AGREEMENT FOR CONTRIBUTION OF ASSETS IN EXCHANGE FOR PARTNERSHIP INTERESTS

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EXHIBIT 10.28

AGREEMENT FOR CONTRIBUTION OF ASSETS

IN EXCHANGE FOR PARTNERSHIP INTERESTS

THIS AGREEMENT is made this _____ day of December, 2002, by and between

V-1 OIL CO., an Idaho corporation ("Transferor") and Heritage Operating, L.P., a

Delaware limited partnership ("Operating"), Heritage Propane Partners, L.P., a

Delaware limited partnership (the "Partnership"), and each of Sandra G. Truex,

Kristie B. Pederson, Mark J. Bennion, Julie B. Mertlich and Patti B. Eaton (each

an "Owner" and collectively these individuals are the "Owners") for purposes of

Sections 8.5, 8.20, 8.23, 12.4, 12.5, 12.6, 12.7 and 12.9.

RECITALS:

A. Transferor owns and operates a business engaged in the retail sales

of propane gas and related products and services, and all activities associated

with that business (the "Operations") in those cities and areas set forth on

Annex I attached hereto and incorporated herein by reference (the "Plant

Facilities"). Transferor uses the Plant Facilities to sell and distribute LP-gas

products and related services in the areas surrounding the Plant Facilities to a

number of individuals and entities (the "Customers"). Transferor desires to

either contribute or sell, as the case may be, all of the assets used in the

Operations other than the "Excluded Assets".

B. Transferor has agreed to contribute to the Partnership, as a capital

contribution thereto, all of the assets of the Transferor described in Section

1.1 as the "Contributed Property" in exchange for the HPP Units (hereinafter

defined).

C. Transferor has agreed to sell to Operating, for the consideration

described in Section 1.2, all of the assets of the Transferor described in

Section 1.2 (the "Additional Property").

D. The Partnership has agreed to contribute to Operating, as a capital

contribution thereto, all of the Contributed Property (hereinafter defined).

E. The Partnership wishes to acquire the Contributed Property used in

the Operations from the Transferor and, thereafter, contribute the same to

Operating upon the terms and conditions set forth herein.

F. Operating wishes to acquire the Additional Property used in the

Operations from the Transferor and the Contributed Property used in the

Operations from the Partnership upon the terms and conditions set forth herein.

H. At the time of the Closing, Operating will assume all obligations of

the Partnership to the Transferor arising hereunder (other than the obligations

to issue HPP Units as hereinafter defined) and issue to the Partnership

additional limited partnership interests in Operating in exchange for the

Partnership's contribution to Operating of the Contributed Property, and as an

accommodation to the Partnership and Operating the Transferor will assign the

Contributed Property directly to Operating.

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DEFINITIONS

The following definitions are used in this Agreement as defined in the

Sections set forth opposite such terms:

<Table>

<Caption>

Defined Term Section Reference

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

<S> <C>

Accounts Receivable 3

Additional Property 1.2

Agreed Value 2

Assets 1.2

Assumed Obligations 6

Average Price 2.4

Billings Fire 2.5

Cash Portion of the Value 1.2

CERCLA 7.5

Certification 7.13

Claims Fund 4.2

Closing 11.1

Code 7.9

Collection Period 3

commercially reasonable best efforts 8.11

Consents 7.2

Contracts 1.2

Contributed Customer Tanks 1.1

Contributed Property 1.1

Count 5.1

Credits 2.2

Customers Recitals

Customer Deposits 2.2

Customer Leases 1.2

Customer Tanks 1.2

Damage 10.1

Deeds 8.2

Delivery Credit 2.2

Disclosure Letters 8.15

Environmental Condition 7.5(b)

Environmental Fund 4.2

ERISA 7.9

Exchange Act 8.16

Exchange Number 1.3

Excluded Assets 1.2

Final Count 5.1

Formula Price 2.4

Hardware 1.2

HPP Unit 1.1

HPP Unit Value 1.3

</Table>

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<Table>

<Caption>

Defined Term Section Reference

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

<S> <C>

HPP Units 1.1

Indemnified Party 10.3

Indemnifying Party 10.3

Interest Factor 9.7(a)

Leased Real Property Schedule 1.2(v)

Lease and Option 8.2

Operations Recitals

Operating Recitals

Owned Real Property Schedule 1.1(ii) and 1.2(v)

Partnership Recitals

Partnership Agreement 7.12

Permitted Encumbrances 7.2

Plant Facilities Recitals

Processing Fee 3

Propane Inventory 1.2

Real Property 1.2

Relocation Cost 8.22

Restricted Area 8.5(a)(1)

Restricted Party 8.5(a)

Restricted Parties 8.5(a)

Sale Customer Tanks 1.2

SEC Documents 9.4

Securities Act 7.12

Security Agreement 4.2

Tank Bucket 5.2

Tax Payment 9.7(a)

Title Commitments 12.1

Transferred Employee 8.3(a)

Transferor Recitals

Transition Services Agreement 8.23

Wyoming Property 8.21

</Table>

NOW, THEREFORE, the parties hereto agree as follows:

1.0 CONTRIBUTION AND SALE OF ASSETS.

1.1 Contribution. Transferor will contribute, in exchange for the

Exchange Number of the Common Units in the Partnership listed for trading on the

New York Stock Exchange (collectively, the "HPP Units" and individually an "HPP

Unit"), and the Partnership will thereby acquire, effective upon the Closing,

the following property and rights which are used in the Operations (the

"Contributed Property") consisting of (i) certain customer storage tanks,

together with pigtails, regulators and other related equipment ("Contributed

Customer Tanks") which are listed on the attached Schedule 1.1(i).

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1.2 Sale. Transferor will sell to Operating for FIFTEEN MILLION

AND NO/100 DOLLARS ($15,000,000.00) in cash, plus the payments for the (i)

Propane Inventory (defined below) and (ii) the Hardware (defined below), each as

provided in Section 2.1, the payment for the Accounts Receivable as provided in

Section 3, and adjustments pursuant to Section 2.2 (collectively, the "Cash

Portion of the Value"), and Operating will thereby acquire effective upon the

Closing the following property and rights which are used in the Operations (the

"Additional Property") consisting of (i) customer storage tanks, together with

pigtails, regulators and other related equipment not otherwise included in the

Contributed Customer Tanks ("Sale Customer Tanks"), (ii) bulk plant storage

tanks with pumps, motors, piping, piers, fencing and other related equipment,

(iii) motor vehicles, (iv) miscellaneous office equipment, tools and other

related equipment, (v) rights in real estate directly related to Transferor's

Operations (the "Real Property"), (vi) customer tank leases ("Customer Leases"),

(vii) contracts with Customers and suppliers ("Contracts"), (viii) the telephone

number(s) and post office box numbers of the Transferor, (ix) Customer lists and

records, goodwill, trade names (including "V-1 Propane," "V-1," and "V-1 Oil")

including the Registered Trademark No. 2,617,855 for V-1 Oil, and (x) all

inventories of propane gas ("Propane Inventory") and of new and saleable

hardware, appliances, fittings, and related items held for sale to Customers

(the "Hardware"), the Transferor's Accounts Receivable (the "Accounts

Receivable"), and all other tangible property used in the Operations not

otherwise included in the Contributed Property, most of which are described on

Schedules 1.2(i) through 1.2(ix), excluding therefrom the property described on

Schedules 1.2(xi) (the "Excluded Assets"). (The Contributed Property and the

Additional Property acquired hereby are collectively referred to as the

"Assets." (The Contributed Customer Tanks and the Sale Customer Tanks are

collectively the "Customer Tanks.")

1.3 Exchange Number. The "Exchange Number" shall be that number

of HPP Units rounded to the nearest whole unit that is equal to the number

derived by dividing $15,000,000 (the "HPP Unit Value") by the Formula Price.

(For example, if the Average Price is $27.50, then the Formula Price is $27.50 x

.97 = $26.675 and the Exchange Number is $15,000,000 / $26.675 or 562,324 HPP

Units.)

2. AGREED VALUE AND ADJUSTMENTS. The Agreed Value for all of the Assets

other than the Hardware (valued pursuant to Section 2.1(b)), the Propane

Inventory (valued pursuant to Section 2.1(a)) and the Accounts Receivable

(valued pursuant to Section 3) (the "Agreed Value") shall be THIRTY MILLION AND

NO/100 DOLLARS ($30,000,000.00) in the form of the Cash Portion of the Value for

the Additional Property and the HPP Unit Value for the Contributed Property,

subject to adjustment as provided in this Sections 2.2 and 2.5.

2.1 Inventory.

(a) Propane Inventory. As of Closing, an inventory of Propane

Inventory shall be conducted jointly by the parties and the value of such

Propane Inventory shall be computed utilizing Transferor's laid-in cost for the

Propane Inventory, which includes freight. The value of such Propane Inventory

shall be paid by Operating to Transferor by check within thirty (30) days

following Closing.

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(b) Hardware Inventory. An inventory of the Hardware shall be

conducted jointly by the parties as of Closing and the value of such Hardware,

as agreed, shall be paid by Operating to Transferor by check within thirty (30)

days following the Closing. The inventory of new and saleable hardware,

appliances, fittings, and related items held for sale to Customers will be

valued at Transferor's cost. Obsolete and/or used equipment and parts will be

excluded from the sale and retained by the Transferor.

2.2 Adjustment to Cash Portion of the Value for Taxes, Tank Rent,

Utilities, Rents, Customer Deposits, Credit Balances and Other Prorations. The

parties will calculate and prorate, as of the day of the Closing, all taxes

(other than taxes measured by revenues or income) with property taxes, if not

assessed for the current year, calculated on a calendar basis based on the prior

year's assessment, which are attributable to the Assets acquired hereunder.

Transferor shall be responsible for the charges attributable to the period

through Closing and Operating for periods thereafter. All sales, use or other

transactional taxes imposed on the transfer of any of the Assets shall be

charged fifty percent (50%) to the Transferor and fifty percent (50%) to

Operating. Operating will give the Transferor credit for any transferred utility

deposits. If utility charges are not available as of the day of the Closing,

they shall be prorated and paid upon their receipt, and each party shall

cooperate in the transfer of ownership and contracting for such services.

Rentals on all Leased Real Property will be prorated to the date of Closing. Any

tank rents received or invoiced by Transferor prior to Closing for property

transferred hereunder shall be prorated as of the day of Closing. Transferor's

credit balances shall be identified on Schedule 2.2 (the "Delivery Credit") and

shall be deducted from the Cash Portion of the Value and Operating shall assume

responsibility for such future delivery or other credit. All of Transferor's

outstanding customer deposits are identified on Schedule 2.2 (the "Customer

Deposits"), and Operating will be given credit by reduction of the Cash Portion

of the Value and Operating will assume the obligation for such Customer

Deposits. Any customer credit balances ("Credits") not otherwise identified

herein are also identified on Schedule 2.2 and Operating will be given credit

therefor. The Payment in cash at Closing pursuant to Section 4.1 shall be

increased or decreased, as the case may be, to reflect any amounts due on

account of prorations and adjustment of Section 2.2.

2.3 Exchange Issue Price. The HPP Units will be exchanged at the

per unit price equal to the Formula Price.

2.4 Formula Price/Average Price. The "Formula Price" shall be the

Average Price times 0.97. The "Average Price" means the average of the closing

sales prices of a HPP Unit as reported in The Wall Street Journal - Composite

Transactions for the 20 consecutive trading days commencing on the tenth trading

day prior to the day that the transaction contemplated by this Agreement is

publicly announced.

2.5 Adjustment for Impairment of Assets. Should any portion of

the Assets be materially impaired in value by any casualty between the date of

this Agreement and the Closing, the parties shall adjust the Cash Portion of the

Value by reducing the Cash Portion by the amount of the reduction of the fair

market value of the property injured caused by such loss. In addition, the Cash

Portion shall be reduced by the (i) value of the supplies, tools, equipment and

miscellaneous items lost or injured by reason of the Billings, Montana District

fire at this location that occurred on or about October 29, 2002 (the "Billings

Fire"); (ii) amount of the insurance proceeds received by Transferor plus the

amount of Transferor's deductible relating to the bobtail delivery vehicle lost

or

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injured by reason of the Billings Fire; and (iii) amount of the insurance

proceeds received by Transferor plus the amount of Transferor's deductible

relating to bobtail delivery vehicle #9740 lost or injured by reason of the

accident occurring near Dubois, Wyoming on or about December 5, 2002.

3. ACCOUNTS RECEIVABLE. At the Closing Operating shall acquire the

Transferor's Accounts Receivable arising from the Operations on the following

basis:

(a) Current accounts (less than 31 days old) at 92% of

face value;

(b) Accounts 31-60 days old at 87% of face value;

(c) Accounts 61-90 days old at 80% of face value;

(d) Accounts 91-365 days old at 50% of face value; and

(e) All other accounts at 0% of face value;

provided, however, (i) if any single account is in excess of 4.9% of the total

Accounts Receivable, (ii) the account is owned by an affiliate of the

transferor, (iii) the account debtor is in any bankruptcy or receivership

proceeding, or (iv) the account is subject to a Conditional Sale Security

Agreement, then in any such case the parties shall enter into a mutual agreement

as to its value, and if they fail to reach agreement, it shall be excluded from

the sale.

The total of the payment for the Accounts Receivable shall be

determined and paid within three (3) business days following the Transferor's

delivery of a listing of such accounts verified by an officer of Transferor as

being true and correct in all material respects.

4. PAYMENT OF AGREED VALUE, INVENTORIES, AND ACCOUNTS RECEIVABLE. The

Agreed Value shall be paid at the time and in the following manner:

4.1 Transfers at Closing. The Cash Portion of the Value, plus

such additions and credits as provided in this Agreement and less such

deductions and credits as provided in this Agreement, shall be paid by wire

transfer at Closing to an account designated by the Transferor at least three

(3) business days prior to the Closing, and the HPP Unit Value will be exchanged

by delivery to the Transferor of the certificates representing the HPP Units at

or within three (3) business days following the Closing.

4.2 Segregation of Cash Portion of Value Into Secured Funds. The

sum of FIVE MILLION FIVE HUNDRED THOUSAND DOLLARS ($5,500,000.00) shall be

deducted from the Cash Portion of the Value and shall be paid by Operating to a

separate account of the Transferor to be held subject to a first security

interest in favor of Operating and subject to claims hereunder, to be held

pursuant to the terms of the Security Agreement attached as Exhibit 4.2 (the

"Security Agreement"). (The Security Agreement provides for two (2) accounts:

(i) $2,000,000 for any claims (other than those in subsection (ii) which

follows), which account will not be reduced except for any claims under this

Agreement held for a period of two (2) years (the "Claims Fund"), and (ii)

$3,500,000 that will be held for five (5) years for (a) claims arising pursuant

to Section 7.5,

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(b) costs of remediation payable pursuant to the terms of the Security Agreement

(the "Environmental Fund"), (c) any payment of a Relocation Cost under Section

8.22, and (d) payments under Section 8.21.)

4.3 Inventories and Accounts Receivable. Operating and the

Partnership shall pay for the Propane Inventories and Hardware Inventory within

thirty (30) days following the Closing, and the Accounts Receivable shall be

paid within three (3) business days of the receipt of and the agreement to the

Accounts Receivable listing.

5. VERIFICATION OF CUSTOMER STORAGE TANKS.

5.1 Count of Customer Storage Tanks. After the Closing, Operating

will diligently proceed to physically count and otherwise verify the number of

Customer Tanks actually existing and will deliver its report of that number (the

"Count") to Transferor not later than six (6) months after the day of the

Closing. The notice supplied to Transferor shall identify those Customer Tanks

not verified to the Customer Listing set forth on Schedule 1.2(vi) and/or

Schedule 1.2(vii). Upon receipt of such notice, Transferor (at its effort and

expense) shall have one (1) month to verify those storage tanks not verified by

Operating. The Count, subject to any adjustment by Transferor by providing

verification of missing tanks, shall become the "Final Count" at the end of the

two hundred ten (210) day period.

5.2 Shortage of Tanks. In the event the Final Count discloses a

number of Customer Tanks that is lower than that shown on Schedules 1.1(i) and

1.2(i), the Agreed Value shall be reduced by an amount equal to the product of

multiplying the number of each type of tank that is short by the value of that

type of tank listed on Schedule 5.2, and the value of any overage of tanks in

one category may be offset against a shortage in another category. If the amount

of such reduction exceeds five percent (5%) of the total value of all Customer

Tanks (using Schedule 5.2) (the "Tank Bucket"), then the amount of the payment

in excess of the Tank Bucket shall be refunded to Operating (with interest at

six percent (6%) per annum) from the funds held subject to the Security

Agreement within ten (10) days of receiving written request for such payment.

5.3 Proof of Ownership. For the purpose of verification of the

number of Customer Tanks pursuant to Section 5.1 hereof, only the following

Customer Tanks physically verified and with one of the following proofs of

ownership shall be included in the Count and the Final Count:

(a) Those Customer Tanks for which Transferor has a valid

executed lease agreement between Transferor (or any predecessor in interest) and

a Customer or a valid contract that recognizes the Transferor's ownership of

such tank; or

(b) Those Customer Tanks for which Transferor, with, if

necessary, the cooperation and assistance of Operating's representatives, is

able to secure a new lease agreement after Operating shall have furnished the

Transferor a listing of unverified tanks; or

(c) Those Customer Tanks for which Transferor is receiving

tank rental incomes; or

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(d) All Customer Tanks stored at the Plant Facilities as of

the day of the Closing.

6. NO ASSUMPTION OF LIABILITIES. Neither the Partnership nor Operating

shall assume any liabilities of Transferor, except those for which the

Partnership or Operating has received credit as an adjustment at Closing and

those described in Schedule 6 hereto (the "Assumed Obligations").

7. REPRESENTATIONS AND WARRANTIES OF TRANSFEROR. As additional

consideration for the transactions contemplated herein, Transferor makes the

following representations, warranties, and covenants as of the date hereof and

(except as may be set forth in a Disclosure Letter as provided by Section 8.15,

if any, and specifically waived by Operating at Closing) as of the Closing, each

of which is deemed by the parties to be material and shall survive the Closing:

7.1 Corporate Standing, Powers, Authorizations and

Non-Violations. Transferor is a corporation duly organized, validly existing,

and in good standing under the laws of the state of Idaho, has full corporate

power to own its properties and to carry on the Operations as now being

conducted, and has full corporate power to execute, deliver, and perform this

Agreement, and has obtained all corporate authorizations and any other approvals

or consents necessary for the execution and delivery of this Agreement and the

consummation of the transactions contemplated hereunder without violation of any

agreement or order to which the Transferor or its property is subject,

including, without limitation, the approval of its board of directors and its

stockholders.

7.2 Marketable Title/Condition. Transferor has good and

marketable title to all of the Assets to be acquired by Operating hereunder,

free and clear of any mortgage, pledge, lien, conditional sales agreement, lease

(except leases on Customer Tanks, provided that the same do not contain any

purchase option for said tank at less than the fair market value at the time of

purchase), judgment, or other claim, charge, or encumbrance of any kind or

character, except for liens for current property taxes not delinquent, the

materiality of which does not impair marketability ("Permitted Encumbrances").

The Real Property, except as may be specifically disclosed in the Title

Commitments, (i) has all necessary access to public roads, electricity, water

and other utilities used and necessary in the Operations, (ii) is not subject to

any special assessment, condemnation or eminent domain proceeding, (iii) is not

subject to any agreement that would preclude the transfer to Operating or the

continued Operations by Operating thereon, (iv) and all improvements constructed

thereon are within the boundaries thereof, do not encroach on any other parcel

of adjacent real estate and, where appropriate, are set back from the boundaries

to comply with all applicable codes and regulations covering the Operations, and

(v) no structure primarily located on another parcel of real property encroaches

thereon. Except for the consents listed on Schedule 7.2 (the "Consents"), each

lease that constitutes a part of the Assets is freely assignable to Operating at

no additional consideration.

7.3 Tangible Personal Property. All tangible property being

transferred to Operating hereunder is in good operating condition and is

suitable for its current use and, where appropriate, such property is in

compliance with (i) the rules and regulations of the applicable authorities for

the storage and handling of propane, (ii) the current National Fire Protection

Association Pamphlet No. 58 (including, but not limited to, bona fide valid data

plates affixed to all

<PAGE>

bulk storage tanks, and location and placement of all tanks on the Real Property

in relation to the property lines and the surrounding areas), and (iii) the

requirements and standards as promulgated by the United States Department of

Transportation for LP gas products. All the property being transferred

(including, without limitation, bulk and Customer Tanks and vehicles and their

installation) complies with all relevant governmental codes and good operating

practices and safety standards in the propane business and the state of location

of such asset.

7.4 Legal or Administrative Liability. There is no suit, action,

arbitration, or legal, administrative, or other proceeding, or governmental

investigation pending or to the knowledge of Transferor threatened against

Transferor or affecting Transferor or any of its assets which relates to the

Operations, except as set forth in Schedule 7.4 attached hereto, all of which

litigations or claims will be defended by Transferor, or its insurance

companies, and liability in respect of which is expressly not assumed by

Operating and against which Transferor indemnifies and holds harmless Operating

and the Partnership. Transferor has not received any notice that it is under

investigation with respect to any alleged violation of any provision of federal,

state, local law or administrative regulations with respect to the Operations.

Transferor is not in default with respect to any order, writ, injunction, or

decree of any federal, state, local, or foreign court, department, agent, or

instrumentality.

7.5 No Violation of Governmental Regulations.

(a) General Operations. The Operations and the Assets have not

been, and were not prior to the day of the Closing, conducted in any material

violation of any statute, law, ordinance, or regulation of any governmental

entity. The Real Property is zoned and permitted for its current use and the

Transferor is in compliance with all zoning laws and any applicable permit. The

current uses of the real estate upon which the Plant Facilities are located are

not nonconforming or special uses or special exceptions, which uses could be

terminated upon the sale of the Operations to Operating; the current uses and

improvements at the Plant Facilities are not "grandfathered" under any previous

zoning laws or ordinances; and Transferor has no knowledge of any contemplated

changes under current zoning classification which would adversely affect the

Operations.

(b) Environmental Conditions. Except as set forth on Schedule

7.5(b) (the "Environmental Conditions"), the Transferor is not and has not in

the past been, in violation of, or charged with, convicted of or investigated

for any violation of any federal, state or local environmental law or regulation

by any court, governmental body or agency with respect to the Real Property or

in its Operations, nor does any environmental condition exist on any portion of

the Real Property that would likely give rise to a claim that Transferor is in

violation of any such federal, state or local law, rule or regulation; there

have been no disposals, releases of hazardous substances, materials or wastes,

or pollutants or contaminants, from, in or under any of the Real Property. For

purposes of this Agreement, the terms "release" and "hazardous substances" shall

have the definitions assigned thereto by the Federal Comprehensive Environmental

Response, Compensation, and Liability Act of 1980, 42 U.S.C. Section 9601, et

seq., as amended ("CERCLA"). Except as set forth on Schedule 7.5(b) (the

"Environmental Conditions"), there (i) are presently no tanks for storage of

petroleum products or other material (other than propane inventory) located on

the Real Property; (ii) have been no, nor are there now any, electrical

transformers or other equipment containing PCBs located on or under the Real

Property; (iii) have been no, nor are there

<PAGE>

now any drums, cans, canisters, or containers buried underground located on the

Real Property; (iv) have been no, nor are there now any, wastes buried

underground on the Real Property; (v) have been no, nor is there now any,

asbestos of any type or character located on the Real Property; (vi) is no

contamination of soil, ground water or surface water on or under the Real

Property; (vii) is no portion of the Real Property that is or has been on any

list prepared by any federal, state or local governmental body or agency as

requiring remedial environmental action; and (viii) has been no release of any

hazardous substance, material or waste, or pollutants or contaminants on, in,

from or under any property adjacent to the Real Property. Transferor has

furnished Operating with copies of all environmental studies or reports

referring to or relating to the Real Property. Schedule 7.5(b) contains an

accurate summary of the state of all remediation actions at each parcel of Real

Property and the Transferor's plan of action with respect thereto.

7.6 Insurance and Workers' Compensation. With respect to the

Operations, Transferor has had continuously in force policies of liability

insurance for the 3-year period prior to the Closing, in the amount of at least

$1,000,000 and workers' compensation insurance coverage in compliance with the

minimum standards of the state(s) where the Operations are conducted. True and

complete copies of such policies and a listing of all claims Transferor has made

over the past three (3) years and all workers' claims made or being paid during

the past three (3) years have been supplied to Operating and certificates

reflecting such coverages are attached hereto as Schedule 7.6. All of such

liability policies provide insurance on an "occurrence" basis with respect to

all risks normally insured against by companies similarly situated. There are

presently no existing conditions, claims or injuries to any current employee

that will rise to any claims under the workers' compensation laws.

7.7 Ordinary Course of Business. The Operations have been

conducted and the Assets have been operated and maintained by Transferor in

accordance with standards of operation and maintenance generally recommended in

the propane industry.

7.8 Taxes and Employee Pension and Profit Sharing Plans. The

Transferor's Operations have been conducted in conformity with all applicable

tax laws and all necessary returns and filings have been or will be made and the

related taxes paid such that there is and will not be any liability to Operating

for any taxes, penalties or interest for any Operations that occurred prior to

the Closing.

7.9 Benefit Plans.

(a) Schedule 7.9 contains an accurate and complete list of all

Benefit Plans and any employment contracts (whether individually or with any

union or labor organization) existing with or maintained or sponsored by the

Transferor or covering any employees of the Transferor to which the Transferor

is obligated to contribute or with respect to which the Transferor has any

material liability. For purposes of the Agreement, the term "Benefit Plans"

shall mean: (i) employee benefit plans as defined in Section 3(3) of the

Employment Retirement Security Act of 1974, as amended ("ERISA"), (ii)

employment agreements, and (iii) fringe benefit plans, policies, programs and

arrangements, whether or not subject to ERISA, and whether or not funded. Except

as set forth on Schedule 7.9, the Transferor has no obligations to contribute to

any "multiemployer pension plan," as such term is defined in section 3(37) of

ERISA, or with respect to any employee benefit plan of the type

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described in Sections 4063 and 4064 of ERISA or in Section 413(c) of the Code

(and regulations promulgated thereunder).

(b) Except as set forth on Schedule 7.9, the Transferor does

not contribute to or have any liability with respect to any Benefit Plan which

provides health, life insurance, accident or other "welfare-type" benefits to

current or future retirees or current or future former employees, their spouses

or dependents, other than in accordance with Section 4980B of the Code or

applicable state continuation coverage law.

(c) Except as set forth on Schedule 7.9, each Benefit Plan and

all related trusts, insurance contracts and funds have been maintained, funded

and administered in compliance with the terms of such Benefit Plan and with all

reporting and disclosure requirements and applicable laws and regulations,

including, but not limited to, ERISA and the Internal Revenue Code of 1986, as

amended (the "Code"). As of the date hereof, no actions, suits, claims (other

than routine claims for benefits), taxes, penalties or liens with respect or

relating to the Benefit Plans are pending or, to the knowledge of the

Transferor, threatened, or have been assessed or incurred. There have been no

"prohibited transactions" as defined in Section 4975 of the Code with respect to

each Benefit Plan, and, to the knowledge of the Transferor, no employee of the

Transferor who acts as a fiduciary for any Benefit Plan has any liability for

breach of a fiduciary duty or any failure to act or comply in connection with

the administration or investment of the assets of any Benefit Plan.

(d) Except as set forth on Schedule 7.9, each Benefit Plan

that is intended to be qualified under Section 401(a) of the Code, and each

trust (if any) forming a part thereof, if requested has received a favorable

determination letter from the IRS as to the qualification under the Code of such

Benefit Plan and the tax-exempt status of such related trust, and, to the

knowledge of the Transferor, nothing has occurred since the date of such

determination through the date hereof, that could adversely affect the

qualification of such Benefit Plan or the tax-exempt status of such related

trust.

7.10 Disclosure. Neither this Agreement nor any Schedule or

Exhibit hereto nor any other document, certificate of instrument delivered to

Operating by or on behalf of Transferor in connection with the transactions

contemplated by this Agreement contains any untrue statement of a material fact

or omits to state a material fact necessary in order to make the statements

contained herein and therein not misleading. There is no fact known to

Transferor that is not set forth in the Schedules of this Agreement that

materially and adversely affects, nor so far as Transferor can now foresee will

materially and adversely affect the Property.

7.11 Written Material. All written materials heretofore supplied

to Operating, including, without limitation, the 2000 and 2001 financial

statements and revenue and expense computations are correct, complete and

accurate in all material respects and none of such financial computations omits

any item of material cost which should have been included under proper

accounting practice.

7.12 Securities Representation, Application for Admission as

Limited Partner and Acceptance of Partnership Agreement. Transferor hereby

represents that (i) Transferor has such knowledge and experience in financial

and business matters that it, with its advisors, are capable of

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evaluating the merits and risks of the investment in the Limited Partner

Interests and the HPP Units and (ii) it understands and agrees that if it

desires to avail itself of the exemption from underwriter liability under the

Securities Act of 1933, as amended (the "Securities Act"), it may only resale

the HPP Units in compliance with Rule 145 of the Securities Act. Transferor

represents that it has reviewed the SEC Documents and Partnership Agreement

described in Section 9.4 and has had such opportunity as it deems necessary to

ask questions of the Partnership and its affiliates, officers and employees to

enable the Transferor, to make an investment decision concerning the receipt of

the HPP Units and the operation of the Partnership. The Transferor, by entering

into this Agreement, requests admission as a Limited Partner of the Partnership

and agrees to comply with, and be bound by, and hereby executes, the Amended and

Restated Agreement of Limited Partnership of the Partnership, as amended,

supplemented or restated to the date hereof (the "Partnership Agreement"), (b)

represents and warrants that the Transferor has all right power and authority

and, if an individual, the capacity necessary to enter into the Partnership

Agreement, (c) appoints the General Partner of the Partnership and, if a

Liquidator shall be appointed, the Liquidator of the Partnership as the

Transferor attorney-in-fact to execute, swear to, acknowledge and file any

document, including, without limitation, the Partnership Agreement and any

amendment thereto, necessary or appropriate for the Transferor admission as a

Additional Limited Partner and as a party to the Partnership Agreement, (d)

gives the power of attorney provided for in the Partnership Agreement and (e)

makes the waivers and gives the consents and approvals contained in the

Partnership Agreement. Capitalized terms not defined in this paragraph have the

meanings assigned to such terms in the Partnership Agreement

7.13 Admission to Partnership. At the Closing Transferor will

deliver the completed form of Certification To Partnership attached as Exhibit

7.13 qualifying the Transferor to be a limited partner in the Partnership (the

"Certification").

8. COVENANTS OF OWNERS, TRANSFEROR, OPERATING AND THE PARTNERSHIP.

8.1 Records. Transferor agrees to transfer and convey to

Operating on the day of the Closing the following items, including all rights

associated therewith as they relate to the Operations. Transferor, after Closing

if necessary for business purposes, may have access to these records if it

provides reasonable notice to Operating of its need to review such documents:

(a) All Customer files, including, without limitation, credit,

sales, tank leases, and other records in regard to the Operations.

(b) All other records in the possession of Transferor relating

to the Operations, all such records shall be available to the Transferor during

normal business hours.

8.2 Transfer of Real Property. At the Closing Transferor will

convey to Operating all of its right, title, and interest in and to the Real

Property, other than that listed on Schedule 8.22(A), by (i) General Warranty

Deeds (the "Deeds"), (ii) any leased property utilized in the Operations

described on Schedule 1(v) by a properly approved assignment of lease in form

satisfactory to Operating, and (iii) grant to Operating the Lease and Option to

purchase in the form of Exhibit 8.2(iii) (a "Lease and Option") for each parcel

of Real Property owned in fee and subject

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as of Closing to an Environmental Condition and set forth on Schedule 8.22(A) as

a Lease and Option Property.

8.3 Employee Matters.

(a) Services of Transferor Employees. It is the intent of

Operating to offer employment to substantially all of those employees of

Transferor who are employed by Transferor on January 1, 2003 and engaged in the

Operations (a "Transferred Employee") in substantially similar positions and

wage levels as the wage levels of Operating's or its affiliates' current

employees in similar positions, and with the same employee benefits that are

otherwise provided by Operating, or a parent or affiliate of Operating, to its

other employees. Transferor will terminate the employment of the