Document:

<PAGE>
                                                                     EXHIBIT 4.2

                             SOUTHWEST AIRLINES CO.

                         2002 BONUS SWAPA NON-QUALIFIED
                                STOCK OPTION PLAN

         SOUTHWEST AIRLINES CO., a Texas corporation (the "Company"), hereby
formulates and adopts the following 2002 Bonus SWAPA Non-Qualified Stock Option
Plan.

         1. PURPOSE. This Plan is adopted pursuant to proposed Letter of
Agreement No. 26, to the Collective Bargaining Agreement (the "Agreement")
between the Company and the Southwest Airlines Pilots Association ("SWAPA")
ratified on January 12, 1995.

         2. ADMINISTRATION. This Plan shall be administered by an Administrative
Committee (the "Committee") consisting of not more than five (5) persons
designated from time to time by the Chief Executive Officer of the Company,
including as one of its members the President of SWAPA or his or her designee.
Members of the Committee (except the President of SWAPA or his designee) may be
removed or replaced at any time by the Chief Executive Officer of the Company.
The Administrative Committee shall select one of its members as Chairman and
shall adopt such rules and regulations as it shall deem appropriate concerning
the holding of its meetings, the transaction of its business and the
administration of this Plan. A majority of the whole Committee shall constitute
a quorum, and the act of a majority of the members of the Committee present at a
meeting at which a quorum is present shall be the act of the Committee; any
decision or determination reduced to writing and signed by a majority of the
members of the Administrative Committee shall be fully as effective as if made
by a majority vote at a meeting duly called and held.

         3. GRANT OF OPTIONS; PERSONS ELIGIBLE. The Stock Option Committee of
the Board of Directors of the Company, or such other committee as may be
appointed by the Board, shall have the authority and responsibility, within the
limitations of this Plan, to grant options from time to time to persons employed
as Pilots (including Pilots in management positions retaining seniority numbers
("Management Pilots") by the Company pursuant to the Agreement and as set forth
in the schedule attached as Exhibit A and made a part hereof. Options shall be
granted at an exercise price equal to the fair market value of the Common Stock
of the Company on the date of the grant of the option with initial grants on the
date of ratification of Letter of Agreement No.

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2002 SWAPA NON-QUALIFIED STOCK OPTION PLAN                                Page 1

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26. Only persons who are employed as Pilots of the Company, including Management
Pilots on the date of the grant may be granted options under this Plan; under no
circumstances shall officers of the Company be eligible to receive options
hereunder.

         4. DEFINITIONS. An employee receiving any option under this Plan is
hereinafter referred to as an "Optionee." Any reference herein to the employment
of an Optionee with the Company shall include only employment with the Company.
The fair market value of the Common Stock on any day shall be the mean between
the highest and lowest quoted selling prices of the Common Stock on such day as
reported by the primary national stock exchange on which such stock is listed.
If no sale shall have been made on that day, or if the Common Stock is not
listed on a national exchange at that time, fair market value will be determined
by the Committee. If the date of grant is not a business day, the grant price
will be calculated using the immediately preceding business day.

         5. STOCK SUBJECT TO OPTIONS. Subject to the provisions of paragraph 12,
the number of shares of the Company's Common Stock subject at any one time to
options, plus the number of such shares then outstanding pursuant to exercises
of options, granted under this Plan, shall not exceed 7,200,000 shares. If, and
to the extent the options granted under this Plan terminate or expire without
having been exercised, new options may be granted with respect to the shares
covered by such terminated or expired options; provided that the granting and
terms of such new options shall in all respects comply with the provisions of
this Plan.

         Shares sold or distributed upon the exercise of any option granted
under this Plan may be shares of the Company's authorized and unissued Common
Stock, shares of the Company's issued Common Stock held in the Company's
treasury, or both.

         There shall be reserved at all times for sale or distribution under
this Plan a number of shares of Common Stock (either authorized and unissued
shares or shares held in the Company's treasury, or both) equal to the maximum
number of shares which may be purchased or distributed upon the exercise of
options granted under this Plan.

         Exercise of an Option in any manner shall result in a decrease in the
number of shares of Common Stock which may thereafter be available, both for
purposes of this Plan and for sale to any one individual, by the number of
shares as to which the Option is exercised.

         6. EXPIRATION AND TERMINATION OF THE PLAN. This Plan will expire on
December 31, 2006, except as to any options then outstanding under this Plan,
which shall remain in effect until they have been exercised or expired.

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2002 SWAPA NON-QUALIFIED STOCK OPTION PLAN                                Page 2

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         No modification, extension, renewal or other change in any option
granted under this Plan shall be made after the grant of such option unless the
same is consistent with the provisions of this Plan.

         7.  EXERCISABILITY AND DURATION OF OPTIONS.

         (a) Exercisability. Options granted under this Plan shall become
exercisable pursuant to the vesting schedule and requirements set forth in
Exhibit A attached hereto.

         (b) Duration. The unexercised portion of any option granted under this
Plan shall automatically and without notice terminate and become null and void
at the time of the earliest to occur of the following:

                  (1) the expiration of twelve years from the date of grant;

                  (2) The expiration of three months from the date of
termination of the Optionee's employment with the Company (unless such
termination was as a result of the circumstances set forth in subparagraphs (3)
or (4) below); provided that if the Optionee shall die during such 3-month
period the provisions of subparagraph (3) below shall apply;

                  (3) The expiration of 12 months from the Optionee's death, if
the Optionee's death occurs either during his employment with the Company,
during the three-month period following the date of termination of such
employment, or during the 24-month period following retirement as a result of
FAA-imposed mandatory retirement age; or

                  (4) The expiration of 24 months following the retirement of
the Optionee as a result of FAA-imposed mandatory retirement age; provided that
if the Optionee shall die during such 24-month period, the provisions of
subparagraph (3) above shall apply.

                  In the case of subparagraphs (2), (3) and (4) above, the
Optionee shall have the right to exercise any Option prior to such expiration to
the extent it was exercisable at the date of such termination of employment and
shall not have been exercised.

         8.  EXERCISE OF OPTIONS.

         (a) Procedure. The option granted herein shall be exercised by the
Optionee (or by the person who acquires such options by will or the laws of
descent and distribution or otherwise by reason of the death of the Optionee) as
to all or part of the shares covered by the option by giving notice of the
exercise thereof (the "Notice") to the Company. From time to time the Committee
may establish procedures relating to

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2002 SWAPA NON-QUALIFIED STOCK OPTION PLAN                                Page 2

<PAGE>

effecting such exercises. No fractional shares shall be issued as a result of
exercising an Option.

         (b) Payment. In the Notice, the Optionee shall elect whether he or she
is to pay for his or her shares in cash or in Common Stock of the Company, or
both. If payment is to be made in cash, the Optionee shall deliver to the
Company funds in the amount of the exercise price on or before the exercise
date. If payment is to be made in Common Stock, (a) it shall be valued at its
fair market value on the date of such notice, as determined pursuant to
Paragraph 4 hereof; (b) such Common Stock must have been owned by the Optionee
for at least six months prior to the exercise date; and (c) the Notice shall be
accompanied by documentation as proof of ownership for the number of shares of
Common Stock to be used as payment.

         (c) Irrevocable Election. The giving of such notice to the Company
shall constitute an irrevocable election to purchase the number of shares
specified in the notice on the date specified in the notice.

         (d) Withholding Taxes. To the extent that the exercise of any Option
granted pursuant to this Plan or the disposition of shares of Common Stock
acquired by exercise of an Option results in compensation income to the Optionee
for federal or state income tax purposes, the Optionee shall deliver to the
Company at the time of such exercise or disposition such amount of money as the
Company may require to meet its obligation under applicable tax laws or
regulations, and, if the Optionee fails to do so, the Company is authorized to
(a) withhold delivery of certificates upon exercise and (b) withhold from
remuneration then or thereafter payable to Optionee any tax required to be
withheld by reason of such resulting compensation income.

         (e) Delivery of Shares. The Company shall cause shares to be delivered
to the Optionee (or the person exercising the Optionee's options in the event of
death) as soon as practicable after the exercise date.

         9. NONTRANSFERABILITY OF OPTIONS. No option granted under this Plan or
any right evidenced thereby shall be transferable by the Optionee other than by
will or the laws of descent and distribution. During the lifetime of an
Optionee, only the Optionee (or his or her guardian or legal representative) may
exercise his or her options.

         In the event of the Optionee's death during his or her employment with
the Company, during the three-month period following the date of termination of
such employment, or during the 24-month period following FAA-mandated
retirement, the Optionee's options shall thereafter be exercisable by his or her
executor or administrator, or by the person who acquires such options by will or
the laws of descent and distribution or otherwise by reason of the death of the
Optionee.

         10. RIGHTS OF OPTIONEE. Neither the Optionee nor his or her executors,
administrators, or legal representatives shall have any of the rights of a
shareholder of

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2002 SWAPA NON-QUALIFIED STOCK OPTION PLAN                                Page 4

<PAGE>

the Company with respect to the shares subject to an option granted under this
Plan until certificates for such shares shall have been issued upon the exercise
of such option.

         11. RIGHT TO TERMINATE EMPLOYMENT. Nothing in this Plan or in any
option granted under this Plan shall confer upon any Optionee the right to
continue in the employment of the Company or affect the right of the Company or
any of its subsidiaries to terminate the Optionee's employment at any time;
subject, however, to the provisions of the Agreement.

         12.  ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC.

         (a) The existence of the Plan and the options granted hereunder shall
not affect in any way the right or power of the Board of Directors or the
shareholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's capital
structure or its business, any merger or consolidation of the Company, any issue
of debt or equity securities ahead of or affecting Common Stock or the rights
thereof, the dissolution or liquidation of the Company or any sale, lease,
exchange or other disposition of all or any part of its assets or business or
any other corporate act or proceeding.

         (b) The shares with respect to which options may be granted are shares
of Common Stock as presently constituted, but if, and whenever, prior to the
expiration of an option theretofore granted, the Company shall effect a
subdivision or consolidation of shares of Common Stock or the payment of a stock
dividend on Common Stock without receipt of consideration by the Company, the
number of shares of Common Stock with respect to which such option may
thereafter be exercised (i) in the event of an increase in the number of
outstanding shares shall be proportionately increased, and the purchase price
per share shall be proportionately reduced, and (ii) in the event of a reduction
in the number of outstanding shares shall be proportionately reduced, and the
purchase price per share shall be proportionately increased; likewise, the
number of shares to be granted pursuant to the schedule set forth in Exhibit A
shall be appropriately adjusted. In the event of any such change in the
outstanding Common Stock, the aggregate number of shares available under the
Plan shall be appropriately adjusted by the Board of Directors of the Company,
whose determination shall be conclusive.

         (c) If the Company recapitalizes or otherwise changes its capital
structure, thereafter upon any exercise of an option theretofore granted the
Optionee shall be entitled to purchase under such option, in lieu of the number
of shares of Common Stock as to which such option shall then be exercisable, the
number and class of shares of stock and securities to which the Optionee would
have been entitled pursuant to the terms of the recapitalization if, immediately
prior to such recapitalization, the Optionee had been the holder of record of
the number of shares of Common Stock as to which such option is then
exercisable. If the Company shall not be the

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2002 SWAPA NON-QUALIFIED STOCK OPTION PLAN                                Page 5

<PAGE>

surviving entity in any merger or consolidation (or survives only as a
subsidiary of an entity other than a previously wholly-owned subsidiary of the
Company) or if the Company is to be dissolved or liquidated, then unless a
surviving corporation assumes or substitutes new options for Options then
outstanding hereunder (i) the time at which such Options may be exercised shall
be accelerated and such Options shall become exercisable in full on or before a
date fixed by the Company prior to the effective date of such merger or
consolidation or such dissolution or liquidation, and (ii) upon such effective
date Options shall expire.

         (d) Except as hereinbefore expressly provided, the issuance by the
Company of shares of stock of any class or securities convertible into shares of
stock of any class, property, labor or services, upon direct sale, upon the
exercise of rights or warrants to subscribe therefor, or upon conversion of
shares or obligations of the Company convertible into such shares or other
securities, and in any case whether or not for fair value, shall not affect, and
no adjustment by reason thereof shall be made with respect to, the number of
shares of Common Stock subject to options theretofore granted or to be granted
or the purchase price per share.

         13. PURCHASE FOR INVESTMENT AND LEGALITY. The Optionee, by acceptance
of any option granted under this Plan, shall represent and warrant to the
Company that the purchase or receipt of shares of Common Stock upon the exercise
thereof shall be for investment and not with a view to distribution, provided
that such representation and warranty shall be inoperative if, in the opinion of
counsel to the Company, a proposed sale or distribution of such shares is
pursuant to an applicable effective registration statement under the Securities
Act of 1933 or is, without such representation and warranty, exempt from
registration under such Act. The Company shall file a Registration Statement on
Form S-8 pursuant to the Securities Act of 1933, as amended, covering the shares
to be offered pursuant to the Plan and will use its best efforts to maintain
such registration at all times necessary to permit holders of options to
exercise them.

         The obligation of the Company to issue shares upon the exercise of an
option shall also be subject as conditions precedent to compliance with
applicable provisions of the Securities Act of 1933, the Securities Exchange Act
of 1934, state securities laws, rules and regulations under any of the foregoing
and applicable requirements of any securities exchange upon which the Company's
securities shall be listed.

         The Company may endorse an appropriate legend referring to the
foregoing restrictions upon the certificate or certificates representing any
shares issued or transferred to the Optionee upon the exercise of any option
granted under this Plan.

         14. EFFECTIVE DATE OF PLAN. This Plan shall become effective upon its
adoption by the Board of Directors of the Company; provided, however, if the
Agreement is not ratified by SWAPA on or before August 20, 2002, this Plan shall
be null and void.

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2002 SWAPA NON-QUALIFIED STOCK OPTION PLAN                                Page 6

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2002 SWAPA NON-QUALIFIED STOCK OPTION PLAN                                Page 1

<PAGE>
                                    EXHIBIT A

STOCK OPTION GRANTS

         On the Date of Ratification of Letter Agreement No. 26 to the
Agreement, options will be granted to persons employed as Pilots by the Company
(including Management Pilots) according to the following schedule.

                        OPTION AMOUNTS PER MONTH OF HIRE

<Table>
<Caption>

                                      MONTH OF HIRE
----------------------------------------------------------------------------------------------------------------------------------
          YEAR OF HIRE               Sep          Oct         Nov         Dec         Jan          Feb         Mar         Apr
----------------------------------------------------------------------------------------------------------------------------------

<S>                               <C>          <C>         <C>          <C>         <C>         <C>         <C>           <C>
        Before Sep 1983                --           --          --          --          --           --          --          --

      Sep 1983 - Aug 1984              40           40          40          40          39           39          39          39

      Sep 1984 - Aug 1985             118          118         117         117         116          115         115         114

      Sep 1985 - Aug 1986             272          271         270         268         267          266         265         263

      Sep 1986 - Aug 1987             499          497         495         493         491          489         487         485

      Sep 1987 - Aug 1988             798          795         792         789         786          783         780         777

      Sep 1988 - Aug 1989           1,166        1,162       1,158       1,154       1,151        1,147       1,143       1,139

      Sep 1989 - Aug 1990           1,604        1,593       1,581       1,570       1,558        1,547       1,536       1,524

      Sep 1990 - Aug 1991           2,032        2,013       1,994       1,974       1,955        1,936       1,917       1,897

      Sep 1991 - Aug 1992           2,447        2,420       2,393       2,365       2,338        2,311       2,284       2,256

      Sep 1992 - Aug 1993           2,847        2,811       2,776       2,740       2,705        2,669       2,634       2,598

      Sep 1993 - Aug 1994           3,188        3,143       3,097       3,051       3,005        2,960       2,914       2,868

      Sep 1994 - Aug 1995           2,640        2,585       2,529       2,474       2,419        3,090       3,035       2,980

      Sep 1995 - Aug 1996           3,349        3,286       3,223       3,160       3,097        3,034       2,971       2,908

      Sep 1996 - Aug 1997           3,157        3,088       3,019       2,950       2,880        2,811       2,742       2,672

      Sep 1997 - Aug 1998           2,810        2,736       2,662       2,588       2,514        2,440       2,365       2,291

      Sep 1998 - Aug 1999           2,325        2,249       2,173       2,098       2,022        1,947       1,871       1,796

      Sep 1999 - Aug 2000           1,741        1,692       1,643       1,594       1,545        1,496       1,447       1,398

      Sep 2000 - Aug 2001           1,395        1,351       1,308       1,264       1,220        1,176       1,132       1,089

      Sep 2001 - Aug 2002           1,031          992         954         915         876          837         798         759

      Sep 2002 - Aug 2003             646          612         578         544         510          476         442         408

      Sep 2003 - Aug 2004             238          218         198         178         159          139         119          99

<Caption>

                                      MONTH OF HIRE
------------------------------------------------------------------------------------
          YEAR OF HIRE                 May         Jun         Jul          Aug
------------------------------------------------------------------------------------

<S>                                  <C>         <C>           <C>      <C>
        Before Sep 1983                  --          --          --           --

      Sep 1983 - Aug 1984                39          38          38           38

      Sep 1984 - Aug 1985               113         113         112          111

      Sep 1985 - Aug 1986               262         261         260          258

      Sep 1986 - Aug 1987               483         481         479          477

      Sep 1987 - Aug 1988               774         771         768          765

      Sep 1988 - Aug 1989             1,135       1,131       1,127        1,123

      Sep 1989 - Aug 1990             1,513       1,501       1,490        1,478

      Sep 1990 - Aug 1991             1,878       1,859       1,840        1,821

      Sep 1991 - Aug 1992             2,229       2,202       2,175        2,147

      Sep 1992 - Aug 1993             2,563       2,528       2,492        2,457

      Sep 1993 - Aug 1994             2,823       2,777       2,731        2,686

      Sep 1994 - Aug 1995             2,924       2,869       2,814        2,759

      Sep 1995 - Aug 1996             2,845       2,782       2,718        2,655

      Sep 1996 - Aug 1997             2,603       2,534       2,464        2,395

      Sep 1997 - Aug 1998             2,217       2,143       2,069        1,995

      Sep 1998 - Aug 1999             1,720       1,645       1,569        1,494

      Sep 1999 - Aug 2000             1,349       1,300       1,251        1,202

      Sep 2000 - Aug 2001             1,045       1,001         957          913

      Sep 2001 - Aug 2002               721         682         643          604

      Sep 2002 - Aug 2003               374         340         306          272

      Sep 2003 - Aug 2004                79          59          40           20
</Table>

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2002 SWAPA BONUS NON-QUALIFIED STOCK OPTION PLAN                         Page 1

<PAGE>

Vesting Requirements

         Options will vest immediately for all Pilots on paid status; Pilots on
unpaid status on the grant date will vest upon returning to paid status by
September 1, 2004.

New Hire Grants and Vesting

         Pilots hired after Date of Ratification will receive options according
to Exhibit A. Options will be granted on the Date of Hire and will vest upon
successfully completing probation.

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2002 SWAPA BONUS NON-QUALIFIED STOCK OPTION PLAN                         Page 2<PAGE>
                                                                    EXHIBIT 10.3

                CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT

                  This Contribution, Conveyance and Assumption Agreement (this
"Agreement") dated effective as of [o], 2002, is entered into by and among
Martin Resource Management Corporation, a Texas corporation ("MRMC"), Martin
Resource LLC, a Delaware limited liability company ("Martin LLC"), Martin
Midstream GP LLC, a Delaware limited liability company (the "GP"), Martin
Midstream Partners L.P., a Delaware limited partnership (the "MLP"), Martin
Operating GP LLC, a Delaware limited liability company (the "Operating GP"),
Martin Operating Partnership L.P., a Delaware limited partnership (the
"Operating Partnership"), Martin Gas Marine LLC, a Texas limited liability
company ("Marine LLC"), Martin Resources, Inc., a Texas corporation
("Resources"), Martin L.P. Gas, Inc., a Texas corporation ("MLP Gas"), Martin
Gas Sales LLC, a Texas limited liability company ("MGSLLC"), Martin Transport,
Inc., a Texas corporation ("Transport"), CF Martin Sulphur Holding Corporation,
a Nevada corporation ("CFM-SHC"), and Midstream Fuel Service LLC, an Alabama
limited liability company ("Midstream LLC").

                                    RECITALS

                  WHEREAS, prior to the date hereof, MRMC formed Martin LLC, as
a wholly-owned direct subsidiary, which in turn formed the GP, and contributed
$1,000 to it as a capital contribution in exchange for all of the membership
interests in the GP;

                  WHEREAS, in turn Martin LLC and the GP formed the MLP, with
the GP contributing $20 to it as a capital contribution in exchange for a 2%
general partner interest and Martin LLC contributing $980 to it as a capital
contribution in exchange for a 98% limited partner interest in the MLP;

                  WHEREAS, in turn Martin LLC formed the Operating GP, and
contributed $1,000 to it as a capital contribution in exchange for all of the
membership interests in the Operating GP;

                  WHEREAS, in turn Martin LLC and the Operating GP formed the
Operating Partnership, with the Operating GP contributing $1.00 in exchange for
a 0.1% general partner interest and Martin LLC contributing $999.0 in exchange
for a 99.9% limited partner interest in the Operating Partnership;

                  WHEREAS, Martin Gas Sales, Inc., a Texas corporation,
converted under Texas law into MGSLLC;

                  WHEREAS, Midstream Fuel Services, Inc., an Alabama
corporation, converted under Alabama law into Midstream LLC;

                  WHEREAS, Martin Gas Marine, Inc., a Texas corporation,
converted under Texas law into Marine LLC;

                                       1
<PAGE>

                  WHEREAS, each of the following transactions shall occur as of
12:01 A.M. Eastern Time on the date (the "Contribution Effective Time") that is
two days prior to the day of the closing of the offering of Common Units of the
MLP (the "Closing"):

                  1. MRMC will contribute all of the outstanding membership
interests in Marine LLC (the "Marine Interest") and all of the outstanding
common stock of Resources (the "Resources Common Stock") to Martin LLC as a
capital contribution.

                  2. MGSLLC will contribute all of the outstanding common stock
(the "MLP Gas Common Stock") of MLP Gas to the Operating Partnership in exchange
for a [o]% limited partner interest in the Operating Partnership;

                  3. Martin LLC will contribute the Marine Interest and the
Resources Common Stock to the Operating Partnership in exchange for a [o]%
limited partner interest in the Operating Partnership;

                  4. The Operating Partnership will cause each of Resources and
MLP Gas to merge with and into the Operating Partnership, with the Operating
Partnership being the surviving entity.

                  5. MGSLLC will contribute to the Operating Partnership (i)
certain LPG Assets, as set forth in the Bill of Sale described in Section 2.10
below, (ii) the [rail rack], (iii) all assets and property at MGSLLC's facility
at 4118 Pendola Point Road, including that certain Ground Lease Agreement
between MGSI and the Tampa Port Authority, (iv) the [Stanolind Terminal]
(collectively, the "LPG Assets") in exchange for a [o]% limited partner interest
in the Operating Partnership;

                  6. Midstream LLC will contribute to the Operating Partnership
those assets set forth in the Bill of Sale described in Section 2.7 below
(collectively, the "Tenn-Tom Towing Assets") in exchange for a [o]% limited
partner interest in the Operating Partnership;

                  7. Marine LLC will transfer to the Operating Partnership (i) a
25.030% interest in CF Martin Sulphur L.L.C. and (ii) certain office equipment
and vehicles (the "Marine Retained Equipment"), as more fully described in a
Bill of Sale to be executed by Marine LLC in favor of the Operating partnership
(the "Marine Retained Equipment Bill of Sale"). All of the assets and properties
described in this recital are collectively referred to herein as the "Marine
Retained Assets";

                  8. The Operating Partnership will distribute to Martin LLC
(i)(A) the Marine Retained Assets, (B) certain assets and equipment as more
fully described in a Bill of Sale to be executed by the Operating Partnership in
favor of Martin LLC (the "Retained Assets Bill of Sale"), that the Operating
Partnership received in the merger with MLP Gas described above, and (ii)(A) a
50% limited partner interest in Continental Sulphur [L.P.], (B) the lease for
the facility located in Hondo, Texas, together with all of the improvements and
assets located at such location, all as to be more fully described in an
Assignment of Lease and Bill of Sale to be

                                       2
<PAGE>

executed by the Operating Partnership in favor of Martin LLC (collectively, the
"Hondo Conveyance Documents"), and (C) the real estate, improvements and assets
comprising the facility located at Troy, Alabama, all as to be more fully
described in a Special Warranty Deed and Bill of Sale to be executed by the
Operating Partnership in favor of Martin LLC (collectively, the "Troy Conveyance
Documents"). All of the assets and properties described in this recital are
collectively referred to herein as the "Retained Assets";

                  9. Transport shall sell the 7.3 shares of the Common Stock of
CFM-SHC (the "Transport Owned Shares") held by Transport to MGSLLC in exchange
for either (i) [o] shares of the Common Stock of MRMC, or (ii) $[o] in cash;

                  WHEREAS, each of the following transactions shall occur as of
12:01 am Eastern Time on the date (the "Dissolution Effective Time") that is one
day prior to the day of the Closing:

                  1. Marine LLC and MGSLLC shall cause CFM-SHC to dissolve under
the laws of Nevada, and in such dissolution, CFM-SHC shall distribute its
assets, including its 49.5% limited partner interest in CF Martin Sulphur L.P.,
on a pro rata basis to Marine LLC and MGSLLC;

                  2. MGSLLC shall contribute the interest in CF Martin Sulphur
L.P. that it received upon the dissolution of CFM-SHC to the Operating
Partnership in exchange for a [o]% limited partner interest in the Operating
Partnership;

                  WHEREAS, each of the following transactions shall occur as of
12:01 A.M. Eastern Time on the Closing (the "Closing Day Effective Time"):

                  1. MGSLLC will contribute its [o]% limited partner interest in
the Operating Partnership to the MLP in exchange for [o] Subordinated Units;

                  2. Midstream LLC will contribute its [o]% limited partner
interest in the Operating Partnership to the MLP in exchange for [o]
Subordinated Units;

3. Martin LLC will contribute (i) a [o]% limited partner interest in the
Operating Partnership to the GP as a capital contribution, (ii) a [o]% limited
partner interest in the Operating Partnership to the MLP in exchange for [o]
subordinated units of the MLP representing limited partner interests in the MLP
("Subordinated Units"), and (iii) all of its interest in the Operating GP to the
MLP in exchange for [o] Subordinated Units;

                  4. The GP will contribute the [o]% limited partner interest in
the Operating Partnership it received from Martin LLC to the MLP in exchange for
(a) a continuation of its 2% general partner interest in the MLP and (b) the
issuance of incentive distribution rights to the GP;

                  5. The MLP will redeem the original 98% limited partner
interest in the MLP held by Martin LLC for $980 in cash.

                                       3
<PAGE>

                  6. The Operating Partnership will cause Marine LLC to merge
with and into the Operating Partnership, with the Operating Partnership being
the Surviving Entity.

                  NOW, THEREFORE, in consideration of their mutual undertakings
and agreements hereunder, the parties to this Agreement undertake and agree as
follows:

                                    ARTICLE I
                                   RECORDATION

                  SECTION 1.1 RECORDATION OF EVIDENCE OF OWNERSHIP OF ASSETS. In
connection with the conveyances and mergers that are referred to in the recitals
to this Agreement, the parties to this Agreement acknowledge that certain
jurisdictions in which the assets of the applicable parties to such conveyances
and mergers are located may require that documents be recorded by the entities
resulting from such conveyances and mergers in order to evidence title to the
assets owned by such entities. All such documents shall evidence such new
ownership and are not intended to modify, and shall not modify, any of the
terms, covenants and conditions herein set forth.

                                   ARTICLE II
           MERGERS, CONTRIBUTIONS AND DISTRIBUTIONS OF VARIOUS ASSETS

                  SECTION 2.1 CONTRIBUTION OF MARINE INTEREST AND RESOURCES
COMMON STOCK BY MRMC TO MARTIN LLC. At the Contribution Effective Time, MRMC
hereby grants, contributes, transfers, assigns and conveys to Martin LLC, its
successors and assigns, all right, title and interest in and to (i) the Marine
Interest and (ii) the Resources Common Stock as a capital contribution.

                  SECTION 2.2 CONTRIBUTION OF MLP GAS COMMON STOCK TO THE
OPERATING PARTNERSHIP. At the Contribution Effective Time, MGSLLC hereby grants,
contributes, transfers, assigns and conveys to the Operating Partnership, its
successors and assigns, all right, title and interest in and to the MLP Gas
Common Stock in exchange for a [o] % limited partner interest in the Operating
Partnership.

                  SECTION 2.3 CONTRIBUTION OF MARINE INTEREST AND RESOURCES
COMMON STOCK TO THE OPERATING PARTNERSHIP. At the Contribution Effective Time,
Martin LLC hereby grants, contributes, transfers, assigns and conveys to the
Operating Partnership, its successors and assigns, all right, title and interest
in and to (i) the Marine Interest and (ii) the Resources Common Stock in
exchange for a [o] % limited partner interest in the Operating Partnership.

                  SECTION 2.4 MERGER OF RESOURCES INTO THE OPERATING
PARTNERSHIP. Pursuant to the Agreement and Plan of Merger attached hereto as
Exhibit A, at the Contribution Effective Time, the Operating Partnership shall
cause Resources to merge with and into the Operating Partnership, with the
Operating Partnership being the surviving entity.

                  SECTION 2.5 MERGER OF MLP GAS INTO THE OPERATING PARTNERSHIP.
Pursuant to the Agreement and Plan of Merger attached hereto as Exhibit B, at
the Contribution Effective

                                       4
<PAGE>

Time, the Operating Partnership shall cause MLP Gas to merge with and into the
Operating Partnership, with the Operating Partnership being the surviving
entity.

                  SECTION 2.6 CONTRIBUTION OF LPG ASSETS BY MGSLLC TO THE
OPERATING PARTNERSHIP. At the Contribution Effective Time, MGSLLC hereby grants,
contributes, transfers, assigns and conveys to the Operating Partnership, its
successors and assigns, all right, title and interest in and to the LPG Assets,
and the Operating Partnership hereby accepts the LPG Assets in exchange for a
[o]% limited partner interest in the Operating Partnership. In order to give
full effect to the foregoing grant, contribution, transfer, assignment and
conveyance, MGSLLC, as grantor, and the Operating Partnership, as grantee, shall
execute a Bill of Sale in the form attached hereto as Exhibit C together with
such other bills of sale, special warranty deeds, conveyances or other documents
required to transfer the LPG Assets in the jurisdictions in which they are
located.

                  SECTION 2.7 CONTRIBUTION OF TENN-TOM TOWING ASSETS BY
MIDSTREAM LLC TO THE OPERATING PARTNERSHIP. At the Contribution Effective Time,
Midstream LLC hereby grants, contributes, transfers, assigns and conveys to the
Operating Partnership, its successors and assigns, all right, title and interest
in and to the Tenn-Tom Towing Assets, and the Operating Partnership hereby
accepts the Tenn-Tom Towing Assets in exchange for a [o]% limited partner
interest in the Operating Partnership. In order to give full effect to the
foregoing grant, contribution, transfer, assignment and conveyance, Midstream
LLC, as grantor, and the Operating Partnership, as grantee, shall execute a Bill
of Sale in the form attached hereto as Exhibit D together with any other bills
of sale, conveyances or other documents required by the United States Department
of Transportation or the United States Coast Guard to transfer the Tenn-Tom
Towing Assets.

                  SECTION 2.8 DISTRIBUTION OF THE MARINE RETAINED ASSETS BY
MARINE LLC TO THE OPERATING PARTNERSHIP. At the Contribution Effective Time,
Marine LLC hereby grants, distributes, transfers, assigns and conveys to the
Operating Partnership, its successors and assigns, all right, title, and
interest in and to the Marine Retained Assets. In order to give effect to the
foregoing grant, distribution, transfer, assignment and conveyance, Marine LLC,
as grantor, and the Operating Partnership, as grantee, shall execute (i) such
assignment documents as are necessary to transfer the 25.030% interest in CF
Martin Sulphur L.L.C. and (ii) the Marine Retained Equipment Bill of Sale,
together with any other bills of sale, conveyances or other documents as are
necessary to transfer the Marine Retained Assets to the Operating Partnership.

                  SECTION 2.9 DISTRIBUTION OF THE RETAINED ASSETS BY THE
OPERATING PARTNERSHIP TO MARTIN LLC. At the Contribution Effective Time, the
Operating Partnership hereby grants, distributes, transfers, assigns and conveys
to Martin LLC, its successors and assigns, all right, title, and interest in and
to the Retained Assets in exchange for the redemption of a [o]% limited partner
interest in the Operating Partnership held by Martin LLC. In order to give full
effect to the foregoing grant, distribution, transfer, assignment and
conveyance, the Operating Partnership, as grantor, and Martin LLC, as grantee,
shall execute (i) such assignment documents as are necessary to transfer the
25.030% interest in CF Martin Sulphur L.L.C., (ii) the Retained Assets Bill of
Sale, (iii) the Hondo Conveyance Documents, and (iv) the Troy

                                       5
<PAGE>

Conveyance Documents, together with any other bills of sale, conveyances or
other documents as are necessary to transfer the Retained Assets.

                  SECTION 2.10 PURCHASE OF TRANSPORT OWNED SHARES BY MGSLLC FROM
TRANSPORT. At the Contribution Effective Time, Transport hereby grants,
contributes, transfers, assigns and conveys to MGSLLC, its successors and
assigns, all right, title and interest in an to the Transport Owned Shares in
exchange for either (i) [o] shares of the Common Stock of MRMC, or (ii) $[o] in
cash.

                  SECTION 2.11 DISSOLUTION AND LIQUIDATION OF CFM-SHC. At the
Dissolution Effective Time, CFM-SHC shall liquidate, and hereby grants,
distributes, transfers, assigns and conveys to each of Marine LLC and MGSLLC,
their successors and assigns, on a pro-rata basis in accordance with the
percentage ownership that each of Marine LLC and MGSLLC hold in CFM-SHC, all
right, title and interest in and to all assets held by CFM-SHC, including its
49.5% limited partner interest in CF Martin Sulphur L.P.

                  SECTION 2.12 CONTRIBUTION OF CF MARTIN SULPHUR L.P. LIMITED
PARTNER INTEREST BY MGSLLC TO THE OPERATING PARTNERSHIP. At the Dissolution
Effective Time, MGSLLC hereby grants, contributes, transfers, assigns and
conveys to the Operating Partnership, its successors and assigns, all right,
title and interest in an to the limited partner interest in CF Martin Sulphur
L.P. that it received pursuant to Section 2.11 in exchange for a [o]% limited
partner interest in the Operating Partnership.

                  SECTION 2.13 CONTRIBUTION OF OPERATING PARTNERSHIP INTEREST BY
MGSLLC TO THE MLP. At the Closing Day Effective Time, MGSLLC hereby grants,
contributes, transfers, assigns and conveys to the MLP, its successors and
assigns, all right, title and interest of MGSLLC in and to all of its [o]%
limited partner interest in the Operating Partnership in exchange for [o]
Subordinated Units of the MLP.

                  SECTION 2.14 CONTRIBUTION OF OPERATING PARTNERSHIP INTEREST BY
MIDSTREAM LLC TO THE MLP. At the Closing Day Effective Time, Midstream LLC
hereby grants, contributes, transfers, assigns and conveys to the MLP, its
successors and assigns, all right, title and interest of Midstream LLC in and to
its [o]% limited partner interest in the Operating Partnership in exchange for
[o] Subordinated Units of the MLP.

                  SECTION 2.15 CONTRIBUTION OF OPERATING PARTNERSHIP INTEREST BY
MARTIN LLC TO THE GP. At the Closing Day Effective Time, Martin LLC hereby
grants, contributes, transfers, assigns and conveys to the GP, its successors
and assigns, all right, title and interest of Martin LLC in and to a [o]%
limited partner interest in the Operating Partnership as a contribution to the
capital of the GP.

                  SECTION 2.16 CONTRIBUTION OF OPERATING PARTNERSHIP INTEREST BY
THE GP TO THE MLP. At the Closing Day Effective Time, the GP hereby grants,
contributes, transfers, assigns and conveys to the MLP, its successors and
assigns, all right, title and interest of the GP in and to the [o]% limited
partner interest in the Operating Partnership that it received from Martin LLC
(following the transaction set forth in Section 2.15 above) in exchange for (a)
a

                                       6
<PAGE>

continuation of its 2% general partner interest in the MLP and (b) the issuance
to it by the MLP of [o] incentive distribution rights under the First Amended
and Restated Agreement of Limited Partnership of the MLP.

                  SECTION 2.17 CONTRIBUTION OF OPERATING PARTNERSHIP INTEREST
AND THE OPERATING GP INTEREST BY MARTIN LLC TO THE MLP. At the Closing Day
Effective Time, Martin LLC hereby grants, contributes, transfers, assigns and
conveys to the MLP, its successors and assigns, all right, title and interest of
Martin LLC in and to (a) all of the remaining [o]% limited partner interest in
the Operating Partnership held by Martin LLC and (b) the 100% membership
interest in the Operating GP held by Martin LLC to the MLP in exchange for [o]
Subordinated Units of the MLP.

                  SECTION 2.18 REDEMPTION OF MARTIN LLC'S LIMITED PARTNER
INTEREST IN THE MLP. At the Closing Day Effective Time, the MLP hereby redeems
from Martin LLC all of Martin LLC's original 98% limited partner interest in the
MLP (exclusive of any Subordinated Units or other interests that Martin LLC has
received pursuant to the terms of this Article II), and in exchange therefore,
the MLP hereby pays to Martin LLC $980 in cash.

                  SECTION 2.19 MERGER OF MARINE LLC INTO THE OPERATING
PARTNERSHIP. Pursuant to the Agreement and Plan of Merger attached hereto as
Exhibit E, at the effective time set forth in such Agreement and Plan of Merger,
the Operating Partnership shall cause Marine LLC to merge with and into the
Operating Partnership, with the Operating Partnership being the surviving
entity.

                                   ARTICLE III
                        ASSUMPTION OF CERTAIN LIABILITIES

                  SECTION 3.1 ASSUMPTION OF LIABILITIES AND OBLIGATIONS BY THE
OPERATING PARTNERSHIP AND THE MLP.

                  (a) In connection with the contribution of the Tenn-Tom Towing
         Assets by Midstream LLC and the LPG Assets by MGSLLC to the Operating
         Partnership, as well as all of the assets (other than the Retained
         Assets) acquired by the Operating Partnership in connection with the
         mergers of Marine LLC, Resources and MLP Gas into the Operating
         Partnership, the Operating Partnership hereby assumes and agrees to
         duly and timely pay, perform and discharge all obligations and
         liabilities incurred with respect to the Contributed Assets, that arise
         from and after the date of this Agreement, to the full extent that
         either Midstream LLC, MGSLLC, Marine LLC, Resources or MLP Gas would
         have been obligated to pay, perform and discharge such obligations and
         liabilities in the future, were it not for the execution and delivery
         of this Agreement; provided, however, that said assumption and
         agreement to duly and timely pay, perform and discharge such
         obligations and liabilities shall not increase the obligation of the
         Operating Partnership with respect to such obligations and liabilities
         beyond that of any of Midstream as to the Tenn-Tom Towing Assets,
         MGSLLC as to the LPG Assets, or Marine LLC, Resources or MLP Gas as to
         the assets (other than the Retained Assets) acquired by the Operating
         Partnership in connection with such mergers, to the extent of

                                       7
<PAGE>
         such interest conveyed by any of Midstream LLC, MGSLLC, Marine LLC,
         Resources or MLP Gas. For purposes of this Agreement, the term
         "Contributed Assets" shall mean, collectively, the Tenn-Tom Towing
         Assets, the LPG Assets, the Transport Owned Shares, and all of the
         assets acquired by the Operating Partnership in connection with (i) any
         of the contributions of member interests, stock or assets to the
         Operating Partnership and (ii) any of the mergers of Marine LLC,
         Resources and MLP Gas, but the Contributed Assets shall not include the
         Retained Assets.

                  (b) In connection with the transfers of the Contributed Assets
         to the Operating Partnership, and the transfers of the Operating
         Partnership interests to the MLP, the Operating Partnership and the MLP
         will assume the existing debt as set forth on Schedule 3.1 attached
         hereto.

                                   ARTICLE IV
                                  TITLE MATTERS

                  SECTION 4.1 ENCUMBRANCES. The distributions of the Contributed
Assets in connection with the mergers of Marine LLC, Resources and MLP Gas into
the Operating Partnership, under this Agreement are made expressly subject to
all recorded and unrecorded liens, encumbrances, agreements, defects,
restrictions, adverse claim and all laws, rules, regulations, ordinances,
judgments and orders of governmental authorities or tribunals having or
asserting jurisdiction over the applicable Contributed Assets, and operations
conducted in connection therewith, in each case to the extent the same are valid
and enforceable and affect such Contributed Assets, including, without
limitation, (a) all matters that a current visual inspection of such Contributed
Assets would reflect, and (b) the liabilities assumed by the Operating
Partnership with respect to such Contributed Assets.

                  SECTION 4.2 Disclaimer of Warranties; Subrogation; Waiver of
Bulk Sales Laws.

                  (a) (i) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN
         THIS AGREEMENT, THE MLP AND THE OPERATING PARTNERSHIP ACKNOWLEDGE AND
         AGREE THAT MRMC, MIDSTREAM LLC, MGSLLC, MARINE LLC, RESOURCES, AND MLP
         GAS HAVE NOT MADE, DO NOT MAKE, AND SPECIFICALLY NEGATE AND DISCLAIM,
         ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR
         GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS,
         IMPLIED OR STATUTORY, ORAL OR WRITTEN, PAST OR PRESENT (ALL OF WHICH
         ARE EXPRESSLY DISCLAIMED BY MRMC, MIDSTREAM LLC, MGSLLC, MARINE LLC,
         RESOURCES AND MLP GAS), REGARDING (1) THE TITLE, VALUE, NATURE, QUALITY
         OR CONDITION OF THE CONTRIBUTED ASSETS, (2) THE INCOME TO BE DERIVED
         FROM THE CONTRIBUTED ASSETS, (3) THE SUITABILITY OF THE CONTRIBUTED
         ASSETS FOR ANY AND ALL ACTIVITIES AND USES WHICH THE MLP MAY CONDUCT
         THEREON, (4) THE COMPLIANCE OF OR BY THE CONTRIBUTED ASSETS, OR THEIR
         OPERATIONS WITH ANY LAWS (INCLUDING WITHOUT LIMITATION ANY ZONING,
         ENVIRONMENTAL PROTECTION, POLLUTION OR LAND USE LAWS, RULES,
         REGULATIONS, ORDERS OR REQUIREMENTS), OR (5) THE HABITABILITY,
         MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR A
         PARTICULAR PURPOSE OF THE CONTRIBUTED ASSETS.

                                       8
<PAGE>

                  (ii) THE MLP AND THE OPERATING PARTNERSHIP ACKNOWLEDGE AND
         AGREE THAT THEY HAVE HAD THE OPPORTUNITY TO INSPECT THE CONTRIBUTED
         ASSETS, AND THAT THEY ARE RELYING SOLELY ON THEIR OWN INVESTIGATION OF
         THE CONTRIBUTED ASSETS, AND NOT ON ANY INFORMATION PROVIDED OR TO BE
         PROVIDED BY MRMC, MIDSTREAM LLC, MGSLLC, MARINE LLC, RESOURCES OR MLP
         GAS. MRMC, MIDSTREAM LLC, MGSLLC, MARINE LLC, RESOURCES AND MLP GAS ARE
         NOT LIABLE OR BOUND IN ANY MANNER BY ANY VERBAL OR WRITTEN STATEMENTS,
         REPRESENTATIONS OR INFORMATION PERTAINING TO THE CONTRIBUTED ASSETS,
         FURNISHED BY ANY AGENT, EMPLOYEE, SERVANT OR THIRD PARTY.

                  (iii) THE MLP AND THE OPERATING PARTNERSHIP ACKNOWLEDGE THAT
         TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE CONTRIBUTION OF THE
         CONTRIBUTED ASSETS, AS PROVIDED FOR HEREIN IS MADE ON AN "AS IS",
         "WHERE IS" BASIS WITH ALL FAULTS AND THE CONTRIBUTED ASSETS, ARE
         CONTRIBUTED OR DISTRIBUTED AND CONVEYED BY MIDSTREAM, MGSI, MARINE LLC,
         RESOURCES AND MLP GAS SUBJECT TO THE FOREGOING. THIS PARAGRAPH SHALL
         SURVIVE SUCH CONTRIBUTION OR DISTRIBUTION AND CONVEYANCE OR THE
         TERMINATION OF THIS AGREEMENT.

                  (iv) THE PROVISIONS OF THIS SECTION 4.2 HAVE BEEN NEGOTIATED
         BY MRMC, MIDSTREAM LLC, MGSLLC, MARINE LLC, RESOURCES, MLP GAS, THE MLP
         AND THE OPERATING PARTNERSHIP AFTER DUE CONSIDERATION AND ARE INTENDED
         TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY REPRESENTATIONS OR
         WARRANTIES OF MRMC, MIDSTREAM LLC, MGSLLC, MARINE LLC, RESOURCES AND
         MLP GAS, WHETHER EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO THE
         CONTRIBUTED ASSETS, THAT MAY ARISE PURSUANT TO ANY LAW NOW OR HEREAFTER
         IN EFFECT, OR OTHERWISE.

                  (b) The distributions and contributions of the Contributed
         Assets, made under this Agreement are made with full rights of
         substitution and subrogation of the Operating Partnership, and all
         persons claiming by, through and under the Operating Partnership, to
         the extent assignable, in and to all covenants and warranties by the
         predecessors-in-title of Midstream LLC, MGSLLC, Marine LLC, Resources
         and MLP Gas, and with full subrogation of all rights accruing under
         applicable statutes of limitation and all rights of action of warranty
         against all former owners of the Contributed Assets.

                  (c) Midstream LLC, MGSLLC, Marine LLC, Resources, MLP Gas, the
         MLP, the GP, the Operating Partnership and Operating GP agree that the
         disclaimers contained in this Section 4.2 are "conspicuous"
         disclaimers. Any covenants implied by statute or

                                       9
<PAGE>

         law by the use of the words "grant," "convey," "bargain," "sell,"
         "assign," "transfer," "deliver," or "set over" or any of them or any
         other words used in this Agreement or any exhibits hereto are hereby
         expressly disclaimed, waived or negated.

                  (d) Each of the parties hereto hereby waives compliance with
         any applicable bulk sales law or any similar law in any applicable
         jurisdiction in respect of the transactions contemplated by this
         Agreement. "Laws" means any and all laws, statutes, ordinances, rules
         or regulations promulgated by a governmental authority, orders of a
         governmental authority, judicial decisions, decisions of arbitrators or
         determinations of any governmental authority or court.

                                    ARTICLE V
                               FURTHER ASSURANCES

                  SECTION 5.1 FURTHER ASSURANCES. From time to time after the
date hereof, and without any further consideration, Midstream LLC, MGSLLC,
Martin LLC, the GP, the MLP, the Operating GP and the Operating Partnership
shall execute, acknowledge and deliver all such additional deeds, assignments,
bills of sale, conveyances, instruments, notices, releases, acquittances and
other documents, and will do all such other acts and things, all in accordance
with applicable law, as may be necessary or appropriate more fully and
effectively to vest in the Operating Partnership and the MLP and their
successors and assigns beneficial and record title to the Contributed Assets
hereby contributed and assigned to the Operating Partnership or intended so to
be and to more fully and effectively carry out the purposes and intent of this
Agreement.

                  SECTION 5.2 OTHER ASSURANCES. From time to time after the date
hereof, and without any further consideration, each of the parties to this
Agreement shall execute, acknowledge and deliver all such additional
instruments, notices and other documents, and will do all such other acts and
things, all in accordance with applicable law, as may be necessary or
appropriate to more fully and effectively carry out the purposes and intent of
this Agreement.

                                   ARTICLE VI
                                  MISCELLANEOUS

                  SECTION 6.1 HEADINGS; REFERENCES; INTERPRETATION. All article
and section headings in this Agreement are for convenience only and shall not be
deemed to control or affect the meaning or construction of any of the provisions
hereof. The words "hereof," "herein" and "hereunder" and words of similar
import, when used in this Agreement, shall refer to this Agreement as a whole,
including without limitation, all exhibits attached hereto, and not to any
particular provision of this Agreement. All references herein to articles,
sections, and exhibits shall, unless the context requires a different
construction, be deemed to be references to the articles, sections and exhibits
of this Agreement, respectively, and all such Exhibits attached hereto are
hereby incorporated herein and made a part hereof for all purposes. All personal
pronouns used in this Agreement, whether used in the masculine, feminine or
neuter gender, shall include all other genders, and the singular shall include
the plural and vice versa. The use herein of the word "including" following any
general statement, term or matter shall not be construed to limit such
statement, term or matter to the specific items or matters set forth

                                       10
<PAGE>

immediately following such word or to similar items or matters, whether or not
non-limiting language (such as "without limitation," "but not limited to," or
words of similar import) is used with reference thereto, but rather shall be
deemed to refer to all other items or matters that could reasonably fall within
the broadest possible scope of such general statement, term or matter.

                  SECTION 6.2 SUCCESSORS AND ASSIGNS. The Agreement shall be
binding upon and inure to the benefit of the parties signatory hereto and their
respective successors and assigns.

                  SECTION 6.3 NO THIRD PARTY RIGHTS. The provisions of this
Agreement are intended to bind the parties signatory hereto as to each other and
are not intended to and do not create rights in any other person or confer upon
any other person any benefits, rights or remedies and no person is or is
intended to be a third party beneficiary of any of the provisions of this
Agreement.

                  SECTION 6.4 COUNTERPARTS. This Agreement may be executed in
any number of counterparts, all of which together shall constitute one agreement
binding on the parties hereto.

                  SECTION 6.5 GOVERNING LAW. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Texas applicable
to contracts made and to be performed wholly within such state without giving
effect to conflict of law principles thereof, except to the extent that it is
mandatory that the law of some other jurisdiction, shall apply.

                  SECTION 6.6 SEVERABILITY. If any of the provisions of this
Agreement are held by any court of competent jurisdiction to contravene, or to
be invalid under, the laws of any political body having jurisdiction over the
subject matter hereof, such contravention or invalidity shall not invalidate the
entire Agreement. Instead, this Agreement shall be construed as if it did not
contain the particular provision or provisions held to be invalid, and an
equitable adjustment shall be made and necessary provision added so as to give
effect to the intention of the parties as expressed in this Agreement at the
time of execution of this Agreement.

                  SECTION 6.7 AMENDMENT OR MODIFICATION. This Agreement may be
amended or modified from time to time only by the written agreement of all the
parties hereto.

                  SECTION 6.8 INTEGRATION. This Agreement, together with that
certain Omnibus Agreement dated of even date herewith, to be entered into by and
among MRMC, certain of MRMC's subsidiaries, the MLP, the GP, the Operating
Partnership and the Operating GP (the "Omnibus Agreement"), supersedes all
previous understandings or agreements between the parties, whether oral or
written, with respect to its subject matter. This document is an integrated
agreement which contains the entire understanding of the parties. No
understanding, representation, promise or agreement, whether oral or written,
other than those contained in the Omnibus Agreement, is intended to be or shall
be included in or form part of this Agreement unless it is contained in a
written amendment hereto executed by the parties hereto after the date of this
Agreement.

                                       11
<PAGE>

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

                                       MARTIN RESOURCE MANAGEMENT CORPORATION

                                       By:
                                          --------------------------------------
                                          Robert D. Bondurant
                                          Chief Financial Officer

                                       MARTIN MIDSTREAM GP LLC

                                       By:
                                          --------------------------------------
                                          Robert D. Bondurant
                                          Chief Financial Officer

                                       MARTIN MIDSTREAM PARTNERS L.P.

                                       By:  MARTIN MIDSTREAM GP LLC

                                            By:
                                               ---------------------------------
                                               Robert D. Bondurant
                                               Chief Financial Officer

                                       MARTIN GAS MARINE LLC

                                       By:  Martin Resource LLC,
                                            As Sole Member

                                            By:  Martin Resource Management
                                                 Corporation
                                                 As Sole Member

                                                 By:
                                                    ----------------------------
                                                    Robert D. Bondurant
                                                    Chief Financial Officer

                                       12
<PAGE>

                                       MARTIN RESOURCES, INC.

                                       By:
                                          --------------------------------------
                                          Robert D. Bondurant
                                          Chief Financial Officer

                                       MARTIN GAS SALES LLC

                                       By:
                                          --------------------------------------
                                          Robert D. Bondurant
                                          Chief Financial Officer

                                       MARTIN L.P. GAS, INC.

                                       By:
                                          --------------------------------------
                                          Robert D. Bondurant
                                          Chief Financial Officer

                                       MARTIN TRANSPORT, INC.

                                       By:
                                          --------------------------------------
                                          Robert D. Bondurant
                                          Chief Financial Officer

                                       MARTIN RESOURCE LLC

                                       By:  Martin Resource Management
                                            Corporation
                                            As Sole Member

                                            By:
                                               ---------------------------------
                                               Robert D. Bondurant
                                               Chief Financial Officer

                                       13
<PAGE>

                                       CF MARTIN SULPHUR HOLDING CORPORATION

                                       By:
                                          --------------------------------------
                                          Robert D. Bondurant
                                          Chief Financial Officer

                                       MIDSTREAM FUEL SERVICE LLC

                                       By:
                                          --------------------------------------
                                          Robert D. Bondurant
                                          Chief Financial Officer

                                       MARTIN OPERATING GP LLC

                                       By:  Martin Resource LLC
                                            As Sole Member

                                            By:  Martin Resource Management
                                                 Corporation
                                                 As Sole Member

                                                 By:
                                                    ----------------------------
                                                    Name:
                                                         -----------------------
                                                    Title:
                                                          ----------------------

                                       MARTIN OPERATING PARTNERSHIP L.P.

                                       By:  Martin Operating GP LLC, its General
                                            Partner

                                            By:
                                               ---------------------------------
                                               Name:
                                                    ----------------------------
                                               Title:
                                                     ---------------------------

                                       14
<PAGE>

                                    EXHIBIT A

<PAGE>

                          AGREEMENT AND PLAN OF MERGER

                                     BETWEEN

                             MARTIN RESOURCES, INC.

                                       AND

                        MARTIN OPERATING PARTNERSHIP L.P.

                              DATED AS OF [o], 2002

<PAGE>

                          AGREEMENT AND PLAN OF MERGER

         This AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of [o],
2002, but effective as of the Effective Time (as defined in Section 1.2),
between Martin Resources, Inc., a Texas corporation ("Resources"), and Martin
Operating Partnership L.P., a Delaware limited partnership (the "Partnership");

                                   WITNESSETH:

         WHEREAS, the Board of Directors of Resources has determined that it is
in the best interests of Resources and its sole shareholder to effectuate a
merger whereby Resources will be merged with and into the Partnership with the
Partnership being the surviving entity (the "Merger");

         WHEREAS, Martin Operating GP LLC, a Delaware limited liability company
and the General Partner of the Partnership (the "General Partner"), has
determined that it is in the best interests of the Partnership and its partners
to effectuate the Merger;

         WHEREAS, the Board of Directors of Resources and the sole member of the
General Partner have each approved the Merger, upon the terms and subject to the
conditions set forth in this Agreement; and

         NOW, THEREFORE, in consideration of the foregoing and of the covenants
and agreements contained herein, and of other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

                                    ARTICLE I
                                   THE MERGER

         Section 1.1 The Merger. Subject to the terms and conditions of this
Agreement, and in accordance with the Texas Business Corporation Act (the
"TBCA") and the Delaware Revised Uniform Limited Partnership Act (the "DRULPA"),
at the Effective Time, Resources shall be merged with and into the Partnership
in accordance with this Agreement, and the separate corporate existence of
Resources shall thereupon cease. The Partnership shall continue as the surviving
entity in the Merger (sometimes hereinafter referred to as the "Surviving
Entity"), and all the properties, rights, privileges, powers and franchises of
Resources shall vest in the Surviving Entity without any transfer or assignment
having occurred, and all debts, liabilities and duties of Resources shall attach
to the Surviving Entity, all in accordance with the TBCA and the DRULPA.

         Section 1.2 Filing Certificate of Merger; Effective Time. As soon as
practicable following the satisfaction or, to the extent permitted by applicable
law, waiver of the conditions set forth in Article IV, if this Agreement shall
not have been terminated prior thereto as provided in Section 5.1, Resources and
the Partnership shall cause (i) articles of merger meeting the requirements of
Section 5.04 of the TBCA (the "Articles of Merger") and (ii) a certificate of

<PAGE>

merger meeting the requirements of Section 17-211 of the DRULPA (together with
the Articles of Merger, the "Merger Filings") to be properly executed and filed
in accordance with each such section. The Merger shall become effective at the
later of (1) the time of filing of the Merger Filings with the Secretaries of
State of the States of Texas and Delaware and (2) at 12:01 Eastern time on [o]
(the "Effective Time").

                                   ARTICLE II
                                SURVIVING ENTITY

         Section 2.1 Name of Surviving Entity. The name of the Surviving Entity
shall be "Martin Operating Partnership L.P."

         Section 2.2 Certificate of Limited Partnership of Surviving Entity. The
Certificate of Limited Partnership of the Partnership shall continue to be the
Certificate of Limited Partnership of the Surviving Entity until amended as
provided therein and under the DRULPA.

                                   ARTICLE III
                          CANCELLATION OF COMMON STOCK

         Section 3.1 Cancellation of Common Stock in the Merger. At the
Effective Time, by virtue of the Merger and without any action on the part of
Resources or the sole shareholder of Resources, (i) each issued and outstanding
share of Common Stock shall be automatically cancelled, and (ii) each issued
share, if any, held by Resources as a treasury share shall be cancelled without
receipt of any consideration therefor.

                                   ARTICLE IV
                              CONDITIONS PRECEDENT

         The respective obligation of each party to effect the Merger is subject
to the satisfaction or waiver of the following conditions:

                  (a) None of the parties hereto shall be subject to any decree,
         order or injunction of a court of competent jurisdiction, U.S. or
         foreign, which prohibits the consummation of the Merger.

                  (b) Other than the filing of the Merger Filings provided for
         under Article I, all material consents, appeals, authorizations of, or
         filings or registrations with and notices to any governmental or
         regulatory authority required of Resources and the Partnership or any
         of their subsidiaries to consummate the Merger and the other
         transactions contemplated hereby, shall have been made or obtained.

                  (c) Any consents required under instruments evidencing
         indebtedness and any consents required under any contracts to which
         Resources or any subsidiary of Resources is a party, shall have been
         obtained.

                                      A-2
<PAGE>

                                    ARTICLE V
                        TERMINATION, AMENDMENT AND WAIVER

         Section 5.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time by action of the Board of Directors of Resources or
the General Partner.

         Section 5.2 Effect of Termination. In the event of termination of this
Agreement as provided in Section 5.1, this Agreement shall forthwith become void
and have no effect, without any liability or obligation on the part of Resources
or the Partnership.

         Section 5.3 Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.

         Section 5.4 Waiver. At any time prior to the Effective Time, the
parties may waive compliance by the other parties with any of the agreements
contained in this Agreement, or may waive any of the conditions to consummation
of the Merger contained in this Agreement. Any agreement on the part of a party
to any such waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. The failure of any party to this Agreement to
assert any of its rights under this Agreement or otherwise shall not constitute
a waiver of such rights.

                                   ARTICLE VI
                               GENERAL PROVISIONS

         Section 6.1 Assignment; Binding Effect; Benefit. Neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned by
any of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other parties. Subject to the preceding sentence,
this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns. Notwithstanding
anything contained in this Agreement to the contrary, nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement.

         Section 6.2 Entire Agreement. This Agreement and any documents
delivered by the parties in connection herewith constitute the entire agreement
among the parties with respect to the subject matter hereof and supersede all
prior agreements and understandings among the parties with respect thereto. No
addition to or modification of any provision of this Agreement shall be binding
upon any party hereto unless made in writing and signed by all parties hereto.

         Section 6.3 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without regard to
its rules of conflict of laws.

         Section 6.4 Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all

                                      A-3
<PAGE>

such counterparts shall together constitute one and the same instrument. Each
counterpart may consist of a number of copies hereof each signed by less than
all, but together signed by all of the parties hereto.

         Section 6.5 Headings. Headings of the Articles and Sections of this
Agreement are for the convenience of the parties only and shall be given no
substantive or interpretative effect whatsoever.

                                      A-4
<PAGE>

         IN WITNESS WHEREOF, Resources and the Partnership have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the date first written above.

                                       MARTIN RESOURCES, INC.

                                       By:
                                          --------------------------------------
                                          Robert D. Bondurant
                                          Chief Financial Officer

                                       MARTIN OPERATING PARTNERSHIP L.P.

                                       By:  Martin Operating GP LLC
                                            Its General Partner

                                            By:  Martin Resource LLC
                                                 Its Sole Member

                                                 By:  Martin Resource Management
                                                      Corporation
                                                      Its Sole Member

                                                      By:
                                                         -----------------------
                                                         Robert D. Bondurant
                                                         Chief Financial Officer

                                      A-5
<PAGE>

                                    EXHIBIT B

<PAGE>

                          AGREEMENT AND PLAN OF MERGER

                                     BETWEEN

                              MARTIN L.P. GAS, INC.

                                       AND

                        MARTIN OPERATING PARTNERSHIP L.P.

                              DATED AS OF [o], 2002

<PAGE>

                          AGREEMENT AND PLAN OF MERGER

         This AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of [o],
2002, but effective as of the Effective Time (as defined in Section 1.2),
between Martin L.P. Gas, Inc., a Texas corporation ("MLPG"), and Martin
Operating Partnership L.P., a Delaware limited partnership (the "Partnership");

                                   WITNESSETH:

         WHEREAS, the Board of Directors of MLPG has determined that it is in
the best interests of MLPG and its sole shareholder to effectuate a merger
whereby MLPG will be merged with and into the Partnership with the Partnership
being the surviving entity (the "Merger");

         WHEREAS, Martin Operating GP LLC, a Delaware limited liability company
and the General Partner of the Partnership (the "General Partner"), has
determined that it is in the best interests of the Partnership and its partners
to effectuate the Merger;

         WHEREAS, the Board of Directors of MLPG and the sole member of the
General Partner have each approved the Merger, upon the terms and subject to the
conditions set forth in this Agreement; and

         NOW, THEREFORE, in consideration of the foregoing and of the covenants
and agreements contained herein, and of other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

                                    ARTICLE I
                                   THE MERGER

         Section 1.1 The Merger. Subject to the terms and conditions of this
Agreement, and in accordance with the Texas Business Corporation Act (the
"TBCA") and the Delaware Revised Uniform Limited Partnership Act (the "DRULPA"),
at the Effective Time, MLPG shall be merged with and into the Partnership in
accordance with this Agreement, and the separate corporate existence of MLPG
shall thereupon cease. The Partnership shall continue as the surviving entity in
the Merger (sometimes hereinafter referred to as the "Surviving Entity"), and
all the properties, rights, privileges, powers and franchises of MLPG shall vest
in the Surviving Entity without any transfer or assignment having occurred, and
all debts, liabilities and duties of MLPG shall attach to the Surviving Entity,
all in accordance with the TBCA and the DRULPA.

         Section 1.2 Filing Certificate of Merger; Effective Time. As soon as
practicable following the satisfaction or, to the extent permitted by applicable
law, waiver of the conditions set forth in Article IV, if this Agreement shall
not have been terminated prior thereto as provided in Section 5.1, MLPG and the
Partnership shall cause (i) articles of merger meeting the requirements of
Section 5.04 of the TBCA (the "Articles of Merger") and (ii) a certificate of
merger meeting the requirements of Section 17-211 of the DRULPA (together with
the Articles

<PAGE>

of Merger, the "Merger Filings") to be properly executed and filed in accordance
with each such section. The Merger shall become effective at the later of (1)
the time of filing of the Merger Filings with the Secretaries of State of the
States of Texas and Delaware and (2) at 12:01 a.m. Eastern time on [o] (the
"Effective Time").

                                   ARTICLE II
                                SURVIVING ENTITY

         Section 2.1 Name of Surviving Entity. The name of the Surviving Entity
shall be "Martin Operating Partnership L.P."

         Section 2.2 Certificate of Limited Partnership of Surviving Entity. The
Certificate of Limited Partnership of the Partnership shall continue to be the
Certificate of Limited Partnership of the Surviving Entity until amended as
provided therein and under the DRULPA.

                                   ARTICLE III
                          CANCELLATION OF COMMON STOCK

         Section 3.1 Cancellation of Common Stock in the Merger. At the
Effective Time, by virtue of the Merger and without any action on the part of
MLPG or the sole shareholder of MLPG, (i) each issued and outstanding share of
Common Stock shall be automatically cancelled, and (ii) each issued share, if
any, held by MLPG as a treasury share shall be cancelled without receipt of any
consideration therefor.

                                   ARTICLE IV
                              CONDITIONS PRECEDENT

         The respective obligation of each party to effect the Merger is subject
to the satisfaction or waiver of the following conditions:

                  (a) None of the parties hereto shall be subject to any decree,
         order or injunction of a court of competent jurisdiction, U.S. or
         foreign, which prohibits the consummation of the Merger.

                  (b) Other than the filing of the Merger Filings provided for
         under Article I, all material consents, appeals, authorizations of, or
         filings or registrations with and notices to any governmental or
         regulatory authority required of MLPG and the Partnership or any of
         their subsidiaries to consummate the Merger and the other transactions
         contemplated hereby, shall have been made or obtained.

                  (c) Any consents required under instruments evidencing
         indebtedness and any consents required under any contracts to which
         MLPG or any subsidiary of MLPG is a party, shall have been obtained.

                                      B-2
<PAGE>

                                    ARTICLE V
                        TERMINATION, AMENDMENT AND WAIVER

         Section 5.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time by action of the Board of Directors of MLPG or the
General Partner.

         Section 5.2 Effect of Termination. In the event of termination of this
Agreement as provided in Section 5.1, this Agreement shall forthwith become void
and have no effect, without any liability or obligation on the part of MLPG or
the Partnership.

         Section 5.3 Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.

         Section 5.4 Waiver. At any time prior to the Effective Time, the
parties may waive compliance by the other parties with any of the agreements
contained in this Agreement, or may waive any of the conditions to consummation
of the Merger contained in this Agreement. Any agreement on the part of a party
to any such waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. The failure of any party to this Agreement to
assert any of its rights under this Agreement or otherwise shall not constitute
a waiver of such rights.

                                   ARTICLE VI
                               GENERAL PROVISIONS

         Section 6.1 Assignment; Binding Effect; Benefit. Neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned by
any of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other parties. Subject to the preceding sentence,
this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns. Notwithstanding
anything contained in this Agreement to the contrary, nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement.

         Section 6.2 Entire Agreement. This Agreement and any documents
delivered by the parties in connection herewith constitute the entire agreement
among the parties with respect to the subject matter hereof and supersede all
prior agreements and understandings among the parties with respect thereto. No
addition to or modification of any provision of this Agreement shall be binding
upon any party hereto unless made in writing and signed by all parties hereto.

         Section 6.3 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without regard to
its rules of conflict of laws.

         Section 6.4 Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument. Each counterpart may

                                      B-3
<PAGE>

consist of a number of copies hereof each signed by less than all, but together
signed by all of the parties hereto.

         Section 6.5 Headings. Headings of the Articles and Sections of this
Agreement are for the convenience of the parties only and shall be given no
substantive or interpretative effect whatsoever.

                                      B-4
<PAGE>

         IN WITNESS WHEREOF, MLPG and the Partnership have caused this Agreement
to be signed by their respective officers thereunto duly authorized, all as of
the date first written above.

                                       MARTIN L.P. GAS, INC.

                                       By:
                                          --------------------------------------
                                          Robert D. Bondurant
                                          Chief Financial Officer

                                       MARTIN OPERATING PARTNERSHIP L.P.

                                       By:  Martin Operating GP LLC
                                            Its General Partner

                                            By:  Martin Resource LLC
                                                 Its Sole Member

                                                 By:  Martin Resource Management
                                                      Corporation
                                                      Its Sole Member

                                                      By:
                                                         -----------------------
                                                         Robert D. Bondurant
                                                         Chief Financial Officer

                                      B-5
<PAGE>

                                    EXHIBIT C

<PAGE>

                             CONVEYANCE, ASSIGNMENT
                                AND BILL OF SALE

         Recording Requested by and When Recorded Return to: Baker Botts L.L.P.,
2001 Ross Avenue, Dallas, Texas 75201, Attn: Chad D. Burkhardt.

                     CONVEYANCE, ASSIGNMENT AND BILL OF SALE

         This Conveyance, Assignment and Bill of Sale (this "Conveyance"),
effective as of 12:01 A.M. Eastern Time on [o] (the "Effective Date"), is from
MARTIN GAS SALES LLC, a Texas limited liability company (herein called
"Grantor"), and in favor of MARTIN OPERATING PARTNERSHIP L.P., whose mailing
address is 4200 Stone Road, Kilgore Texas 75662 (herein called "Grantee").

                                    ARTICLE I
                          GRANTING AND HABENDUM CLAUSES

         1.1 GRANTING AND HABENDUM CLAUSES. For good and valuable consideration,
the receipt and sufficiency of which Grantee hereby acknowledges, Grantor hereby
contributes, conveys, assigns, transfers, delivers, and sets over unto Grantee,
its successors and assigns, all right, title, interests and estate of Grantor in
and to the following described property, to-wit:

         ALL OF THE ASSETS SET FORTH ON SCHEDULE A ATTACHED HERETO

The property described in this Section 1.1 shall be referred to herein
collectively as the "Subject Property".

         TO HAVE AND TO HOLD the Subject Property, subject to the terms and
conditions hereof, unto Grantee, its successors and assigns, forever.

                                   ARTICLE II
                      ENCUMBRANCES AND WARRANTY DISCLAIMERS

         2.1 PERMITTED ENCUMBRANCES. This Conveyance is made and accepted
expressly subject to (a) all liens, charges, encumbrances, contracts,
agreements, instruments, obligations, defects, restrictions, security interests,
options or preferential rights to purchase, adverse claims, reservations,
exceptions, easements, rights-of-way, conditions, leases, other matters
affecting the Subject Property or to which it is subject; and (b) to all matters
that a current on the ground survey or visual inspection would reflect.

         2.2 CONTRIBUTION AGREEMENT. This Conveyance is expressly made subject
to the terms and conditions of that certain Contribution, Conveyance and
Assumption Agreement dated as of [o], 2002, among Grantor, Grantee and the other
parties thereto (the "Contribution Agreement"). All capitalized terms used
herein shall have the meanings given to such terms in the Contribution
Agreement, unless otherwise defined herein. Nothing contained in this

<PAGE>

Conveyance shall in any way affect the provisions set forth in the Contribution
Agreement nor shall this Conveyance expand or contract any rights or remedies
under the Contribution Agreement. This Conveyance is intended only to effect the
transfer of the Subject Property to Grantee as provided for in the Contribution
Agreement and shall be governed entirely in accordance with the terms and
conditions of the Contribution Agreement. In the event of a conflict between the
terms of this Conveyance and the terms of the Contribution Agreement, the terms
of the Contribution Agreement shall prevail.

         2.3 DISCLAIMER OF WARRANTIES; SUBROGATION. Except as expressly provided
herein or in the Contribution Agreement, this Conveyance is made, and is
accepted by Grantee, without warranty of title, express, implied or statutory,
and without recourse, but with full substitution and subrogation of Grantee, and
all persons claiming by, through, and under Grantee, to the extent assignable,
in and to all covenants and warranties by the predecessors in title of Grantor
and with full subrogation of all rights accruing under applicable statutes of
limitation or prescription and all rights of action of warranty against all
former owners of the Subject Property. Except as expressly provided herein or in
the Contribution Agreement, any covenants implied by statute or by the use of
the words "convey", "sell", "assign", "transfer", "deliver", or "set over" or
any of them or any other words used in this Conveyance, are hereby expressly
disclaimed, waived and negated.

                                   ARTICLE III
                                  MISCELLANEOUS

         3.1 FURTHER ASSURANCES. Grantor and Grantee agree to take all such
further actions and to execute, acknowledge and deliver all such further
documents that are necessary or useful in carrying out the purposes of this
Conveyance. So long as authorized by applicable law so to do, Grantor agrees to
execute, acknowledge and deliver to Grantee all such other additional
instruments, notices, affidavits, deeds, conveyances, assignments and other
documents and to do all such other and further acts and things as may be
necessary or useful to more fully and effectively grant, bargain, assign,
convey, transfer and deliver to Grantee the Subject Property conveyed hereby or
intended so to be conveyed.

         3.2 SUCCESSORS AND ASSIGNS; NO THIRD PARTY BENEFICIARY. This Conveyance
shall be binding upon, and shall and inure to the benefit of, Grantor and
Grantee and their successors and assigns. The provisions of this Conveyance are
not intended to and do not create rights in any other person or entity or confer
upon any other person or entity any benefits, rights or remedies and no person
or entity is or is intended to be a third party beneficiary of any of the
provisions of this Conveyance.

         3.3 GOVERNING LAW. This Conveyance and the legal relations between the
parties shall be governed by, and construed in accordance with, the laws of the
State of Texas, excluding any conflict of law rule which would refer any issue
to the laws of another jurisdiction, except when it is mandatory that the law of
the jurisdiction wherein the Subject Property is located shall apply.

                                      C-2
<PAGE>

         3.4 HEADINGS; REFERENCES; DEFINED TERMS. All Section headings in this
Conveyance are for convenience only and shall not be deemed to control or affect
the meaning or construction of any of the provisions hereof. The words "hereof",
"herein" and "hereunder" and words of similar import, when used in this
Conveyance, shall refer to this Conveyance as a whole, including, without
limitation, all Schedules and Exhibits attached hereto, and not to any
particular provision of this Conveyance.

         3.5 COUNTERPARTS. This Conveyance may be executed in any number of
counterparts, all of which together shall constitute one agreement binding on
the parties hereto.

         3.6 SEVERABILITY. If any of the provisions of this Conveyance are held
by any court of competent jurisdiction to contravene, or to be invalid under,
the laws of any political body having jurisdiction over the subject matter
hereof, such contravention or invalidity shall not invalidate the entire
agreement. Instead, this Conveyance shall be construed as if it did not contain
the particular provision or provisions held to be invalid and an equitable
adjustment shall be made and necessary provision added so as to give effect to
the intention of the parties as expressed in this Conveyance at the time of
execution of this Conveyance.

                                      C-3
<PAGE>

         IN WITNESS WHEREOF, this Conveyance has been duly executed by the
parties hereto on the dates of the acknowledgments set forth below, to be
effective, however, as of the Effective Date.

                                       GRANTOR:

                                       MARTIN GAS SALES LLC,

                                       By:  Martin Resource LLC,
                                            Its sole member

                                            By:  Martin Resource Management
                                                 Corporation,
                                                 Its sole member

                                                 By:
                                                    ----------------------------
                                                    Name:
                                                         -----------------------
                                                    Title:
                                                          ----------------------

                                       GRANTEE

                                       MARTIN OPERATING
                                       PARTNERSHIP L.P.

                                       By:  Martin Operating GP LLC,
                                            Its general partner

                                            By:  Martin Midstream Partners L.P.,
                                                 Its sole member

                                                 By:  Martin Midstream GP LLC,
                                                      Its general partner

                                                      By:
                                                         -----------------------
                                                         Name:
                                                              ------------------
                                                         Title:
                                                               -----------------

                                      C-4
<PAGE>

THE STATE OF TEXAS                  )
                                    )
COUNTY OF _________                 )

         This instrument was acknowledged before me on the ____ day of
___________, 2002, by ______________, ______________ of [o], on behalf of and in
[HIS/HER] capacity as __________ of [o].

                                       -----------------------------------------
                                       NOTARY PUBLIC

My Commission Expires:

-----------------------------

THE STATE OF TEXAS                  )
                                    )
COUNTY OF _________                 )

         This instrument was acknowledged before me on the ____ day of
___________, 2002, by ______________, ______________ of [o], on behalf of and in
[HIS/HER] capacity as __________ of [o].

                                       -----------------------------------------
                                       NOTARY PUBLIC

My Commission Expires:

-----------------------------

                                      C-5
<PAGE>

                                   SCHEDULE A

                                      C-6
<PAGE>

                                    EXHIBIT D

<PAGE>

                             CONVEYANCE, ASSIGNMENT
                                AND BILL OF SALE

         Recording Requested by and When Recorded Return to: Baker Botts L.L.P.,
2001 Ross Avenue, Dallas, Texas 75201, Attn: Chad D. Burkhardt.

                     CONVEYANCE, ASSIGNMENT AND BILL OF SALE

         This Conveyance, Assignment and Bill of Sale (this "Conveyance"),
effective as of 12:01 A.M. Eastern Time on [o] (the "Effective Date"), is from
MIDSTREAM LLC, an Alabama limited liability company (herein called "Grantor"),
and in favor of MARTIN OPERATING PARTNERSHIP L.P., whose mailing address is 4200
Stone Road, Kilgore Texas 75662 (herein called "Grantee").

                                    ARTICLE I
                          GRANTING AND HABENDUM CLAUSES

         1.1 GRANTING AND HABENDUM CLAUSES. For good and valuable consideration,
the receipt and sufficiency of which Grantee hereby acknowledges, Grantor hereby
contributes, conveys, assigns, transfers, delivers, and sets over unto Grantee,
its successors and assigns, all right, title, interests and estate of Grantor in
and to the following described property, to-wit:

         ALL OF THE ASSETS SET FORTH ON SCHEDULE A ATTACHED HERETO

The property described in this Section 1.1 shall be referred to herein
collectively as the "Subject Property".

         TO HAVE AND TO HOLD the Subject Property, subject to the terms and
conditions hereof, unto Grantee, its successors and assigns, forever.

                                   ARTICLE II
                      ENCUMBRANCES AND WARRANTY DISCLAIMERS

         2.1 PERMITTED ENCUMBRANCES. This Conveyance is made and accepted
expressly subject to (a) all liens, charges, encumbrances, contracts,
agreements, instruments, obligations, defects, restrictions, security interests,
options or preferential rights to purchase, adverse claims, reservations,
exceptions, easements, rights-of-way, conditions, leases, other matters
affecting the Subject Property or to which it is subject; and (b) to all matters
that a current on the ground survey or visual inspection would reflect.

         2.2 CONTRIBUTION AGREEMENT. This Conveyance is expressly made subject
to the terms and conditions of that certain Contribution, Conveyance and
Assumption Agreement dated as of [o], 2002, among Grantor, Grantee and the other
parties thereto (the "Contribution Agreement"). All capitalized terms used
herein shall have the meanings given to such terms in the Contribution
Agreement, unless otherwise defined herein. Nothing contained in this Conveyance
shall in any way affect the provisions set forth in the Contribution Agreement
nor

<PAGE>

shall this Conveyance expand or contract any rights or remedies under the
Contribution Agreement. This Conveyance is intended only to effect the transfer
of the Subject Property to Grantee as provided for in the Contribution Agreement
and shall be governed entirely in accordance with the terms and conditions of
the Contribution Agreement. In the event of a conflict between the terms of this
Conveyance and the terms of the Contribution Agreement, the terms of the
Contribution Agreement shall prevail.

         2.3 DISCLAIMER OF WARRANTIES; SUBROGATION. Except as expressly provided
herein or in the Contribution Agreement, this Conveyance is made, and is
accepted by Grantee, without warranty of title, express, implied or statutory,
and without recourse, but with full substitution and subrogation of Grantee, and
all persons claiming by, through, and under Grantee, to the extent assignable,
in and to all covenants and warranties by the predecessors in title of Grantor
and with full subrogation of all rights accruing under applicable statutes of
limitation or prescription and all rights of action of warranty against all
former owners of the Subject Property. Except as expressly provided herein or in
the Contribution Agreement, any covenants implied by statute or by the use of
the words "convey", "sell", "assign", "transfer", "deliver", or "set over" or
any of them or any other words used in this Conveyance, are hereby expressly
disclaimed, waived and negated.

                                   ARTICLE III
                                  MISCELLANEOUS

         3.1 FURTHER ASSURANCES. Grantor and Grantee agree to take all such
further actions and to execute, acknowledge and deliver all such further
documents, including all bills of sales and other instruments as are required by
the United States Department of Transportation or the United States Coast Guard
to transfer any of the Subject Assets, that are necessary or useful in carrying
out the purposes of this Conveyance. So long as authorized by applicable law so
to do, Grantor agrees to execute, acknowledge and deliver to Grantee all such
other additional instruments, notices, affidavits, deeds, conveyances,
assignments and other documents and to do all such other and further acts and
things as may be necessary or useful to more fully and effectively grant,
bargain, assign, convey, transfer and deliver to Grantee the Subject Property
conveyed hereby or intended so to be conveyed.

         3.2 SUCCESSORS AND ASSIGNS; NO THIRD PARTY BENEFICIARY. This Conveyance
shall be binding upon, and shall and inure to the benefit of, Grantor and
Grantee and their successors and assigns. The provisions of this Conveyance are
not intended to and do not create rights in any other person or entity or confer
upon any other person or entity any benefits, rights or remedies and no person
or entity is or is intended to be a third party beneficiary of any of the
provisions of this Conveyance.

         3.3 GOVERNING LAW. This Conveyance and the legal relations between the
parties shall be governed by, and construed in accordance with, the laws of the
State of Texas, excluding any conflict of law rule which would refer any issue
to the laws of another jurisdiction, except when it is mandatory that the law of
the jurisdiction wherein the Subject Property is located shall apply.

                                      D-2
<PAGE>

         3.4 HEADINGS; REFERENCES; DEFINED TERMS. All Section headings in this
Conveyance are for convenience only and shall not be deemed to control or affect
the meaning or construction of any of the provisions hereof. The words "hereof",
"herein" and "hereunder" and words of similar import, when used in this
Conveyance, shall refer to this Conveyance as a whole, including, without
limitation, all Schedules and Exhibits attached hereto, and not to any
particular provision of this Conveyance.

         3.5 COUNTERPARTS. This Conveyance may be executed in any number of
counterparts, all of which together shall constitute one agreement binding on
the parties hereto.

         3.6 SEVERABILITY. If any of the provisions of this Conveyance are held
by any court of competent jurisdiction to contravene, or to be invalid under,
the laws of any political body having jurisdiction over the subject matter
hereof, such contravention or invalidity shall not invalidate the entire
agreement. Instead, this Conveyance shall be construed as if it did not contain
the particular provision or provisions held to be invalid and an equitable
adjustment shall be made and necessary provision added so as to give effect to
the intention of the parties as expressed in this Conveyance at the time of
execution of this Conveyance.

                                      D-3
<PAGE>

         IN WITNESS WHEREOF, this Conveyance has been duly executed by the
parties hereto on the dates of the acknowledgments set forth below, to be
effective, however, as of the Effective Date.

                                       GRANTOR:

                                       MARTIN MIDSTREAM LLC,

                                       By:  Martin Resource Management
                                            Corporation,
                                            Its sole member

                                            By:
                                               ---------------------------------
                                               Name:
                                                    ----------------------------
                                               Title:
                                                     ---------------------------

                                       GRANTEE

                                       MARTIN OPERATING PARTNERSHIP L.P.

                                       By:  Martin Operating GP LLC,
                                            Its general partner

                                            By:  Martin Midstream Partners L.P.,
                                                 Its sole member

                                                 By:  Martin Midstream GP LLC,
                                                      Its general partner

                                                      By:
                                                         -----------------------
                                                         Name:
                                                              ------------------
                                                         Title:
                                                               -----------------

                                      D-4
<PAGE>

THE STATE OF TEXAS                  )
                                    )
COUNTY OF _________                 )

         This instrument was acknowledged before me on the ____ day of
___________, 2002, by ______________, ______________ of [o], on behalf of and in
[HIS/HER] capacity as __________ of [o].

                                       ----------------------------------------
                                       NOTARY PUBLIC

My Commission Expires:

-----------------------------

THE STATE OF TEXAS                  )
                                    )
COUNTY OF _________                 )

         This instrument was acknowledged before me on the ____ day of
___________, 2002, by ______________, ______________ of [o], on behalf of and in
[HIS/HER] capacity as __________ of [o].

                                       ----------------------------------------
                                       NOTARY PUBLIC

My Commission Expires:

-----------------------------

                                      D-5
<PAGE>

                                   SCHEDULE A

                                      D-6
<PAGE>

                                    EXHIBIT E

<PAGE>

                          AGREEMENT AND PLAN OF MERGER

                                     BETWEEN

                              MARTIN GAS MARINE LLC

                                       AND

                        MARTIN OPERATING PARTNERSHIP L.P.

                              DATED AS OF [o], 2002

<PAGE>

                          AGREEMENT AND PLAN OF MERGER

         This AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of [o],
2002, but effective as of the Effective Time (as defined in Section 1.2),
between Martin Gas Marine LLC, a Texas limited liability company ("Marine"), and
Martin Operating Partnership L.P., a Delaware limited partnership (the
"Partnership");

                                   WITNESSETH:

         WHEREAS, the sole member of Marine has determined that it is in the
best interests of Marine sole member to effectuate a merger whereby Marine will
be merged with and into the Partnership with the Partnership being the surviving
entity (the "Merger");

         WHEREAS, Martin Operating GP LLC, a Delaware limited liability company
and the General Partner of the Partnership (the "General Partner"), has
determined that it is in the best interests of the Partnership and its partners
to effectuate the Merger;

         WHEREAS, the sole member of Marine and the sole member of the General
Partner have each approved the Merger, upon the terms and subject to the
conditions set forth in this Agreement; and

         NOW, THEREFORE, in consideration of the foregoing and of the covenants
and agreements contained herein, and of other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

                                  ARTICLE VII
                                   THE MERGER

         Section 1.1 The Merger. Subject to the terms and conditions of this
Agreement, and in accordance with the Texas Limited Liability Company Act (the
"TLLCA") and the Delaware Revised Uniform Limited Partnership Act (the
"DRULPA"), at the Effective Time, Marine shall be merged with and into the
Partnership in accordance with this Agreement, and the separate corporate
existence of Marine shall thereupon cease. The Partnership shall continue as the
surviving entity in the Merger (sometimes hereinafter referred to as the
"Surviving Entity"), and all the properties, rights, privileges, powers and
franchises of Marine shall vest in the Surviving Entity without any transfer or
assignment having occurred, and all debts, liabilities and duties of Marine
shall attach to the Surviving Entity, all in accordance with the TBCA and the
DRULPA.

         Section 1.2 Filing Certificate of Merger; Effective Time. As soon as
practicable following the satisfaction or, to the extent permitted by applicable
law, waiver of the conditions set forth in Article IV, if this Agreement shall
not have been terminated prior thereto as provided in Section 5.1, Marine and
the Partnership shall cause (i) articles of merger meeting the requirements of
the TLLCA (the "Articles of Merger") and (ii) a certificate of merger meeting
the requirements of Section 17-211 of the DRULPA (together with the Articles of
Merger, the "Merger Filings") to be properly executed and filed in accordance
with each such section. The

<PAGE>

Merger shall become effective at the later of (1) the time of filing of the
Merger Filings with the Secretaries of State of the States of Texas and Delaware
and (2) at 12:01 a.m. Eastern time on [o] (the "Effective Time").

                                   ARTICLE II
                                SURVIVING ENTITY

         Section 2.1 Name of Surviving Entity. The name of the Surviving Entity
shall be "Martin Operating Partnership L.P."

         Section 2.2 Certificate of Limited Partnership of Surviving Entity. The
Certificate of Limited Partnership of the Partnership shall continue to be the
Certificate of Limited Partnership of the Surviving Entity until amended as
provided therein and under the DRULPA.

                                   ARTICLE III
                          CANCELLATION OF COMMON STOCK

         Section 3.1 Cancellation of Membership Interests in the Merger. At the
Effective Time, by virtue of the Merger and without any action on the part of
Marine or the sole member of Marine, all outstanding membership interests in
Marine shall be automatically cancelled.

                                   ARTICLE IV
                              CONDITIONS PRECEDENT

         The respective obligation of each party to effect the Merger is subject
to the satisfaction or waiver of the following conditions:

                  (a) None of the parties hereto shall be subject to any decree,
         order or injunction of a court of competent jurisdiction, U.S. or
         foreign, which prohibits the consummation of the Merger.

                  (b) Other than the filing of the Merger Filings provided for
         under Article I, all material consents, appeals, authorizations of, or
         filings or registrations with and notices to any governmental or
         regulatory authority required of Marine and the Partnership or any of
         their subsidiaries to consummate the Merger and the other transactions
         contemplated hereby, shall have been made or obtained.

                  (c) Any consents required under instruments evidencing
         indebtedness and any consents required under any contracts to which
         Marine or any subsidiary of Marine is a party, shall have been
         obtained.

                                      E-2
<PAGE>

                                    ARTICLE V
                        TERMINATION, AMENDMENT AND WAIVER

         Section 5.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time by action of the sole member of Marine or the
General Partner.

         Section 5.2 Effect of Termination. In the event of termination of this
Agreement as provided in Section 5.1, this Agreement shall forthwith become void
and have no effect, without any liability or obligation on the part of Marine or
the Partnership.

         Section 5.3 Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.

         Section 5.4 Waiver. At any time prior to the Effective Time, the
parties may waive compliance by the other parties with any of the agreements
contained in this Agreement, or may waive any of the conditions to consummation
of the Merger contained in this Agreement. Any agreement on the part of a party
to any such waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. The failure of any party to this Agreement to
assert any of its rights under this Agreement or otherwise shall not constitute
a waiver of such rights.

                                   ARTICLE VI
                               GENERAL PROVISIONS

         Section 6.1 Assignment; Binding Effect; Benefit. Neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned by
any of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other parties. Subject to the preceding sentence,
this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns. Notwithstanding
anything contained in this Agreement to the contrary, nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement.

         Section 6.2 Entire Agreement. This Agreement and any documents
delivered by the parties in connection herewith constitute the entire agreement
among the parties with respect to the subject matter hereof and supersede all
prior agreements and understandings among the parties with respect thereto. No
addition to or modification of any provision of this Agreement shall be binding
upon any party hereto unless made in writing and signed by all parties hereto.

         Section 6.3 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without regard to
its rules of conflict of laws.

         Section 6.4 Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all

                                      E-3
<PAGE>

such counterparts shall together constitute one and the same instrument. Each
counterpart may consist of a number of copies hereof each signed by less than
all, but together signed by all of the parties hereto.

         Section 6.5 Headings. Headings of the Articles and Sections of this
Agreement are for the convenience of the parties only and shall be given no
substantive or interpretative effect whatsoever.

                                      E-4
<PAGE>

         IN WITNESS WHEREOF, Marine and the Partnership have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the date first written above.

                                  MARTIN GAS MARINE LLC

                                  By:  Martin Operating Partnership L.P.
                                       Its Sole member

                                       By:  Martin Operating GP LLC
                                            Its General Partner

                                            By:  Martin Resource LLC
                                                 Its Sole Member

                                                 By:  Martin Resource Management
                                                      Corporation
                                                      Its Sole Member

                                                 By:
                                                    ----------------------------
                                                    Robert D. Bondurant
                                                    Chief Financial Officer

                                  MARTIN OPERATING PARTNERSHIP L.P.

                                  By:  Martin Operating GP LLC
                                       Its General Partner

                                       By:  Martin Resource LLC
                                            Its Sole Member

                                            By:  Martin Resource Management
                                                 Corporation
                                                 Its Sole Member

                                                 By:
                                                    ----------------------------
                                                    Robert D. Bondurant
                                                    Chief Financial Officer

                                      E-5

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