the Company desires to provide for the form
and provisions of the Warrants, the terms upon which they shall be
issued and exercised, and the respective rights, limitation of rights,
and immunities of the Company, the Warrant Agent, and the holders of
the Warrants; and

WHEREAS, all acts and things
have been done and performed which are necessary to make the Warrants,
when executed on behalf of the Company and countersigned by or on
behalf of the Warrant Agent, as provided herein, the valid, binding and
legal obligations of the Company, and to authorize the execution and
delivery of this Agreement.

NOW, THEREFORE, in
consideration of the mutual agreements herein contained, the parties
hereto agree as follows:

1.    Appointment of
Warrant Agent.    The Company hereby appoints the Warrant Agent
to act as agent for the Company for the Warrants, and the Warrant Agent
hereby accepts such appointment and agrees to perform the same in
accordance with the terms and conditions set forth in this
Agreement.

2.    Warrants.

2.1.    Form of Warrant.    Each Warrant shall be issued
in registered form only, shall be in substantially the form of Exhibit
A hereto, the provisions of which are incorporated herein and shall be
signed by, or bear the facsimile signature of, the Chairman of the
Board, the Chief Executive Officer or President and Treasurer or
Assistant Treasurer of the Company and shall bear a facsimile of the
Company's seal. In the event the person whose facsimile signature
has been placed upon any Warrant shall have ceased to serve in the
capacity in which such person signed the Warrant before such Warrant is
issued, it may be issued with the same effect as if he or she had not
ceased to be such at the date of issuance.

2.2.    Effect
of Countersignature.    Unless and until countersigned by the
Warrant Agent pursuant to this Agreement, a Warrant shall be invalid
and of no effect and may not be exercised by the holder thereof.

2.3.    Registration.

2.3.1.    Warrant
Register.    The Warrant Agent shall maintain books
(‘‘Warrant Register’’), for the registration of
original issuance and the registration of transfer of the Warrants.
Upon the 

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initial issuance of the Warrants, the Warrant
Agent shall issue and register the Warrants in the names of the
respective holders thereof in such denominations and otherwise in
accordance with instructions delivered to the Warrant Agent by the
Company.

2.3.2.    Registered
Holder.    Prior to due presentment for registration of transfer
of any Warrant, the Company and the Warrant Agent may deem and treat
the person in whose name such Warrant shall be registered upon the
Warrant Register (‘‘registered holder’’), as
the absolute owner of such Warrant and of each Warrant represented
thereby (notwithstanding any notation of ownership or other writing on
the Warrant Certificate made by anyone other than the Company or the
Warrant Agent), for the purpose of any exercise thereof, and for all
other purposes, and neither the Company nor the Warrant Agent shall be
affected by any notice to the contrary.

2.4.    Detachability of Warrants.    The securities
comprising the Units will not be separately transferable until five
business days following the earlier to occur of the expiration of the
Underwriters' over-allotment option or its exercise in full, (the
‘‘Detachment Date’’), but in no event will
separate trading of the securities comprising the Units be allowed
until the Company (i) files a Current Report on Form 8-K which includes
an audited balance sheet reflecting the receipt by the Company of the
gross proceeds of the Public Offering including the proceeds received
by the Company from the exercise of the Underwriters'
over-allotment option, if all or a part of the over-allotment option is
exercised prior to the filing of the Form 8-K, and (ii) issues a press
release announcing when such separate trading of the securities
comprising the Units is to commence.

3.    Terms and
Exercise of Warrants

3.1.    Warrant
Price.    Each Warrant shall, when countersigned by the Warrant
Agent, entitle the registered holder thereof, subject to the provisions
of such Warrant and of this Warrant Agreement, to purchase from the
Company the number of shares of Common Stock stated therein, at the
price of $6.00 per whole share, subject to the adjustments provided in
Section 4 hereof and in the last sentence of this Section 3.1. The term
‘‘Warrant Price’’ as used in this Warrant
Agreement refers to the price per share at which Common Stock may be
purchased at the time a Warrant is exercised. The Company in its sole
discretion may lower the Warrant Price at any time prior to the
Expiration Date.

3.2.    Duration of Warrants.    A
Warrant may be exercised only during the period (‘‘Exercise
Period’’) commencing on the later of the consummation by
the Company of an acquisition through merger, capital stock exchange,
asset acquisition, stock purchase or other business combination
transaction of one or more operating businesses in the communications
industry that is its initial business combination and which meets the
size, timing and other criteria outlined in the Company's
registration statement on Form S-1 initially filed with the Securities
and Exchange Commission on August 5, 2005 (File No.  333-127238),
as amended (‘‘Business Combination’’) or
                            , 2007 and terminating at
5:00 p.m., New York City time on the earlier to occur of (i)
                                , 2010 or (ii) the date
fixed for redemption of the Warrants as provided in Section 6 of this
Agreement (‘‘Expiration Date’’). Except with
respect to the right to receive the Redemption Price (as set forth in
Section 6 hereunder), each Warrant not exercised on or before the
Expiration Date shall become void, and all rights thereunder and all
rights in respect thereof under this Agreement shall cease at the close
of business on the Expiration Date. The Company in its sole discretion
may extend the duration of the Warrants by delaying the Expiration
Date.

3.3.    Exercise of Warrants.

3.3.1.    Payment.    Subject to the provisions
of the Warrant and this Warrant Agreement, a Warrant, when
countersigned by the Warrant Agent, may be exercised by the registered
holder thereof by surrendering it, at the office of the Warrant Agent,
or at the office of its successor as Warrant Agent, in the Borough of
Manhattan, City and State of New York, with the subscription form, as
set forth in the Warrant, duly executed, and by paying in full, in
lawful money of the United States, in cash, good certified check or
good bank draft payable to the order of the Company (or as otherwise
agreed to by the Company), the Warrant Price for each full share of
Common Stock as to which the Warrant is exercised and any and all
applicable taxes due in connection with the exercise of the Warrant,
the exchange of the Warrant for the Common Stock, and the issuance of
the Common Stock.

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3.3.2.    Issuance of
Certificates.    As soon as practicable after the exercise of any
Warrant and the clearance of the funds in payment of any Warrant Price,
the Company shall issue to the registered holder of such Warrant a
certificate or certificates for the number of full shares of Common
Stock to which he is entitled, registered in such name or names as may
be directed by him, her or it, and if fewer than all of the Warrants
evidenced by a Warrant certificate are exercised, a new Warrant
certificate for the number of Warrants remaining unexercised shall be
executed by the Company and countersigned by the Warrant Agent.
Notwithstanding the foregoing, the Company shall not be obligated to
deliver any shares of Common Stock pursuant to the exercise of a
Warrant and shall have no obligation to settle the Warrant exercise
unless a registration statement under the Act, with respect to the
shares of Common Stock is effective and a current prospectus relating
to the shares of Common Stock (the
‘‘Prospectus’’) is available for delivery by
the Warrant Agent. In the event that a registration statement with
respect to the shares of Common Stock underlying a Warrant is not
effective under the Securities Act or a Prospectus is not available for
delivery by the Warrant Agent, the registered holder of such Warrant
shall not be entitled to exercise such Warrant. Notwithstanding
anything to the contrary in this Warrant Agreement, under no
circumstances will the Company be required to net cash settle the
Warrant exercise. Warrants may not be exercised by, or shares of Common
Stock issued to, any registered holder in any state in which such
exercise would be unlawful. As a result of this Section 3.3.2 any or
all of the Warrants may expire unexercised and
worthless.

3.3.3.    Valid Issuance.    All
shares of Common Stock issued upon the proper exercise of a Warrant in
conformity with this Agreement shall be validly issued, fully paid and
nonassessable.

3.3.4.    Date of
Issuance.    Each person in whose name any such certificate for
shares of Common Stock is issued shall for all purposes be deemed to
have become the holder of record of such shares on the date on which
the Warrant was surrendered for exercise and payment of the Warrant
Price was made, irrespective of the date of delivery of such
certificate, except that, if the date of such surrender and payment is
a date when the stock transfer books of the Company are closed, such
person shall be deemed to have become the holder of such shares at the
close of business on the next succeeding date on which the stock
transfer books are open.

4.    Adjustments.

4.1.    Stock Dividends – Split-Ups.    If, after
the date hereof, and subject to the provisions of Section 4.6 below,
the number of outstanding shares of Common Stock is increased by a
stock dividend payable in shares of Common Stock, or by a split-up of
shares of Common Stock, or other similar event, then, on the effective
date of such stock dividend, split-up or similar event, the number of
shares of Common Stock issuable on exercise of each Warrant shall be
increased in proportion to such increase in outstanding shares of
Common Stock.

4.2.    Aggregation of Shares.    If,
after the date hereof, and subject to the provisions of Section 4.6,
the number of outstanding shares of Common Stock is decreased by a
consolidation, combination, reverse stock split or reclassification of
shares of Common Stock or other similar event, then, on the effective
date of such consolidation, combination, reverse stock split,
reclassification or similar event, the number of shares of Common Stock
issuable on exercise of each Warrant shall be decreased in proportion
to such decrease in outstanding shares of Common Stock.

4.3.    Adjustments in Exercise Price.    Whenever the
number of shares of Common Stock purchasable upon the exercise of the
Warrants is adjusted, as provided in Section 4.1 and 4.2 above, the
Warrant Price shall be adjusted (to the nearest cent) by multiplying
such Warrant Price immediately prior to such adjustment by a fraction
(x) the numerator of which shall be the number of shares of Common
Stock purchasable upon the exercise of the Warrants immediately prior
to such adjustment, and (y) the denominator of which shall be the
number of shares of Common Stock so purchasable immediately
thereafter.

4.4.    Replacement of Securities upon
Reorganization, etc.    In case of any reclassification or
reorganization of the outstanding shares of Common Stock (other than a
change covered by Section 4.1 or 4.2 hereof or that solely affects the
par value of such shares of Common Stock), or in the case of any merger
or consolidation of the Company with or into another corporation (other
than a 

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consolidation or merger in which the Company
is the continuing corporation and that does not result in any
reclassification or reorganization of the outstanding shares of Common
Stock), or in the case of any sale or conveyance to another corporation
or entity of the assets or other property of the Company as an entirety
or substantially as an entirety in connection with which the Company is
dissolved, the Warrant holders shall thereafter have the right to
purchase and receive, upon the basis and upon the terms and conditions
specified in the Warrants and in lieu of the shares of Common Stock of
the Company immediately theretofore purchasable and receivable upon the
exercise of the rights represented thereby, the kind and amount of
shares of stock or other securities or property (including cash)
receivable upon such reclassification, reorganization, merger or
consolidation, or upon a dissolution following any such sale or
transfer, that the Warrant holder would have received if such Warrant
holder had exercised his, her or its Warrant(s) immediately prior to
such event; and if any reclassification also results in a change in
shares of Common Stock covered by Section 4.1 or 4.2, then such
adjustment shall be made pursuant to Sections 4.1, 4.2, 4.3 and this
Section 4.4. The provisions of this Section 4.4 shall similarly apply
to successive reclassifications, reorganizations, mergers or
consolidations, sales or other transfers.

4.5.    Notices
of Changes in Warrant.    Upon every adjustment of the Warrant
Price or the number of shares issuable upon exercise of a Warrant, the
Company shall give written notice thereof to the Warrant Agent, which
notice shall state the Warrant Price resulting from such adjustment and
the increase or decrease, if any, in the number of shares purchasable
at such price upon the exercise of a Warrant, setting forth in
reasonable detail the method of calculation and the facts upon which
such calculation is based. Upon the occurrence of any event specified
in Sections 4.1, 4.2, 4.3 or 4.4, then, in any such event, the Company
shall give written notice to the Warrant holder, at the last address
set forth for such holder in the warrant register, of the record date
or the effective date of the event. Failure to give such notice, or any
defect therein, shall not affect the legality or validity of such
event.

4.6.    No Fractional
Shares.    Notwithstanding any provision contained in this
Warrant Agreement to the contrary, the Company shall not issue
fractional shares upon exercise of Warrants. If, by reason of any
adjustment made pursuant to this Section 4, the holder of any Warrant
would be entitled, upon the exercise of such Warrant, to receive a
fractional interest in a share, the Company shall, upon such exercise,
round up or down to the nearest whole number the number of the shares
of Common Stock to be issued to the Warrant holder.

4.7.    Form of Warrant.    The form of Warrant need not
be changed because of any adjustment pursuant to this Section 4, and
Warrants issued after such adjustment may state the same Warrant Price
and the same number of shares as is stated in the Warrants initially
issued pursuant to this Agreement. However, the Company may at any time
in its sole discretion make any change in the form of Warrant that the
Company may deem appropriate and that does not affect the substance
thereof, and any Warrant thereafter issued or countersigned, whether in
exchange or substitution for an outstanding Warrant or otherwise, may
be in the form as so changed.

5.    Transfer and
Exchange of Warrants.

5.1.    Transfer of
Warrants.    Prior to the Detachment Date, Warrants may be
transferred or exchanged only together with the Unit in which such
Warrant is included, and only for the purpose of effecting, or in
conjunction with, a transfer or exchange of such Unit. Furthermore,
prior to the Detachment Date, each transfer of a Unit on the register
relating to such Units shall operate also to transfer the Warrants
included in such Unit. From and after the Detachment Date, this Section
5.1 shall be of no further force and effect.

5.2.    Registration of Transfer.    The Warrant Agent
shall register the transfer, from time to time, of any outstanding
Warrant upon the Warrant Register, upon surrender of such Warrant for
transfer, properly endorsed with signatures properly guaranteed and
accompanied by appropriate instructions for transfer. Upon any such
transfer, a new Warrant representing an equal aggregate number of
Warrants shall be issued and the old Warrant shall be cancelled by the
Warrant Agent. The Warrants so cancelled shall be delivered by the
Warrant Agent to the Company from time to time upon request.

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5.3.    Procedure for Surrender of
Warrants.    Warrants may be surrendered to the Warrant Agent,
together with a written request for exchange or transfer, and thereupon
the Warrant Agent shall issue in exchange therefor one or more new
Warrants as requested by the registered holder of the Warrants so
surrendered, representing an equal aggregate number of Warrants;
provided, however, that in the event that a Warrant surrendered for
transfer bears a restrictive legend, the Warrant Agent shall not cancel
such Warrant and issue new Warrants in exchange therefor until the
Warrant Agent has received an opinion of counsel for the Company
stating that such transfer may be made and indicating whether the new
Warrants must also bear a restrictive legend.

5.4.    Fractional Warrants.    The Warrant Agent shall
not be required to effect any registration of transfer or exchange
which will result in the issuance of a warrant certificate for a
fraction of a warrant.

5.5.    Service Charges.    No
service charge shall be made for any exchange or registration of
transfer of Warrants.

5.6.    Warrant Execution and
Countersignature.    The Warrant Agent is hereby authorized to
countersign and to deliver, in accordance with the terms of this
Agreement, the Warrants required to be issued pursuant to the
provisions of this Section 5, and the Company, whenever required by the
Warrant Agent, will supply the Warrant Agent with Warrants duly
executed on behalf of the Company for such purpose.

6.    Redemption.

6.1.    Redemption.    Not less than all of the
outstanding Warrants may be redeemed, at the option and sole discretion
of the Company, at any time after they become exercisable and prior to
their expiration, at the office of the Warrant Agent, upon the notice
referred to in Section 6.2, at the price of $.01 per Warrant
(‘‘Redemption Price’’), provided that the last
sales price of the Common Stock has been at least $11.50 per share, on
each of twenty (20) trading days within a thirty (30) trading day
period ending on the third business day prior to the date on which
notice of redemption is given; and provided, further, that the Warrants
and shares of Common Stock underlying the Warrants are covered by a
registration statement that is effective under the Securities Act and a
Prospectus is available for delivery by the Warrant Agent.
Notwithstanding anything to the contrary contained herein, the Company
shall not redeem the Warrants unless the Warrants and shares of Common
Stock underlying the Warrants are covered by a registration statement
that is effective under the Securities Act and a Prospectus is
available for delivery by the Warrant Agent on the date of the
redemption call and during the entire period thereafter ending on the
date scheduled for redemption. Because redemption is at the option of
the Company and because such redemption is subject to conditions, any
or all of the Warrants may expire unredeemed.

6.2.    Date
Fixed for, and Notice of, Redemption.    In the event the Company
shall elect to redeem all of the Warrants, the Company shall fix a date
for the redemption, which date shall be prior to the expiration of the
Warrants. Notice of redemption shall be mailed by first class mail,
postage prepaid, by the Company not less than 30 days prior to the date
fixed for redemption to the registered holders of the Warrants to be
redeemed at their last addresses as they shall appear on the
registration books. Any notice mailed in the manner herein provided
shall be conclusively presumed to have been duly given whether or not
the registered holder received such notice.

6.3.    Exercise After Notice of Redemption.    The
Warrants may be exercised in accordance with Section 3 of this
Agreement at any time after notice of redemption shall have been given
by the Company pursuant to Section 6.2 hereof and prior to the time and
date fixed for redemption. On and after the redemption date, the record
holder of the Warrants shall have no further rights except to receive,
upon surrender of the Warrants, the Redemption Price.

7.    Other Provisions Relating to Rights of Holders of
Warrants.

7.1.    No Rights as Stockholder.    A
Warrant does not entitle the registered holder thereof to any of the
rights of a stockholder of the Company, including, without limitation,
the right to receive dividends, or other distributions, exercise any
preemptive rights to vote or to consent or to receive notice as
stockholders in respect of the meetings of stockholders or the election
of directors of the Company or any other matter.

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7.2.    Lost, Stolen, Mutilated, or
Destroyed Warrants.    If any Warrant is lost, stolen, mutilated,
or destroyed, the Company and the Warrant Agent may on such terms as to
indemnity or otherwise as they may in their discretion impose (which
shall, in the case of a mutilated Warrant, include the surrender
thereof), issue a new Warrant of like denomination, tenor, and date as
the Warrant so lost, stolen, mutilated, or destroyed. Any such new
Warrant shall constitute a substitute contractual obligation of the
Company, whether or not the allegedly lost, stolen, mutilated, or
destroyed Warrant shall be at any time enforceable by anyone.

7.3.    Reservation of Common Stock.    The Company shall
at all times reserve and keep available a number of its authorized but
unissued shares of Common Stock that will be sufficient to permit the
exercise in full of all outstanding Warrants issued pursuant to this
Agreement.

7.4.    Registration of Common Stock.    
Prior to the commencement of the Exercise Period, the Company shall use
its best efforts to prepare and file with the Securities and Exchange
Commission a post-effective amendment to the Registration Statement, or
a new registration statement, for the registration under the Act of,
and it shall use its best efforts to take such action as is necessary
to qualify for sale, in those states in which the Warrants were
initially offered by the Company, the shares of Common Stock issuable
upon exercise of the Warrants. The Company shall use its best efforts
to cause the same to become effective on or prior to the commencement
of the Exercise Period and shall use its best efforts to maintain the
effectiveness of such registration statement and ensure that a
Prospectus is available for delivery by the Warrant Agent until the
expiration of the Warrants in accordance with the provisions of this
Agreement; provided, however, that the Company shall not be obligated
to deliver shares of Common Stock and shall not have penalties nor be
liable to the Warrant holder for failure to deliver shares of Common
Stock, if a registration statement is not effective or a Prospectus is
not available for delivery by the Warrant Agent at the time of exercise
of the Warrant by the registered holder.

7.5.    Delivery of
Prospectus or Notice.    The Company shall furnish to the Warrant
Agent sufficient copies of the Prospectus and the Warrant Agent agrees
that upon the exercise of any Warrant, the Warrant Agent shall deliver
a Prospectus to the registered holder of such Warrant, prior to or
concurrently with the delivery of the shares of Common Stock issued
upon such exercise; provided, however, that the Warrant Agent shall
deliver to each such holder at such time the notice referred to in Rule
173 under the Securities Act in lieu of such Prospectus to the extent
permitted by the Securities Act and the rules and regulations
promulgated thereunder.

8.    Concerning the Warrant
Agent and Other Matters.

8.1.    Payment of
Taxes.    The Company will from time to time promptly pay all
taxes and charges that may be imposed upon the Company or the Warrant
Agent in respect of the issuance or delivery of shares of Common Stock
upon the exercise of Warrants, but the Company shall not be obligated
to pay any transfer taxes in respect of the Warrants or such
shares.

8.2.    Resignation, Consolidation, or Merger of
Warrant Agent.

8.2.1.    Appointment of
Successor Warrant Agent.    The Warrant Agent, or any successor
to it hereafter appointed, may resign its duties and be discharged from
all further duties and liabilities hereunder after giving sixty (60)
days' notice in writing to the Company. If the office of the
Warrant Agent becomes vacant by resignation or incapacity to act or
otherwise, the Company shall appoint in writing a successor Warrant
Agent in place of the Warrant Agent. If the Company shall fail to make
such appointment within a period of 30 days after it has been notified
in writing of such resignation or incapacity by the Warrant Agent or by
the holder of the Warrant (who shall, with such notice, submit his
Warrant for inspection by the Company), then the holder of any Warrant
may apply to the Supreme Court of the State of New York for the County
of New York for the appointment of a successor Warrant Agent at the
Company's cost. Any successor Warrant Agent, whether appointed by
the Company or by such court, shall be a corporation organized and
existing under the laws of the State of New York, in good standing and
having its principal office in the Borough of Manhattan, City and State
of New York, and authorized under such laws to exercise corporate trust
powers and subject to supervision or examination by federal or state
authority. After appointment, any successor Warrant 

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Agent shall be vested with all the authority,
powers, rights, immunities, duties, and obligations of its predecessor
Warrant Agent with like effect as if originally named as Warrant Agent
hereunder, without any further act or deed; but if for any reason it
becomes necessary or appropriate, the predecessor Warrant Agent shall
execute and deliver, at the expense of the Company, an instrument
transferring to such successor Warrant Agent all the authority, powers,
and rights of such predecessor Warrant Agent hereunder; and upon
request of any successor Warrant Agent the Company shall make, execute,
acknowledge, and deliver any and all instruments in writing for more
fully and effectually vesting in and confirming to such successor
Warrant Agent all such authority, powers, rights, immunities, duties,
and obligations.

8.2.2.    Notice of Successor
Warrant Agent.    In the event a successor Warrant Agent shall be
appointed, the Company shall give notice thereof to the predecessor
Warrant Agent and the transfer agent for the Common Stock not later
than the effective date of any such appointment.

8.2.3.    Merger or Consolidation of Warrant
Agent.    Any corporation into which the Warrant Agent may be
merged or with which it may be consolidated or any corporation
resulting from any merger or consolidation to which the Warrant Agent
shall be a party shall be the successor Warrant Agent under this
Agreement without any further act.

8.3.    Fees and
Expenses of Warrant Agent.

8.3.1.    Remuneration.    The Company agrees to
pay the Warrant Agent reasonable remuneration for its services as such
Warrant Agent hereunder and will reimburse the Warrant Agent upon
demand for all expenditures that the Warrant Agent may reasonably incur
in the execution of its duties hereunder.

8.3.2.    Further Assurances.    The Company
agrees to perform, execute, acknowledge, and deliver or cause to be
performed, executed, acknowledged, and delivered all such further and
other acts, instruments, and assurances as may reasonably be required
by the Warrant Agent for the carrying out or performing of the
provisions of this Agreement.

8.4.    Liability of Warrant
Agent.

8.4.1.    Reliance on Company
Statement.    Whenever in the performance of its duties under
this Warrant Agreement, the Warrant Agent shall deem it necessary or
desirable that any fact or matter be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by
a statement signed by the Chief Executive Officer, President, Chief
Financial Officer, any Vice President or Chairman of the Board of the
Company and delivered to the Warrant Agent. The Warrant Agent may rely
upon such statement for any action taken or suffered in good faith by
it pursuant to the provisions of this Agreement.

8.4.2.    Indemnity.    The Warrant Agent shall
be liable hereunder only for its own negligence, willful misconduct or
bad faith. The Company agrees to indemnify the Warrant Agent and save
it harmless against any and all liabilities, including judgments, costs
and reasonable counsel fees, for anything done or omitted by the
Warrant Agent in the execution of this Agreement except as a result of
the Warrant Agent's negligence, willful misconduct, or bad
faith.

8.4.3.    Exclusions.    The Warrant
Agent shall have no responsibility with respect to the validity of this
Agreement or with respect to the validity or execution of any Warrant
(except its countersignature thereof); nor shall it be responsible for
any breach by the Company of any covenant or condition contained in
this Agreement or in any Warrant; nor shall it be responsible to make
any adjustments required under the provisions of Section 4 hereof or
responsible for the manner, method, or amount of any such adjustment or
the ascertaining of the existence of facts that would require any such
adjustment; nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of
any shares of Common Stock to be issued pursuant to this Agreement or
any Warrant or as to whether any shares of Common Stock will when
issued be valid and fully paid and nonassessable.

8.5.    Acceptance of Agency.    The Warrant Agent hereby
accepts the agency established by this Agreement and agrees to perform
the same upon the terms and conditions herein set forth and

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among other things, shall account promptly to
the Company with respect to Warrants exercised and concurrently account
for, and pay to the Company, all moneys received by the Warrant Agent
for the purchase of shares of the Company's Common Stock through
the exercise of Warrants.

8.6.    The Warrant Agent hereby
waives any and all right, title, interest or claim of any kind
(‘‘Claim’’) in or to any distribution of the
Trust Account (as defined in that certain Investment Management Trust
Agreement, dated as of the date hereof, by and between the Company and
the Trustee), and hereby agrees not to seek recourse, reimbursement,
payment or satisfaction for any Claim against the Trust Fund for any
reason whatsoever.

9.    Miscellaneous
Provisions.

9.1.    Amendments.    (a) This
Agreement and any Warrant Certificate may be amended by the parties
hereto by executing a supplemental warrant agreement (a
‘‘Supplemental Agreement’’), without the
consent of the registered holder of any Warrant, for the purpose of (i)
curing any ambiguity, or curing, correcting or supplementing any
defective provision contained herein, or making any other provisions
with respect to matters or questions arising under this Agreement that
is not inconsistent with the provisions of this Agreement or the
Warrant Certificate, (ii) evidencing the succession of another
corporation to the Company and the assumption by any such successor of
the covenants of the Company contained in this Agreement and the
Warrants, (iii) evidencing and providing for the acceptance of
appointment by a successor Warrant Agent with respect to the Warrants,
(iv) adding to the covenants of the Company for the benefit of the
registered holders or surrendering any right or power conferred upon
the Company under this Agreement, (vii) appointing a successor Warrant
Agent, or (viii) amending this Agreement and the Warrants in any manner
that the Company may deem to be necessary or desirable and that will
not adversely affect the interests of the registered holders in any
material respect.

(b) The Company and the Warrant Agent may
amend this Agreement and the Warrants by executing a Supplemental
Agreement with the consent of the registered holders of not fewer than
a majority of the unexercised Warrants affected by such amendment, for
the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the registered holders under this Agreement;
provided, however, that, without the consent of each registered holder
of Warrants affected thereby, no such amendment may be made that (i)
changes the Warrants so as to reduce the number of shares of Common
Stock purchasable upon exercise of the Warrants or so as to increase
the Warrant Price (other than as provided by Section 4), (ii) shortens
the period of time during which the Warrants may be exercised, (iii)
otherwise adversely affects the exercise rights of the registered
holders in any material respect, or (iv) reduces the number of
unexercised Warrants the consent of the registered holders of which is
required for amendment of this Agreement or the Warrants.

9.2.    Successors.    All the covenants and provisions
of this Agreement by or for the benefit of the Company or the Warrant
Agent shall bind and inure to the benefit of their respective
successors and assigns.

9.3.    Notices.    Any
notice, statement or demand authorized by this Warrant Agreement to be
given or made by the Warrant Agent or by the holder of any Warrant to
or on the Company shall be sufficiently given when so delivered if by
hand or overnight delivery or if sent by certified mail or private
courier service within five days after deposit of such notice, postage
prepaid, addressed (until another address is filed in writing by the
Company with the Warrant Agent), as follows:

Bank
Street Telecom Funding Corp.
 One Landmark Square, 18th Floor

Stamford, Connecticut 06901
 Attention: Chief Financial Officer

Any notice, statement or demand authorized by this Agreement
to be given or made by the holder of any Warrant or by the Company to
or on the Warrant Agent shall be sufficiently given when so delivered
if by hand or overnight delivery or if sent by certified mail or
private courier service within five days after deposit of such notice,
postage prepaid, addressed (until another address is filed in writing
by the Warrant Agent with the Company), as follows:

8

Table of Contents
Continental Stock Transfer &
Trust Company
 17 Battery Place, New York, NY 10004
 Attention:
Compliance Department

with a copy in each case to:

[Counsel for the Warrant Agent]

and

Fried, Frank, Harris, Shriver & Jacobson LLP New
York
 One New York Plaza
 New York, NY 10004
 Attention:
Stuart H. Gelfond

9.4.    Applicable law.    The
validity, interpretation, and performance of this Agreement and of the
Warrants shall be governed in all respects by the laws of the State of
New York, without giving effect to conflict of laws. The Company hereby
agrees that any action, proceeding or claim against it arising out of
or relating in any way to this Agreement shall be brought and enforced
in the courts of the State of New York or the United States District
Court for the Southern District of New York, and irrevocably submits to
such jurisdiction, which jurisdiction shall be exclusive. The Company
hereby waives any objection to such exclusive jurisdiction and that
such courts represent an inconvenience forum. Any such process or
summons to be served upon the Company may be served by transmitting a
copy thereof by registered or certified mail, return receipt requested,
postage prepaid, addressed to it at the address set forth in Section
9.3 hereof. Such mailing shall be deemed personal service and shall be
legal and binding upon the Company in any action, proceeding or
claim.

9.5.    Persons Having Rights under this
Agreement.    Nothing in this Agreement expressed and nothing
that may be implied from any of the provisions hereof is intended, or
shall be construed, to confer upon, or give to, any person or
corporation other than the parties hereto and the registered holders of
the Warrants any right, remedy, or claim under or by reason of this
Warrant Agreement or of any covenant, condition, stipulation, promise,
or agreement hereof. All covenants, conditions, stipulations, promises,
and agreements contained in this Warrant Agreement shall be for the
sole and exclusive benefit of the parties hereto and their successors
and assigns and of the registered holders of the Warrants.

9.6.    Examination of the Warrant Agreement.    A copy
of this Agreement shall be available at all reasonable times at the
office of the Warrant Agent in the Borough of Manhattan, City and State
of New York, for inspection by the registered holder of any Warrant.
The Warrant Agent may require any such holder to submit his Warrant for
inspection by it.

9.7.    Counterparts.    This
Agreement may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the
same instrument.

9.8.    Effect of Headings.    The
Section headings herein are for convenience only and are not part of
this Warrant Agreement and shall not affect the interpretation
thereof.

[SIGNATURE PAGE FOLLOWS]

9

Table of Contents
IN WITNESS WHEREOF, this Agreement has
been duly executed by the parties hereto as of the day and year first
above
written.

				
	Attest:			BANK STREET TELECOM FUNDING CORP.
	 			By:                                                                                   
Name:

Title:
	Attest:			CONTINENTAL STOCK TRANSFER & TRUST
COMPANY
	 			By:                                                                                   

Name:

Title:
	

10exv10w1

 

Exhibit 10.1

Chief Executive Officer

     EMPLOYMENT SEVERANCE AGREEMENT (the “Agreement”), dated
as of October 5, 2006, between Terra Industries Inc., a Maryland
corporation (the “Company”), and Michael L. Bennett (the
“Executive”).

               WHEREAS the Executive is currently employed by the Company as President and Chief Executive
Officer;

               WHEREAS the Company acknowledges the importance of, and wishes to secure, the Executive’s
continued services as contemplated in this Agreement, and considers such continued services
essential to the best interests of its shareholders;

               WHEREAS the Company and the Executive have entered into the Executive Retention Agreement,
dated as of November 12, 1998 (the “Executive Retention Agreement”), which provides the
Executive with reasonable protection against the risks of termination of employment following a
Change in Control (as defined in this Agreement);

               WHEREAS the Company recognizes the importance of providing the Executive with reasonable
protection against the risks of termination of employment in circumstances that are unrelated to a
Change in Control in order to retain the Executive’s continued services, and therefore, the Company
wishes to enter into this Agreement, which will replace and supersede the Executive Retention
Agreement in its entirety, in order to address a termination of the Executive’s employment in
circumstances that are both related to and unrelated to a Change in Control; and

               WHEREAS, pursuant to this Agreement, the Executive has agreed not to compete with the Company
or solicit its employees or customers for a one-year period after his employment terminates and to
provide other benefits to the Company to which the Company would not otherwise be entitled, all as
described herein.

               NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained
herein, and intending to be legally bound hereby, the parties hereto agree as follows:

               SECTION 1. Definitions. 

     For purposes of this Agreement:

               (a) “280G Gross-Up Payment” shall have the meaning set forth in Section 5(a).

               (b) “Accounting Firm” shall have the meaning set forth in Section 5(b).

 

2

               (c) “Accrued Rights” shall have the meaning set forth in Section 4(a).

               (d) “Affiliate(s)” means, with respect to any specified Person, any other Person that
directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under
common control with, such specified Person.

               (e) “Base Salary” means the Executive’s per annum base salary in effect on the
relevant date (without regard to any reduction during a CIC Period giving rise to Good Reason).

               (f) “Board” means the board of directors of the Company.

               (g) “Cause” shall have the meaning set forth in Section 4(b)(ii).

               (h) “Change in Control” means the occurrence of any of the following:

          (i) individuals who, as of the date of this Agreement, were members of the Board (the
“Incumbent Directors”) cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent to the date
of this Agreement whose election, or nomination for election, by the Company’s shareholders was
approved by a vote of at least a majority of the Incumbent Directors shall be considered as though
such individual were an Incumbent Director, but excluding, for purposes of this proviso, any such
individual whose assumption of office after the date of this Agreement occurs as a result of an
actual or threatened proxy contest with respect to election or removal of directors or other actual
or threatened solicitation of proxies or consents by or on behalf of a Person, other than the
Board;

          (ii) the consummation of (A) a merger, consolidation, statutory share exchange or similar form
of corporate transaction involving (x) the Company or (y) any of its Subsidiaries, but in the case
of this clause (y) only if Company Voting Securities (as defined below) are issued or issuable
(each of the events referred to in this clause (A) being hereinafter referred to as a
“Reorganization”) or (B) a sale or other disposition of all or substantially all the assets
of the Company (a “Sale”), unless, immediately following such Reorganization or Sale, (1)
all or substantially all the individuals and entities who were the “beneficial owners” (as such
term is defined in Rule 13d-3 under the Exchange Act (or a successor rule thereto)) of shares of
the Company’s common stock or other securities eligible to vote for the election of the Board
outstanding immediately prior to the consummation of such Reorganization or Sale (such securities,
the “Company Voting Securities”) beneficially own, directly or indirectly, more than 60% of
the combined voting power of the then outstanding voting securities of the corporation or other
entity resulting from such Reorganization or Sale (including a corporation or other entity that, as
a result of such transaction, owns the Company or all or substantially all the Company’s assets
either directly or through one or more subsidiaries) (the “Continuing Entity”) in
substantially the same proportions as their ownership, immediately prior to the consummation of
such Reorganization or Sale, of the outstanding Company Voting Securities (excluding any
outstanding voting securities of

 

3

the Continuing Entity that such beneficial owners hold immediately following the consummation
of the Reorganization or Sale as a result of their ownership prior to such consummation of voting
securities of any corporation or other entity involved in or forming part of such Reorganization or
Sale other than the Company or a Subsidiary), (2) no Person (excluding any employee benefit plan
(or related trust) sponsored or maintained by the Continuing Entity or any corporation or other
entity controlled by the Continuing Entity) beneficially owns, directly or indirectly, 25% or more
of the combined voting power of the then outstanding voting securities of the Continuing Entity and
(3) at least a majority of the members of the board of directors or other governing body of the
Continuing Entity were Incumbent Directors at the time of the execution of the definitive agreement
providing for such Reorganization or Sale or, in the absence of such an agreement, at the time at
which approval of the Board was obtained for such Reorganization or Sale;

          (iii) the shareholders of the Company approve a plan of complete liquidation or dissolution of
the Company; or

          (iv) any Person, corporation or other entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Exchange Act) becomes the beneficial owner, directly or indirectly, of
securities of the Company representing 25% or more of the combined voting power of the Company
Voting Securities; provided, however, that for purposes of this subparagraph (iv),
the following acquisitions shall not constitute a Change in Control: (A) any acquisition by the
Company or any Subsidiary, (B) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any Subsidiary, (C) any acquisition by an underwriter
temporarily holding such Company Voting Securities pursuant to an offering of such securities or
(D) any acquisition pursuant to a Reorganization or Sale that does not constitute a Change in
Control for purposes of subparagraph (ii) of this Section 1(h).

               (i) “CIC Period” shall have the meaning set forth in Section 4(b)(iii).

               (j) “COBRA” means the Consolidated Omnibus Reconciliation Act of 1985, as amended.

               (k) “Code” means the Internal Revenue Code of 1986, as amended from time to time, and
the regulations promulgated thereunder.

               (l) “Competitive Activity” shall have the meaning set forth in Section 6(a)(i).

               (m) “Confidential Information” shall have the meaning set forth in Section 7(b).

               (n) “Equity-Based Awards” shall have the meaning set forth in Section 4(c)(iii).

               (o) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to
time, or any successor statute thereto.

 

4

               (p) “Excise Tax” means the excise tax imposed by Section 4999 of the Code, together
with any interest or penalties imposed with respect to such tax.

               (q) “Good Reason” shall have meaning set forth in Section 4(b)(iii).

               (r) “Non-CIC Period” shall have the meaning set forth in Section 4(b)(iii).

               (s) “Notice of Termination for Good Reason” shall have the meaning set forth in
Section 4(b)(iii).

               (t) “Notification Date” shall have the meaning set forth in Section 2.

               (u) “Payment” means any payment, benefit or distribution (or combination thereof) by
the Company, any of its Affiliates or any trust established by the Company or its Affiliates, to or
for the benefit of the Executive, whether paid, payable, distributed, distributable or provided
pursuant to this Agreement or otherwise, including any payment, benefit or other right that
constitutes a “parachute payment” within the meaning of Section 280G of the Code.

               (v) “Permanent Disability” shall have the meaning set forth in Section 4(g)(ii).

               (w) “Person” means any individual, corporation, partnership, trust, association,
limited liability company, joint venture, joint-stock company or any other entity or organization,
including a government or governmental agency.

               (aa) “Release Effective Date” means the date the release of claims described in
Section 4(f) becomes effective and irrevocable.

               (bb) “Restriction Period” shall have the meaning set forth in Section 6(a)

               (cc) “Review Period” shall have the meaning set forth in Section 2.

               (dd) “Subsidiary” means any entity in which the Company, directly or indirectly,
possesses 50% or more of the total combined voting power of all classes of its stock.

               (ee) “Successor” shall have the meaning set forth in Section 14(c).

               (ff) “Target Bonus” means the Executive’s target cash incentive annual bonus in
effect on the relevant date (without regard to any reduction during a CIC period giving rise to
Good Reason).

               (gg) “Term” shall have the meaning set forth in Section 2.

               (hh) “Underpayment” shall have the meaning set forth in Section 5(b).

 

5

               SECTION 2. Effective Date; Term. This Agreement shall become effective when one or
more counterparts have been signed by each of the parties and delivered to the other party and
shall remain in effect until the fifth anniversary of the date it becomes effective (such period,
including any extension thereof pursuant to the remainder of this Section 2, the “Term”);
provided, however, that not later than 60 days prior to (a) the fourth anniversary
of the effective date and (b) each anniversary thereafter (each, a “Notification Date”),
the Company’s General Counsel, Vice President of Human Resources or another senior officer
authorized to act on behalf of the Company shall deliver to the Board a written notice alerting the
Board of the duration of the period that remains prior to the scheduled expiration of this
Agreement. Prior to the end of the 60-day period that begins upon receipt of such notice (such
period, the “Review Period”), the Board shall determine whether it wishes to extend this
Agreement for an additional one-year period following the scheduled expiration date, and in the
event that the Board does wish to so extend, it shall communicate such extension to the Executive
in writing prior to the end of the Review Period. Unless the Board notifies the Executive of an
extension prior to the end of the applicable Review Period, the Board shall be deemed to have
decided not to extend this Agreement, and this Agreement shall expire on its scheduled expiration
date (which shall be approximately one year following the end of the Review Period).
Notwithstanding the foregoing, this Agreement shall not be terminated by the Company during any CIC
Period.

               SECTION 3. Duties and Responsibilities. (a) During the period of the Executive’s
employment with the Company, the Executive agrees to be employed and devote substantially all the
Executive’s business time and attention to the Company and its Subsidiaries and Affiliates and the
promotion of their interests and the performance of the Executive’s duties and responsibilities
hereunder, upon the terms and conditions of this Agreement. During the period of the Executive’s
employment with the Company, the Executive will conduct his duties in accordance with the Company’s
policies, as in effect from time to time.

               (b) During the period of the Executive’s employment with the Company, the Executive shall not
act in any capacity that is in conflict with the Executive’s duties and responsibilities hereunder,
and shall not accept employment with, or provide services as a consultant or in any other capacity
for, any Person or entity other than the Company and its Subsidiaries and Affiliates.

               SECTION 4. Termination of Employment; Compensation Upon Certain Termination Events.
(a) Generally. The Executive’s employment may be terminated by the Executive or the
Company at any time and for any reason; provided, however, that the Executive shall
be required to give the Company at least 90 days’ advance written notice of any resignation of the
Executive’s employment hereunder (other than for Good Reason). Except as otherwise expressly
provided below in Sections 4(c), 4(d), 4(e) and 5, following any termination of the Executive’s
employment, the obligations of the Company to pay or provide the Executive with compensation and
benefits shall cease, and the Company shall have no further obligations to the Executive hereunder
except (i) for payment of any unpaid Base Salary accrued through the date of termination of
employment and for payment of any unreimbursed business expenses incurred through

 

6

the date of termination of employment, (ii) as explicitly set forth in any other benefit
plans, programs or arrangements in which the Executive participates and (iii) as otherwise
expressly required by applicable law (the amounts described in clauses (i), (ii) and (iii) of this
Section 4(a) being referred to herein as the “Accrued Rights”). Upon termination of the
Executive’s employment for any reason, the Executive agrees to resign, as of the date of such
termination of employment, from the Board and any committees thereof (and, if applicable, from the
board of directors (and any committees thereof) of any Subsidiary) to the extent the Executive is
then serving thereon.

               (b) Termination by the Company for Cause; Voluntary Resignation by the Executive without
Good Reason. (i) If the Executive’s employment is terminated either by the Company for Cause
or by resignation of the Executive without Good Reason, the Executive shall not be entitled to any
compensation or benefits in addition to the Accrued Rights.

          (ii) For purposes of this Agreement, “Cause” means the occurrence of any of the
following events or circumstances, except as provided below:

     (A) the willful and continued failure of the Executive to perform
substantially the Executive’s duties with the Company (other than any such failure
resulting from incapacity due to physical or mental illness), after a written
demand for substantial performance is delivered to the Executive by the Board which
specifically identifies the manner in which the Board believes that the Executive
has not substantially performed the Executive’s duties;

     (B) the willful engaging by the Executive in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the Company; or

     (C) the Executive’s willful and material breach of this Agreement, including,
without limitation, Section 6 or 7.

For purposes of this provision, no act or failure to act, on the part of the Executive, shall be
considered “willful” unless it is done, or omitted to be done, by the Executive in bad faith or
without reasonable belief that the Executive’s action or omission was in the best interests of the
Company. The termination of employment of the Executive shall not be deemed to be for Cause
unless and until there shall have been delivered to the Executive a copy of a resolution duly
adopted by the affirmative vote of not less than three-quarters of the entire membership of the
Board (excluding the Executive) at a meeting of the Board called and held for such purpose (after
reasonable notice is provided to the Executive and the Executive is given an opportunity, together
with counsel, to be heard before the Board), finding that, in the good faith opinion of the Board,
the Executive is guilty of the conduct described in clauses (A), (B) or (C) above and specifying
the particulars thereof in detail.

 

7

          (iii) For purposes of this Agreement, “Good Reason” means (A) during the period prior
to a Change in Control and during the period following the second anniversary thereof (each such
period, a “Non-CIC Period”), the occurrence of any of the events or circumstances set forth
in clauses (1) and (2) below and (B) during the two-year period following a Change in Control (the
“CIC Period”), the occurrence of any of the events or circumstances set forth in clauses
(1) through (8) below, in each such case during the Term, without the Executive’s express prior
written consent and other than as a result of the Executive’s Permanent Disability:

               (1) the failure of the Company to pay the Executive any compensation when due (other than an
inadvertent failure that is remedied within ten business days after receipt of notice thereof given
by the Executive);

               (2) delivery by the Company or any Subsidiary of a notice to the Executive of the intent to
terminate the Executive’s employment for any reason, other than for Cause or Permanent Disability,
in each case in accordance with this Agreement, regardless of whether such termination is intended
to become effective during or after the Term;

               (3) any reduction of the Executive’s Base Salary;

               (4) the change of the Executive’s principal place of employment to a location more than 25
miles from Executive’s principal place of employment immediately prior to the change;

               (5) any reduction in the Executive’s Target Bonus from the level in effect immediately prior
to the Change in Control;

               (6) any diminution in the Executive’s titles, duties, responsibilities or status from the
positions, duties, responsibilities or status existing immediately prior to the Change in Control;

               (7) the removal of the Executive from, or any failure to re-elect the Executive to, any of the
offices the Executive held immediately prior to the Change in Control; or

               (8) any material reduction in Executive’s retirement, insurance or fringe benefits from the
levels in effect immediately prior to the Change in Control.

A termination of employment by the Executive for Good Reason for purposes of this Agreement shall
be effectuated by giving the Company written notice (“Notice of Termination for Good
Reason”) of the termination setting forth in reasonable detail the specific conduct of the
Company that constitutes Good Reason and the specific provision(s) of this Agreement on which the
Executive relied. The Company shall be entitled, during the 30-day period following receipt of a
Notice of Termination for Good Reason, to cure the circumstances that gave rise to Good Reason,
provided that the Company shall be entitled to waive its right to cure or reduce the cure period by
delivery of written notice to that effect to the Executive. Unless the parties agree otherwise,
and

 

8

provided that the Company fails to cure the circumstances that gave rise to Good Reason, a
termination of employment by the Executive for Good Reason shall be effective on the 30th day
following the termination of the Company’s right to cure, unless the notice sets forth a later date
(which date shall in no event be later than 60 days after the notice is given); provided,
however, that so long as an event that constitutes Good Reason occurs during the Non-CIC
Period or the CIC Period, as applicable, and the Executive delivers the Notice of Termination for
Good Reason at any time prior to the expiration of the Non-CIC Period or the CIC Period, for
purposes of the payments, benefits and other entitlements set forth in Section 4(c) or 4(d), as
applicable, and Section 4(e), the termination of the Executive’s employment pursuant thereto shall
be deemed to be a resignation for Good Reason during the Non-CIC Period or the CIC Period. If the
Company disputes the existence of Good Reason, the Company shall have the burden of proof to
establish that Good Reason does not exist or that the circumstances that gave rise to Good Reason
have been cured. If the Executive continues to provide services to the Company after one of the
events giving rise to Good Reason has occurred, the Executive shall not be deemed to have consented
to such event or to have waived the Executive’s right to terminate his employment at any time
during the Term for Good Reason in connection with such event.

               (c) Termination During the Non-CIC Period by the Company Without Cause or by the Executive
for Good Reason. (i) Subject to Section 4(f), if the Executive’s employment under this
Agreement is terminated by the Company without Cause or the Executive terminates his employment
hereunder for Good Reason, in each case during the Non-CIC Period (the effective date of such
termination is hereafter referred to as the “Termination Date”), then, in addition to the
Accrued Rights, the Executive shall be entitled to the payments and benefits provided in this
Section 4(c) and Section 4(e). Notwithstanding any provision of this Agreement to the contrary,
the Executive shall not be entitled to any payments or benefits under this Section 4(c) if he
becomes entitled to any payments or benefits pursuant to the Section 4(d), and the Executive shall
not become entitled to any payments or benefits pursuant to Section 4(d) if he becomes entitled to
any payments or benefits pursuant to this Section 4(c).

          (ii) Severance Pay. The Company shall pay the Executive an amount equal to 1.5 times
the sum of (A) the Executive’s current Base Salary plus (B) the Executive’s current Target Bonus,
in a lump-sum payment payable on the tenth business day after the Release Effective Date.

          (iii) Equity-Based Awards. The treatment of all outstanding stock options, restricted
shares, phantom shares, performance share awards and other equity-based awards (the
“Equity-Based Awards”) held by the Executive as of the Termination Date shall be governed
by the terms and conditions of the equity compensation plans and award agreements pursuant to which
they were granted.

               (d) Termination During the CIC Period by the Company Without Cause or by the Executive for
Good Reason. (i) Subject to Section 4(f), if the Executive’s employment under this Agreement
is terminated by the Company without Cause or the Executive terminates his employment hereunder for
Good Reason, in each case during

 

9

the CIC Period, then, in addition to the Accrued Rights, the Executive shall be entitled to
the payments and benefits provided in this Section 4(d) and Section 4(e).

          (ii) Severance Pay. The Company shall pay the Executive an amount equal to two times
the sum of (A) the Executive’s current Base Salary plus (B) the Executive’s current Target Bonus,
in a lump-sum payment payable on the tenth business day after the date the Release Effective Date.

          (iii) Equity-Based Awards. Notwithstanding anything to the contrary in any equity
compensation plan or any award agreement thereunder and subject to Section 4(f), (A) all
outstanding Equity-Based Awards held by the Executive as of the Termination Date that are subject
to vesting based on the passage of time and without regard to attainment of performance criteria
that are unvested shall become fully vested (and, if applicable, exercisable in full), and (B) all
outstanding Equity-Based Awards then held by the Executive that are subject to performance-based
vesting criteria shall become vested and earned (and, if applicable, immediately exercisable) at a
deemed performance level equal to the target performance level with respect to such Equity-Based
Awards. In addition, all outstanding Equity-Based Awards held by the Executive as of the
Termination Date that are vested as of such date (including any Equity-Based Awards that become
vested in accordance with clause (A) or (B) of the preceding sentence) shall remain outstanding,
shall be settled and shall otherwise be treated in accordance with the terms and conditions of the
equity compensation plans and award agreements pursuant to which they were granted.

          (iv) SERP Benefits. On the Termination Date, the Executive shall become vested in the
benefits accrued by the Executive under the Terra Industries Inc. Excess Benefit Plan (the
“SERP”) as of the Termination Date and shall become entitled to payment of benefits in
accordance with the terms of the SERP, as in effect from time to time. For purposes of computing
the Executive’s accrued benefits under the SERP, the Company shall credit the Executive with two
(2) years of participation in the SERP and two (2) years of age in addition to the actual years of
participation and age credited to the Executive under the SERP as of the Termination Date.

               (e) Termination During the Term by the Company Without Cause or by the Executive for Good
Reason. (i) Subject to Section 4(f), if the Executive’s employment under this Agreement is
terminated by the Company without Cause or the Executive terminates his employment hereunder for
Good Reason, in each case during the Term (whether during the CIC Period or the Non-CIC Period),
then, in addition to the Accrued Rights and the payments and benefits provided in Section 4(c) or
4(d), as applicable, the Executive shall be entitled to the benefits provided in this Section 4(e).

          (ii) Continued Welfare Benefits. Commencing on the Release Effective Date and for two
years thereafter or, if earlier, the date on which the Executive becomes employed by a new
employer, the Company shall, at its expense (subject to the Executive’s payment of the normal
premium, if any, then in effect at the time of payment for employees generally), provide the
Executive with medical and dental benefits at the level provided to the Company’s active employees
during such period; provided,

 

10

however, that if the Executive becomes employed by a new employer that maintains a
major medical plan that either (A) does not cover the Executive with respect to a preexisting
condition which was covered under the Company’s major medical plan, or (B) does not cover the
Executive for a designated waiting period, the Executive’s coverage under the Company’s major
medical plan shall continue (but shall be limited in the event of noncoverage due to a preexisting
condition, to the preexisting condition itself) until the earlier of the end of the applicable
period of noncoverage under the new employer’s plan or the second anniversary of the Release
Effective Date. Nothing contained herein shall adversely affect the Executive’s rights under
COBRA.

          (iii) Outplacement Counseling. From the period beginning on the Release Effective
Date and ending on the earlier of the first anniversary thereof or the date on which the Executive
becomes employed by a new employer, the Company shall make available to the Executive at the
Company’s expense professional outplacement services provided by qualified consultants employed by
the firm of Challenger, Gray & Associates or a comparable firm selected by the Company.

               (f) Release of Claims. Notwithstanding any provision of this Agreement to the
contrary, the Company shall not be obligated to make any payments or provide any of the benefits
described in Sections 4(c), 4(d) and 4(e) and the Executive shall not be entitled to any
accelerated vesting of outstanding Equity-Based Awards pursuant to Section 4(d)(iii) unless and
until such time as the Executive has executed a waiver and release of claims substantially in the
form of Exhibit A hereto and such release has become effective and irrevocable.

               (g) Termination on Account of Death or Permanent Disability. (i) The Executive’s
employment hereunder shall terminate automatically upon the Executive’s death or Permanent
Disability. In the event of a termination as a result of death or Permanent Disability, the
Executive shall not be entitled to any additional payments from the Company, other than payments
with respect to the Accrued Rights.

          (ii) For purposes of this Agreement, the Executive shall be deemed to have a “Permanent
Disability” if (A) the Executive is incapacitated by a physical or mental condition, illness or
injury that has prevented or is expected to prevent the Executive from being able to perform the
essential duties of the Executive’s position under this Agreement in a satisfactory manner for an
aggregate of 180 days in any consecutive 365-day period or (B) the Executive is accepted for
long-term disability benefits under any long-term disability plan of the Company or any Subsidiary
in which he is then participating. The Board shall determine, according to the facts then
available, whether and when the Permanent Disability of the Executive has occurred. Such
determination shall not be arbitrary or unreasonable and the Board will take into consideration the
expert medical opinion of a physician mutually selected by the Company and the Executive after such
physician has completed an examination of the Executive. The Executive agrees to make himself
available for such examination upon the reasonable request of the Company.

 

11

               SECTION 5. Certain Additional Payments by the Company. (a) Notwithstanding anything in this Agreement to the contrary and except
as set forth below, in the event it shall be determined that any Payment that is paid or payable
during the Term would be subject to the Excise Tax, the Executive shall be entitled to receive an
additional payment (a “280G Gross-Up Payment”) in an amount such that, after payment by the
Executive of all taxes (and any interest or penalties imposed with respect to such taxes),
including any income and employment taxes (and any interest and penalties imposed with respect
thereto) and Excise Taxes imposed upon the 280G Gross-Up Payment, the Executive retains an amount
of the 280G Gross-Up Payment equal to the Excise Tax imposed upon such Payments. The Company’s
obligation to make 280G Gross-Up Payments under this Section 5(a) shall not be conditioned upon the
Executive’s termination of employment and shall survive and apply after the Executive’s termination
of employment.

               (b) Subject to the provisions of Section 5(c), all determinations required to be made under
this Section 5(b), including whether and when a 280G Gross-Up Payment is required, the amount of
such 280G Gross-Up Payment and the assumptions to be utilized in arriving at such determination,
shall be made in accordance with the terms of this Section 5(b) by a nationally recognized
certified public accounting firm that shall be designated by the Company (the “Accounting
Firm”). The Accounting Firm shall provide detailed supporting calculations both to the Company
and the Executive within 15 business days of the receipt of notice from the Executive that there
has been a Payment or such earlier time as is requested by the Company. For purposes of
determining the amount of any 280G Gross-Up Payment, the Executive shall be deemed to pay Federal
income tax at the highest marginal rate applicable to individuals in the calendar year in which any
such 280G Gross-Up Payment is to be made and deemed to pay state and local income taxes at the
highest marginal rates applicable to individuals in the state or locality of the Executive’s
residence or place of employment in the calendar year in which any such 280G Gross-Up Payment is to
be made, net of the maximum reduction in Federal income taxes that can be obtained from deduction
of state and local taxes, taking into account limitations applicable to individuals subject to
Federal income tax at the highest marginal rate. All fees and expenses of the Accounting Firm
shall be borne solely by the Company. Any 280G Gross-Up Payment, as determined pursuant to this
Section 5(b), shall be paid by the Company to the Executive within 5 business days of the receipt
of the Accounting Firm’s determination. If the Accounting Firm determines that no Excise Tax is
payable by the Executive, it shall so indicate to the Executive in writing. Any determination by
the Accounting Firm shall be binding upon the Company and the Executive. As a result of the
uncertainty in the application of the Excise Tax, at the time of the initial determination by the
Accounting Firm hereunder, it is possible that the amount of the 280G Gross-Up Payment determined
by the Accounting Firm to be due to the Executive, consistent with the calculations required to be
made hereunder, will be lower than the amount actually due (an “Underpayment”). In the
event the Company exhausts its remedies pursuant to Section 5(c) and the Executive thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be paid by the Company to the
Executive within 5 business days of the receipt of the Accounting Firm’s determination.

 

12

               (c) The Executive shall notify the Company in writing of any written claim by the Internal
Revenue Service that, if successful, would require the payment by the Company of a 280G Gross-Up
Payment. Such notification shall be given as soon as practicable, but no later than 10 business
days after the Executive is informed in writing of such claim. Failure to give timely notice shall
not prejudice the Executive’s right to 280G Gross-Up Payments and rights of indemnity under this
Section 5(c). The Executive shall apprise the Company of the nature of such claim and the date on
which such claim is requested to be paid. The Executive shall not pay such claim prior to the
expiration of the 30-day period following the date on which the Executive gives such notice to the
Company (or such shorter period ending on the date that any payment of taxes with respect to such
claim is due). If the Company notifies the Executive in writing prior to the expiration of such
period that the Company desires to contest such claim, the Executive shall (i) give the Company any
information reasonably requested by the Company relating to such claim, (ii) take such action in
connection with contesting such claim as the Company shall reasonably request in writing from time
to time, including accepting legal representation with respect to such claim by an attorney
reasonably selected by the Company, (iii) cooperate with the Company in good faith in order
effectively to contest such claim and (iv) permit the Company to participate in any proceedings
relating to such claim; provided, however, that the Company shall bear and pay
directly all costs and expenses (including additional income taxes, interest and penalties)
incurred in connection with such contest, and shall indemnify and hold the Executive harmless, on
an after-tax basis, for any Excise Tax or income tax (including interest or penalties) imposed as a
result of such representation and payment of costs and expenses. Without limitation on the
foregoing provisions of this Section 5(c), the Company shall control all proceedings taken in
connection with such contest, and, at its sole discretion, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the applicable taxing authority
in respect of such claim and may, at its sole discretion, either direct the Executive to pay the
tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive
agrees to prosecute such contest to a determination before any administrative tribunal, in a court
of initial jurisdiction and in one or more appellate courts, as the Company shall determine;
provided, however, that (A) if the Company directs the Executive to pay such claim
and sue for a refund, the Company shall advance the amount of such payment to the Executive, on an
interest-free basis, and shall indemnify and hold the Executive harmless, on an after-tax basis,
from any Excise Tax or income tax (including interest or penalties) imposed with respect to such
advance or with respect to any imputed income in connection with such advance and (B) if such
contest results in any extension of the statute of limitations relating to payment of taxes for the
taxable year of the Executive with respect to which such contested amount is claimed to be due,
such extension must be limited solely to such contested amount. Furthermore, the Company’s control
of the contest shall be limited to issues with respect to which the 280G Gross-Up Payment would be
payable hereunder, and the Executive shall be entitled to settle or contest, as the case may be,
any other issue raised by the Internal Revenue Service or any other taxing authority.

               (d) If, after the receipt by the Executive of an amount advanced by the Company pursuant to
Section 5(c), the Executive becomes entitled to receive any refund

 

13

with respect to such claim, the Executive shall (subject to the Company’s complying with the
requirements of Section 5(c)) promptly pay to the Company the amount of such refund received
(together with any interest paid or credited thereon after taxes applicable thereto). If, after
the receipt by the Executive of an amount advanced by the Company pursuant to Section 5(c), a
determination is made that the Executive shall not be entitled to any refund with respect to such
claim and the Company does not notify the Executive in writing of its intent to contest such denial
of refund prior to the expiration of the 30-day period after such determination, then such advance
shall be forgiven and shall not be required to be repaid and the amount of such advance shall
offset, to the extent thereof, the amount of 280G Gross-Up Payment required to be paid.

               SECTION 6. Noncompetition and Nonsolicitation. (a) The Executive agrees that the
Executive shall not, without the prior written consent of the Board, during the period the
Executive is an employee of the Company and its Subsidiaries, and for a period of one year
following termination of employment with the Company and its Subsidiaries (such periods, the
“Restriction Period”), directly or indirectly (other than in the Executive’s capacity as an
employee of the Company and its Subsidiaries):

          (i) engage in any activity or business, or establish any new business that is in competition
with the Company or its Subsidiaries or Affiliates (such activity or business, a “Competitive
Activity”), including (A) operating, attempting to operate or participating in the operation of
a business relating to the production and marketing of nitrogen products; (B) soliciting or
attempting to solicit any customer or client or prospective customer or client of the Company or
any of its Subsidiaries or Affiliates (including, without limitation, actively sought prospective
customers or clients), to purchase any goods or services of the type sold by the Company or any of
its Subsidiaries or Affiliates from anyone other than the Company or its Subsidiaries or
Affiliates; and (C) assisting any Person in any way to do, or attempt to do, anything prohibited by
(A) or (B) above; or

          (ii) (A) solicit, recruit or hire, any person who is at such time, or who at any time during
the six-month period prior to such solicitation or hiring had been, an employee of, or exclusive
consultant then under contract with, the Company or its Subsidiaries or Affiliates, without the
Company’s prior written consent; (B) solicit or encourage any employee of the Company or its
Subsidiaries or Affiliates to leave the employment of the Company or its Subsidiaries or
Affiliates; or (C) intentionally interfere with the relationship of the Company or any of its
Subsidiaries or Affiliates with any Person or entity who or which is employed by or otherwise
engaged to perform services for the Company or any such Subsidiary or Affiliate.

The Restriction Period shall be deemed automatically extended for a period equal to any period
during which the Executive is in violation of the provisions of this Section 6(a).

               (b) Notwithstanding anything to the contrary contained in this Agreement, the Executive’s
passive ownership of less than an aggregate of 2% of any class of stock of a Person engaged,
directly or indirectly, in Competitive Activities will

 

14

not be deemed to result in a breach of Section 6(a), provided that such stock is listed on a
national securities exchange or is quoted on the National Market System of NASDAQ.

               (c) If a final and non-appealable judicial determination is made that any of the provisions of
this Section 6 constitutes an unreasonable or otherwise unenforceable restriction against the
Executive, the provisions of this Section 6 will not be rendered void but will be deemed to be
modified to the minimum extent necessary to remain in force and effect for the greatest period and
to the greatest extent that such court determines constitutes a reasonable restriction under the
circumstances. Moreover, notwithstanding the fact that any provision of this Section 6 is
determined not to be specifically enforceable, the Company will nevertheless be entitled to recover
monetary damages as a result of the Executive’s breach of such provision.

               SECTION 7. Nondisclosure of Confidential Information. (a) The Company and the
Executive agree that, during the course of the Executive’s employment with the Company, the
Executive will have access to, and has gained and will gain knowledge with respect to, the
Company’s Confidential Information (as defined below). The Executive agrees that the Executive
will not (except as may be required by law), without the prior written consent of the Company
during the period of the Executive’s employment with the Company and thereafter for so long as it
remains Confidential Information, use or disclose, or knowingly permit any unauthorized Person to
use, disclose or gain access to, any Confidential Information; provided, however,
that the Executive may disclose Confidential Information to a Person to whom disclosure is
reasonably necessary or appropriate in connection with the performance by the Executive of the
Executive’s duties under this Agreement or as required by law or as ordered by a court, provided
that in any such event, (i) the Executive shall promptly notify the Company in writing, and consult
with and assist the Company (at the Company’s sole cost) in seeking a protective order or request
for another appropriate remedy, (ii) in the event that such protective order or remedy is not
obtained, or if the Company waives compliance with the terms hereof, the Executive shall disclose
only that portion of the Confidential Information which, in the written opinion of the Executive’s
legal counsel, is legally required to be disclosed and shall exercise reasonable best efforts to
assure that confidential treatment shall be accorded to such Confidential Information by the
receiving Person or entity and (iii) the Company shall be given an opportunity to review the
Confidential Information prior to disclosure thereof.

               (b) For purposes of this Agreement, “Confidential Information” means information,
observations and data concerning the business or affairs of the Company and its Subsidiaries and
Affiliates, including, without limitation, all business information (whether or not in written
form) which relates to the Company, its Subsidiaries or Affiliates, or their customers, suppliers
or contractors or any other third parties in respect of which the Company or its Subsidiaries or
Affiliates has a business relationship or owes a duty of confidentiality, or their respective
businesses or products, and which is not known to the public generally other than as a result of
the Executive’s breach of this Agreement, including but not limited to technical information or
reports; trade secrets; unwritten knowledge and “know-how”; operating instructions; training
manuals; customer lists; customer buying records and habits; product sales records and documents,

 

15

and product development, marketing and sales strategies; market surveys; marketing plans;
profitability analyses; product cost; long-range plans; information relating to pricing,
competitive strategies and new product development; information relating to any forms of
compensation or other personnel-related information; contracts; and supplier lists. Confidential
Information will not include such information known to the Executive prior to the Executive’s
involvement with the Company or its Subsidiaries or Affiliates or information rightfully obtained
from a third party (other than pursuant to a breach by the Executive of this Agreement). Without
limiting the foregoing, the Executive agrees to keep confidential the existence of, and any
information concerning, any dispute between the Executive and the Company or its Subsidiaries and
Affiliates, except that the Executive may disclose information concerning such dispute to the court
that is considering such dispute or to the Executive’s legal counsel (provided that such counsel
agrees not to disclose any such information other than as necessary to the prosecution or defense
of such dispute).

               SECTION 8. Acknowledgments. (a) The Executive acknowledges that the Company and its
Subsidiaries and Affiliates have expended and shall continue to expend substantial amounts of time,
money and effort to develop business strategies, employee and customer relationships, relationships
and goodwill and build an effective organization. The Executive acknowledges that the Company has
a legitimate business interest and right in protecting its Confidential Information, goodwill,
employee and customer relationships, and that the Company would be seriously damaged by the
disclosure of Confidential Information and the loss or deterioration of its customer and employee
relationships. The Executive further acknowledges that the Company and its Subsidiaries and
Affiliates are entitled to protect and preserve the going concern value of the Company to the
extent permitted by law.

               (b) In light of the foregoing acknowledgments, the Executive agrees that the covenants
contained in Sections 6 and 7 are reasonable and properly required for the adequate protection of
the businesses and goodwill of the Company, its Subsidiaries and Affiliates. The Executive further
acknowledges that, although the Executive’s compliance with the covenants contained in Sections 6
and 7 may prevent the Executive from earning a livelihood in a business similar to the business of
the Company, the Executive’s experience and capabilities are such that the Executive has other
opportunities to earn a livelihood and adequate means of support for the Executive and the
Executive’s dependents.

               SECTION 9. Remedies and Injunctive Relief. The Executive acknowledges that a
violation by the Executive of any of the covenants contained in Sections 6 and 7 would cause
irreparable damage to the Company, its Subsidiaries and Affiliates in an amount that would be
material but not readily ascertainable, and that any remedy at law (including the payment of
damages) would be inadequate. Accordingly, the Executive agrees that, notwithstanding any
provision of this Agreement to the contrary, the Company shall be entitled (without the necessity
of showing economic loss or other actual damage) to injunctive relief (including temporary
restraining orders, preliminary injunctions and/or permanent injunctions) in any court of competent
jurisdiction for any actual or threatened breach of any of the covenants set forth in

 

16

Sections 6 and 7 in addition to any other legal or equitable remedies it may have. The
preceding sentence shall not be construed as a waiver of the rights that the Company may have for
damages under this Agreement or otherwise, and all of such rights shall be unrestricted.

               SECTION 10. Representations of the Executive. Prior to execution of this Agreement,
the Executive was advised by the Company of the Executive’s right to seek independent advice from
an attorney of the Executive’s own selection regarding this Agreement. The Executive acknowledges
that the Executive has entered into this Agreement knowingly and voluntarily and with full
knowledge and understanding of the provisions of this Agreement after being given the opportunity
to consult with counsel. The Executive further represents that, in entering into this Agreement,
the Executive is not relying on any statements or representations made by any of the Company’s
directors, officers, employees or agents that are not expressly set forth herein, and that the
Executive is relying only upon the Executive’s own judgment and any advice provided by the
Executive’s attorney.

               SECTION 11. Cooperation. The Executive agrees that, upon reasonable notice and
without the necessity of the Company’s obtaining a subpoena or court order, the Executive shall
provide reasonable cooperation in connection with any suit, action or proceeding (or any appeal
from any suit, action or proceeding), and any investigation and/or defense of any claims asserted
against the Company or any of its Subsidiaries or Affiliates, that relates to events occurring
during the Executive’s employment with the Company as to which the Executive may have relevant
information (including but not limited to furnishing relevant information and materials to the
Company or its designee and/or providing testimony at depositions and at trial), provided that the
Company shall reimburse the Executive for expenses reasonably incurred in connection with any such
cooperation occurring after the termination of Executive’s employment and provided that any such
cooperation occurring after the termination of the Executive’s employment shall be scheduled to the
extent reasonably practicable so as not to unreasonably interfere with the Executive’s business or
personal affairs.

               SECTION 12. Withholding. The Company may deduct and withhold from any amounts payable
under this Agreement such Federal, state, local, foreign or other taxes as are required to be
withheld pursuant to any applicable law or regulation.

               SECTION 13. Section 409A of the Code. Except as specifically provided in Section 5,
the Executive is solely responsible and liable for the satisfaction of all taxes and penalties that
may arise in connection with this Agreement (including any taxes arising under Section 409A of the
Code), and the Company shall not have any obligation to indemnify or otherwise hold the Executive
harmless from any or all of such taxes. It is intended that the provisions of this Agreement
comply with Section 409A of the Code, and all provisions of this Agreement shall be construed and
interpreted in a manner consistent with Section 409A of the Code. In particular, if necessary to
avoid imposition of penalties and additional taxes under Section 409A of the Code, notwithstanding
the timing of payment provided in any other Section of this Agreement, the timing of any amounts
payable pursuant to this Agreement shall be subject to a six-month delay in a

 

17

manner consistent with Section 409A(a)(2)(B)(i) of the Code, and the Executive shall not be
entitled to interest with respect to such six-month delay. Furthermore, notwithstanding any
provision of this Agreement to the contrary, in light of the uncertainty surrounding the proper
application of Section 409A of the Code, the Company may make necessary amendments to this
Agreement for the limited purpose of, and solely to the extent necessary to avoid imposition of
penalties and additional taxes under, Section 409A of the Code.

               SECTION 14. Assignment. (a) This Agreement is personal to the Executive and, without
the prior written consent of the Company, shall not be assignable by the Executive otherwise than
by will or the laws of descent and distribution, and any assignment in violation of this Agreement
shall be void.

               (b) Notwithstanding the foregoing Section 14(a), this Agreement and all rights of the
Executive hereunder shall inure to the benefit of and be enforceable by the Executive’s personal or
legal representatives, executors, administrators, successors, heirs, distributees, devisees and
legatees. If the Executive should die while any amounts would still be payable to him hereunder if
he had continued to live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Executive’s devisee, legatee, or other designee
or, should there be no such designee, to the Executive’s estate.

               (c) The Company shall require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business or assets of the Company (a
“Successor”) to assume and agree to perform this Agreement in the same manner and to the
same extent that the Company would have been required to perform it if no such succession had taken
place. As used in this Agreement, the term “Company” shall mean the Company as hereinbefore
defined and any Successor and any permitted assignee to which this Agreement is assigned.

               SECTION 15. Dispute Resolution. (a) Except as otherwise specifically provided
herein, the Executive and the Company each hereby irrevocably submit to the exclusive jurisdiction
of the United States District Court for the Northern District of Iowa (or, if subject matter
jurisdiction in that court is not available, in any state court located within the city of Sioux
City, Iowa) over any dispute arising out of or relating to this Agreement. Except as otherwise
specifically provided in this Agreement, the parties undertake not to commence any suit, action or
proceeding arising out of or relating to this Agreement in a forum other than a forum described in
this Section 15(a); provided, however, that nothing herein shall preclude the
Company or the Executive from bringing any suit, action or proceeding in any other court for the
purposes of enforcing the provisions of this Section 15 or enforcing any judgment obtained by the
Company or the Executive.

               (b) The agreement of the parties to the forum described in Section 15(a) is independent of the
law that may be applied in any suit, action or proceeding and the parties agree to such forum even
if such forum may under applicable law choose to apply non-forum law. The parties hereby waive, to
the fullest extent permitted by applicable

 

18

law, any objection that they now or hereafter have to personal jurisdiction or to the laying
of venue of any such suit, action or proceeding brought in an applicable court described in Section
15(a), and the parties agree that they shall not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court. The parties agree that, to
the fullest extent permitted by applicable law, a final and non-appealable judgment in any suit,
action or proceeding brought in any applicable court described in Section 15(a) shall be conclusive
and binding upon the parties and may be enforced in any other jurisdiction.

               (c) The parties hereto irrevocably consent to the service of any and all process in any suit,
action or proceeding arising out of or relating to this Agreement by the mailing of copies of such
process to such party at such party’s address specified in Section 21.

               (d) Each party hereto hereby waives, to the fullest extent permitted by applicable law, any
right it may have to a trial by jury in respect of any suit, action or proceeding arising out of or
relating to this Agreement. Each party hereto (i) certifies that no representative, agent or
attorney of any other party has represented, expressly or otherwise, that such party would not, in
the event of any suit, action or proceeding, seek to enforce the foregoing waiver and (ii)
acknowledges that it and the other party hereto have been induced to enter into this Agreement by,
among other things, the mutual waiver and certifications in this Section 15(d).

               (e) Each party shall bear its own costs and expenses (including reasonable attorneys’ fees and
expenses) incurred in connection with any dispute arising out of or relating to this Agreement.

               SECTION 16. Governing Law; Construction. This Agreement shall be deemed to be made in
the State of Iowa, and the validity, interpretation, construction and performance of this Agreement
in all respects shall be governed by the laws of the State of Iowa without regard to its principles
of conflicts of law. No provision of this Agreement or any related document shall be construed
against or interpreted to the disadvantage of any party hereto by any court or other governmental
or judicial authority by reason of such party’s having or being deemed to have structured or
drafted such provision.

               SECTION 17. Amendment; No Waiver. Except as set forth in Section 13, no provisions of
this Agreement may be amended, modified, waived or discharged except by a written document signed
by the Executive and a duly authorized officer of the Company. The failure of a party to insist
upon strict adherence to any term of this Agreement on any occasion shall not be considered a
waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement. No failure or delay by either party in
exercising any right or power hereunder will operate as a waiver thereof, nor will any single or
partial exercise of any such right or power, or any abandonment of any steps to enforce such right
or power, preclude any other or further exercise thereof or the exercise of any other right or
power. No agreements or representations, oral or otherwise, express or implied,

 

19

with respect to the subject matter hereof have been made by either party, which are not set
forth expressly in this Agreement.

               SECTION 18. Severability. If any term or provision of this Agreement is invalid,
illegal or incapable of being enforced by any applicable law or public policy, all other conditions
and provisions of this Agreement shall nonetheless remain in full force and effect so long as the
economic and legal substance of the transactions contemplated by this Agreement is not affected in
any manner materially adverse to any party. Upon any such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the parties as closely
as possible in a mutually acceptable manner in order that the transactions contemplated hereby be
consummated as originally contemplated to the fullest extent possible.

               SECTION 19. Entire Agreement. This Agreement sets forth the entire agreement of the
parties hereto in respect of the subject matter contained herein and supersedes all prior
agreements, promises, covenants, arrangements, communications, representations or warranties,
whether oral or written, by any officer, employee or representative of any party hereto. The
Executive Retention Agreement and any other prior agreements of the parties hereto in respect of
the subject matter contained herein are hereby terminated and canceled. None of the parties shall
be liable or bound to any other party in any manner by any representations and warranties or
covenants relating to such subject matter except as specifically set forth herein.

               SECTION 20. Survival. The rights and obligations of the parties under the provisions
of this Agreement, including, without limitation, Sections 5, 6, 7, 11 and 15, shall survive and
remain binding and enforceable, notwithstanding the expiration of the Term, the termination of this
Agreement, the termination of the Executive’s employment with the Company for any reason or any
settlement of the financial rights and obligations arising from the Executive’s employment
hereunder, to the extent necessary to preserve the intended benefits of such provisions.

               SECTION 21. Notices. All notices or other communications required or permitted by
this Agreement will be made in writing and all such notices or communications will be deemed to
have been duly given when delivered or (unless otherwise specified) mailed by United States
certified or registered mail, return receipt requested, postage prepaid, addressed as follows:

	 	 	 	 	 	 	 
	 

	 	If to the Company:
	 	 	 	Terra Industries Inc.
	 

	 	 	 	 	 	600 Fourth Street
	 

	 	 	 	 	 	P.O. Box 6000
	 

	 	 	 	 	 	Sioux City, IA 51102-6000
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Attention: General Counsel
	 

	 	 	 	 	 	Fax: (712) 233-5586

 

20

	 	 	 	 	 	 	 	 	 
	 

	 	If to the Executive:
	 	 	 	Michael L. Bennett	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Fax:	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	With a copy to:	 	 	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 

Attention:
	 	 
	 

	 	 	 	 	 	Fax:	 	 

or to such other address as any party may have furnished to the other in writing in accordance
herewith, except that notices of change of address shall be effective only upon receipt.

               SECTION 22. Headings and References. The headings of this Agreement are inserted for
convenience only and neither constitute a part of this Agreement nor affect in any way the meaning
or interpretation of this Agreement. When a reference in this Agreement is made to a Section, such
reference shall be to a Section of this Agreement unless otherwise indicated.

               SECTION 23. Counterpart. This Agreement may be executed in one or more counterparts
(including via facsimile), each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument and shall become effective when one or more
counterparts have been signed by each of the parties and delivered to the other party.

               SECTION 24. Construction. For purposes of this Agreement, the words “include” and
“including”, and variations thereof, shall not be deemed to be terms of limitation but rather shall
be deemed to be followed by the words “without limitation”. The term “or” is not exclusive. The
word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing
extends, and such phrase shall not simply mean if.

[Signature Page Follows]

 

21

               IN WITNESS WHEREOF, this Agreement has been executed by the parties as of the date first
written above.

	 	 	 	 	 	 	 	 	 
	 	 	TERRA INDUSTRIES INC.,	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	by	 	 	 	 
	 

	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	EXECUTIVE,	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	MICHAEL L. BENNETT	 	 

 

 

EXHIBIT A

GENERAL RELEASE

               For good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the undersigned, with the intention of binding himself, his heirs, executors,
administrators and assigns, does hereby release and forever discharge Terra Industries Inc., a
Maryland corporation (the “Company”), and its present and former officers, directors,
executives, agents, employees, affiliated companies, subsidiaries, successors, predecessors and
assigns (collectively the “Released Parties”), from any and all claims, actions, causes of
action, demands, rights, damages, debts, accounts, suits, expenses, attorneys’ fees and liabilities
of whatever kind or nature in law, equity, or otherwise, whether now known or unknown, which the
undersigned now has, owns or holds, or has at any time heretofore had, owned or held against any
Released Party, arising out of or in any way connected with the undersigned’s employment
relationship with the Company, its subsidiaries, predecessors or affiliated entities, or the
termination thereof, including without limitation, any claim for severance or vacation benefits,
unpaid wages, salary or bonus, breach of contract, wrongful discharge, impairment of economic
opportunity, intentional infliction of emotional harm or other tort or employment discrimination
under any applicable Federal, state or local statute, provision, order or regulation including but
not limited to, any claim under Title VII of the Civil Rights Act (“Title VII”), the
Federal Age Discrimination in Employment Act (“ADEA”) and any similar or analogous state
statute, excepting only (i) those obligations of the Company under that certain Employment
Agreement between the Company and the undersigned effective October 5, 2006 (the “Employment
Agreement”), pursuant to which this General Release is being executed and delivered, and (ii)
any rights to indemnification the undersigned may have under applicable corporate law, the by-laws
or certificate of incorporation of any Released Party or as an insured under any D & O or liability
insurance policy now or previously in force.

               The undersigned understands that by releasing employment discrimination claims against the
Released Parties, the undersigned also forever releases and discharges any rights he may have to
file or recover in a lawsuit he may bring himself on the same claims and also any right that he may
have to any relief that he might otherwise be entitled to as a result of any proceedings instituted
by the Equal Employment Opportunity Commission or any other comparable enforcement authority or by
the representative(s) of any class to which it is alleged the undersigned may belong.

               The undersigned acknowledges and agrees that neither the Employment Agreement nor this General
Release is to be construed in any way as an admission of any liability whatsoever by any Released
Party under Title VII, ADEA, or any other Federal or state statute or the principles of common law,
any such liability having been expressly denied.

               The undersigned further declares and represents that he has carefully read and fully
understands the terms of this General Release and the Employment Agreement,

 

23

that he has been advised and had the opportunity to seek the advice and assistance of counsel
with regard to this General Release and the Employment Agreement, that he may take up to and
including twenty-one (21) days from receipt of this General Release, to consider whether to sign
this General Release, that he may revoke this General Release within seven (7) calendar days after
signing it by delivering to the Company, at its Sioux City, Iowa offices, written notification of
revocation, and that he knowingly and voluntarily, of his own free will, without any duress, being
fully informed and after due deliberate action, accepts the terms of and signs the same as his own
free act.

	 	 	 	 	 	 	 
	Dated:

	 	 	 	Signature:	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

Michael L. Bennett

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